SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A
(Rule 14a-101)
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrantxý Filed by a Party other than the Registrant¨ ☐Check the appropriate box:
| | | | | | |
¨Check the appropriate box: |
| ☐ | Preliminary Proxy Statement |
| ☐ | ¨ | | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
x | ý | Definitive Proxy Statement | | |
¨ | ☐ | Definitive Additional Materials | | |
¨ | ☐ | Soliciting Material Pursuant to §240.14a-12 | | |
DexCom, Inc.(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x | | | | | | | | | | | | | | |
| (Name of Registrant as Specified In Its Charter) |
|
| (Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
| | | | | | | | |
| Payment of Filing Fee (Check all boxes that apply): |
| ý | No fee required. |
¨ | | |
| ☐ | Fee paid previously with preliminary materials. |
| | |
| ☐ | Fee computed on table belowin exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
April 8, 2022
| (1) | Title | | | |
| TO OUR STOCKHOLDERS |
| |
| You are cordially invited to attend the 2022 Annual Meeting of each classStockholders of securitiesDexCom, Inc. online on May 19, 2022, at 2:00 p.m. Pacific Time (the "Annual Meeting"). Due to which transaction applies: |
| (2) | Aggregate number of securities to which transaction applies: |
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| (4) | Proposed maximum aggregate value of transaction: |
¨ | Fee paid previously with preliminary materials. |
¨ | Check box if any partpublic health impact of the fee is offsetCOVID-19 pandemic and to support the health and well-being of our employees and stockholders, we are pleased to provide stockholders with an opportunity to participate in the Annual Meeting online via the Internet to facilitate stockholder attendance and provide a consistent experience to all stockholders regardless of location. We will provide a live webcast of the Annual Meeting at www.proxydocs.com/DXCM, where you will also be able to submit questions and vote online.The matters expected to be acted upon at the Annual Meeting are described in detail in the following Notice of Annual Meeting of Stockholders and Proxy Statement. We are using the Internet as providedour primary means of furnishing proxy materials to stockholders. Consequently, most stockholders will not receive paper copies of our proxy materials. We will instead send these stockholders a notice with instructions for accessing the proxy materials and voting via the Internet. The notice also provides information on how stockholders may obtain paper copies of our proxy materials if they so choose. Whether or not you plan to attend the Annual Meeting, please vote as soon as possible. As an alternative to voting online at the Annual Meeting, you may vote via the Internet, by Exchange Act Rule 0-11(a)(2) and identifytelephone or, if you receive a paper proxy card in the filing for whichmail, by mailing the offsetting fee was paid previously. Identifycompleted proxy card. Voting by any of these methods will ensure your representation at the previous filing by registration statement number, orAnnual Meeting. We look forward to seeing you at the Form or Schedule and the date of its filing.meeting. Sincerely, |
| (1) | Amount Previously Paid: |
| (2) | Form, Schedule or Registration Statement No.: |
April 6, 2016
To Our Stockholders:
You are cordially invited to attend the 2016 Annual Meeting of Stockholders of DexCom, Inc. to be held at DexCom’s offices located at 6310 Sequence Drive, San Diego, California 92121, on May 19, 2016, at 2:00 p.m. local time.
The matters expected to be acted upon at the meeting are described in detail in the following Notice of Annual Meeting of Stockholders and Proxy Statement.
We are using the Internet as our primary means of furnishing proxy materials to stockholders. Consequently, most stockholders will not receive paper copies of our proxy materials. We will instead send these stockholders a notice with instructions for accessing the proxy materials and voting via the Internet. The notice also provides information on how stockholders may obtain paper copies of our proxy materials if they so choose.
Whether or not you plan to attend the annual meeting, please vote as soon as possible. As an alternative to voting in person at the annual meeting, you may vote via the Internet, by telephone or, if you receive a paper proxy card in the mail, by mailing the completed proxy card. Voting by any of these methods will ensure your representation at the annual meeting.
We look forward to seeing you at the meeting.
| | | | | | | | |
Sincerely, | | |
|
 |
| Kevin R. Sayer |
| Chairman, President and Chief Executive Officer |
| DexCom, Inc. |
| April 8, 2022 |
| |
| | | | | | | | |
| | |
| YOUR VOTE IS IMPORTANT
In order to ensure your representation at the 2022 Annual Meeting of Stockholders (“Annual Meeting”), you may submit your proxy and voting instructions via the Internet at www.proxydocs.com/DXCM or by telephone, or, if you receive a paper proxy card and voting instructions by mail, you may vote your shares by completing, signing and dating the proxy card as promptly as possible and returning it in the enclosed envelope (to which no postage need be affixed if mailed in the United States).
Please refer to the section entitled “Voting via the Internet, by Telephone or by Mail” on page 2 of the Proxy Statement for a description of these voting methods. If your shares are held by a bank, brokerage firm or other holder of record (your record holder) and you have not given your record holder instructions to do so, your record holder will NOT be able to vote your shares with respect to any matter other than ratification of the appointment of Dexcom’s independent registered public accounting firm. We strongly encourage you to vote. | |
| | |
In order to ensure your representation at the annual meeting, you may submit your proxy and voting instructions via the Internet atwww.proxyvote.com or by telephone, or, if you receive
DEXCOM, INC.
6340 Sequence Drive
San Diego, California 92121
NOTICE OF
2022 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 2016Dear Stockholder:
You are cordially invited to attend
| | | | | |
| |
| Location | Date and Time |
Attend the 2016 Annual Meeting Online at: | May 19, 2022 |
| www.proxydocs.com/DXCM | 2:00 p.m. Pacific Time |
| | | | | | | | | | | | | | |
| Company Proposals | | Board Recommendation | Page |
| | | | |
| (1) | To elect four Class II directors to hold office until our 2023 Annual Meeting of Stockholders presented by our Board of Directors: •Steven R. Altman •Barbara E. Kahn •Kyle Malady •Jay S. Skyler, M.D., MACP | þ | FOR the election of each director nominee | |
| | | | |
| (2) | To ratify the selection by the Audit Committee of our Board of Directors of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022. | þ | FOR the ratification of the appointment | |
| | | | |
| (3) | To hold a non-binding vote on an advisory resolution to approve executive compensation. | þ | FOR approval on an advisory basis | |
| | | | |
| (4) | To approve the amendment and restatement of our Restated Certificate of Incorporation to (i) effect a 4:1 forward split of our Common Stock (the "Forward Stock Split") and (ii) increase the number of shares of authorized Common Stock to effectuate the Forward Stock Split. | þ | FOR the amendment and restatement of our Restated Certificate of Incorporation | |
| | | | |
Stockholders
of DexCom, Inc., a Delaware corporation. The meeting will be held on May 19, 2016 at 2:00 p.m. local time at our offices located at 6310 Sequence Drive, San Diego, California 92121, for the following purposes:1. To elect three Class II directors to hold office until our 2019 Annual Meeting of Stockholders. DexCom’s Board of Directors has nominated the following persons for election as Class II directors:
Steven R. Altman
Barbara E. Kahn
Jay S. Skyler
2. To ratify the selection by the audit committee of our Board of Directors of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016.
3. To hold a non-binding vote on an advisory resolution to approve executive compensation.
4. To conductmay also transact any other business properly brought before the meeting.
2022 Annual Meeting of Stockholders. These items of business are more fully described in the Proxy Statement accompanying this Notice.
The record date for the annual meeting is March 30, 2016. Only stockholders
You are entitled to vote if you were a stockholder as of record at the close of business on that date may vote atMarch 31, 2022. For stockholders of record who are entitled to attend the meeting or any adjournment or postponement thereof. AAnnual Meeting, the list of stockholders entitled to vote at the annual meetingof record will be available for inspection at DexCom’sDexcom's principal executive offices at the address listed above.Whether or not you plan to attend the annual meeting, please vote as soon as possible. As an alternative to voting in person at the annual meeting, you may vote via the Internet, by telephone or, if you receive a paper proxy card in the mail, by mailing a completed proxy card. For detailed information regarding voting instructions, please refer to the section entitled “Voting via the Internet, by Telephone or by Mail” on page 2 of the Proxy Statement. You may revoke a previously delivered proxy at any timeabove for 10 calendar days prior to the annual meeting. If you decide to attend the annual meeting and wish to change your proxy vote, you may do so automatically by voting in person at the annual meeting.
Annual Meeting. | | | | | | | | | | | |
| Voting Methods |
| | | |
| Internet | Telephone | Mail |
| | | |
| For detailed information regarding voting instructions, please refer to the section entitled "Voting via the Internet, by Telephone or by Mail” on page 2 of the Proxy Statement. You may revoke a previously delivered proxy at any time prior to the Annual Meeting. If you decide to attend the Annual Meeting and wish to change your proxy vote, you may do so automatically by voting online at the Annual Meeting. |
| | | |
| | | | | |
| By Order of the Board of Directors, |
|
|
| Kevin R. Sayer |
| Chairman, President and Chief Executive Officer |
| April 8, 2022 |
San Diego, California
April 6, 2016
DexCom, Inc.
San Diego, California 92121
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
ON MAY 19,
20162022
INFORMATION ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING
The accompanying proxy is delivered and solicited on behalf of the Board of Directors (“Board”) of DexCom, Inc., a Delaware corporation (“Dexcom” or the “Company”), in connection with the 20162022 Annual Meeting of Stockholders ("Annual Meeting"), which is being held at 2:00 p.m. local timePacific Time on May 19, 20162022 online at our offices located at 6310 Sequence Drive, San Diego, California 92121.www.proxydocs.com/DXCM. The Notice of Internet Availability of Proxy Materials (“Notice”) and proxy statement, Proxy Statement and form of proxy are being distributed and made available on the Internet on or about April 6, 2016.8, 2022. As a stockholder, you are invited to attend the annual meetingAnnual Meeting and are requested to vote on the items of business described in this proxy statement.Proxy Statement. The proxy materials include our proxy statementProxy Statement for the annual meeting,Annual Meeting, an annual report to stockholders, including our Annual Report on Form 10-K (“Annual Report”) for the year ended December 31, 2015,2021, and the proxy card or a voting instruction card for the annual meeting.Annual Meeting.
Only stockholders of record of DexCom, Inc. (“DexCom” or the “Company”)Dexcom common stock on March 30, 2016,31, 2022, the record date, will be entitled to vote at the annual meeting.Annual Meeting. Each holder of record will be entitled to one vote on each matter for each share of common stock held on the record date. On the record date, there were 83,395,60198,125,933 shares of common stock outstanding. For 10 days prior to the meeting, a complete list of the stockholders entitled to vote at the meeting will be available for examination by any stockholder for any purpose relating to the meeting electronically at
www.proxydocs.com/DXCM. The holders of a majority of the outstanding shares of common stock entitled to vote at the
annual meetingAnnual Meeting must be present or represented by proxy at the
annual meetingAnnual Meeting in order to have a quorum. Abstentions and broker non-votes will be treated as shares present for the purpose of determining the presence of a quorum for the transaction of business at the
annual meeting.Annual Meeting. A broker non-vote occurs when a bank, broker or other holder of record holding shares for a beneficial owner submits a proxy for the
annual meetingAnnual Meeting but does not vote on a particular proposal,
except for Proposal No. 2, because that holder does not have discretionary voting power with respect to that proposal and has not received instructions from the beneficial owner. If the persons present or represented by proxy at the
annual meetingAnnual Meeting constitute the holders of less than a majority of the outstanding shares of common stock entitled to vote at the
annual meeting,Annual Meeting, the
annual meetingAnnual Meeting may be adjourned by the chairperson of the
annual meetingAnnual Meeting to a subsequent date for the purpose of obtaining a quorum.
In an electionFor Proposal No. 1 (election of directors,directors), our Amended and Restated Bylaws ("Bylaws")and our Corporate Governance Principles ("Governance Principles") require that directors must be elected by a majority of the votes cast in uncontested elections. This means that the number of votes cast “For” a director nominee must exceed the number of votes cast “Against” that nominee. Abstentions and if applicable, broker non-votes are not counted as votes “For” or “Against” a director nominee and have no effect on the election of directors. Each current director and any director nominee must, promptly following such person’s election or re-election, submit to the Board an irrevocable resignation effective upon such person’s failure to receive the required vote at the next annual meeting at which they face re-election. Following an uncontested election in which any nominee who does not receive a majority of votes cast “For” his or her election, the Board is required to decide whether to accept such resignation, and it will disclose its decision-makingdecision- making process. In contested elections, the required vote would be a plurality of votes cast. Full details of this policy are set forth in our Corporate Governance Principles, which is available athttp:https://investor.shareholder.com/dexcom/governance.cfminvestors.dexcom.com/corporate-governance.The other proposals
Proposal Nos. 2 (ratification of independent registered public accounting firm) and 3 (advisory vote on executive compensation) require the approval of a majority of shares present and entitled to vote on the matter either in persononline at the Annual Meeting or by proxy. proxy and are voted for or against the proposal. Proposal No. 4 (amendment to our Restated Certificate of Incorporation to effect a 4-for-1 forward split of our common stock) requires the affirmative vote of a majority of the shares of common stock outstanding.
Abstentions and broker non-votes
will not be countedhave no effect on the determination of whether a nominee or Proposal Nos. 2 or 3 have received the vote of a majority of the shares of common stock present or represented by proxy and voted for
any purpose in determining whether these proposalsor against the proposal. Abstentions and broker non-votes shall have
been approved.the same effect as a vote against Proposal No. 4.
On each matter to be voted upon, stockholders of record have one vote for each share of common stock owned by them as of the close of business on March
30, 2016,31, 2022, the record date for the
annual meeting.Annual Meeting. Stockholders may not cumulate votes in the election of directors.
You are entitled to attend the annual meetingAnnual Meeting if you were a stockholder of record or a beneficial owner of our common stock as of March 30, 2016,31, 2022, the record date, or you hold a valid legal proxy for the annual meeting.Annual Meeting.
Due to public health and travel concerns as well as state and local government restrictions caused by the COVID-19 pandemic, the Annual Meeting will only be accessible online through the Internet. We have worked to offer the same participation opportunities as if you attended the Annual Meeting in person. To be admitted to the Annual Meeting at www.proxydocs.com/DXCM, you must enter the control number found next to the label “Control Number” for postal mail recipients or within the body of the email sending you the Proxy Statement. We encourage you to access the Annual Meeting before it begins. Online check-in will begin 1 hour prior to the meeting time of 2:00 pm Pacific Time on the date of the Annual Meeting. If you are a stockholder of record,have difficulty accessing the meeting, please call the number in the email you may be asked to present valid picture identification, such as a driver’s license or passport, for admissionwill receive one hour prior to the annual meeting.meeting start. We will have technicians available to assist you. This year’s stockholders' question and answer session will only include questions submitted in advance of the Annual Meeting at
www.proxydocs.com/DXCM after logging in with your Control Number. If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a voting instruction card and voting instructions with these proxy materials from that organization rather than from us. Simply complete and mail the voting instruction card to ensure that your vote is counted. To vote
in persononline at the
annual meeting,Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker, bank or other agent included with these proxy materials, or contact your broker, bank or other agent to request a proxy form.
Recommendations ofWe plan to announce any such updates on our proxy website at www.proxydocs.com/DXCM, and we encourage you to check this website prior to the Board of DirectorsDexCom’s Board of Directors recommends thatmeeting if you vote:
FOR each of the nominees of the Board of Directors (Proposal No. 1);
FOR the ratification of the appointment of Ernst & Young LLP as DexCom’s independent registered public accounting firm for the fiscal year ending December 31, 2016 (Proposal No. 2); and
FOR the non-binding advisory resolutionplan to approve executive compensation (Proposal No. 3).
attend.Voting via the Internet, by Telephone or by Mail
Holders of shares of
DexComDexcom common stock whose shares are registered in their own name with
DexCom’sDexcom’s transfer agent, American Stock Transfer & Trust Company, are record holders. As an alternative to voting
in persononline at the
annual meeting,Annual Meeting, record holders may vote via the Internet, by telephone or, for those stockholders who receive a paper proxy card in the mail, by mailing a completed proxy card.
For those record holders who receive a paper proxy card, instructions for voting via the Internet, telephone or by mail are set forth on the proxy card. All votes must be received by 8:59 p.m., Pacific Time, May 19, 2022. All votes for participants in the Dexcom Employee Stock Purchase Program must be received by 2:00 p.m., Pacific Time, May 14, 2022. If you are a stockholder who elects to vote by mail, you should sign and mail the proxy card in the addressed, postage paid envelope that was enclosed with the proxy materials, and your shares will be voted at the annual meetingAnnual Meeting in the manner you direct. In the event that you return a signed proxy card on which no directions are specified, your shares will be votedFOReach of the nominees of the Board of Directors (Proposal No. 1),FOR the ratification of the appointment of Ernst & Young LLP as DexCom’sDexcom’s independent registered public accounting firm for the fiscal year ending December 31, 20162022 (Proposal No. 2) and, FOR the non-binding advisory resolution to approve executive compensation (Proposal No. 3), and in FOR the discretionamendment and restatement of the proxy holders asour Existing Certificate to any other matters that may properly come before the annual meeting or any postponement or adjournmenteffect a 4-for-1 forward split of the annual meeting.our common stock (Proposal No. 4).DexCom
Dexcom stockholders whose shares are not registered in their own name with American Stock Transfer & Trust
Company, are beneficial holders of shares held in street name. Such shares may be held in an account at a bank or at a
brokerage firm (your record holder). As the beneficial holder, you have the right to direct your record holder on how to vote your shares, and you will receive instructions from your record holder that must be followed in order for your record holder to vote your shares per your instructions. Many banks and brokerage firms have a process for their beneficial holders to provide instructions via the Internet or by telephone. If Internet or telephone voting is unavailable from your record holder, simply complete and mail the voting instruction card provided to you by your record holder to ensure that your vote is counted. If your shares are held beneficially in street name and you have not given your record holder voting instructions, your record holder will not be able to vote your shares with respect to any matter other than ratification of the appointment of DexCom’sDexcom’s independent registered public accounting firm. Shares held beneficially in street name may be voted by you in persononline at the annual meetingAnnual Meeting only if you obtain a legal proxy from your record holder giving you the right to vote such shares in persononline at the annual meeting.
Annual Meeting.
For those stockholders who receive a Notice,
(described under “Internet Availability of Proxy Materials” below), the Notice provides information on how to access your proxy on the Internet, which contains instructions on how to vote via the Internet or by telephone. If you received a Notice, you can request a printed copy of your proxy materials by following the instructions contained in the Notice.
We strongly recommend that you vote your shares in advance of the meeting as instructed above, even if you plan to attend the virtual meeting.
You may revoke or change a previously delivered proxy at any time before the annual meetingAnnual Meeting by delivering another proxy with a later date, by voting again via the Internet or by telephone, or by delivering written notice of revocation of your proxy to DexCom’sDexcom’s Secretary at DexCom’sDexcom’s principal executive offices before the beginning of the annual meeting.Annual Meeting. You may also revoke your proxy by attending the annual meetingAnnual Meeting and voting in person,online, although attendance at the annual meetingAnnual Meeting will not, in and of itself, revoke a valid proxy that was previously delivered. If you hold shares through a bank or brokerage firm, you must contact that bank or brokerage firm to revoke any prior voting instructions. You also may revoke any prior voting instructions by voting in persononline at the annual meetingAnnual Meeting if you obtain a legal proxy as described under “Admission“Admission to Meeting”Meeting” above. Expenses of Soliciting Proxies
The expenses of soliciting proxies will be paid by Dexcom. Following the original mailing of the soliciting materials, Dexcom and its agents may solicit proxies by mail, electronic mail, telephone, facsimile, by other similar means or in person. Proxies may also be solicited on behalf of the Board by directors, officers or employees of Dexcom by telephone or in person, or by email or through the Internet. Further, the original solicitation of proxies by mail may be supplemented by solicitation by telephone and other means by directors, officers and employees of Dexcom. No additional compensation will be paid to these individuals for any such services. Following the original mailing of the soliciting materials, we will request brokers, custodians, nominees and other record holders to forward copies of the soliciting materials to persons for whom they hold shares and to request authority for the exercise of proxies. In such cases, upon the request of the record holders, we will reimburse such holders for their reasonable expenses. If you choose to access the proxy materials and/or vote through the Internet, you are responsible for any Internet access charges you may incur.
Results of Annual Meeting
Preliminary voting results will be announced at the
annual meeting.Annual Meeting. Final voting results will be published in a current report on Form 8-K no later than
four4 business days after the date the
annual meetingAnnual Meeting ends.
INTERNET AVAILABILITY OF PROXY MATERIALSTableofContentsIn accordance with the rules of the Securities and Exchange Commission (“SEC”), we are using the Internet as our primary means of furnishing proxy materials to stockholders. Consequently, most stockholders will not receive paper copies of our proxy materials. We will instead send these stockholders a Notice of Internet Availability of Proxy Materials with instructions for accessing the proxy materials, including our Proxy Statement and annual report, and voting via the Internet. The Notice also provides information on how stockholders may obtain paper copies of our proxy materials if they so choose. This makes the proxy distribution process more efficient and less costly, and helps conserve natural resources.
PROPOSAL 1
ELECTION OF DIRECTORS
| | | | | |
| |
| PROPOSAL NO. 1 |
| Election of Directors |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | Our Board recommends the following four nominees for election to our Board for a one-year term beginning in May and continuing until the 2023 Annual Meeting of Stockholders and until their successors have been elected and qualified: | | |
| | | |
| | | | | | | | | | | | | |
| | 1) | | Steven R. Altman | 2) | | Barbara E. Kahn | 3) | | Kyle Malady | | | |
| | | | | | | | | | | | | |
| | 4) | | Jay S. Skyler, M.D., MACP | | | | | | | | | |
| | | | | | | | | | | | | |
| þ | | | | | | | | | | | |
| | THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES NAMED ABOVE. | | |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
As of the date of mailing of this Proxy Statement, ourthe Board of Directors (the “Board of Directors” or “Board”) consists of nineeleven members and is divided into three classes, each of which has a three-year term. On May 21, 2021, we filed our Restated Certificate of Incorporation to declassify the Board over a three-year period beginning at this Annual Meeting. Commencing with this Annual Meeting, each class of directors whose term shall expire shall be elected to hold office for a term expiring the next annual meeting of stockholders or until such director’s earlier death, resignation or removal.
Class I currently consists of
Terrance H. Gregg, Kevin
R. Sayer,
and Nicholas Augustinos
and Bridgette P. Heller, Class II currently consists of Steven R. Altman, Barbara E. Kahn,
Kyle Malady and Jay S. Skyler,
M.D., MACP, and Class III currently consists of
Richard A. Collins, Karen Dahut, Mark
G. Foletta
Jonathan T. Lord and Eric J.
Topol. ThreeTopol, M.D. Four Class II directors are to be elected at this
annual meetingAnnual Meeting to serve until our
20192023 Annual Meeting of Stockholders and until their successors are duly elected and qualified, or until their
earlier death, resignation or removal. The terms of the directors in Classes III and I expire at our
20172023 and
20182024 Annual
MeetingsMeeting of Stockholders, respectively.
The nominees for Class II directors are Steven R. Altman, Barbara E. Kahn,
Kyle Malady, and
Jay S.Jay. S Skyler,
M.D. MACP, each of whom is a current director. Mr. Altman has served
on the Board since November 2013, Dr. Kahn has served since April 2011,
Mr. Malady has served on the board since October 2020, and Dr. Skyler has served since September 2002. Each of
Mr.Messrs. Altman,
and Drs. KahnMalady and Skyler
hasand Dr. Kahn have agreed to continue to serve as directors if elected, and we have no reason to believe that the nominees will be unable to serve.
Directors are elected by a majority of votes cast in an uncontested election. A majority of the votes cast means that the number of votes cast “For” a director nominee must exceed the number of votes cast “Against” that nominee. In contested elections (an election in which the number of nominees for election as
a director is greater than the number of directors to be elected)
, the vote standard would be a plurality of the votes cast.
Abstentions and broker non-votes are not counted as votes "For" or "Against" a director nominee and have no effect on the election of directors.
In accordance with our
Corporate Governance Principles,
(available on our website athttp://investor.shareholder.com/dexcom/governance.cfm), the Board will nominate for election only candidates who agree, if elected, to tender, promptly following such person’s election or re-election, an irrevocable resignation that will be effective upon (i) such person’s failure to receive the required vote at the next
annual meetingAnnual Meeting at which they face re-election, and (ii) the Board’s acceptance of such resignation, at which point, any unvested portion of annual equity grants to a director whose resignation becomes effective
shallwill become fully vested. In addition, the Board will fill director vacancies and new directorships only with candidates who agree to tender the same form of resignation promptly following their appointment to the Board. Each of
Mr. Altman and Drs. Kahn and Skyler hasthe nominees have provided an irrevocable resignation.
| | | | | | | | |
| | |
| LEARN MORE ABOUT OUR COMPANY To see more information about our Governance Principles, please visit our website at: https://investors.dexcom.com/corporate-governance | |
| | |
If an incumbent director fails to receive the required vote for election, then, within 90 days following certification of the stockholder vote, the Board will disclose its decision-making process and decision regarding whether to accept the director’s resignation offer (or the reason(s) for rejecting the resignation offer, if applicable) in a Form 8-K furnished to the SEC. Any director who tenders his or her resignation pursuant to this provision of our
Corporate Governance Principles may not participate in the Board action regarding whether to accept the resignation offer.
| | | | | | | | | | | | | | |
| Board Demographics and Biographies |
At Dexcom, our Board nominees bring a variety of
thebackgrounds, qualifications, skills and experiences that contribute to a well-rounded Board
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES NAMED ABOVE.
uniquely positioned to effectively guide our strategy and oversee our operations. The following is biographical information as of March 30, 201631, 2022 for the nominees for Class II directors and each person whose term of office as a Class I orand Class III director will continue after the annual meeting.
Annual Meeting.
| | | | | | | | | | | | | | |
Name
HIGHLY INDEPENDENT | | AgeBALANCED
TENURE | | | Position
NEW
DIRECTORS |
Class I Directors | | | | | | |
Terrance H. Gregg
| | | 67 | | | Executive Chairman of the Board of Directors |
Kevin Sayer
| | | 58 | | | President, Chief Executive Officer (“CEO”) and Director |
Nicholas Augustinos
| | | 57 | | | Director |
Class II Directors | | | | | | |
Steven R. Altman | | | 54 | | | Director |
Barbara E. Kahn
| | | 63 | | | Director |
Jay S. Skyler, M.D.
| | | 69 | | | Director |
Class III Directors | | | | | | | | | | | | | | | | | | | | | | |
Mark Foletta | | | 55 | | | Lead Independent Director | | | |
Jonathan T. Lord, M.D.
| | | 61 | | | Director | | | |
Eric Topol, M.D.
| | | 61 | | | Director | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
10 of 11 |
All independent,
except the CEO |
| | | | | | | | |
| 3 |
|
|
|
|
|
|
| | |
| New directors hired in the last three years |
| | | | | | | | | | | | | | |
| BOARD ENGAGEMENT | | AGE
DISTRIBUTION | | GENDER DIVERSITY |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 75%+ | |
| |
| |
| |
| |
| |
| | | | | | | | | |
| Attendance rate for each director for the four board meetings held in 2021 |
|
| | | | | | | | | | | | | | |
| | | | |
| Kevin R. Sayer |
| Class I | Chairman of the Board, President and CEO | | |
| | | | |
| | | | |
| Age: | Joined the Board: | Committees: | | Other Current Public Company Boards: |
| 64 | 2007 | None | | None |
| | | | |
StevenKevin R. Altmanhas served on our Board since November 2013. From November 2011 through January 2014, Mr. Altman served as the vice chairman of Qualcomm Incorporated (“Qualcomm”) and a member of Qualcomm’s executive committee. Mr. Altman previously served as the president of Qualcomm from July 2005 to November 2011, as Executive Vice President from November 1997 to June 2005 and as President of Qualcomm Technology Licensing from September 1995 to April 2005. Mr. Altman was the chief architect of Qualcomm’s strategy for licensing its broad intellectual property portfolio for wireless communications, which has accelerated the growth of CDMA technology. Mr. Altman served on the board of Ubiquiti Networks, Inc., a publicly traded company that develops networking technology for service providers and enterprises, from October 2013 to December 2015. Mr. Altman received a B.S. from Northern Arizona University in Police Science and Administration and a J.D. from the University of San Diego. Mr. Altman brings to the Board significant senior leadership, and technical and global experience. Mr. Altman’s experiences with Qualcomm allow him to provide DexCom with valuable insights on corporate strategy and initiatives that are critical to the continued growth and maturation of DexCom.Sayer Barbara E. Kahnhas served on our Board since April 2011. Since January 2011, Dr. Kahn has served as the Patty and Jay H. Baker Professor of Marketing and the Director of the Jay H. Baker Retailing Center at The Wharton School, where she previously served as the Dorothy Silberberg Professor of Marketing from June 1990 to July 2007. Prior to rejoining Wharton, Dr. Kahn served for three and a half years as the Dean and Schein Family Chair Professor of Marketing at the School of Business Administration, University of Miami, Coral Gables, Florida from August 2007 to January 2011. Dr. Kahn received her Ph.D., M.B.A. and M.Phil degrees from Columbia University, and a B.A. in English Literature from the University of Rochester. Through Dr. Kahn’s experience in consumer-based research, she provides the Board with senior leadership and important guidance on issues relating to market and product development.
Jay S. Skyler, M.D., MACPhas served on our Board since September 2002. Dr. Skyler is a Professor of Medicine, Pediatrics and Psychology and Deputy Director of the Diabetes Research Institute at the University of Miami in Florida, where he has been employed since 1976. For 22 years, Dr. Skyler also served as Study Chairman for the National Institute of Diabetes & Digestive & Kidney Diseases Type 1 Diabetes clinical trials network. He is a past President of the American Diabetes Association and a past Vice-President of the International Diabetes Federation. Dr. Skyler served as a director of Amylin Pharmaceuticals, Inc. until its acquisition by Bristol-Myers Squibb Company in August 2012, and served as a director of MiniMed, Inc. until its acquisition by Medtronic, Inc. in 2001. Dr. Skyler received a B.S. from Pennsylvania State University and an M.D. from Jefferson Medical College. As a scholar and educator in the field of endocrinology, Dr. Skyler brings
to the Board industry and technical experience directly related to DexCom’s research and development activities. In addition, Dr. Skyler’s board service with other public companies provides cross-board experience.
Directors Continuing in Office Until the 2017 Annual Meeting
Mark Foletta has served on our Board since November 2014 and has served as our Lead Independent Director since November 2015. Mr. Foletta previously served as Senior Vice President, Finance and Chief Financial Officer of Amylin Pharmaceuticals, Inc., a public pharmaceutical company, from March 2006 through Amylin’s acquisition by Bristol Myers-Squibb Company in August 2012, and as Vice President, Finance and Chief Financial Officer of Amylin from 2000 to 2006. Prior to joining Amylin in 2000, Mr. Foletta held a number of management positions with Intermark, Inc. and Triton Group Ltd. from 1986 to 2000 and served as an Audit Manager with Ernst & Young. Mr. Foletta is currently a member of the Board of Directors and Audit Committee of AMN Healthcare Services, Inc., a publicly traded healthcare workforce solutions provider, and Regulus Therapeutics, Inc., a publicly traded biopharmaceutical company. Since August 2015, Mr. Foletta has served as the interim CFO of Biocept, Inc., an early commercial-stage publicly traded molecular oncology diagnostics company. Mr. Foletta is also on the Board of Directors of Viacyte, Inc., a private biotechnology company. Mr. Foletta received a B.A. in Business Economics from the University of California, Santa Barbara and is a member of the Corporate Directors Forum. Mr. Foletta’s considerable audit and financial experience in the biotechnology and pharmaceutical sectors qualifies him to serve on the Board.
Jonathan T. Lord, M.D.has served on our Board since May 2008, and served as our Chairman from May 2010 until December 31, 2014 when, on January 1, 2015, Mr. Gregg became Chairman after resigning as DexCom’s Chief Executive Officer and served as our Lead Independent Director from January 2015 until November 2015. Recently Dr. Lord served as a professor of pathology at the University of Miami’s Miller School of Medicine after serving as the Chief Operating Officer of the Miller School and UHealth-University of Miami Health System from March 2012 to January 31, 2013. From August 2011 to March 2012, Dr. Lord served as the Chief Innovation Officer at the University of Miami, Florida. From April 2009 to January 2010, Dr. Lord served as President and Chief Executive Officer of Navigenics, Inc., a privately held healthcare company. From April 2000 to April 2009, Dr. Lord served as Chief Innovation Officer and Senior Vice President at Humana Inc., a health benefits company. From October 1999 to April 2000, Dr. Lord served as President of Health Dialog, a health information provider, and from April 1997 to October 1999, he served as Chief Operating Officer of the American Hospital Association, a national organization representing hospitals, health care networks and their patients. Dr. Lord also serves as a director of Biolase, Digital Reasoning, Par 80, and Velano Vascular. Dr. Lord also serves in an advisory board role for ViaGenetics. From 2012 to 2015, Dr. Lord served in an advisory board role for Third Rock Ventures. Dr. Lord received a B.S. degree in chemistry and a M.D. degree from the University of Miami. Through Dr. Lord’s experience in healthcare technology and insurance, he provides the Board with senior leadership and critical guidance on issues relating to technology, market and commercial development.
Eric Topol, M.D. has served on our Board since July 2009. Since January 2007, Dr. Topol has served as the Director of the Scripps Translational Science Institute, a National Institutes of Health funded program of the Clinical and Translational Science Award Consortium. He is Professor of Genomics at the Scripps Research Institute, the Chief Academic Officer of Scripps Health, and a senior consulting cardiologist at Scripps Clinic. Prior to Scripps, Dr. Topol served on the faculty of Case Western Reserve University as a professor in genetics, chaired the Department of Cardiovascular Medicine at Cleveland Clinic for 15 years and founded the Cleveland Clinic Lerner College of Medicine. Dr. Topol serves as a digital medical advisor to Google, AT&T, Walgreens, Quanttus, and Sotera Wireless. In April 2009, he co-founded the West Wireless Health Institute. As a practicing physician, academic and thought leader in wireless healthcare technologies, Dr. Topol is uniquely situated to provide the Board with guidance on its technology, clinical and market development.
Directors Continuing in Office until the 2018 Annual Meeting
Terrance H. Gregghas served on our Board since May 2005 and served as our Chief Executive Officer from June 2007 until January 2015. Mr. Gregg concurrently served as our President from June 2007 to June
2011. Effective January 1, 2015, Mr. Gregg assumed a new role with DexCom as Executive Chairman of the Board of Directors. In this role, Mr. Gregg is employed as an executive officer and will continue to lead our external efforts. From 1999 to June 2007, Mr. Gregg served as a director of Vasogen, Inc., an immunotherapy company focused on heart failure and neurogenerative diseases, and served as its Chairman from 2006 to 2007. Since 2004, Mr. Gregg served as a Special Venture Partner with Galen Collaborative Capital, a private equity firm. Since 2015, Mr. Gregg also has served on Sectoral Asset Management’s New Emerging Medical Opportunities Advisory Board, a private equity fund focused on companies involved with the development of new pharmaceuticals, medical technology and related products to serve the global healthcare market. Mr. Gregg has also operated Soleil Partners LLC, formerly THG Consulting LLC, a healthcare advisory firm since 2002. From July 2002 to September 2004, Mr. Gregg served as a senior advisor to the diabetes business of Medtronic, Inc., a medical technology company. Mr. Gregg served as President and Chief Operating Officer of MiniMed, Inc., a medical technology company focused on insulin pumps for people with diabetes, from October 1996 until its acquisition by Medtronic, Inc. in August 2001, and Mr. Gregg served as a Vice President of Medtronic and President of Medtronic MiniMed after the acquisition until July 2002. Mr. Gregg formerly served as the Chairman of the American Diabetes Association Research Foundation Board. Mr. Gregg received a B.S. from Colorado State University. As our Executive Chairman, Mr. Gregg brings to the Board significant senior leadership, industry, technical, and global experience.
Kevin Sayerhas served on our Board since November 2007, as our President and Chief Executive Officer (“CEO”) since January 2015 and as our Chairman of the Board (“Chairman”) since July 2018. Mr. Sayer has been our President since June 2011. From2011, and from January 2013 until January 2015, Mr. Sayer also served as our Chief Operating Officer. In connection with Mr. Gregg assuming a new role as Executive Chairman of the Board of Directors, Mr. Sayer assumed the role of Chief Executive Officer effective on January 1, 2015. From April 2007 to December 2010, Mr. Sayer served as Chief Financial Officer of Biosensors International Group, Ltd. (“Biosensors”), a medical technology company developing, manufacturing and commercializing medical devices used in interventional cardiology and critical care procedures. Prior to joining Biosensors, from May 2005 to April 2007, Mr. Sayer served as an independent healthcare and medical technology industry consultant. From March 2004 to May 2005, Mr. Sayer was Executive Vice President and Chief Financial Officer of Specialty Laboratories, Inc., a company offering clinical reference laboratory services. From August 2002 to March 2004, Mr. Sayer worked as an independent healthcare and medical technology industry consultant. Mr. Sayer served as Chief Financial Officer of MiniMed, Inc. from May 1994 until it was acquired by Medtronic, Inc. in August 2001. Mr. Sayer served as Vice President and General Manager of Medtronic MiniMed after the acquisition until August 2002. Mr. Sayer is a Certified Public Accountant (inactive) and received his Master’sMaster's Degree in Accounting and Information Systems concurrently with a B.A., both from Brigham Young University. As CEO, Mr. Sayer has direct responsibility for our strategy and operations.
| | | | | | | | | | | | | | |
| | | | |
| Nicholas Augustinos |
| Class I | Independent Director | | |
| | | | |
| | | | |
| Age: | Joined the Board: | Committees: | | Other Current Public Company Boards: |
| 63 | 2009 | Audit, Technology | | None |
| | | | |
Nicholas (Nick) Augustinoshas served on our Board since November 2009. SinceFrom December 2015 through December 2018, Mr. Augustinos has served as President and CEO of Aver, Inc., a company specializing in bundled payment, analytics and analytics solutions andpayment solutions. He has served on the Board of Directors of Aver since September 2014.2014, and was Chairman of the Board of Directors of Aver during 2019. From November 2011 until December 2015, Mr. Augustinos worked for Cardinal Health, Inc. as its Senior Vice President for Health Information Services and Strategy. From March 2005 through October 2011, Mr. Augustinos worked for Cisco Systems, Inc. (“Cisco”), a networking company. At Cisco, he held various positions, including Director of Cisco’s Internet Business Solutions Group, Senior Director, Global Healthcare Solutions Group, and most recently Senior Director of Global Healthcare Operations. In January 2015, Mr. Augustinos was appointed to the Board of Directors of the California Health Care Foundation (“CHCF”), which seeks to improve care for all Californians through innovations that improve quality, increase efficiency, and lower the cost of care. Prior to CHCF, he served on the Board of Directors of the SCAN Foundation, an organization dedicated to advancing the development of a sustainable continuum of quality care for seniors, from June 2011 until December 2014. Mr. Augustinos served on the Board of Directors of Audax Health, now Rally, from March 2012 until February 2014. With a 29-year35-year career in healthcare and healthcare technology, Mr. Augustinos has broad managerial, consulting and business development experience in the private and public sectors. Mr. Augustinos has worked with a diverse range of leading healthcare delivery systems, healthcare insurers and government organizations globally and brings to the Board significant business and market development experience with growth companies. | | | | | | | | | | | | | | |
| | | | |
| Bridgette P. Heller |
| Class I | Independent Director | | |
| | | | |
| | | | |
| Age: | Joined the Board: | Committees: | | Other Current Public Company Boards: |
| 60 | 2019 | Compensation | | Novartis, Aramark, Integral Ad Science |
| | | | |
CORPORATE GOVERNANCEBridgette P. Heller Independencehas served on our Board since September 2019. Ms. Heller is currently leading a small nonprofit, the Shirley Proctor Puller Foundation, committed to generating better educational outcomes for underserved children in St. Petersburg, Florida. Previously, Ms. Heller served as the Executive Vice President and President of Nutricia, the Specialized Nutrition Division of Danone from July 2016 to August 2019. From 2010 to 2015, she served as Executive Vice President of Merck & Co., Inc. and President of Merck Consumer Care. Prior to joining Merck, Ms. Heller was President of Johnson & Johnson’s Global Baby Business Unit from 2007 to 2010 and President of its Global Baby, Kids, and Wound Care business from 2005 to 2007. She also worked for Kraft Foods from 1985 to 2002, ultimately serving as Executive Vice President and General Manager for the North American Coffee Portfolio. Ms. Heller serves on the Board of Directors of Novartis, a global pharmaceuticals manufacturer and Fortune 200 company.She also serves on the Board of Directors of Newman’s Own, a privately held social business and food manufacturer. Since February 2021, Ms. Heller has served on the Board of Directors of Aramark Corporation, a U.S. publicly traded food service, facilities and uniform services provider. Ms. Heller received her Bachelor’s degree in Economics and Computer Studies from Northwestern University and an MBA from Northwestern University’s Kellogg Graduate School of Management, where she is also a member of the school’s Advisory Board. Ms. Heller brings to our Board considerable experience in business, specifically as it relates to technology and manufacturing, and she is a strong addition to the Board as Dexcom continues to expand and scale its operations.
| | | | | | | | | | | | | | |
| | | | |
| Steven R. Altman |
| Class II | Independent Director | | |
| | | | |
| | | | |
| Age: | Joined the Board: | Committees: | | Other Current Public Company Boards: |
| 60 | 2013 | Compensation, Nominating and Governance | | Prospector Capital Corporation |
| | | | |
Steven R. Altman has served on our Board since November 2013. Since January 2021, Mr. Altman has served as the Chairman of the Board of Directors of Prospector Capital Corporation, a publicly-traded blank check company. From November 2011 through January 2014, Mr. Altman served as the Vice Chairman of Qualcomm Incorporated (“Qualcomm”) and a member of Qualcomm’s Executive Committee. Mr. Altman previously served as President of Qualcomm from July 2005 to November 2011, as Executive Vice President from November 1997 to June 2005 and as President of Qualcomm Technology Licensing from September 1995 to April 2005. Mr. Altman was the chief architect of Qualcomm’s strategy for licensing its broad intellectual property portfolio for wireless communications, which has accelerated the growth of CDMA technology. Mr. Altman received a B.S. from Northern Arizona University in Police Science and Administration and a J.D. from the University of San Diego. Mr. Altman brings to the Board significant senior leadership, and technical and global experience. Mr. Altman’s experiences with Qualcomm allow him to provide Dexcom with valuable insights on corporate strategy and initiatives that are critical to the continued growth and maturation of Dexcom.
| | | | | | | | | | | | | | |
| | | | |
| Barbara E. Kahn |
| Class II | Independent Director | | |
| | | | |
| | | | |
| Age: | Joined the Board: | Committees: | | Other Current Public Company Boards: |
| 69 | 2011 | Audit, Compensation | | None |
| | | | |
Barbara E. Kahn has served on our Board since April 2011. Since January 2011, Dr. Kahn has served as the Patty and Jay H. Baker Professor of Marketing at The Wharton School, where she previously served as the Director of the Jay H. Baker Retailing Center from January 2011 to June 2017, Vice Dean of Wharton Undergraduate Division from 2003 to 2007, and the Dorothy Silberberg Professor of Marketing from June 1990 to July 2007. Dr. Kahn is currently serving as Executive Director of Marketing Science Institute. Prior to rejoining Wharton, Dr. Kahn served for three and a half years as the Dean and Schein
Family Chair Professor of Marketing at the School of Business Administration, University of Miami, Coral Gables, Florida from August 2007 to January 2011. Dr. Kahn received a B.A. in English Literature from the University of Rochester and her Ph.D., MBA and M.Phil degrees from Columbia University. Through Dr. Kahn’s experience in consumer-based research, she provides the Board with senior leadership and important guidance on issues relating to market and product development.
| | | | | | | | | | | | | | |
| | | | |
| Kyle Malady |
| Class II | Independent Director | | |
| | | | |
| | | | |
| Age: | Joined the Board: | Committees: | | Other Current Public Company Boards: |
| 55 | 2020 | Nominating and Governance, Technology | | None |
| | | | |
Kyle Malady has served on our Board since October 2020. Mr. Malady has served as Executive Vice President of Global Networks and Technology and Chief Technology Officer at Verizon Communications Inc., a telecommunications company, since August 2018. Prior to assuming this role, Mr. Malady was head of the Core Engineering and Operations organization within the Global Network and Technology organization at Verizon from May 2012 to July 2018. He has also served as Verizon’s Vice President of New Product Development from June 2005 to April 2012. Mr. Malady received a B.S. in Mechanical Engineering from the University of Bridgeport and an MBA in Finance from the NYU Stern School of Business. Mr. Malady’s experience in numerous fields at Verizon provides him with insights and guidance that qualify him to serve on the Board.
| | | | | | | | | | | | | | |
| | | | |
| Jay S. Skyler, M.D., MACP |
| Class II | Independent Director | | |
| | | | |
| | | | |
| Age: | Joined the Board: | Committees: | | Other Current Public Company Boards: |
| 75 | 2002 | Nominating and Governance | | Applied Therapeutics |
| | | | |
Jay S. Skyler, M.D., MACP has served on our Board since September 2002. Dr. Skyler is a Professor of Medicine, Pediatrics and Psychology and Deputy Director of the Diabetes Research Institute at the University of Miami in Florida, where he has been employed since 1976. For 22 years, Dr. Skyler also served as Study Chairman for the National Institute of Diabetes & Digestive & Kidney Diseases Type 1 Diabetes clinical trials network. He is a past President of the American Diabetes Association and a past Vice-President of the International Diabetes Federation. Dr. Skyler served as a director of Amylin Pharmaceuticals, Inc. until its acquisition by Bristol-Myers Squibb Company in August 2012, and served as a director of MiniMed, Inc. until its acquisition by Medtronic, Inc. in 2001. He currently serves as a director of Applied Therapeutics, a biotechnology company. Dr. Skyler received a B.S. from Pennsylvania State University and an M.D. from Jefferson Medical College. As a scholar and educator in the field of endocrinology, Dr. Skyler brings to the Board industry and technical experience directly related to Dexcom’s research and development activities. In addition, Dr. Skyler’s board service with other public companies provides cross-board experience.
| | | | | | | | | | | | | | |
| | | | |
| Richard A. Collins |
| Class III | Independent Director | | |
| | | | |
| | | | |
| Age: | Joined the Board: | Committees: | | Other Current Public Company Boards: |
| 65 | 2017 | Audit, Nominating and Governance | | None |
| | | | |
Richard A. Collins has served on our Board since March 2017. Mr. Collins has been a self-employed consultant since October 2013. From March 2011 to October 2013 Mr. Collins was the Chief Executive Officer for UnitedHealthcare’s Northeast Region and was President, Director, and Chairman of numerous UnitedHealthcare subsidiaries including Oxford Health Plans, Mid Atlantic Medical Services and UHC Insurance Company of New York. From July 2005 through December of 2012 Mr. Collins served as the President – Individual Line of Business for UnitedHealthcare and the Chairman and Chief Executive Officer of Golden Rule Financial Corporation. Prior to 2011, Mr. Collins also held leadership positions in pricing, underwriting and healthcare economics with UnitedHealthcare. Mr. Collins has previously served on the Boards of Fairbanks
Hospital in Indianapolis, Indiana, The Nature Conservancy – Indiana, UnitedHealthcare Children’s Foundation and the Council for Affordable Health Insurance. Mr. Collins received a B.S. from Maine Maritime Academy and completed the executive development program at Harvard University’s John F. Kennedy School of Government. Mr. Collins was a National Association of Corporate Directors (NACD) Board Leadership Fellow. Mr. Collins' significant experience in healthcare insurance and administration, including his tenure during a period in which UnitedHealth Group grew from a mid-cap health insurer into one of the largest public corporations in America, qualify him to serve on the Board.
| | | | | | | | | | | | | | |
| | | | |
| Karen Dahut |
| Class III | Independent Director | | |
| | | | |
| | | | |
| Age: | Joined the Board: | Committees: | | Other Current Public Company Boards: |
| 58 | 2020 | Compensation, Technology | | None |
| | | | |
Karen Dahut has served on our Board since August 2020. Ms. Dahut is Executive Vice President and Senior Partner at Booz Allen Hamilton, a leading global consulting firm to business, government, and military clients, and has served in that role since April 2020. Ms. Dahut is also Group Leader of the Global Commercial and Defense Business at Booz Allen, a position she has held since April 2018. Prior to April 2020, Ms. Dahut held several leadership positions throughout the organization, including Chief Innovation Officer; Leader, Analytics and Data Science Business; and Leader, Economic and Business Analytics Capability. Before joining Booz Allen in 2002, Ms. Dahut served as comptroller for the Navy’s premier biomedical research institute and as a United States Naval Officer. Ms. Dahut also actively serves on the Board of Directors for the National Air and Space Museum and Northern Virginia Technology Council. Additionally, Ms. Dahut has served as a Director of EisnerAmper LLP, since August 2021. She previously served on the Board of Directors of Tech Data Corporation, an end-to-end technology distributor and Fortune 100 company, prior to its acquisition by Apollo Global Management in June 2020. Ms. Dahut received a Bachelor’s degree in Finance from Mount Saint Mary’s University and a Master's of Science degree from the University of Southern California’s Viterbi School of Engineering. Ms. Dahut’s considerable leadership experience qualifies her to serve on the Board.
| | | | | | | | | | | | | | |
| | | | |
| Mark G. Foletta |
| Class III | Independent Director | | |
| | | | |
| | | | |
| Age: | Joined the Board: | Committees: | | Other Current Public Company Boards: |
| 61 | 2014 | Audit | | AMN Healthcare Services, Inc., Enanta Pharmaceuticals |
| | | | |
Mark G. Foletta has served on our Board since November 2014 and has served as our Lead Independent Director since November 2015. Mr. Foletta served as Chief Financial Officer and Executive Vice President of Tocagen, Inc., a publicly traded biotechnology company, from February 2017 until its merger with Forte Biosciences in June 2020. From August 2015 to July 2016, Mr. Foletta served as the interim CFO of Biocept, Inc., an early commercial stage publicly traded molecular oncology diagnostics company. Mr. Foletta previously served as Senior Vice President, Finance and Chief Financial Officer of Amylin Pharmaceuticals, Inc., a publicly traded pharmaceutical company, from March 2006 through Amylin’s acquisition by Bristol Myers-Squibb Company in August 2012, and as Vice President, Finance and Chief Financial Officer of Amylin from 2000 to 2006. Prior to joining Amylin in 2000, Mr. Foletta held a number of management positions with Intermark, Inc. and Triton Group Ltd. from 1986 to 2000 and served as an Audit Manager with Ernst & Young. Mr. Foletta is currently a member of the Board of Directors and Audit Committee of AMN Healthcare Services, Inc., a publicly traded healthcare workforce solutions provider. Mr. Foletta is also on the Boards of Directors of Viacyte, Inc., a private biotechnology company, and Enanta Pharmaceuticals, Inc., a publicly traded biotechnology company. Mr. Foletta received a B.A. in Business Economics from the University of California, Santa Barbara and is a member of the Corporate Directors Forum. Mr. Foletta’s considerable audit and financial experience in the biotechnology and pharmaceutical sectors qualifies him to serve on the Board.
| | | | | | | | | | | | | | |
| | | | |
| Eric J. Topol |
| Class III | Independent Director | | |
| | | | |
| | | | |
| Age: | Joined the Board: | Committees: | | Other Current Public Company Boards: |
| 67 | 2009 | Technology | | None |
| | | | |
Eric J. Topol, M.D. has served on our Board since July 2009. Since January 2007, Dr. Topol has served as the Director of the Scripps Translational Science Institute, a National Institutes of Health funded program of the Clinical and Translational Science Award Consortium. He is Executive Vice President and Professor of Molecular Medicine at the Scripps Research Institute, and a senior consulting cardiologist at Scripps Clinic. Prior to Scripps, Dr. Topol served on the faculty of Case Western Reserve University as a professor in genetics, chaired the Department of Cardiovascular Medicine at Cleveland Clinic for 15 years and founded the Cleveland Clinic Lerner College of Medicine. Dr. Topol serves as a digital medical advisor to Blue Cross Blue Shield Association. In April 2009, he co-founded the West Wireless Health Institute, a non-profit foundation for applied medical research and policy on the prevention of aging. As a practicing physician, academic and thought leader in wireless healthcare technologies, Dr. Topol is uniquely situated to provide the Board with guidance on its Committeestechnology, clinical and market development.
Due to the global and complex nature of our business, the Board believes it is important to consider diversity of race, ethnicity, gender, sexual orientation, age, education, cultural background, and professional experiences in evaluating board candidates in order to provide practical insights and diverse perspectives. Below is an overview of our director nominee diversity.
| | | | | | | | | | | | | | |
| | | | |
| Board Diversity Matrix |
| | | | |
| | | | |
| Total Number of Directors | 11 |
| | | | |
| Female | Male | Non-Binary | Did Not Disclose Gender |
| Part I: Gender Identity |
| Directors | 3 | 8 | — | — |
| Part II: Demographic Background | | | | |
| African American or Black | 1 | — | — | — |
| Alaskan Native or Native American | — | — | — | — |
| Asian | — | — | — | — |
| Hispanic or Latinx | — | — | — | — |
| Native Hawaiian or Pacific Islander | — | — | — | — |
| White | 2 | 8 | — | — |
| Two or More Races or Ethnicities | — | — | — | — |
| LGBTQ+ | 1 |
| Did Not Disclose Demographic Background | — |
| | | | | | | | | | | | | | |
| Our Corporate Governance Principles |
Our Board has adopted our Governance Principles to describe the corporate governance practices and policies that serve the best interests of Dexcom and its stockholders. The Board intends that these Governance Principles serve as a flexible framework for the governance of Dexcom. The Governance Principles should be interpreted in the context of all applicable laws, Dexcom’s charter documents and other governing legal documents.
The Governance Principles provide that our Board is free to choose its Chairman in any way that it considers in the best interests of our company, and that the Nominating and Governance Committee will periodically consider the leadership structure of our Board and make recommendations related to the same to the Board. Our Governance Principles also provide that, if the Chairman is also the CEO or if the Chairman is a former employee, the independent directors will designate a “lead independent director.” In such cases, the Chairman schedules and sets the agenda for meetings of the Board, and the Chairman, or if the Chairman is not present, the lead independent director, chairs such meetings. The responsibilities of the Chairman or, if the Chairman is also the CEO or a former employee, the lead independent director include: presiding at executive sessions, being available, under appropriate circumstances, for consultation and direct communication with stockholders and performing such other responsibilities as requested by the Board. The lead independent director encourages direct dialogue between all directors and management.
| | | | | | | | |
| | |
| LEARN MORE ABOUT OUR COMPANY To see more information about our Governance Principles, please visit our website at: https://investors.dexcom.com/corporate-governance | |
| | |
Our Board believes that our stockholders and Dexcom currently are best served by having Kevin R. Sayer, our CEO, also serve as Chairman of the Board, and Mark G. Foletta serve as lead independent director. Our Board believes that the current Board leadership structure, coupled with a strong emphasis on Board independence, provides effective independent oversight of management while allowing the Board and management to benefit from Mr. Sayer’s extensive executive leadership and operational experience, including familiarity with our business. Our independent directors bring experience, oversight and expertise from outside of our company, while our Chairman and CEO brings company and industry specific experience and expertise. Our Board believes that this governance structure provides strong leadership, creates clear accountability, and enhances our ability to communicate our message and strategy clearly and consistently to stockholders. Our Board believes that its independence and oversight of management is maintained effectively through this leadership structure, the composition of the Board and sound corporate governance policies and practices.
Under
NASDAQThe Nasdaq Stock Market LLC (“Nasdaq”) listing standards, a majority of the members of a listed company’s Board
of Directors must qualify as “independent,” as affirmatively determined by the
board.Board. Our Board
of Directors consults with our
legal counsel to ensure that the Board’s determinations are consistent with all relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in applicable
NASDAQNasdaq listing standards, as in effect from time to time.
Consistent with these considerations, after review of all relevant transactions and relationships between each director, or any of his or her family members, and us, our senior management and our independent registered public accounting firm, our Board
of Directors has affirmatively determined that all of our directors are independent directors within the meaning of the applicable
NASDAQNasdaq listing standards, except for Mr.
Gregg, our Executive Chairman of the Board and our former Chief Executive Officer, and Mr. Sayer, our
Chairman, President and
Chief Executive Officer.CEO. In making its independence determinations, the Board reviewed transactions and relationships
with thebetween or among us or one of our subsidiaries or affiliates, and each director, or any member of his or her immediate family,
us or one of our subsidiaries or affiliates, and our independent registered public accounting firm based on information provided by the
director,directors, our records and publicly available information. Specifically, the Board considered the following types of relationships and transactions: (i) principal employment of and other public company directorships held by each non-employee director; (ii) contracts or arrangements that are ongoing or which existed during any of the past
three3 fiscal years between us and/or our subsidiaries or affiliates and any entity for which the non-employee director, or his or her immediate family member, is an executive officer or greater-than-10% stockholder; and (iii) contracts or arrangements that are ongoing or which existed during any of the past
three3 fiscal years between us and/or our subsidiaries or affiliates and any other public company for which the non-employee director serves as a director.
As required under applicable
NASDAQNasdaq listing standards, our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. All of the
committeesCommittees of our Board
of Directors are comprised entirely of directors determined by the Board to be independent within the meaning of applicable
NASDAQNasdaq listing standards and as required by
SECSecurities and Exchange Commission ("SEC") rules and regulations.
Board Leadership Structure
Our Corporate Governance Guidelines provide that our Board of Directors shall be free to choose its chairman in any way that it considers in the best interests of our company, and that the nominating and governance committee shall periodically consider the leadership structure of our Board of Directors and make such recommendations related thereto to the Board of Directors with respect thereto as the nominating and governance committee deems appropriate. Our Corporate Governance Principles also provide that, when the positions of chairman and chief executive officer are held by the same person, the independent directors shall designate a “lead independent director.” In cases in which the chairman and chief executive officer are the same person, the chairman schedules and sets the agenda for meetings of the Board of Directors, and the chairman, or if the chairman is not present, the lead independent director, chairs such meetings. The responsibilities of the chairman or, if the chairman and the chief executive officer are the same person, the lead independent director include: presiding at executive sessions; serving as a liaison between the chairman and the independent directors and being available, under appropriate circumstances, for consultation and direct communication with stockholders.
Our Board of Directors believes that our stockholders and DexCom currently are best served by having Kevin Sayer, our CEO, serve as a member of the board, Terry Gregg, our former CEO and executive chairman, serve as Executive Chairman of the Board, and Mark Foletta serve as lead independent director. Our Board of Directors believes that the current board leadership structure, coupled with a strong emphasis on board independence, provides effective independent oversight of management while allowing the board and
management to benefit from Mr. Sayer’s and Mr. Gregg’s extensive executive leadership and operational experience, including familiarity with our business. In addition, separation of the office of Chairman allows Mr. Sayer to focus on his duties as Chief Executive Officer. Our independent directors bring experience, oversight and expertise from outside of our company, while our CEO and Executive Chairman bring company-specific experience and expertise. Our Board of Directors believes that this governance structure provides strong leadership, creates clear accountability, and enhances our ability to communicate our message and strategy clearly and consistently to stockholders. Our Board of Directors believes that its independence and oversight of management is maintained effectively through this leadership structure, the composition of the Board of Directors and sound corporate governance policies and practices.
Board of Directors’ Role in Risk Oversight
| | | | | | | | | | | | | | |
| Board of Directors’ Role in Risk Oversight |
Management continually monitors the material risks we face, including financial risk, strategic risk,
enterprise and operational risk and legal and compliance risk. The Board
of Directors is responsible for exercising oversight of management’s identification and management of, and planning for, those risks. In fulfilling this oversight role, our Board
of Directors focuses on understanding the nature of our enterprise risks, including our operations and strategic direction, as well as the adequacy of our risk management process and overall risk management system. Our Board
of Directors performs these functions in a number of ways, including the following:
at its regularly scheduled meetings, the Board of Directors receives management updates on our business operations, financial results, committee activities, and strategy and discusses risks related to the business;
| | | | | | | | |
| Board of Directors Meetings | At its regularly scheduled meetings, the Board receives management updates and Committee reports regarding business operations, financial results, Committee activities, strategy, and discusses risks related to the business. |
| Audit Committee | The Audit Committee assists the Board in its oversight of risk management by discussing with management our guidelines and policies regarding financial risk management, including major risk exposures, and the steps management has taken to monitor or mitigate such exposure. |
| Compensation Committee | The Compensation Committee assists the Board by evaluating potential risks related to our compensation programs. |
| Nominating and Governance Committee | The Nominating and Governance Committee assists the Board in its oversight of Dexcom’s legal compliance policies, including its Insider Trading Policy, enterprise, operating and compliance risk exposures and the steps management has taken to monitor or mitigate such exposures, and assessment and management of environmental, sustainability and governance risks affecting our business. |
| Technology Committee | The Technology Committee assists the Board in its oversight of Dexcom’s technology plans and strategies, cybersecurity and major information technology risk exposures and the steps management has taken to monitor or mitigate such exposures. |
| Monitoring Risk Management Activities | Through management updates and Committee reports, the Board monitors our risk management activities, including the enterprise risk management process and cybersecurity risks, risks relating to our compensation programs, and financial, legal and operational risks. |
| Time-based Equity Compensation | A substantial portion of our compensation paid to employees is time-based equity that is oriented to performance as its value derives from our stock price. |
the audit committee assists the Board of Directors in its oversight of risk management by discussing with management our guidelines and policies regarding financial and enterprise risk management, including major risk exposures, and the steps management has taken to monitor and mitigate such exposures;
the nominating and governance committee assists the Board of Directors in its oversight of DexCom’s legal compliance policies, including its Insider Trading Policy, compliance risk exposures and the steps management has taken to monitor or mitigate such exposures;
the compensation committee assists the Board of Directors by evaluating potential risks related to our compensation programs;
through management updates and committee reports, the Board monitors our risk management activities, including the enterprise risk management process, risks relating to our compensation programs, and financial and operational risks; and
a substantial portion of our compensation paid to employees is time-based equity that is oriented to performance as its value derives from our stock price.
| | | | | | | | | | | | | | |
| Committees of the Board and Meetings |
Information Regarding the Board of Directors and its CommitteesOur Board of Directors has an audit committee,Audit Committee, a compensation committeeCompensation Committee, a Nominating and Governance Committee and a nominatingTechnology and governance committee. The following is membership and meeting information for each of these committees during the fiscal year ended December 31, 2015, as well as a description of each committee and its functions.
| | | | | | | | | | | | |
Name | | Audit
Committee | | | Compensation
Committee | | | Nominating
and Governance
Committee | |
Terrance H. Gregg | | | | | | | | | | | | |
Kevin Sayer | | | | | | | | | | | | |
Steven R. Altman | | | | | | | X | | | | X | |
Nicholas Augustinos | | | X | | | | | | | | X | |
Mark Foletta | | | X | * | | | X | | | | | |
Barbara E. Kahn | | | X | | | | | | | | | |
Jonathan T. Lord, M.D. | | | X | | | | X | | | | | |
Jay S. Skyler, M.D. | | | | | | | X | | | | X | * |
Eric Topol, M.D. | | | | | | | X | * | | | X | |
Total meetings (including actions by unanimous written consent) in fiscal year 2015 | | | 8 | | | | 8 | | | | 5 | |
* | Science Committee (“Technology Committee”). Each Committee Chairperson. |
Audit Committee
The audit committee operates pursuant to a written charter that is available at http:https://investor.shareholder.com/dexcom/governance.cfminvestors.dexcom.com/corporate-governance.
The
audit committee reviews and evaluates our financial statements, accounting practices and our internal accounting procedures, selects and engages our independent registered public accounting firm and reviews the results and scope of the audit and other services provided by our independent registered public accounting firm.Audit Committee Financial Experts. Our Board has determined that both Mr. Foletta and Dr. Lord qualify as an “audit committee financial expert,” as defined in applicable Securities and Exchange Commission (“SEC”) rules. In addition, each member of our audit committee possesses the financial qualifications required of audit committee members set forth in the rules and regulations of the NASDAQ Global Select Market. The Board made a qualitative assessment of the committee members’ level of knowledge and experience based on a number of factors, including formal education and experience.
Compensation Committee
The compensation committee operates pursuant to a written charter that is available at http://investor.stockholder.com/dexcom/governance.cfm. The compensation committee reviews and determines the compensation and benefits of our executive officers, reviews and recommends to our Board the compensation for our non-employee directors, reviews annually and recommends to our Board cash-based and equity-based incentive compensation under our equity compensation and employee benefits plans and reviews our general policies relating to compensation and benefits. See “Executive Compensation—Compensation Discussion and Analysis” later in this Proxy Statement for information concerning the committee’s role, processes and activities in overseeing executive compensation. In addition, the compensation committee evaluates the potential risks related to our compensation programs.
Each member of this committeefollowing is a non-employee director, as defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),chart showing membership and an outside director, as defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). No member of the compensation committee has accepted directly or indirectly any consulting, advisory or other compensatory fee from DexCom or any subsidiary thereof.
Compensation Committee Policies and Procedures. The compensation committee annually reviews and evaluates base salary and bonuses for all executive officers, and in conducting such reviews, places significant consideration upon the recommendations by the CEO, along with the rationale for such recommendations, with the exception of the compensation review of the CEO himself. The compensation committee reviews management’s recommendations for compensation and benefits for executive officers. The compensation committee reviews and determines the amount and composition of executive compensation to be paid to the executive officers, including the Executive Chairman and CEO. Neither the Executive Chairman nor the CEO participates in the compensation committee’s review or decision as to their respective compensation packages. In establishing individual compensation levels, the compensation committee considers our overall strategic objectives and performance, our stock performance, peer group comparisons and individual performance. No formula is used to determine an executive officer’s base salary. Our overall performance and the achievement of financial and business objectives are considered.
Management’s Role in the Compensation-Setting Process.Management, including our named executive officers, plays some role in the compensation-setting process. The most significant aspects of management’s role are evaluating employee performance, assisting in establishing performance targets and objectives, and recommending salary levels and equity awards. The CEO works with the compensation committee in establishing the agenda for compensation committee meetings. Management also prepares meeting information for each compensation committee meeting.
Use of Compensation Consultants. The compensation committee has inthese Committees during the past engaged Compensia, Inc. to conductfiscal year ended December 31, 2021, as well as a review and analysisdescription of how our compensation practices compare with our peer group of companies, including during 2013, 2014 and 2015. During 2015, the compensation committee reviewed the fees provided to the compensation consultant relative to its revenue, the services provided by the compensation consultant to the compensation committee, the relationships between the compensation consultanteach Committee and its functions.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Name | | Age | | Dexcom Director Since | | Independent | | Audit
Committee | | Compensation
Committee | | Nominating
and Governance
Committee | | Technology
Committee |
| Class I Directors | | | | | | | | | | | | | | |
| Nicholas Augustinos | | 63 | | 2009 | | ü | | l | | | | | | l |
| Bridgette P. Heller | | 60 | | 2019 | | ü | | | | u | | | | |
| Kevin R. Sayer | | 64 | | 2007 | | | | | | | | | | |
| Class II Directors | | | | | | | | | | | | | | |
| Steven R. Altman | | 60 | | 2013 | | ü | | | | l | | l | | |
| Barbara E. Kahn | | 69 | | 2011 | | ü | | l | | l | | | | |
| Kyle Malady | | 55 | | 2020 | | ü | | | | | | l | | l |
| Jay S. Skyler, M.D. | | 75 | | 2002 | | ü | | | | | | u | | |
| Class III Directors | | | | | | | | | | | | | | |
| Richard A. Collins | | 65 | | 2017 | | ü | | l | | | | l | | |
| Karen Dahut | | 58 | | 2020 | | ü | | | | l | | | | l |
| Mark G. Foletta | | 61 | | 2014 | | n | | u | | | | | | |
| Eric J. Topol, M.D. | | 67 | | 2009 | | ü | | | | | | | | u |
| Total meetings in fiscal year 2021 | | 8 | | 5 | | 6 | | 4 |
| n | Lead Independent Director | | u | | Committee Chairperson | | | | | | | | |
| ü | Independent Director | | l | | Committee Member | | | | | | | | |
| | | | | | | | |
| | AUDIT COMMITTEE |
| | |
| Responsibility The Audit Committee reviews and evaluates our financial statements, accounting practices and our internal accounting procedures, selects and engages our independent registered public accounting firm and reviews the results and scope of the audit and other services provided by our independent registered public accounting firm. In addition, the Audit Committee evaluates our potential financial, legal and compliance, risk exposures. |
| | |
| Audit Committee Financial Experts Our Board has determined that Mr. Foletta qualifies as an “audit committee financial expert,” as defined in applicable SEC rules. In addition, each member of our Audit Committee possesses the financial qualifications required of Audit Committee members set forth in applicable Nasdaq listing standards. The Board made a qualitative assessment of the Committee members’ level of knowledge and experience based on a number of factors, including formal education and experience. |
| | | | | | | | | | | | | | |
| | COMPENSATION COMMITTEE |
| | | | |
| Responsibility The Compensation Committee reviews and determines the compensation and benefits of our executive officers, reviews and recommends to our Board the compensation for our non-employee directors, reviews annually and recommends to our Board cash-based and equity-based incentive compensation under our equity compensation and employee benefits plans and reviews our general policies relating to compensation and benefits. See “Executive Compensation—Compensation Discussion and Analysis” later in this Proxy Statement for information concerning the Committee’s role, processes and activities in overseeing executive compensation. In addition, the Compensation Committee evaluates the potential risks related to our compensation programs and periodically reviews the succession plans for senior management positions, concurrent with the authority of the Board with respect to succession planning. Each member of this Committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”). No member of the Compensation Committee has accepted directly or indirectly any consulting, advisory or other compensatory fee from Dexcom or any subsidiary thereof. |
| | | | |
| Policies and Procedures The Compensation Committee annually reviews and evaluates base salary, bonuses and long-term incentives for all executive officers, and in conducting such reviews, places significant consideration upon the recommendations by the CEO, along with the rationale for such recommendations, with the exception of the compensation review of the CEO himself. The Compensation Committee reviews management’s recommendations for compensation and benefits for executive officers. The Compensation Committee reviews and determines the amount and composition of executive compensation to be paid to the executive officers, including our Chairman and CEO. The CEO does not participate in the Compensation Committee’s review or decision as to the compensation packages. In establishing individual compensation levels, the Compensation Committee considers our overall strategic objectives and performance, our stock performance, peer group comparisons and individual performance. No formula is used to determine an executive’s total compensation, including salary. Our overall performance and the achievement of financial and business objectives are considered. |
| | | | |
| Management’s Role in the Compensation-Setting Process Management, including our named executive officers, plays some role in the compensation-setting process. The most significant aspects of management’s role are evaluating employee performance, assisting in establishing performance targets and objectives, and recommending salary and bonus levels and equity awards. The CEO and the head of Human Resources work with the Compensation Committee in establishing the agenda for Compensation Committee meetings. Management also prepares meeting information for each Compensation Committee meeting. |
| | | | |
| Use of Compensation Consultants The Compensation Committee has the authority under its charter to retain, approve fees for, and, as may be necessary or advisable, change or terminate the relationship with compensation consultants, legal counsel or other advisors as it deems necessary to assist in the fulfillment of its responsibilities. The Compensation Committee annually evaluates the independence of its compensation consultants, assesses their performance and establishes the scope of work and fees for such consultants. Following a thorough review, in August 2021, the Company engaged a new independent compensation consultant Aon Hewitt Consulting Company and requested that Aon conduct a review and analysis of how our compensation practices compare with our peer group of companies, including during 2021. Prior to the appointment of Aon, the Company engaged Compensia, a compensation consulting firm, who advised on our 2021 executive and director compensation programs and advised on other executive compensation-related trends. During fiscal year 2021, the Compensation Committee reviewed the fees provided to the compensation consultant relative to its revenue, the services provided by the compensation consultant to the Compensation Committee, the relationships between the compensation consultant and its consultants and our executive officers, and other factors relating to the compensation consultant’s independence, and concluded that it is independent within the meaning of the listing standards of Nasdaq and that its engagement did not present any conflict of interest. |
| | | | | | | | | | | | | | |
| | NOMINATING AND GOVERNANCE COMMITTEE |
| | | | |
| Responsibility The Nominating and Governance Committee makes recommendations to our Board concerning candidates for election to our Board of Directors and oversees our compliance activities and other corporate governance matters. In addition, the Nominating and Governance Committee oversees our risk governance framework, oversees our risk management policies and evaluates the potential risks related to enterprise, operational and legal compliance. Further, the Nominating and Governance Committee oversees and reviews annually (a) our policies and programs concerning (i) corporate social responsibility and (ii) our participation and visibility as a global corporate citizen; (b) our sustainability performance; and (c) the assessment and management of environmental, sustainability and governance risks affecting our business. |
| | | | |
| | TECHNOLOGY COMMITTEE |
| | | | |
| Responsibility The Technology Committee reviews, evaluates and makes recommendations to our Board regarding our major technology plans and strategies, including our research and development activities, as well as technical and market risks associated with product development and investment. Further, the Technology Committee oversees our cybersecurity and other major information technology risk exposures and our compliance with applicable information security and data protection laws and industry standards. |
| | | | | | | | | | | | | | |
| Meetings of the Board of Directors; Director Attendance |
Our Board met four times during the last fiscal year. Each director attended 75% or more of the
listing standardstotal Board and Board Committee meetings on which the director served during for the period for which he or she was a director or Committee member, as applicable, for fiscal year 2021. In addition, we encourage all of
NASDAQour directors and
nominees for director to attend our Annual Meeting of Stockholders. All directors serving at that
its engagement did not present any conflicttime attended our Annual Meeting of
interest.Stockholders in 2021.
| | |
| Director Selection Process and Qualifications |
Considerations in Evaluating Director Nominees
The Nominating and Governance Committee
The nominating and governance committee operates pursuant to a written charter that is available at http://investor.shareholder.com/dexcom/governance.cfm. The nominating and governance committee makes recommendations to our Board of Directors concerning candidates for election to our Board of Directors and oversees our compliance activities and other corporate governance matters.
The nominating and governance committee considers director nominees recommended by sitting directors, officers, employees, stockholders and others using the same criteria to evaluate all candidates. The nominatingNominating and governance committeeGovernance Committee reviews each candidate’s qualifications, including whether a candidate possesses any of the specific qualities and skills desirable in certain members of the Board. Evaluations of candidates generally involve a review of background materials, internal discussions and interviews with selected candidates as appropriate. Upon selection of a qualified candidate, the nominatingNominating and governance committeeGovernance Committee recommends the candidate for consideration by the full Board. The nominatingNominating and governance committeeGovernance Committee may engage consultants or third-party search firms to assist in identifying and evaluating potential nominees, but has not done so to date.
Nominees for the Board should be committed to enhancing long-term stockholder value and must possess a high level of personal and professional ethics, sound business judgment and integrity. The Board’s policy is to encourage selection of directors who will contribute to our overall corporate goals: responsibility to our stockholders, technology leadership in diabetes care,
increasing access to our technologies, effective execution, high customer satisfaction and superior employee working environment. The
nominatingNominating and
governance committeeGovernance Committee may from time to time review the appropriate skills and characteristics required of Board members, including such factors as
personal skills,independence, knowledge of our business, educational background, diversity andof professional experience, in diabetes care, medical technology, finance, marketing, internationalpersonal skills, business, financial reporting and other areas that are expected to contribute to an effective Board of Directors.Board. In evaluating potential candidates for the Board, the nominatingNominating and governance committeeGovernance Committee considers these factors in the light of the specific needs of the Board at that time. While we do not have a formal policy with regard to the consideration of diversity in identifying director nominees, the nominatingNominating and governance committeeGovernance Committee strives to nominate directors with a variety of complementary skills so that, as a group, the Board will possess the appropriate talent, skills, and expertise to oversee our business effectively. Board members are expected to prepare for, attend
and participate in meetings of the Board and
committeesCommittees on which they serve, and are strongly encouraged to attend our
annual meetingsAnnual Meeting of
stockholders.Stockholders.
Stockholder Recommendations for Nominations to the Board
The nominatingNominating and governance committeeGovernance Committee will consider director candidates recommended by stockholders. The nominatingNominating and governance committeeGovernance Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder. Stockholders who wish to recommend individuals for consideration by the nominatingNominating and governance committeeGovernance Committee to become nominees for election to the Board at an annual meetingAnnual Meeting of stockholdersStockholders must do so in accordance with the procedures set forth in “Stockholder Proposals for Annual Meeting” onpage 44 62of this Proxy Statement. Each submission must set forth: the name and address of the stockholder on whose behalf the submission is made; the number of our shares that are owned beneficially by such stockholder as of the date of the submission; a description of any agreement, arrangement or understanding with respect to the nomination or proposal between or among such stockholder and such beneficial owner, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing; a representation that the stockholder is a holder of record of our stock and entitled to vote at such meeting and intends to appear personally or by proxy at the meeting to propose such nomination; a representation whether either such stockholder intends to deliver a Proxy Statement and form of proxy to holders of a sufficient number of holders of our voting shares to elect such nominee; the full name of the proposed candidate; a description of the proposed candidate’s business experience for at least the previous five5 years; complete biographical information for the proposed candidate; and a description of the proposed candidate’s qualifications as a director. To date, the nominatingNominating and governance committeeGovernance Committee has not received a director nominee from a stockholder or stockholders holding more than five percent of our voting stock.Meetings
Stockholder Nominations to the Board
Under our Bylaws as adopted by the Board, to be effective upon the filing of the amendment and restatement of our Existing Certificate, eligible stockholders may also nominate persons for our Board for inclusion in our Proxy Statement. This is commonly known as “proxy access.” A stockholder, or a group of up to 20 stockholders, owning at least three percent of our outstanding common stock continuously for at least three years, may nominate and include in our proxy materials director nominees constituting up to the greater of two individuals or twenty percent of the Board, of Directorssubject to certain limitations and provided that the stockholders and the nominees satisfy the requirements specified in our Bylaws.
The Board and
Committee Member AttendanceOur Boardeach committee conduct a self-evaluation of Directors met (including actionstheir performance, composition, leadership structure, and governance at least annually. The evaluation format and process is supervised by unanimous written consent) eight times during the last fiscal year. Each Board member attended 75% or moreNominating and Governance Committee. The evaluation is typically conducted as an interview with a third-party advisor. A summary of the aggregate of the meetings ofresults is presented to the Board on a “no-names” basis identifying any themes or issues that have emerged. The Board considers the results and ofways in which Board processes and effectiveness may be enhanced. Based upon the committeesassessment results, the Board agrees on which he or she served, held during the period for which he or she was a director or committee member, respectively. We encourage all of our directorsimprovement goals and nominees for director to attend our annual meeting of stockholders. All members of ourtracks its progress against those goals over time. The Board of Directors attended our annual meeting of stockholders in 2015.
Compensation Committee Interlockshas, and Insider Participation
None of the members of our compensation committee has at any time been one of our officers or employees. None of our executive officers serves or in the past has served asfuture may, engaged and paid fees to a member ofthird-party advisor to assist in performing the Board of Directors or compensation committee of any entity that has one or more of its executive officers servingevaluation. Generally, Dexcom’s legal advisors assist with the Board evaluation on our Board of Directors or our compensation committee.
Code of Business Conduct and Ethics
an annual basis.
| | | | | | | | | | | | | | |
| Code of Conduct and Business Ethics |
We have adopted a Code of Conduct and Business Ethics for Employees and Directors (“Code of Conduct”) that applies tois an essential resource for all of our officers, directors and employees. We have also adopted an additional written codeIt outlines our values on a number of ethics,issues affecting our business, sets requirements for business conduct, and serves as the Code of Conduct and Ethicsbasis for Chief Executive Officer and Senior Finance Department Personnel, which applies to our principal executive officer, principal financial officer, principal accounting officer, controller and other employees of the finance department designated by our Chief Financial Officer (“CFO”). These codes are available at http://investor.shareholder.com/dexcom/governance.cfm.compliance program. If we make any material substantive amendments to the codesour Code of Conduct or grant any waiver from a provision the Code of the codesConduct to any executive officer or director, we willintend, to the extent required by Nasdaq listing standards or applicable law, to promptly disclose the nature of the amendment or waiver on our website as well as via anyor a Current Report on Form 8-K.
| | | | | | | | |
| | |
| LEARN MORE ABOUT OUR COMPANY To see more information about our Code of Conduct, please visit our website at: https://investors.dexcom.com/corporate-governance | |
| | |
We strive to advance the interests of all our stakeholders – including patients, caregivers, employees, investors, and our communities – by operating in an ethical and sustainable way. We do this by holding true to our core values: Listen, Think Big, Be Dependable, and Serve with Integrity. These values are at the heart of our sustainability activities.
| | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | | | | |
| LISTEN | | | | THINK BIG | |
| We believe in listening to our customers and our employees. We have launched a number of programs to advocate for individuals living with diabetes and we support our employees and their families through a number of benefit programs that are available. In addition, we promote diversity, practice fairness, and treat everyone with respect and dignity. | | | | We seek to expand global healthcare access for people with diabetes and actively work to increase access to our products. We also have committed to operate our business in a manner that is protective of the environment and conserves natural resources and reduces waste. | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| BE DEPENDABLE | | | | SERVE WITH INTEGRITY | |
| We are committed to quality and believe that is best achieved through a safe and healthy workplace as well as a Quality Management System that is compliant with all applicable regulatory requirements and which is continuously being improved. | | | | While oversight of our ethics and governance structure begins with our Board and Executive Leadership Team, we expect all employees to foster a culture of accountability in line with our Code of Conduct and Business Ethics. We also maintain a compliance program to help enforce ethical conduct and adherence to applicable laws and regulations. | |
| | | | | | |
Our Sustainability Report is available at https://investors.dexcom.com/corporate-governance, which is provided for reference only and is not incorporated by reference in this Proxy Statement.
Our Insider Trading Policy, among other
means then required by NASDAQ listing standards or applicable law.things, establishes periods of time during which employees, including our executive officers, may and may not trade shares of our common stock. In addition, it also prohibits our employees, including our executive officers and the key practices and proceduresnon-employee members of our Board from engaging in acquiring, selling, or trading in any interest or position relating to the future price of Dexcom securities, such as a put option, a call option or a short sale (including a short sale “against the box”). We do not allow employees to hedge our equity securities pursuant to this policy; however, non-employee directors may participate in exchange funds if the following conditions are met: (1) the director obtains the approval of the Board are outlined in the Corporate Governance Principles available on our website athttp://investor.shareholder.com/dexcom/governance.cfm.
Stockholder Communications withand General Counsel, (2) the Board and General Counsel determine that the director is not in possession of Directors
material non-public information, (3) if the director has a pre-existing 10b-5 plan, the contribution to the exchange fund shall be deemed an amendment to the 10b-5 plan and will be subject to certain restrictions in our existing 10b-5 guideline policy (unless waived by the Board), and (4) the director makes an irrevocable contribution of the Dexcom shares to the exchange fund for so long as the director remains an affiliate of Dexcom.
| | | | | | | | | | | | | | |
| Stockholder Communications with the Board |
Should stockholders wish to communicate with the Board, such correspondences should be sent to the attention of the Secretary, at 6340 Sequence Drive, San Diego, California 92121. Our Secretary will forward the communication to the Board. We do not have a formal process by which stockholders may communicate directly with members of our Board of Directors. We believe that an informal process, in which any communication sent to the Board
of Directors in care of the Secretary is generally to be forwarded to the Board,
of Directors, serves the needs of the Board and our stockholders.
The general philosophy of our Board is that annual compensation for non-employee directors should reward them for a year of service in fulfilling their oversight responsibilities. DexCom doesWe do not compensate our Executive Chairman or our Chief Executive Officeremployee-director for Board service in addition to theirsuch director's regular employee compensation. Each year, the compensation committeeThe Compensation Committee periodically evaluates the appropriate level and form of compensation for non-employee directors and recommends changes, if any, to the Board. The compensation committeeCompensation Committee considers advice from the Compensation Committee’s independent consultant, which was Compensia through July 2021 and Aon for the remainder of 2021, in connection with this evaluation when appropriate.appropriate, as well as the annual limit for director equity awards set forth in our Amended and Restated 2015 Equity Incentive Plan (“A&R 2015 EIP”). Our Board reviews the compensation committee’sCompensation Committee’s recommendations and then determines the amount of director compensation. As described more fully below, non-employee director compensation is in the form of equity to align further the longer-term interests of the individual directors with those of our stockholdersstockholders.Our Compensation Committee and Board assessed pay relative to conserve cash resources.Annual Retainers Paid to Non-Employee Directors. During 2015, none of our non-employee directors received a cash annual retainer to compensate them for their service our Board of Directors; instead they received equity awards with a fair value equivalent to $300,000, which are discussed below. In addition, the chairman of the audit committee, the chairman of the compensation committee, the chairman of the nominating and governance committeepeers and the Lead Independent Director received annual retainersmarket annually. In that assessment, we found that the per director average pay and total non-employee director compensation program generally was aligned with values equal to $27,500, $20,625, $13,750 and $13,750, respectively. Consistent with our philosophy to conserve our cash resources, directors were paid applicable chairmanship retainers through grants of restricted stock units with values correlating to the amounts set forth above during 2015, as discussed below. All of our directors, including our non-employee directors, are reimbursed for their reasonable expenses in attending Board of Directors and committee meetings.peer median.
Equity Awards Granted to Non-Employee Directors.
| | | | | | | | | | | | | | |
Non-Employee Director Compensation Arrangements |
Under our A&R 2015 Equity Incentive Plan, or EIP our Board has discretion to determine the value and number of equity awards granted to non-employee directors from time to time, subject to an annual limit. For 2015, eachlimit of 30,000 shares.
In lieu of a cash retainer, our non-employee directors received an annual grantreceive value-based award of restricted stock units with a fair value equivalent(“RSUs”).
The compensation program for our non-employee directors is as follows:
| | | | | | | | |
| Director Compensation Elements | Value-Based Equity Award
($) |
| Initial Equity Grant | | 500,000 | |
| Annual Equity Grant | | 300,000 | |
| Additional Annual Equity Grant | | |
| Audit Committee Chair | | 27,500 | |
| Compensation Committee Chair | | 20,625 | |
| Technology Committee Chair | | 20,625 | |
| Nominating and Governance Committee Chair | | 13,700 | |
| Lead Independent Director | | 40,000 | |
| Audit Committee Member | | 10,000 | |
| Compensation Committee Member | | 10,000 | |
| Technology Committee Member | | 10,000 | |
| Nominating and Governance Committee Member | | 7,500 | |
The number of RSUs granted to
$300,000our directors is based on the
15-dayvalue-based equity award per the table above and the average
fair market valueclosing price of Dexcom common stock for the 15-trading day period prior to the
date of grant
which amount is pro-rated for a non-employee director that has served less than 12 months as of the date of grant. Each restricted stock unit grantdate. Initial equity grants to our
non-employee directors
vestsvest over three years in
oneequal annual
installment 12 months after the date of grant.installments. Annual
equity grants to our non-employee directors are made
at the Board Meeting immediately following the Annual Meeting of Stockholders and vest in one annual installment on
the earlier of the one-year anniversary of the grant date or the date of the annual meeting of stockholders.
In 2015 we eliminatedThe annual equity grant for general Board service will be prorated if a new non-employee director commences service less than 6 months prior to the
initial grants to new directors previously granted under the 2005 EIP and instituted annext annual
restricted stock unit grant with a fair value equivalent to $300,000 to each director.meeting of stockholders. Vesting of outstanding equity awards held by
non-employee directors is accelerated in full upon a change
ofin control of
DexCom.In addition, each memberDexcom.
All of our directors, including our non-employee directors, are reimbursed for their reasonable expenses in attending Board and Committee meetings.
Each non-employee director of our Board is required to own shares of DexComDexcom stock with an aggregate market value equal to threetwo times his or her annual retainer.retainer of $300,000. These stock ownership guidelines are effective forwhen a director joins the Board, and must be met within threefive years of becoming a member of the Board. All of our directors who have served five years or more on our Board currently are in compliance with these guidelines. OwnershipGenerally, ownership levels are determined by including stock acquired through open market purchases, shares vested and unvested pursuant to restricted stock unitRSU grants, as well as the in-the-money value of vested stock options. Directors may, however, sell enough shares to cover their income tax liability on
vested equity awards. Directors who have met the guidelines are expected, absent unusual circumstances, to maintain compliance with their target ownership levels.
2015 Director Compensation Table
| | | | | | | | | | | | | | |
| 2021 Director Compensation Table |
The following table provides information for
20152021 regarding all compensation awarded
to, earned by or paid to each person who served as a non-employee director for some portion or all of
2015.2021. Other than as set forth in the table and the narrative that follows it, to date we have not paid any fees to or, except for reasonable expenses for attending Board and
committeeCommittee meetings, reimbursed any expenses of our directors,
and during fiscal 2021, we have not made any equity or non-equity awards to directors, or paid any other compensation to directors.
Consistent with our philosophy to conserve our cash resources, thoseThose non-employee directors entitled to annual retainers were only issued
restricted stock units,RSUs, and no non-employee directors received cash compensation in
2015. | | | | | | | | |
Name | | Stock
Awards(1) | | | Total | |
Terrance Gregg(2) | | $ | — | | | $ | — | |
Steven R. Altman | | | 310,138 | | | | 310,138 | |
Nicholas Augustinos | | | 310,138 | | | | 310,138 | |
Mark Foletta | | | 338,549 | | | | 338,549 | |
Barbara E. Kahn | | | 310,138 | | | | 310,138 | |
Jonathan Lord, M.D. | | | 324,344 | | | | 324,344 | |
Kevin Sayer(2) | | | — | | | | — | |
Jay S. Skyler, M.D. | | | 324,344 | | | | 324,344 | |
Eric Topol, M.D. | | | 331,446 | | | | 331,446 | |
(1) | These amounts reflect the grant date fair value of restricted stock units granted during 2015, | | | | | | | | | |
| Name | Stock Awards ($)(1)(2) | | |
| Steven R. Altman | | 311,301 | | | |
| Nicholas Augustinos | | 314,038 | | | |
| Richard A. Collins | | 311,301 | | | |
| Karen Dahut | | 314,038 | | | |
| Mark G. Foletta | | 360,562 | | | |
| Bridgette P. Heller | | 314,380 | | | |
| Barbara E. Kahn | | 314,038 | | | |
| Kyle Malady | | 311,301 | | | |
| Jay S. Skyler, M.D. | | 307,880 | | | |
| Eric J. Topol, M.D. | | 314,380 | | | |
(1)These amounts reflect the grant date fair value of RSUs granted during 2021, computed in accordance with FASB ASC Topic 718. For a discussion of our valuation assumptions, see Notes 1 and 8 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission on February 23, 2016. As of December 31, 2015, Mr. Altman had 7,848 unvested restricted stock units, Mr. Augustinos had 4,279 unvested restricted stock units, Mr. Foletta had 9,248 unvested restricted stock units, Dr. Kahn had 4,279 unvested restricted stock units, Dr. Lord had 4,475 unvested restricted stock units, Dr. Skyler had options outstanding for 119,160 shares and 4,475 unvested restricted stock units, and Dr. Topol had 4,573 unvested restricted stock units.(2) | Neither Mr. Sayer nor Mr. Gregg received compensation for their service as director while an employee. |
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The audit committee of our Boardvaluation assumptions, see Note 1 and Note 9 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 14, 2022. For 2021, the annual non-employee directors RSU awards were granted on May 21, 2021 and subject to vesting on the earlier of Directorsthe one-year anniversary of the grant date and the next Annual Meeting of Stockholders.
(2)As of December 31, 2021, Mr. Altman had 910 unvested RSUs, Mr. Augustinos had 918 unvested RSUs, Mr. Collins had 910 unvested RSUs, Ms. Dahut had 918 unvested RSUs, Mr. Foletta had 1,054 unvested RSUs, Ms. Heller had 919 unvested RSUs, Dr. Kahn had 918 unvested RSUs, Mr. Malady had 910 unvested RSUs, Dr. Skyler had 900 unvested RSUs and Dr. Topol had 919 unvested RSUs.
| | | | | |
| |
| PROPOSAL NO. 2 |
| Ratification of Selection of Independent |
| Registered Public Accounting Firm |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| þ | | | | | | | | | | | |
| | THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2022. | | |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
The Audit Committee of our Board has engaged Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31,
20162022 and is seeking ratification of such selection by our stockholders at the
annual meeting.Annual Meeting. Ernst & Young LLP has audited our financial statements since
1999.2000. Representatives of Ernst & Young LLP are expected to be present at the
annual meeting.Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
Neither our
bylawsBylaws nor other governing documents or law require stockholder ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm. However, the
audit committeeAudit Committee is submitting the selection of Ernst & Young LLP to our stockholders for ratification as a matter of good corporate practice. If our stockholders fail to ratify the selection, the
audit committeeAudit Committee will reconsider whether or not to retain Ernst & Young LLP. Even if the selection is ratified, the
audit committeeAudit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if they determine that such a change would be in our best interests and the best interests of our stockholders.
To be approved, the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm must receive a “For” vote from the majority of shares present and entitled to vote either
in persononline at the Annual Meeting or by proxy. Abstentions and broker non-votes will be counted towards a quorum, but will not be counted for any purpose in determining whether this matter has been approved.
Principal Accountant Fees and Services
| | | | | | | | | | | | | | |
| Principal Accountant Fees and Services |
The following table provides information regarding the fees billed to usfor professional services rendered by Ernst & Young LLP, our independent registered public accounting firm, for the fiscal years ended December 31, 20152021 and 2014.2020. All fees described below were approved by the Audit Committee.
| | | | | | | | | | | |
| | Fiscal Year Ended
December 31, |
| | 2021 | | 2020 |
| Audit Fees | $ | 2,614,372 | | | $ | 2,700,239 | |
| Audit-Related Fees | — | | | — | |
| Tax Fees | 530,373 | | | 450,887 | |
| All Other Fees | 4,480 | | | 3,555 | |
| Total Fees | $ | 3,149,225 | | | $ | 3,154,681 | |
Audit fees consist of amounts for professional services rendered in connection with the integrated audit
committee. | | | | | | | | |
| | | Fiscal Year Ended
December 31, | |
| | | 2015 | | | 2014 | |
Audit Fees(1) | | $ | 1,235,736 | | | $ | 939,349 | |
Audit-Related Fees(2) | | | 117,630 | | | | 65,000 | |
Tax Fees(3) | | | 10,000 | | | | 44,000 | |
| | | | | | | | |
Total Fees | | $ | 1,363,366 | | | $ | 1,048,349 | |
(1) | Represents fees for services rendered for the audit and/or reviews of our financial statements | | | | | | | | | | | | | |
Pre-Approval Policies and the assessment of our internal control over financial reporting. Also includes fees for services associated with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (for example, comfort letters and consents).Procedures |
(2) | Represents fees related to accounting consultations. |
(3) | Represents fees related to Code Section 382 tax studies and Medical Device Excise tax review. |
Pre-Approval Policies and Procedures
The audit committeeAudit Committee pre-approves all audit and non-audit services provided by the independent registered public accounting firm. This policy is set forth in the charter of the audit committeeAudit Committee that is available athttp:https://investor.shareholder.com/dexcom/governance.cfminvestors.dexcom.com/corporate-governance. The
audit committeeAudit Committee considered whether the non-audit services rendered by Ernst & Young LLP were compatible with maintaining Ernst & Young LLP’s independence as the independent registered public accounting firm for auditing our consolidated financial statements and concluded they were.
| | | | | | | | | | | | | | |
| Report of the Audit Committee of the Board |
THE BOARD RECOMMENDS A VOTEFOR THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2016.REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The material in this report is not “soliciting material,” is not deemed “filed” with the Securities and Exchange Commission,SEC, and is not to be incorporated by reference into any filing of DexComDexcom under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.amended, unless and only to the extent that
Dexcom specifically incorporates it by reference.
The
primary purpose of the audit committee is to oversee DexCom’s financial reporting processes on behalf of the Board of Directors. The audit committee’s functions are more fully described in the audit committee charter, which is available at http://investor.shareholder.com/dexcom/governance.cfm. Management has the primary responsibility for DexCom’s financial statements and reporting processes, including its systems of internal controls. In fulfilling its oversight responsibilities, the audit committeeAudit Committee reviewed and discussed with
Dexcom’s management
DexCom’sand Ernst & Young LLP the audited
consolidated financial statements
as of
andDexcom for the
fiscal year ended December 31,
2015.2021. The audit committee reviewedAudit Committee has also discussed with Ernst & Young LLP such matters as are required to be discussed withby the audit committee under generally accepted auditing standards, includingapplicable requirements of the mattersPublic Company Accounting Oversight Board.
The Audit Committee has received and reviewed the written disclosures and the letter from Ernst & Young LLP required
to be discussed by
applicable requirements of the Public Company Accounting Oversight Board
(“PCAOB”)regarding the
statement on Auditing Standard No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted byindependent accountant’s communications with the
PCAOB in Rule 3200T, Communications with Audit
Committees. In addition, the audit committeeCommittee concerning independence, and has discussed with Ernst & Young LLP
theirits independence
and received from
Ernst & Young LLP the written disclosures and the letter required by Ethics and Independence Rule 3526 of the PCAOB. Finally, the audit committee discussed with Ernst & Young LLP, with and without management present, the scope and results of Ernst & Young LLP’s audit of DexCom’s consolidated financial statements, their evaluation of DexCom’s internal controls, and the overall quality of DexCom’s financial reporting.Dexcom.
Based on
thesethe reviews and
discussions,discussion referred to above, the
audit committee hasAudit Committee recommended to the Board
of Directors that such audited consolidated financial statements be included in
DexCom’s annual reportDexcom’s Annual Report on Form 10-K for the year ended December 31,
20152021 as filed with the
Securities and Exchange CommissionSEC on February
23, 2016. The audit committee also has engaged Ernst & Young LLP as DexCom’s independent registered public accounting firm for the fiscal year ending December 31, 2016 and is seeking ratification of such selection by the stockholders.14, 2022.
| | |
| Audit Committee |
| Mark G. Foletta (Chair) |
| Nicholas Augustinos |
| Richard A. Collins |
| Barbara E. Kahn |
Audit Committee
Mark Foletta, Chairman
Nicholas Augustinos
Barbara E. Kahn
Jonathan Lord, M.D.
| | | | | |
| |
| PROPOSAL NO. 3 |
| Advisory Vote on Executive Compensation |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| þ | | | | | | | | | | | |
| | THE BOARD RECOMMENDS A VOTE FOR PROPOSAL NO. 3, AS SET FORTH IN THE RESOLUTION BELOW. | | |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
This matter is being submitted to enable stockholders to express views on the design and effectiveness of our executive compensation program. Our
goalgoals for our executive compensation program
isare to support our key strategic and financial goals, and to attract, motivate and retain a talented, entrepreneurial and creative team of executive officers who will provide leadership for our success. Our executive compensation program seeks to accomplish these goals in a way that rewards performance and is aligned with our stockholders’ long-term interests.
We believe that ourOur executive compensation program
which minimizesis aligned to market ranges, as to base salary cash compensation relative to our peer group of companies as we work to
achieve and maintain profitability, and emphasizes long-term equity awards as well as
annual incentive plans with payouts tied to achievement of various financial and operational
goals,goals. We believe that our executive compensation program satisfies
this objectivethese objectives and is strongly aligned with the
short- and long-term interests of our stockholders. We believe the compensation program for our named executive officers was instrumental in helping us achieve strong performance in
2015,2021, including generating a record full fiscal year
2015 product2021 revenue of
$400.7 million,$2.45 billion, an increase of
$143.6$521.8 million, or
56%27%, as compared to
2014,2020, and an increase of
$243.6$972.5 million, or
155%66%, as compared to
2013.The2019.
We encourage stockholders to read the Compensation Discussion and Analysis beginning on page 2433 of this Proxy Statement, which describes the details of our executive compensation program and the decisions made by the compensation committeeCompensation Committee in 2015 in more detail. Highlights of the program include the following:2021. maintained a meaningful proportion of potential cash compensation in our annual cash incentive award program, which awards are paid only upon achievement of various corporate financial and operational goals;
maintained our base salary and target total cash compensation at approximately 50th percentile of our peer group;
maintained our equity compensation approach from 2014, pursuant to which restricted stock unit awards were granted primarily based on our company performance, individual performance and expected future contributions of each executive officer as well as competitive market data in determining equity awards; and
maintained strong governance practices, including:
absence of material perquisites,
absence of tax “gross ups,”
prohibitions against hedging and pledging of our securities,
rigorous equity ownership guidelines, and
a compensation recovery (“clawback”) policy.
The Board of Directors has determined to hold a “say on pay”“Say-on-Pay” advisory vote every year. In accordance with this determination and Section 14A of the Securities Exchange Act of 1934, as amended, and as a matter of good corporate governance, we are asking you to indicate your support for the compensation of our named executive officers as described in this Proxy Statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement.
We are requesting that stockholders cast a non-binding advisory vote on the following resolution:
RESOLVED, that the compensation of our named executive officers, as disclosed pursuant to the SEC’s compensation disclosure rules in this
proxy statementProxy Statement for the
2016 annual meeting2022 Annual Meeting of
stockholdersStockholders (which disclosure includes the Compensation Discussion and Analysis, the compensation tables and the narrative disclosures that accompany the compensation tables) is hereby APPROVED.
To be approved, the advisory vote on executive compensation must receive a “For” vote from the majority of shares present and entitled to vote either online at the Annual Meeting or by proxy. Abstentions and broker non-votes will be counted towards a quorum, but will not be counted for any purpose in determining whether this matter has been approved. As an advisory vote, this proposal is not binding upon us. However, our Board and the
compensation committee,Compensation Committee, which is responsible for designing and administering our executive compensation program, values the opinions expressed by stockholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for our named executive officers.
| | | | | |
| |
| PROPOSAL NO. 4 |
| Approval of Amendment to our Restated Certificate of Incorporation to Effect a Four-For-One Forward Stock Split of our Common Stock with a Proportional Increase in the Authorized Number of Shares of Common Stock |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| þ | | | | | | | | | | | |
| | THE BOARD RECOMMENDS A VOTE FOR PROPOSAL NO. 4, AS SET FORTH IN THE RESOLUTION BELOW. | | |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Our Board has deemed it advisable and in the best interests of our stockholders to effect a four-for-one forward split of our common stock. The trading price of our common stock has experienced significant growth since our initial public offering in 2005. Our Board regularly evaluates the effect of such growth on the liquidity and marketability of our common stock and believes the considerable appreciation in the trading price of our common stock makes our common stock less affordable and attractive to fewer investors. The closing market price of our common stock on March 31, 2022 was $511.60 as reported on Nasdaq. Our Board believes effecting a four-for-one stock split would make our shares more affordable and attractive to a broader group of potential investors and would increase liquidity in the trading of our common shares.
At present, our Restated Certificate of Incorporation (the “Existing Certificate”) authorizes the issuance of up to 200,000,000 shares of common stock, par value $0.001 per share and 5,000,000 shares of preferred stock, par value $0.001 per share. As of March 31, 2022, 98,125,933 shares of common stock were issued and outstanding. Of the unissued shares, no shares of common stock were reserved for issuance under our 2005 Equity Incentive Plan, approximately 3,825,678 shares of common stock were reserved for issuance under our A&R 2015 EIP and approximately 759,815 shares of common stock were reserved for issuance under our 2015 Employee Stock Purchase Plan. No shares of preferred stock have been issued.
On March 4, 2022, subject to approval by our stockholders, the Board approved a Restated Certificate of Incorporation (the “Restated Certificate”) which (i) effects a four-for-one forward stock split of our common stock and (ii) increases the number of authorized shares of our common stock from 200,000,000 to 800,000,000. The additional shares of common stock would have rights identical to the currently outstanding common stock.
The Board recommends the stockholders approve an amendment to Article IV of the
BoardTHE BOARD RECOMMENDSRestated Certificate in order to effect the four-for-one forward stock split of our common stock and the proportional increase in the authorized shares of common stock. A VOTEFOR PROPOSAL NO. 3.copy of the Restated Certificate is attached as Appendix B to this Proxy Statement, which Restated Certificate also sets forth the procedure for the four-for-one stock split.
If the stockholders approve the Restated Certificate, the stock split would become effective upon the filing and effectiveness of the Restated Certificate with the Secretary of State of the State of Delaware. It is expected that this filing will take place on or about June 10, 2022, promptly following a determination by our Board to, at its discretion, effect the stock split, assuming the stockholders approve the Restated Certificate. However, the exact timing of the filing of the Restated Certificate will be determined by the Board based on its evaluation as to when and if such action will be the most advantageous to us and our stockholders. If the Board fails to implement the stock split by the next Annual Meeting of Stockholders, stockholder approval would be required again prior to implementing any stock split. The Board reserves the right, notwithstanding stockholder approval and without further action by the stockholders, to elect not to proceed with the stock split if, at any time prior to filing the Restated Certificate, the Board, in its sole discretion, determines that it is no longer in our best interests and the best interests of our stockholders to proceed with the stock split.
Upon filing and effectiveness of the Restated Certificate with the Secretary of State of the State of Delaware effecting the stock split, the stock split shall occur without any further action on the part of DexCom or the holders of shares of our common stock. Book-entries dated as of a date prior to the effective time of the stock split representing outstanding shares of common stock shall, immediately after the effective time of the stock split, represent a number of shares equal to the same number of shares of common stock as is reflected on the book-entries, multiplied by four.
Following the forward stock split of the common stock, we will have approximately 392.5 million shares of common stock outstanding. We also will have reserved for issuance the maximum number of shares of common stock subject to options and other awards which have been granted or may be granted under our 2005 Equity Incentive Plan, A&R 2015 EIP and 2015
Employee Stock Purchase Plan, which provide that the number of shares of common stock reserved for issuance shall be appropriately adjusted in the event of a stock split.
The Board believes it is in our best interests to increase proportionately the number of authorized shares of common stock so as to accommodate the forward stock split of the common stock and so as to have additional authorized but unissued shares available for issuance by the Board in connection with any future stock dividends or splits, grants under 2005 Equity Incentive Plan, A&R 2015 EIP and 2015 Employee Stock Purchase Plan, financings, mergers or acquisitions and for other general corporate purposes without the delay and expense associated with convening a special stockholders’ meeting or soliciting stockholders’ written consents. Aside from the shares currently reserved or to be reserved for issuance under our 2005 Equity Incentive Plan, A&R 2015 EIP and 2015 Employee Stock Purchase Plan, the Board has not authorized the issuance of any additional shares of common stock, and there are no current agreements or commitments for the issuance of additional shares.
Stockholders’ current ownership of common stock will not give them automatic rights to purchase any of the additional authorized shares of common stock. If the Restated Certificate is adopted, the additional authorized shares of common stock will be available for issuance from time to time at the discretion of the Board without further action by the stockholders, except where stockholder approval is required by NASDAQ or to obtain favorable tax treatment for certain employee benefit plans. Article IV of the Restated Certificate of Incorporation authorizes the Board, without further stockholder approval, to issue preferred stock having such designations, powers, preferences and rights as may be determined by the Board. Any future issuance of additional authorized shares of common stock may, among other things, dilute the earnings per share of the common stock and the equity and voting rights of those holding common stock at the time the additional shares are issued. The Existing Certificate does not authorize cumulative voting for directors. Issuance of shares of preferred stock would dilute the earnings per share and book value per share of existing shares of common stock. Holders of preferred stock would have such voting rights as may be provided for by law and as determined by the Board.
Although an increase in the authorized shares of common stock could, under certain circumstances, be construed as having an anti-takeover effect (for example, by diluting the stock ownership of a person seeking to effect a change in the composition of the Board or contemplating a tender offer or other transaction for the combination of our company with another company), the Board is not proposing to adopt the Restated Certificate in response to any effort to accumulate our stock or obtain control of the company by means of a merger, tender offer, or solicitation in opposition of management. Also, while we have no present intention to issue shares of preferred stock in a manner which would have an anti-takeover effect or otherwise, the issuance of preferred stock could have certain other anti-takeover effects under certain circumstances. Since the voting rights to be accorded to any series of preferred stock remain to be fixed by the Board, the holders of preferred stock may be authorized by the Board to vote separately as a class in connection with approval of certain extraordinary corporate transactions or be given a large number of votes per share. Such preferred stock could also be convertible into a large number of shares of common stock under certain circumstances or have other terms which might render the acquisition of a controlling interest in us more difficult or more costly. Shares of preferred stock could be privately placed with purchasers who might side with the management of DexCom in opposing a hostile tender offer or other attempt to obtain control. The issuance of preferred stock as an anti-takeover device might preclude stockholders from taking advantage of a situation which might be favorable to their interests.
The affirmative vote of the holders of a majority of the outstanding shares of common stock is required for approval of the Restated Certificate as set forth in the Restated Certificate as Appendix B to this Proxy Statement.
TSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTableofContents | | | | | |
| |
| SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
| |
The following table presents information as to the beneficial ownership of our common stock as of March
30, 201631, 2022 for:
•each stockholder known by us to be the beneficial owner of more than 5%five percent of our common stock;
•each named executive officer as set forth in the summary compensation table below; and
•all executive officers and directors as a group.
The percentage of shares beneficially owned is based on
83,395,60198,125,933 shares of common stock outstanding as of March
30, 2016.31, 2022. Beneficial ownership is determined under the rules of the
Securities and Exchange CommissionSEC and generally includes any shares over which a person exercises sole or shared voting or investment power. Unless indicated above, the persons and entities named below have sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable. Shares of common stock subject to options that are currently exercisable or exercisable and
restricted stock unitsRSUs that will vest within 60 days of March
30, 201631, 2022 are deemed to be outstanding and to be beneficially owned by the person holding the options or
restricted stock unitsRSUs for the purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the address for each listed stockholder is c/o DexCom, Inc., 6340 Sequence Drive, San Diego, California 92121.
| | | | | | | | |
| | | Shares of Common
Stock Beneficially Owned | |
Beneficial Owner | | Number | | | Percentage | |
Directors and Named Executive Officers | | | | | | | | |
Steven R. Altman(1) | | | 14,363 | | | | * | |
Nicholas Augustinos(2) | | | 17,592 | | | | * | |
Andrew K. Balo(3) | | | 132,572 | | | | * | |
Richard Doubleday(4) | | | 45,096 | | | | * | |
Mark Foletta(5) | | | 2,745 | | | | * | |
Terrance H. Gregg(6) | | | 710,071 | | | | * | |
Barbara E. Kahn(7) | | | 41,525 | | | | * | |
Jonathan T. Lord, M.D.(8) | | | 127,107 | | | | * | |
Steven R. Pacelli(9) | | | 154,474 | | | | * | |
Jess Roper(10) | | | 28,994 | | | | * | |
Kevin Sayer(11) | | | 335,146 | | | | * | |
Jay S. Skyler, M.D.(12) | | | 201,931 | | | | * | |
Eric Topol, M.D.(13) | | | 90,215 | | | | * | |
All directors and executive officers as a group (16 persons)(14) | | | 2,324,102 | | | | 2.8 | % |
| | |
All 5% Stockholders | | | | | | | | |
The Vanguard Group(15) | | | 5,241,624 | | | | 6.3 | % |
FMR LLC(16) | | | 4,845,805 | | | | 5.8 | % |
Ameriprise Financial Inc.(17) | | | 4,288,002 | | | | 5.1 | % |
T. Rowe Price Associates, Inc.(18) | | | 4,270,871 | | | | 5.1 | % |
| | | | | | | | | | | | | | |
| Name of Beneficial Owner | Amount and Nature of Beneficial Ownership
(#) | | Percent of class
(%) |
| Directors | | |
Steven R. Altman (1) | | 14,696 | | | * |
Nicholas Augustinos (2) | | 8,510 | | | * |
Richard A. Collins (3) | | 8,114 | | | * |
Karen Dahut (4) | | 1,305 | | | * |
Mark G. Foletta (5) | | 13,651 | | | * |
Bridgette P. Heller (6) | | 3,355 | | | * |
Barbara E. Kahn (7) | | 3,918 | | | * |
Kyle Malady (8) | | 1,334 | | | * |
Jay S. Skyler, M.D.(9) | | 24,868 | | | * |
Eric J. Topol, M.D.(10) | | 92,766 | | | * |
| Named Executive Officers | | | | |
Kevin R. Sayer (11) | | 64,185 | | | * |
Jereme M. Sylvain (12) | | 4,425 | | | * |
| | | | |
Paul Flynn (13) | | 2,247 | | | * |
Jacob S. Leach (14) | | 68,208 | | | * |
| | | | |
Chad M. Patterson (15) | | 1,553 | | | * |
All directors and executive officers as a group (24 persons) (16) | | 401,125 | | | * |
| All 5% Stockholders | | | | |
The Vanguard Group (17) | | 10,410,319 | | | 10.6 | % |
| | | | |
BlackRock, Inc.(18) | | 8,128,454 | | | 8.3 | % |
| | | | |
* Represents less than 1% of the outstanding shares of our common stock.
(1)Represents 910 RSUs that vest within 60 days of March 31, 2022 as well as 13,786 shares held directly by a trust of which Mr. Altman is a trustee,
(2)Represents 918 RSUs that vest within 60 days of March 31, 2022 as well as 7,592 shares held directly by a trust of which Mr. Augustinos is a trustee.
(3)Represents 910 RSUs that vest within 60 days of March 31, 2022 as well as 7,204 shares held directly by a trust of which Mr. Collins is a trustee.
(4)Represents 918 RSUs that vest within 60 days of March 31, 2022 as well as 387 shares held directly by a trust of which Ms. Dahut is a trustee.
(5)Represents 1,054 RSUs that vest within 60 days of March 31, 2022 as well as 12,597 shares held directly by a trust of which Mr. Foletta is a trustee.
(6)Represents 919 RSUs that vest within 60 days of March 31, 2022 as well as 2,436 shares held directly by Ms. Heller.
(7)Represents 918 RSUs that vest within 60 days of March 31, 2022 as well as 3,000 shares held directly by a trust of which Dr. Kahn is a trustee.
(8)Represents 910 RSUs that vest within 60 days of March 31, 2022 as well as 424 shares held directly by Mr. Malady.
(9)Represents 900 RSUs that vest within 60 days of March 31, 2022 as well as 13,968 shares held by a partnership in which Dr. Skyler is managing partner and maintains voting rights over these shares and 10,000 shares held by his spouse, of which Dr. Skyler disclaims beneficial ownership.
(10)Represents 919 RSUs that vest within 60 days of March 31, 2022 as well as 91,847 shares held by Topol Family Holdings, LLC for which Dr. Topol is a manager and maintains voting rights of these shares.
(11)Represents shares held directly by Mr. Sayer.
(12)Represents shares held directly by Mr. Sylvain.
(13)Represents shares held directly by Mr. Flynn.
(14)Represents shares held directly by Mr. Leach or by a trust of which Mr. Leach is a trustee.
(15)Represents shares held directly by Mr. Patterson.
(16)Represents 9,276 RSUs that vest within 60 days of March 31, 2022 and a total of 391,849 shares of our common stock.
(17)Represents shares held by The Vanguard Group as of December 31, 2021 based solely on its Schedule 13G/A filing made on February 9, 2022. Of the shares beneficially owned, The Vanguard Group reported that it had shared voting power with respect to 164,635 shares, sole dispositive power with respect to 10,008,691 shares, and shared dispositive power with respect to 401,628 shares. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.
(18)Represents shares held by BlackRock, Inc. as of December 31, 2021 based solely on its Schedule 13G filing made on February 8, 2022. Of the shares beneficially owned, BlackRock, Inc. reported that it had sole voting power with respect to 7,283,754 shares and sole dispositive power with respect to 8,128,454 shares. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.
* | Represents less than 1% of the outstanding shares of our common stock. | | | | | | | | | | | | | |
| DELINQUENT SECTION 16(a) REPORTS |
(1) | Represents shares held directly by Mr. Altman. |
(2) | Represents shares held directly by Mr. Augustinos. |
(3) | Represents fully vested options to purchase 88,926 shares of our common stock, as well as 43,646 shares held directly by Mr. Balo. |
(4) | Represents shares held directly by Mr. Doubleday. |
(5) | Represents shares held directly by Mr. Foletta. |
(6) | Represents fully vested options to purchase 30,000 shares of our common stock, 10,156 restricted stock units that vest within 60 days of March 30, 2016, as well as 669,915 shares held directly by Mr. Gregg, or by a trust of which Mr. Gregg is a trustee. |
(7) | Represents shares held directly by Dr. Kahn. |
(8) | Represents shares held directly by Dr. Lord. |
(9) | Represents fully vested options to purchase 21,423 shares of our common stock, as well as 133,051 shares held directly by Mr. Pacelli. |
(10) | Represents shares held directly by Mr. Roper. |
(11) | Represents fully vested options to purchase 150,919 shares of our common stock, as well as 184,227 shares held directly by Mr. Sayer. |
(12) | Represents fully vested options to purchase 119,160 shares of our common stock, as well as 62,771 shares held by a partnership in which Dr. Skyler is managing partner and maintains voting rights over these shares, 10,000 shares held by a trust in which Dr. Skyler is a trustee, and 10,000 shares held by his spouse, which Dr. Skyler disclaims beneficial ownership. |
(13) | Represents shares held directly by Dr. Topol. |
(14) | Represents fully vested options to purchase 707,076 shares of our common stock, 10,156 restricted stock units that vest within 60 days of March 30, 2016, as well as a total of 1,606,870 shares held directly by the directors and officers or by trusts in which the directors and officers are trustees. |
(15) | Represents shares held by The Vanguard Group according to its Schedule 13G/A filing made on February 11, 2016. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. |
(16) | Represents shares held by FMR LLC according to its Schedule 13G/A filing made on February 12, 2016. The address of FMR LLC is 245 Summer Street, Boston, Massachusetts 02210. |
(17) | Represents shares held by Ameriprise Financial Inc. according to its Schedule 13G filing made on February 12, 2016. The address of Ameriprise Financial Inc. is 145 Ameriprise Financial Center, Minneapolis, MN 55474 |
(18) | Represents shares held by T. Rowe Price Associates, Inc. according to its Schedule 13G/A filing made on February 9, 2016. The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, Maryland 21202. |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.
To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the fiscal year ended December 31,
2015,2021, all Section 16(a) filing requirements applicable to our officers, directors and greater than ten percent beneficial owners
were complied
with all Section 16(a) filing requirements applicable to them, with the exception of one late Form 4 filing for
each of Terrance Gregg, Jeffrey Moy and Jess Roper.Richard Collins.
The following is biographical information as of March 31,
20162022 for our executive officers, with the exception of
Kevin Sayer, our
Chairman, President and Chief Executive Officer,
and President and our Executive Chairman, each of whomwho is discussed above under Proposal
No. 1 (Election of Directors).
| | | | | | | | | | | | | | |
Name | Age | Age | | | Position |
Andrew K. Balo
| | | 68 | | | Executive Vice President, Clinical, Regulatory and Quality |
Richard Doubleday
Jereme M. Sylvain | | 42 | 53 | | | Executive Vice President, Chief CommercialFinancial Officer |
John D. Lister
| | | | |
| Donald M. Abbey | | 55 | | Executive Vice President, Global Business Services, IT Quality and Regulatory Affairs |
| | | | |
| Andrew K. Balo | | 74 | | Executive Vice President, Global Medical Affairs, Access and Evidence |
| Michael Brown | | 52 | | Executive Vice President, Chief Legal Officer |
| Matthew Dolan | | 41 | | | General Manager, Europe, Middle East and Africa |
Jeffrey Moy
| | | 55 | | | Senior Vice President, of OperationsStrategy, Corporate Development and New Markets |
Steven R. Pacelli
Paul Flynn | | 53 | 44 | | | Executive Vice President, Strategy and Corporate DevelopmentGlobal Revenue |
Jess Roper
Jacob S. Leach | | 44 | 51 | Executive Vice President, Chief Technology Officer |
| | | | |
| | | | |
| Steven R. Pacelli | | 50 | | Executive Vice President, Managing Director, Dexcom Ventures |
| Chad M. Patterson | | 40 | | Executive Vice President, Global Marketing |
| Barry J. Regan | | 50 | | Executive Vice President, Global Operations |
| Shelly R. Selvaraj | | 63 | | Senior Vice President, andChief Information Officer |
| Sumi Shrishrimal | | 43 | | Senior Vice President, Chief Risk Officer |
| Sadie M. Stern | | 47 | | Executive Vice President, Chief Human Resources Officer |
| | | | |
| | |
| Jereme M. Sylvain |
| Executive Vice President, Chief Financial Officer |
Jorge Valdes
|
Jereme M. Sylvain was promoted to the role of Chief Financial Officer, in addition to remaining as our Chief Accounting Officer, effective March 19, 2021. Prior to his role as Chief Financial Officer, Mr. Sylvain served as our Senior Vice President, Finance and Chief Accounting Officer since March 2020, and joined DexCom in September 2018 as our Vice President, Finance and Corporate Controller. Prior to joining Dexcom, Mr. Sylvain held various positions at NuVasive, Inc., including Vice President, Corporate Controller and Chief Accounting Officer from August 2016 to September 2018 and Vice President, Corporate Controller from March 2014 to August 2016. Prior to joining NuVasive, Mr. Sylvain held the role of Senior Director, Finance with Thermo Fisher Scientific, where he was responsible for global accounting for the life sciences solutions group. Mr. Sylvain joined Thermo Fisher Scientific in February 2014, following its acquisition of Life Technologies Corporation. From July 2007 to February 2014, Mr. Sylvain held multiple finance and accounting roles at Life Technologies and its predecessor, Invitrogen Corporation. Prior to joining Invitrogen, Mr. Sylvain worked for the public accounting firm Ernst & Young LLP. Mr. Sylvain obtained his Certified Public Accounting license after receiving a B.A. in Finance from Arizona State University and a M.S. in Accountancy from the University of Notre Dame.
| | |
54Donald M. Abbey | | |
Executive Vice President, Chief Technical Officer (“CTO”)Global Business Services, IT Quality and Regulatory Affairs |
|
Donald M. Abbey has served as our Executive Vice President, Global Business Services, IT, Quality and Regulatory Affairs since January 2017 and served as our Executive Vice President, Quality from May 2016 to January 2017. From March 2007 to April 2016, Mr. Abbey served in executive roles for Becton Dickinson (the acquirer of CareFusion in March 2015 which itself was spun off from Cardinal Health in 2009), including as Senior Vice President, Quality and Regulatory for Becton Dickinson from March 2015 to May 2016, as Executive Vice President, Quality, Regulatory and Medical Affairs for CareFusion from May 2011 to March 2015, as Senior Vice President, Quality and Regulatory for CareFusion from October 2009 to May 2011, and as Senior Vice President, Quality and Regulatory for Cardinal Health from March 2007 to October 2009. Prior to 2007 Mr. Abbey held senior quality and regulatory affairs and general management positions with Respironics, Welch Allyn, and Philips Healthcare. Mr. Abbey began his career at Varian Medical and Boston Scientific holding positions of increasing responsibility in research and development and quality. Mr. Abbey received a B.S.E.E. from Washington State University and an MBA from the University of Washington.
| | |
| Andrew K. Balo |
| Executive Vice President, Global Medical Affairs, Access and Evidence |
|
Andrew K. Balo has
served as our Executive Vice President, Global Medical Affairs, Access and Evidence, since January 2022. Mr. Balo previously served as our Executive Vice President, Regulatory Strategy, Clinical Affairs and Strategic Partnership Development since May 2016. From January 2015 until April 2016, Mr. Balo served as our Executive Vice President, Clinical, Regulatory and
Quality since January 2015.Quality. From March 2008 to January 2015, Mr. Balo served as our Senior Vice President of Clinical and Regulatory Affairs, and from February 2002 to March 2008, served as our Vice President of Clinical and Regulatory Affairs. From June 1999 to February 2002, Mr. Balo served as Vice President, Regulatory and Clinical Affairs of Innercool Therapies, Inc., a medical technology company. Mr. Balo
has held several positions at St. Jude Medical, including Clinical, Vice President, Quality, Regulatory and Clinical Affairs. Mr. Balo received
a B.S.his Bachelor of Science degree from the University of Maryland.
| | |
| Michael Brown |
| Executive Vice President, Chief Legal Officer |
|
Richard Doubleday has served as ourMichael Brown is Executive Vice President and Chief CommercialLegal Officer sinceat Dexcom, where he has worldwide responsibility for all legal and intellectual property matters. Before joining Dexcom in 2022, Mr. Brown was a partner at DLA Piper, from January 2015. From February 20132017 until January 2022, where he served as outside general counsel to January 2015,companies, advised on important business and legal issues, assisted with corporate governance and executed mergers and acquisitions and financings. Prior to DLA Piper, he was a partner at Stradling Yocca Carlson & Rauth, where he represented emerging and public technology, life science and other growth companies. Prior to Stradling Yocca Carlson & Rauth, Mr. DoubledayBrown served as outside General Counsel for several high-growth companies. Mr. Brown earned his J.D. from the University of Virginia School of Law and his B.A. from the University of Washington. Mr. Brown is a board member of Riding on Insulin, a non-profit organization that connects the global diabetes community through action sports.
| | |
| Matthew Dolan |
| Senior Vice President, Strategy, Corporate Development and New Markets |
|
Matthew Dolan has served as our Senior Vice President of Worldwide SalesStrategy, Corporate Development and Marketing.New Markets at Dexcom since March 2021. Mr. Dolan joined Dexcom in 2015 and has held various positions of increasing responsibility. Prior to his current role, Mr. Dolan held the role of Senior Vice President and General Manager, New Markets from March 2020 to March 2021. Prior to that, Mr. Dolan was Vice President and General Manager, New Markets from May 2019 to March 2020. From June 2009March 2017 to February 2013, Mr. DoubledayMay 2019, he served as our Vice President of Sales. From May 1988Corporate Development, and held the position of Senior Director, Corporate Affairs from November 2015 to June 2009,March 2017. In his current role, Mr. Doubleday servedDolan is responsible for Dexcom’s corporate strategy and development functions, including long-range planning, strategic and competitive intelligence, partnerships and M&A. Since its inception in various roles2019, he oversees Dexcom’s New Markets incubator, focused on expanding the company’s value proposition across new areas of growth for Johnson & Johnson, Inc. (“J&J”), including Directorboth its Continuous Glucose Monitoring and other sensing capabilities. Mr. Dolan's past responsibilities included support of Marketing for J&J subsidiary Animas Corporation, a manufacturerDexcom’s Investor Relations efforts. With 20 years of insulin pumps, from July 2006experience in the medical technology space, Mr. Dolan began his career as an equity analyst. Prior to June 2009, and Field Sales Director for J&J subsidiary LifeScan, Inc., a manufacturer of blood glucose monitoring systems, from August 2002 to October 2005. Mr. Doubleday received a B.A. from Michigan State University.John D. Lister hasDexcom, he served as our General Manager, Europe, Middle EastSenior Research Analyst at Roth Capital Partners, followed by a leadership role in strategy and Africa since Decemberbusiness development at Volcano Corporation for three years through the company’s acquisition by Philips in 2015. Mr. ListerDolan holds a Bachelor’s degree in Economics/Pre-Medicine from Northwestern University.
| | |
| Paul Flynn |
| Executive Vice President, Global Revenue |
|
Paul Flynn serves as our Executive Vice President, Global Revenue following his promotion in March 2021 from the role of Senior Vice President, Global Revenue, which he has held since January 1, 2021. Mr. Flynn previously served as our Senior Vice President and General CounselManager, Americas and Asia Pacific from April 2019 to March 2014 to December 2015, as General Counsel and2021, Vice President of Human ResourcesInternational Market Development from March 2013October 2015 to March 2014,2019, and various other key roles prior to that since joining Dexcom in October 2015. Previously, Mr. Flynn served with Johnson & Johnson for 23 years including various leadership roles at Animas Corporation from 2006 to 2015, LifeScan Canada from 2001 to 2006, and Johnson and Johnson Medical Products from 1992 to 2001. Mr. Flynn received a Bachelor of Business Administration from Simon Fraser University and an MBA from Wilfrid Laurier University.
| | |
| Jacob S. Leach |
| Executive Vice President, Chief Technology Officer |
|
Jacob S. Leach has served as
our Executive Vice President,
of Legal Affairs from May 2009 to March 2013Chief Technology Officer since October 2018, and
as Director of Legal Affairs from January 2008 to May 2009. Prior to joining DexCom, Mr. Lister served as a corporate attorney for Fenwick & West LLP from June 2004 to January 2008, where he specialized in corporate finance, mergers and acquisitions, corporate compliance and general business matters for life sciences and technology companies. Mr. Lister received a B.A. from Claremont McKenna College, and a J.D. from the University of San Francisco. Mr. Lister is a member of the State Bar of California.Jeffrey Moy haspreviously served as our Senior Vice President of Operations sinceResearch and Development from January 2011,2015 to October 2018, and previously served as our Vice President of OperationsResearch and Development from September 2008January 2011 to January 2011. Previously, Mr. Moy2015. From February 2010 to January 2011, he served as our Senior Director of ManufacturingResearch and Development, from September 2008 to February 2010, he served as our Director of Research and Development, from January 2007 to September 2008. From AprilFebruary 2010 he served as our Manager of Hardware Engineering, and from March 2004 to AugustJanuary 2007 Mr. Moy served as Senior DirectorElectrical Engineer. From 1996 to 2004, Mr. Leach held positions in research and development at MiniMed and subsequently Medtronic Diabetes, focusing on the development of Manufacturing for Biosite, Inc.,glucose sensing systems. Mr. Leach holds a manufacturerBachelor of diagnostic products for laboratory medicine. Mr. Moy receivedScience degree in Electrical Engineering with a B.S.minor in Biomedical Engineering from the University of Pennsylvania and a Masters in Engineering from Cornell University.
California, Los Angeles.
| | |
| Steven R. Pacelli |
| Executive Vice President, Managing Director, Dexcom Ventures |
|
Steven R. Pacelli
was named DexCom’s has served as our Executive Vice President
of Strategy and Corporate Development in August 2012.& Managing Director, Dexcom Ventures since January 2021. Mr. Pacelli has served in roles of increasing responsibility with
DexComDexcom since April 2006, including as its
EVP, Strategy & Corporate Development from August 2012 to January 2021, Chief Operating Officer from June 2010 to August 2012,
its Chief Administrative Officer from December 2008 to June 2010,
its Senior Vice President of Corporate Affairs from June 2007 to December 2008,
and its Vice President of Legal Affairs from April 2006 to June 2007. Prior to joining DexCom,Dexcom, Mr. Pacelli served as a corporate attorney specializing in finance, mergers and acquisitions, and general corporate matters, and also in an executive role as general counsel of several privately held companies. Mr. Pacelli received a BA from the University of California, Los Angeles, and a J.D. from the University of Virginia. Mr. Pacelli is a member of the State Bar of California.
Jess Roper
| | |
| Chad M. Patterson |
| Executive Vice President, Global Marketing |
|
Chad M. Patterson serves as our Executive Vice President, Global Marketing following his promotion in March 2021 from his role as Senior Vice President, Global Marketing and Product Management, which he has held since March 2020. Mr. Patterson previously served as our Vice President, Global Marketing and Product Management from March 2019 to March 2020, Senior Director Global Consumer Marketing from March 2018 to March 2019 and Director of Marketing from November 2015 to February 2018. From January 2005 to October 2015, Mr. Patterson served in various roles for Nestlé. Mr. Patterson received a Bachelor of Arts in Business Administration from Gonzaga University and an MBA from the University of Southern California's Marshall School of Business.
| | |
| Barry J. Regan |
| Executive Vice President, Global Operations |
|
Barry J. Regan has served as our Executive Vice President, Global Operations since November 2020. Prior to joining Dexcom, Mr. Regan served as Senior Vice President, Global Operations at Wright Medical from July 2018 to November 2020. From March 2015 to June 2018 Mr. Regan served as Senior Vice President, Global Supply Chain & Procurement at Smith & Nephew. Mr. Regan served as Vice President, US & Puerto Rico Operations at AbbVie from January 2013 to March 2015. Prior to 2013 Mr. Regan spent nearly 19 years with Abbott, in various operations leadership positions. Mr. Regan received a Bachelor of Technology degree from the University of Limerick and an MBA from the Lake Forest Graduate School of Management.
| | |
| Shelly R. Selvaraj |
| Senior Vice President, Chief Information Officer |
|
Shelly R. Selvaraj has served as our Senior Vice President, and Chief FinancialInformation Officer since January 2015. From March 2008September 2021 and previously served as our Senior Vice President, Information Technology from October 2018 to January 2015, Mr. Roper servedSeptember 2021, and as our Vice President, Information Technology from May 2016 to October 2018. Mr. Selvaraj has a wide range of experience within global organizations in the fields of supply chain management, healthcare informatics and information technology. Prior to joining Dexcom, Mr. Selvaraj held various IT leadership roles at CareFusion, a Becton Dickinson Company, from March 2012 to May 2016, and ResMed in San Diego from April 2007 to March 2012. Earlier in his career, he worked for Motorola, Inc. and ON Semiconductor Corp. in Phoenix, Arizona. Mr. Selvaraj received a BE in Mechanical Engineering from the University of Madras and a Masters in Industrial Engineering from Arizona State University.
| | |
| Sumi Shrishrimal |
| Senior Vice President, Chief Risk Officer |
|
Sumi Shrishrimal serves as our Chief
Financial Officer. Mr. Roper joined us inRisk Officer, a position she has held since March
2005 as Director of Finance2020. In her role, Sumi is responsible for the company’s Enterprise Risk Management program, including identifying, evaluating, and
managing the company’s risks. Additionally, she oversees the company’s Global Compliance and Privacy program ensuring compliance with applicable Healthcare and Privacy laws and regulations. She is responsible for the Internal Audit department managing Sarbanes-Oxley compliance, operational & compliance audits, and other fraud and special investigations. She also spearheads Dexcom’s response to the COVID-19 pandemic. Prior to Dexcom, Sumi served as
interim Chief Financial Officer from July 2007 to February 2008. From December 2003 to March 2005, Mr. Roper served initially as Directorthe Vice President of
FinanceInternal Audit at NuVasive where she was responsible for Sarbanes-Oxley compliance, financial, information technology, and
subsequently as Controller for SeraCare Life Sciences, Inc., a manufacturercompliance audits. She also spearheaded operational audits, fraud investigations, and other special projects. Over the course of
plasma-based products. From September 2002 to December 2003, Mr. Roper served as Accounting Manager for Nanogen, Inc., a developerher career, Sumi has held multiple leadership positions in internal audit and accounting within the medical device, education, and financial services industries with over 19 years of
diagnostic products. Mr. Roper previously served as an auditorexperience. Sumi started her career with PricewaterhouseCoopers
where she consulted on a wide range of projects in the Assurance Business Advisory Services and the Transaction Services groups. Sumi is a Certified Public Accountant in California and a
BankCertified Information Systems Auditor. She holds a Bachelor’s in Accounting and Information Systems
Examiner withfrom the
OfficeUniversity of
the Comptroller of the Currency. Mr. Roper received a B.S. in Finance and an M.S. in Corporate Accountancy from San Diego State University. Mr. Roper is a licensed Certified Public Accountant.Jorge ValdesMumbai.
| | |
| Sadie M. Stern |
| Executive Vice President, Chief Human Resources Officer |
|
Sadie M. Stern has served as our Executive Vice President and Chief TechnicalHuman Resources Officer since June 2010,September 2020. From October 2017 to September 2020, Ms. Stern was employed by 3D Systems Corporation, most recently as Executive Vice President, People and previouslyCulture. From January 2012 until October 2017, Ms. Stern served as our Senior Vice PresidentDirector, Human Resources of Operations from July 2007 to June 2010,Qualcomm. Ms. Stern has also worked at LG Electronics and from November 2005 to July 2007, served as our Vice President of Engineering. From July 1999 to March 2005, Mr. Valdes served as Vice President of Engineering at Advanced Fibre Communications (“AFC”) a provider of broadband access solutions. Mr. Valdes also served as General Manager for the fiber to the premise business unit of AFC beginning in May 2004. Mr. ValdesThe Walt Disney Company, and received a B.S.Bachelor of Arts in English from San Diego State University and an M.B.A.a Masters of Arts in Higher Education from the University of Miami, Florida.Denver.
| | | | | | | | | | | | | | |
| Compensation Discussion and Analysis |
This Compensation Discussion and Analysis
The explains our executive compensation committeephilosophy and programs, the decisions of the Compensation Committee of the Board of Directorsmade regarding those programs during fiscal 2021 and the factors considered in making those decisions. The Compensation Committee has the principal responsibility for establishing, implementing and continually monitoring adherence to our compensation philosophy and objectives. The committee’sCompensation Committee’s duties include evaluating the performance and advising the Board on the compensation of our executive officers, including our Chief Executive Officer ("CEO"), Chief Financial Officer ("CFO"), and settingExecutive Vice Presidents (“EVP”). This Compensation Discussion and Analysis focuses on the compensation of our other named executive officers and directors, as well as performing oversight of our compensation arrangements, plans, policies and programs(our “NEOs”) for employees generally.
2021, who were:
| | | | | | | | |
| | |
| 2021 NAMED EXECUTIVE OFFICERS | |
| | |
| Kevin R. Sayer | |
| Chairman, President & Chief Executive Officer | |
| | |
| Jereme M. Sylvain | |
| EVP, Chief Financial Officer | |
| | |
| Quentin S. Blackford | |
| Former Chief Operating Officer and Former Chief Financial Officer | |
| | |
| Paul Flynn | |
| EVP, Global Revenue | |
| | |
| Jacob S. Leach | |
| EVP, Chief Technology Officer | |
| | |
| Chad M. Patterson | |
| EVP, Global Marketing | |
| | |
| | | | | | | | | | | | | | |
| Fiscal 2021 Corporate Performance |
Executive Summary
We are a medical device company primarily focused on the design, development and commercialization of continuous glucose monitoring (“CGM”) systems for ambulatory use by people with diabetes.diabetes and by healthcare providers. Operating in a novel technology category that we believe remains underpenetrated,under-penetrated, our overarching objective is to both advance our technology platform and to grow our product revenue, each as quickly and sustainably as possible.
| | | | | | | | | | | | | | | | | | | | |
| Fiscal 2021 Performance at a Glance |
| | | | | | |
| | Revenue | % Change | Operating Income | % Change | |
| | | | | | |
| GAAP | $2.45 billion | 27% | $265.8 million | (11)% | |
| | | | | | |
| Non-GAAP (1) | $2.45 billion | 27% | $370.7 million | 16% | |
| | | | | | |
| | | | | | |
| | Net Income | % Change | Diluted EPS | % Change | |
| | | | | | |
| GAAP | $154.7 million | (69)% | $1.55 per share | (69)% | |
| | | | | | |
| Non-GAAP (1) | $266.7 million | (12)% | $2.66 per share | (14)% | |
| | | | | | |
(1)See Appendix A for a reconciliation of the GAAP to Non-GAAP measures
Although
the broadour overall industry has faced significant changes
in the delivery of healthcare due to the Affordable Care Act and continued volatility in the economy have each contributed to a challenging environment during the past several years, we
continued to drive increasing CGM system adoption and achieved important milestones during
2015,fiscal 2021, including:
generating a record full fiscal year 2015 product•26% organic revenue growth, including U.S. revenue growth of $400.7 million, an increase23% and international revenue growth of $143.6 million, or 56%, as compared to 2014,37%.(1)
•Gross margin of 68.6% significantly exceeding expectations established at the beginning of year.
(1) Organic revenue growth excludes non-CGM revenue acquired in conjunction with Dexcom’s acquisition of its distributor in Australia and an increase of $243.6 million, or 155%, as compared to 2013;New Zealand.
| | | | | | | | |
Revenue Performance | | Product
Revenue ($M) | | | % Increase to 2015 | |
Fiscal 2015 | | $ | 400.7 | | | | — | |
Fiscal 2014 | | $ | 257.1 | | | | 56 | % |
Fiscal 2013 | | $ | 157.1 | | | | 155 | % |
generating cash-based (non-GAAP) net operating income of $73.4 million in 2015, an increase of 99% as compared to 2014 (Cash-based (non-GAAP) net operating income for fiscal 2015 excludes
| | | | | | | | | | | |
| Financial Flexibility |
| Cash, Cash Equivalents, & Short Term Marketable Securities | Working Capital | Operating Cash Flows | Available Line of Credit |
$130.52.73 billion | $2.96 billion | $442.5 million | $192.7 million |
| | | |
Our balance sheet remains strong, with $2.73 billion in cash and cash equivalents as of December 31, 2021. This continues to provide us with significant financial and strategic flexibility to support our growth initiatives, including production capacity expansion and exploring new market opportunities.
| | | | | | | | | | | | | | |
| Strategic Achievements |
| • | Annual new customer additions achieved a new record. We estimate that we closed 2021 with approximately 1.25 million users of our CGM systems globally. |
| • | Results from our MOBILE clinical study were published in non-cash expenses, comprised primarilythe Journal of the American Medical Association (JAMA), showing compelling Dexcom CGM-driven outcomes for people with Type 2 diabetes on basal-insulin therapy. These results led to recognition of the clinical value of Dexcom CGM for these customers in the updated American Diabetes Association Standards of Care. |
| • | We received FDA clearance for two key software solutions that enhance Dexcom’s data integration abilities, enabling greater choice for our customers. |
| • | We completed the pivotal studies and regulatory submissions for our next-generation Dexcom G7 CGM System. |
| • | We launched Dexcom ONE, a $36.5 million researchnew CGM system focused on ease of use and development chargeaffordability, in four international markets. |
| • | The Wall Street Journal recognized Dexcom for the issuance of common stock related to an upfront payment associated with a Collaboration and License Agreement with Verily Life Sciences, and $82.7 million of share-based compensation. Cash-based (non-GAAP) net operating incomegreatest gain in the Management Top 250 ranking for fiscal 2014 excludes approximately $58.4 million in non-cash expenses, comprised primarily of $50.0 million of share-based compensation);social responsibility. (1) |
| | | | |
| | | | | | | | |
Net Operating Income Performance | | Net Operating
Inc. ($M) | | | % Increase
to FY14 | |
Fiscal 2015 | | $ | 73.4 | | | | — | |
Fiscal 2014 | | $ | 36.9 | | | | 99 | % |
generating GAAP-based net income of $1.5 million, or $0.02 per share, during the fourth quarter of 2015, the second time that we were GAAP profitable during
obtaining regulatory approval and commercial launch of our G4 Platinum with Share and G5 Mobile systems, which were our first products that enabled mobile connectivity directly with patients’ and caregivers’ smartphones. We are the first company(1)Wall Street Journal. (February 23, 2021). Biggest Gains in Social Responsibility in the CGM industry to achieve such mobile connectivity, and believe this capability is be a critical element demanded by patients and caregivers.
Management Top 250. https://www.wsj.com/articles/biggest-gains-in-social-responsibility-in-the-management-top-250-11614118391Our financial and operational success
has translatedcontinues to translate into
superior and sustained
short and long-term stock price growth for the benefit of our stockholders.
General Objectives The following tables depict our Total Shareholder Return (“TSR”) for the one, three and Philosophyfive-year periods ended December 31, 2021.
| | | | | | | | | | | | | | |
| Fiscal 2021 Compensation Overview |
Given the focus on reducing healthcare costs, trends in the healthcare industry and changing regulation, the pricing pressure from payors, and increased competition, we anticipated that it would be challenging to maintain a rapid rate of growth during fiscal 2021; nevertheless, we expected our business to achieve:
•substantial increases in revenue;
•increases to our operating income; and
•various performance goals to maintain and advance our technology advantage and commercial deployment.
When designing our fiscal 2021 executive compensation program, the Compensation Committee considered the program objectives set forth below, our fiscal 2021 budget, and the intense competition for executive talent within the medical technology and broader technology and life science sectors. The Compensation Committee’s overall objective was to compensate our executive officers, including our NEOs, in a manner that attracts and retains the caliber of individuals needed to manage and staff a demanding and high-growth business in a rapidly evolving, innovative and competitive industry. As a result, with respect to our executive compensation program, the Compensation Committee:
•maintained our base salary and target total cash compensation levels for our NEOs generally within the market range (i.e. 50th to 75th percentile) of our compensation peer group;
•continued to allocate a meaningful proportion of target total cash compensation to our annual cash incentive award plan, which we refer to as our Management Bonus Plan (“2021 Bonus Plan” or “Non-Equity Incentive Plan”), which awards are paid only upon achievement of various financial and operational performance goals;
•paid out 2021 Bonus Plan awards to our CEO and the other NEOs at 131% of target, consistent with company performance at 131% achievement of financial and operational performance goals;
•maintained our equity compensation approach from fiscal 2020, under which RSU awards were granted based on expected future contributions of each executive officer;
•consistent with our prior years, granted performance-based RSUs (“PSUs”) for our CEO that represented a meaningful portion of his total equity offering to ensure alignment with continued company growth and stockholder return; and
•maintained strong governance policies and practices.
Additionally, in 2021, in response to certain feedback from our key investors, we introduced PSUs as a meaningful component of annual equity award allocations for all of our Section 16 officers and increased the percentage of PSUs granted to our CEO.
| | | | | | | | | | | | | | |
| Fiscal 2021 Chief Executive Officer Compensation |
In fiscal 2021, the total target cash compensation for our CEO, Kevin R. Sayer, was $2,025,000 ($900,000 in base salary plus $1,125,000 in target annual cash bonus opportunity under the 2021 Bonus Plan). Mr. Sayer’s base salary was increased for fiscal 2021 by 13% as a result of the Compensation Committee’s assessment of his contribution toward Dexcom’s performance during 2021 and its review of base salaries paid to CEOs of the companies in our compensation peer group CEOs (as recommended by Compensia, the Compensation Committee’s independent consultant at the time) relative to our compensation philosophy, which showed that Mr. Sayer’s base salary was below the median of the CEOs in our peer group. Mr. Sayer’s target annual cash bonus opportunity under the 2021 Bonus Plan for fiscal 2021 (assuming achievement of the corporate goals at 100%) was 125% of his base salary, unchanged since 2016. The Compensation Committee believed this target annual cash bonus opportunity was appropriate based on his level of experience and its review of target annual cash bonus opportunities for CEOs of the companies in our compensation peer group. The bonus Mr. Sayer received for fiscal 2021 was $1,473,750, which represents 131% of target under our 2021 Bonus Plan as discussed further below.
Mr. Sayer received PSUs as a meaningful part of his annual equity award allocation, with 50% (measured at target as of grant date) of the total equity awards for fiscal 2021 being granted as PSUs. Mr. Sayer received a PSU award during fiscal 2021 that had a grant date fair value of $5,132,481 at target achievement. This award was granted as a result of the Compensation Committee’s desire to motivate and incentivize Mr. Sayer to achieve key additional performance metrics and to continue to maintain strong alignment of Mr. Sayer's interests with the long-term interests of our stockholders. Mr. Sayer’s PSUs may only be earned and vest three years after grant upon achievement of both the operational goal in 2021 and our three-year relative TSR performance versus the Nasdaq Composite Index, as well as Mr. Sayer’s continued employment. For additional information regarding the metrics of the PSU, see the section titled “Equity Awards” below.
Additionally, during fiscal 2021, Mr. Sayer received a time-based RSU award that had a grant date fair value of $4,464,264 and comprised 50% of his total equity awards for fiscal 2021. This award was granted as a result of the Compensation Committee’s assessment of his contribution toward Dexcom’s performance during 2020 and its review of the equity awards granted to CEOs of the companies in our compensation peer group as well as a review of Mr. Sayer’s vested and unvested equity awards. Mr. Sayer’s RSUs awarded in 2021 vest over three years in equal annual installments, which is the current executive vesting schedule of our annual RSU awards.
The following graph depicts our CEO’s actual total direct compensation as compared to our Total Shareholder Return (“TSR”) over the last five fiscal years, showing alignment between our CEO’s compensation and Dexcom’s strong financial and operational performance resulting in delivery of positive TSR over such time.
When determining Mr. Sayer’s compensation for fiscal 2021, the Compensation Committee considered our 2020 performance as described above, our delivery of absolute TSR over the past five years equal to 799%, our compound annual growth rate (“CAGR”) TSR over the past five years of 55% and our philosophy that a significant percentage of his target total
direct compensation opportunity should be at-risk and performance-based to align with short- and long-term stockholder interests.
In addition, our CEO is required to retain all shares received as a result of the exercise or settlement of any stock option or time-based RSU granted after April 8, 2015, net of the applicable exercise price and tax withholdings, for a period of no less than twelve months from the date of such exercise or settlement. Notwithstanding the foregoing, the CEO may sell shares that are held for less than twelve months to cover any tax payments relating to such equity awards that the CEO is required to make. In addition, the Compensation Committee may waive the twelve-month requirement for sales made by the CEO in response to a financial, medical or other personal emergency. This holding requirement further aligns our CEO’s interests with the long-term interests of our stockholders and is in addition to the requirement for the CEO and other NEOs to maintain stock ownership equal to three times his or her annual salary.
Quentin Blackford
On September 8, 2021, we received notice from Mr. Blackford of his intention to resign as Chief Operating Officer, effective on September 17, 2021, in order to pursue another employment opportunity. Mr. Blackford did not receive any severance benefits in connection with his resignation.
Jereme Sylvain
Effective March 19, 2021, Mr. Sylvain was promoted from Chief Accounting Officer to Chief Financial Officer, while retaining his role as our Chief Accounting Officer. In connection with his promotion and following input by Compensia, the Compensation Committee's independent compensation consultant at the time, Mr. Sylvain received a raise, with an annual base salary of $379,500 and an annual bonus opportunity equal to 75% of his base salary, which was effective on his promotion date. Mr. Sylvain also received a total equity grant of 6,627 restricted stock units, or $2,587,500 based on the average closing price of our common stock for the 30-trading day period as of five business days prior to the grant date (the “Promotion Equity Award”). The Promotion Equity Award consisted of 5,301 RSUs and 1,326 PSUs, respectively. The RSUs vest in three equal annual installments beginning on the first anniversary of the grant date, subject to the terms and conditions of our A&R 2015 EIP, subject to Mr. Sylvain’s continued employment by us on each vesting date. The PSUs may only be earned and vest upon the achievement of both operational goals in 2021 and our 3-year relative TSR performance versus the Nasdaq Composite Index, as well as Mr. Sylvain’s continued employment by us on their vesting date.
| | | | | | | | | | | | | | |
| Compensation Philosophy and Objectives |
We have designed our
executive and broad-based employee compensation
programprograms to support our near-term
financial and strategic objectives and promote the long-term growth of our company. Our compensation philosophy for all employees, including our executive officers, is to ensure that our compensation
program:programs: supports•support our key financial and strategic and financial goals;
relates•relate directly to our corporate performance;
•align the interests of our executive officers with the interests of our stockholders;
•appropriately managesmanage compensation-related risk within the context of our business strategies;business; and
provides•provide a total compensation package that is competitive and enables us to attract, motivate, reward and retain talented executive officers and employees.
Different compensation elements are
geareddesigned to reward
shortshort-term and longer-term performance with a common goal of increasing value for our key constituencies—patients, healthcare providers, stockholders and our employees. We believe
that the compensation of our executive officers and employees should reflect our performance as an organization, and their performance as individuals, in attaining key financial and operating objectives established by our
Board of Directors.Board. In addition, we strive to promote an ownership mentality among our
employees, including our executive officers,
and employees, which we believe is best achieved through our equity incentive programs.
Despite achieving GAAP-based profitability during the fourth quarter of 2015, we have not yet become profitable for a full fiscal year. Accordingly, asTo achieve these objectives, an
essential part of our efforts to achieve profitability, we endeavor to conserve our cash resources. To that end, one important aspect of our overall compensation philosophy is to
minimize base salary compensation relative to our peer group of companies in favor ofemphasize equity and performance-based incentive compensation, which we believe best aligns the interests of our employees
withand our stockholders. We intend to ensure that our compensation program is perceived as fundamentally fair to all key constituencies. Therefore, we do not offer substantially different benefits or perquisites to our executives as compared to those benefits and perquisites offered to all other employees, nor do we provide tax “gross up” payments for any severance or change-in-control payments made to our executives.
TFiscal 2015 Compensation OverviewableofContentsGiven the climbing costs of healthcare in the United States, the growing share of those costs borne by patients, and increasing competition from insulin pumps that integrate CGM technology and new stand-alone glucose monitoring technologies, we anticipated that it would be challenging to maintain a rapid rate of growth during fiscal 2015; nevertheless, we expected our business to achieve:
substantial increases in product revenue;
decrease to our overall operating loss; and
various operating goals to maintain and advance our technology advantage and commercial development.
When designing our fiscal 2015 executive officer compensation program, the compensation committee considered our fiscal 2015 budget, as well as the program objectives set forth above. In addition, the compensation committee considered the intense competition for executive talent within the medical technology sector and broader regional technology sectors. Our overall objective was to compensate our named executive officers in a manner that attracts and retains the caliber of individuals needed to manage and staff a demanding and high-growth business operation in a rapidly evolving and innovative and competitive industry. As a result, with respect to our program of annual and long-term compensation, the compensation committee:
maintained a meaningful proportion of potential cash compensation in our annual cash incentive award program, which awards are paid only upon achievement of various financial and operational goals;
maintained our base salary and target total cash compensation levels at approximately 50th percentile of our peer group;
reduced the target number of restricted stock units to be granted in 2016 by approximately 50% across the Company, including for our named executive officers;
maintained our equity compensation approach from 2014, pursuant to which restricted stock unit awards were granted primarily based on both company performance and the individual performance and expected future contributions of each executive. The compensation committee also considered competitive market data in determining equity award levels; and
maintained strong governance practices, including:
absence of material perquisites or other personal benefits,
absence of tax “gross ups,”
prohibitions against hedging and pledging,
rigorous equity ownership guidelines, and
compensation recovery (“clawback”) policy.
Executive Compensation Practices at a Glance
| | | | | | | | | | | | | | |
2021 Executive Compensation Policies and Practices at a Glance |
| | | | | | | | |
| WHAT WE DO | | WHAT WE DO NOT DO |
| |
þ Pay for Performance:We link paythe cash compensation of our executive officers to our performance and stockholder interests by heavily weighting their target total cash compensation opportunities to the achievement of strong financial performance tied to a balanced mix of pre-established performance metrics established in advancemeasures and by the compensation committee andgranting long-term equity awards that align executivetheir interests with those of our stockholders.
| | xNo Special Perquisites or Benefits: We do not provide special perquisites In 2021, we also granted a meaningful portion of our NEO's annual equity award allocation in PSUs. These PSUs consisted of 50% of the CEO’s total annual equity awards (at target), 35% of the COO's total annual equity awards (at target), and 20% of the other NEO’s total annual equity award (at target). The PSUs may only be earned and vest upon achievement of both the operational goal in 2021 (tied to certain product sales) and our three-year relative TSR performance versus the Nasdaq Composite Index, as well as our CEOs continued employment. For additional information regarding the metrics for executives, such as company cars, club memberships, supplemental executive retirement plans or supplemental executive health benefits.the PSUs, see the section titled “Equity Awards” below. In 2022, all Section 16 officers will continue to have a meaningful portion of their annual equity awards consist of PSUs.
|
| |
þ Independent Compensation Advisor:Advisor and Compensation Committee members: The compensation committeeCompensation Committee selects and engages its own independent advisor.
| | x No Hedging in Company Securities:Executives, directorsadvisor and all employeesCompensation Committee members are prohibited from engaging in any hedging transaction with respect to our equity securities.independent directors.
|
| |
þ Thoughtful Peer Group Analysis:The compensation committeeCompensation Committee reviews external competitive market data when making compensation decisions and annually reviews and, where appropriate, updates our compensation peer group with its independent compensation consultant.group.
| | xNo Pledging of Company Securities: Our Board adopted a policy prohibiting pledges of our securities by our executives and directors.
|
| |
þ Annual Compensation Risk Assessment:The compensation committee conducts an annual assessment of our executive and broad-based compensation programs to ensure prudent risk management.
| | x No Guaranteed Bonuses:We do not provide guaranteed minimum bonuses or uncapped incentives under our annual bonus plan.
|
| |
þ Compensation Committee Independence and Experience: The compensation committee is comprised solely of independent directors who have extensive experience.
| | x No Re-Pricing or Discounted Options / SARs:We do not provide discount stock options or stock appreciation rights.
Our 2015 Equity Incentive Plan prohibits repricing exchange or buyout of stock options or stock appreciation rights without stockholder approval.
|
| |
þ Post-Vesting Stock Holding Guidelines:Our CEO is required to hold 100%retain all shares received as a result of net after-tax shares issued upon the exercise or settlement of any stock optionsoption or time-based RSUs granted after April 8, 2015, net of the vestingapplicable exercise price and tax withholdings, for a period of restricted stock units for at least 12no less than twelve months.
| | x No Tax Gross-Ups:We do not provide tax gross-ups for “excess parachute payments” or other executive benefits.
|
| |
þ Stock Ownership Guidelines:Executives Our executive officers and directorsthe non-employee members of our Board are subject to stock ownership guidelines equal to a multiple of their respective annual base salaries (3x for executives) or Board retainers (3xannual grants (2x for directors).
| | |
| |
þ Compensation Recovery (“Clawback”) Policy:Our clawbackcompensation recovery (“clawback”) policy provides that our Board of Directors may require the forfeiture, recovery or reimbursement of cash and equity incentive compensation from an executive officer in the event the officer’shis or her fraud or intentional illegal conduct is determined by our Board to have materially contributed to a restatement of DexCom’sour financial results.
| | ý No Special Perquisites or Benefits: We do not provide special perquisites or other personal benefits to our executive officers, such as company cars, club memberships or supplemental executive health benefits. ý No Hedging in Company Securities: Our executive officers, the non-employee members of our Board and all employees are prohibited from engaging in any hedging transaction with respect to our equity securities, except as further described in “Corporate Governance - Anti-Hedging”. ý No Pledging of Company Securities: Our executive officers and the non-employee members of our Board are prohibited from engaging in any pledging transaction with respect to our equity securities. ý No Guaranteed Bonuses or Equity Awards: We do not provide guaranteed minimum bonuses or uncapped incentives under our 2021 Bonus Plan. We also do not provide any guaranteed annual equity values for our executive officers (any awards are periodically determined by our Compensation Committee). ý No Re-Pricing or Discounted Options / SARs: We do not provide discounted stock options or stock appreciation rights. Our A&R 2015 EIP prohibits the repricing, exchange or buyout of stock options or stock appreciation rights without stockholder approval. ý No Tax Gross-Ups: We do not provide tax payments or “gross-ups” for “excess parachute payments” or other executive benefits except with respect to relocation and expatriate benefits per the Company's standard practices. |
Role of Management
Management provides data, analyses, input and recommendations to the compensation committee through both our Executive Chairman and CEO. Management also provides such data, analyses and input directly to our independent compensation consultant. Both our Executive Chairman and CEO, with the support of management representatives from finance, legal and human resources, provide input on various values for the compensation committee to consider when determining each element of compensation. The compensation committee gives significant weight to our Executive Chairman’s and CEO’s evaluation of each named executive officer’s performance and recommendations of appropriate compensation (other than their own). The compensation committee reviews such assessments and recommendations; however, the compensation committee’s decisions are made by the compensation committee in its sole discretion, and outside of the presence of any impacted executive officers.
Stockholder Advisory Vote on Executive Compensation
| | | | | | | | | | | | | | |
| Stockholder Advisory Vote on Executive Compensation |
At our 2015 annual stockholders meeting,2021 Annual Meeting of Stockholders our stockholders again expressed strong support for our executive compensation program, with 88%91.64% of the votes cast (excluding abstentions and broker non-votes) voting in favor of the compensation of our named executive officers.NEOs. When designing our 20162022 executive compensation program including the form and amount of compensation committeeto our NEOs, the Compensation Committee considered among other things, these vote results. As a resultresults, including our 2021 fiscal year financial performance and our sustained market capitalization growth over the prior five years.
The Compensation Committee reviewed the results of the 2015Say-on-Pay vote, combined withand concluded based on the increase in our stock price during 2015, and competitive compensation data for 2015, we elected to reduce the target numberresults of restricted stock units to be granted in 2016 by approximately 50% across the Company. In addition, we engage in dialogue with our stockholders on an ongoing basis,such vote and the stockholders’ endorsement of our compensation committeeprogram that our executive compensation program was operating as anticipated. Consequently, the Compensation Committee did not make any significant changes to our executive compensation program based on its review of the voting results. We introduced PSUs as a meaningful component of annual equity award allocations for all of our Section 16 officers and increased the percentage of PSUs granted to our CEO. The Compensation Committee will continue to consider stockholder feedback and the results of our say-on-paythe Company’s Say-on-Pay votes when making future compensation decisions for the namedCompany’s NEOs.
Following a stockholder vote in 2017, our Board adopted a policy providing for annual Say-on-Pay votes. Our Board values the opinions of our stockholders and the Compensation Committee will continue to consider the outcome of future Say-on-Pay votes, as well as feedback received throughout the year, when making compensation decisions for our NEOs. A vote on the frequency of future Say-on-Pay votes (commonly known as a “Say-on-Frequency” vote) is required every six years, and as such, we currently expect to hold the next Say-on-Frequency vote at our 2023 Annual Meeting of Stockholders.
| | | | | | | | | | | | | | |
| Compensation Decision-Making Process |
Role of Compensation Committee
The Compensation Committee approves the compensation of our NEOs, including establishing the performance metrics for our incentive plans, and provides a recommendation to our Board on the CEO’s compensation.
As part of the decision-making process, the Compensation Committee reviews competitive market information with our CEO for each executive officer. In addition, at the beginning of each fiscal year, the Compensation Committee reviews executive officer performance for the last year and objectives for the next year, together with his or her responsibilities and experience level. The Compensation Committee also considers our overall fiscal performance compared to our fiscal objectives and performance targets, strategic and operational performance and our stockholder returns. The relative weight given to these factors varies with each individual at the discretion of the Compensation Committee.
Role of Management
Management provides data, analyses, input and recommendations to the Compensation Committee through our CEO, including a review of such executive officer’s performance and contribution during the prior year. Management also provides such data, analyses and input directly to Aon, the Compensation Committee’s independent compensation consultant. Our CEO, with the support of management representatives from our human resources, finance and legal departments, provide input on compensation levels and structures for the Compensation Committee to consider when determining each element of compensation. The Compensation Committee gives significant weight to our CEO’s evaluation of each executive officer’s performance and recommendations of appropriate compensation (other than their own). The Compensation Committee reviews these assessments and recommendations; however, the Compensation Committee’s decisions are made by the Compensation Committee in its sole discretion, and outside of the presence of any affected executive officers.
Role of Compensation Consultant
Engagement The compensation committeeCompensation Committee has engaged Compensia as an independent compensation consultant since 2006. Compensia2006 and the Compensation Committee utilized Compensia’s services in fiscal 2020 to make certain determinations with respect to compensation for fiscal 2021.Pursuant to its charter, the Compensation Committee has the authority to retain, approve fees for, and, as may be necessary or advisable, change or terminate the relationship with compensation consultants, legal counsel or other advisors as it deems necessary to assist in the fulfillment of its responsibilities.The Compensation Committee annually evaluates the independence of its compensation consultants, assesses their performance and establishes the scope of work and fees for such consultants.Following a thorough review, in August 2021, the Company engaged a new independent compensation consultant, Aon.Our compensation consultants have implemented policies and procedures to ensure their objectivity, and the objectivity of its executive compensation consultants and the advice it providesthey provide to our compensation committee. The compensation committeethe Compensation Committee. In fiscal 2021, the Compensation Committee conducted an assessment of Compensia’sAon’s independence pursuant to the SEC rules and NASDAQNasdaq listing standards and concluded that noAon’s work did not give rise to any conflict of interest exists that will prevent Compensia from being independent consultants to our compensation committee.interest.
During 2014, we engaged Compensiafiscal 2021, the Compensation Committee directed Aon to complete a competitive assessmentanalysis of our executive compensation. Compensia hascompensation program. In connection with this analysis, Aon analyzed both publicly available data from the companies in our compensation peer datagroup (as described below) and compensation survey data, and obtainedwhile also obtaining historical data and insight into our previous compensation practices.
In preparing its analysis, Compensia, utilizedthe Compensation Committee's independent compensation consultant at the time, used a peer group of publicly traded companies consisting of firms directly comparable in size and industry to ours, and whowhich are generally direct competitors to us for valued employees in the medical device and technology business. Theand broader life science and technology sectors. In addition, the companies in this peer group arewere generally in similar stages of their business lifecycle within the medical or broader life science and technology sector,sectors, and havegenerally had similar annual revenues, annual revenue performance,growth, market capitalizations, capitalization, and/or headcounts. Theheadcount.
This compensation peer group
for 2014 and 2015 was
updated by the
same utilized in 2013, focusing primarily on medical technology and device companiesCompensation Committee with
respect to
the extent feasible, comparable revenue, market capitalization and geographic location. We updated ourfiscal 2021 (the list below reflects peer group
updates in
20152020 to guide
2016 compensation decisions. No peer company was selected on the basis of executive compensation levels.2021 compensations decisions). The
primary specific
attributescriteria used to
developreview and update the peer group
included:consisted of the following:
| • | | Industry: The peer group used focused on medical technology and device companies.
| | | | | | | | | | | |
| Compensation Peer Group Criteria |
| • | |
| |
Revenue: We considered the revenue of the peer companies and generally selected peer companies with trailing 12 | | Industry | | Market Capitalization |
| | | | |
Trailing twelve months of revenue that, at the time of the analysis, generally fell within the range of one-halfone-third to two and one-halfthree times our revenue. |
| revenue, provided the companies also generally had strong annual revenue growth (10% or higher). | • | Medical technology and device and broader high-growth life science and technology companies. |
| Market Capitalization: We selected companies with a market capitalization that, at the time of ourthe analysis, that was generally fell within a range of one-fifthone-fourth to fivefour times our market capitalization. Ourcapitalization, for companies that generally had a market capitalization that was greater than five times revenue. |
| capitalization relative to our peer group atApplication of this criteria resulted in minor changes in the time of our 2014 compensation analysis was at the 83rd percentile because there were a small number of medical technology and device companies with both revenues that fell within our recommended range and similar market capitalizations.
|
For 2015 compensation planning purposes, our peer group, adding and removing companies outside the specific medical device industry that better reflect Dexcom’s size, value and growth. Six companies, Bio-Techne, ICU Medical, Integra LifeSciences, Medidata Solutions, NuVasive, and Zillow Group, were removed from the peer group, and 6 companies were added, as indicated below. For fiscal 2021 compensation decisions, the compensation peer group approved by the Compensation Committee was composedcomprised of the following companies:
| | | | | |
Abaxis,Fiscal 2021 Peer Group Companies
|
| Abiomed, Inc. | Intuitive Surgical, Inc.* |
| Align Technology | Meridian Biosciences,Masimo |
| BioMarin Pharmaceutical Inc. | Palo Alto Networks, Inc. |
| Docusign, Inc.* | ResMed |
| Edward Lifesciences* | Seattle Genetics (acquired by Seagen Inc.) |
| Exact Sciences Corporation | Snap Inc.* |
| IDEXX Laboratories, Inc.* | Splunk Inc. |
| Illumina, Inc.* | Veeva Systems Inc. |
| Insulet Corporation | |
* New peer group companies were added for fiscal 2021.
| | | | | | | | | | | | | | |
Abiomed, Inc.
| | Neogen* |
| |
Conceptus, Inc.
| | NuVasive, Inc. |
| |
Cyberonics, Inc.
| | NxStage Medical, Inc. |
| |
Cynosure, Inc.
| | Palomar Medical Technologies, Inc. |
| |
Heartware International, Inc.
| | Quidel Corporation |
| |
ICU Medical*
| | Thoratec Corporation |
| |
Insulet Corporation
| | Vocera Communications, Inc. |
| |
MAKO Surgical Corp.
| | Volcano Corporation |
| |
Medidata Solutions*
| | Competitive Positioning |
Peer Group Data.
The compensation committee targetsCompensation Committee generally seeks to position each executive officer’s target total annual cash compensation to generally fall within the median range for comparable positions at the companies in our compensation peer group. The compensation committeeIn addition, the Compensation Committee generally structures our officerexecutive compensation program so that outstanding performance (as measured against our compensation plans’ metricsplan measures and associated goalsrelated target levels) generates total annual cash compensation above the median range. On the other hand, our compensation program is generally structured so that achievement below compensation plan goalsour plans’ objectives generates total annual cash compensation below the median range, which reflects the compensation committee’sCompensation Committee’s pay-for-performance philosophy.
The
compensation committee also considers peer group data when determining compensation practices.The compensation committeeCompensation Committee may adjust a componentan element of a namedan executive officer’s pay or target total direct annual compensation above or below the median range to acknowledge the value, experience and potential he or she brings to the role, demonstratedability and success in meeting key objectives and sustained high-levellevel of performance. The differences in compensation levels among our named executive officers are primarily attributable to the differences in the range of compensation for similar positions at the companies in our compensation peer group. However, the Compensation Committee does not benchmark its compensation decisions to any particular level or against any specific member of the peer group. Rather, it utilizesuses the peer group informationdata as a referencefactor in determining the appropriate levels of overall total compensation and each individual compensation element.
Named Executive Officerselement for Fiscal 2015
For fiscal 2015, our named executive officers were:
Kevin Sayer, President and Chief Executive Officer;
Jess Roper, Senior Vice President and Chief Financial Officer;
Andrew Balo, Executive Vice President, Clinical, Regulatory and Quality;
Richard Doubleday, Executive Vice President, Chief Commercial Officer; and
Steven Pacelli, Executive Vice President, Strategy and Corporate Development.
Details and Elements of our 2015 Compensation
Since our primary business goals to achieve profitability and maintain and advance our technology advantage within our field did not change from 2014 to 2015, the structure and elements of our executive officers. In addition to the peer group data, the Compensation Committee also considers market information from the Radford Global Technology published compensation program remained largely consistent during these years. Thesurvey, which reflects the broader market in which we compete for talent.
| | | | | | | | | | | | | | |
| Fiscal 2021 Compensation Elements |
In fiscal 2021, the Compensation Committee designed our executive compensation committee designed the program to focus our executive officers on leading our entire organization toward achieving both short-term and long-term strategic, financial and operational goals, and increasing stockholder value, without encouraging excessive risk taking. risk-taking.
The
base salaries to be paid to our named executive officers were fixed at the beginning of 2015, and incentive cash compensation actually paid to our named executive officers was above target levels, which reflected our strong fiscal 2015 commercial performance and the compensation committee’s pay-for-performance philosophy. The compensation committee reviews competitive market information with our CEO for each executive officer. The compensation committee provides a recommendation to the Board on the Executive Chairman’s and CEO’s compensation. In addition, at the beginning of each fiscal year, the compensation committee reviews executive officers’ performance for the last year and objectives for the next year, together with an executive officer’s responsibilities and experience level. The compensation committee also considers our overall fiscal performance compared to our fiscal objectives and performance targets. The relative weight given to these factors varies with each individual at the discretion of the compensation committee.Thetable sets forth principal elements of compensation for our employees,executive officers, including our executive officers, include:
NEOs.base salary that is designed primarily to be conservative, but generally competitive, with base salary levels in effect at comparable medical technology and device companies with which we compete for personnel;
| | | | | | | | | | | |
| Compensation Type | Description | Rationale |
| | | |
| | | |
| Base Salary
(Cash) | Fixed compensation delivered in cash on a semi-monthly basis. | Base salary that is designed primarily to be appropriate for our executive officers’ positions and responsibilities, or generally competitive with base salary levels in effect at peer group companies. |
| | | |
| Annual Cash Bonus
(Cash) | Annual cash bonus awards under the 2021 Bonus Plan that are contingent upon the achievement of annual financial and operational performance objectives established by our Board of Directors. | Motivates achievement of core strategic short-term financial and operational results. |
| | | |
| Equity Incentives
(Stock) | Equity incentives, in the form of RSU and PSU awards, with the size of such awards based primarily on the individual performance, expected future contributions of each executive officer, relative pay parity considerations within our company, and competitive market considerations. | Award amounts are premised upon our belief that we should: •recognize significant company performance with particular focus on our revenue growth, performance milestone achievements and long-term stock price growth; •conserve our cash resources to support our goal of achieving and maintaining profitability; •increase alignment of our executive officers’ interests with the long-term interests of our stockholders; and •encourage our executive officers to behave like owners. |
cash incentive awards that are contingent upon the achievement of rigorous annual financial and operational performance goals established by the Board of Directors; and
long-term equity incentives, consisting of restricted stock unit grants with such grants based primarily on the individual performance and expected future contributions of each executive in combination with consideration of competitive market data. Grant amounts are premised upon our belief that we should:
recognize significant Company performance with particular focus on our revenue growth, performance milestone achievements and long-term stock price growth;
conserve our cash resources to support our goal of achieving profitability;
increase alignment of management’s interests with the long-term interests of our stockholders; and
encourage employees to behave like owners.
Consistent with the principles of our executive officer compensation summarizedphilosophy and objectives described above, an executive officer’s total direct compensation is based upon our company’s overall performance and the performance of that individual executive officer. We do not have a pre-established policy or target for allocating between fixed and variable compensation, which includes short-term cash compensation and long-term equity compensation or among the different types of variable compensation, although the allocation is influenced by the compensation committee’sCompensation Committee’s assessment of the compensation practices of the companies in the compensation peer group and our short-term and long-term strategic objectives. Variable
The following graphs depict the allocation of “fixed” and “variable” compensation
generally consists of annual cash incentive compensation and long-term equity incentives, and represents the primary portion of the total direct compensation opportunity for each executive officer. The compensation committee believes that the executive officers’ consistent and sustained performance can have a direct and significant impact on long-term stockholder value. The graph below depicts the percentages of fixed and variable income for our CEO and,
foron average, the
remainder of our named executive officersother NEOs during
2015.fiscal 2021.
We provide our executive officers
and other employees with a base salary to compensate them for services rendered during the fiscal year.
We determineThe Compensation Committee determines the base salaries for our executive officers based in part on
ourits review of
the prevailing compensation practices in our
compensation peer group and the following factors: the
executive officer’s scope of responsibilities, experience,
past performance and objectives for the year. Consistent with our
compensation philosophy,
the Compensation Committee generally strives to
pay for performance, as well as to conserve our cash resources as we work towards profitability,set the
compensation committee sets base salaries
for each of our executive officers at or below the 50th percentile of our
compensation peer group
for each named executive officer.but maintains flexibility as warranted.
On March
6, 2015,4, 2021, the
BoardCompensation Committee approved
2015the fiscal 2021 base salaries for our
named executive
officers.officers, including the NEOs. As a group, the
named executive officers’NEOs’ base salaries,
on average, increased by approximately
11%15% in
2015fiscal 2021 as compared to
2014. The changesfiscal 2020. As discussed above, the CEO’s salary increased by 13% in
the base salaries for Messrs. Sayer, Roper, Balo and Doubleday werefiscal 2021 as a result of
their promotionsthe Compensation Committee’s assessment of his contribution toward Dexcom’s performance during 2020 and its review of base salaries paid to
CEO, Senior Vice President, Executive Vice PresidentCEOs of the companies in our compensation peer group CEOs (as recommended by Compensia, the Compensation Committee’s independent consultant at the time of such salary increases) relative to our compensation philosophy, which showed that Mr. Sayer’s base salary was below the median of our peer groups. The other increases were made based on considerations of market data, company performance and
Executive Vice President, respectively. | | | | | | | | | | | | | | |
Name | | Title | | 2015 Salary | | | 2014 Salary | | | % Increase | |
Kevin Sayer | | President & CEO | | $ | 400,000 | | | $ | 325,000 | | | | 23 | % |
Jess Roper | | SVP & CFO | | $ | 260,000 | | | $ | 248,850 | | | | 4 | % |
Andrew Balo | | EVP, Clinical, Regulatory and Quality | | $ | 310,000 | | | $ | 291,200 | | | | 6 | % |
Richard Doubleday | | EVP, Chief Commercial Officer | | $ | 310,000 | | | $ | 265,000 | | | | 17 | % |
Steven R. Pacelli | | EVP, Strategy & Corporate Development | | $ | 310,000 | | | $ | 296,400 | | | | 5 | % |
individual performance and contribution.
| | | | | | | | | | | | | | | | | | | | |
| Name | | 2021 Salary ($) | | 2020 Salary ($) | | Change from 2020 (%) |
| Kevin R. Sayer | | 900,000 | | | 800,000 | | | 13 | % |
| Jereme M. Sylvain | | 379,500 | | | 330,000 | | | 15 | % |
| Quentin S. Blackford | | 600,000 | | | 562,823 | | | 7 | % |
| Paul Flynn | | 373,973 | | | 322,768 | | | 16 | % |
| Jacob S. Leach | | 450,000 | | | 409,406 | | | 10 | % |
| Chad M. Patterson | | 373,750 | | | 285,503 | | | 31 | % |
2021 Bonus
PlansAs noted above,Plan
In March 2021, the compensation committeeCompensation Committee approved an Incentive Bonus Plan pursuant to which we may adopt bonus programs for all of our employees, including our NEOs, who do not participate in sales-based commission incentive plans. The Incentive Bonus Plan was adopted to set out the general framework under which our annual bonus programs may operate. The terms of the Incentive Bonus Plan are described in greater detail in our Form 8-K filed on March 11, 2021.
The Compensation Committee believes that a meaningful portion of the annualtarget total cash compensation for each executive officer should be in the form of variablean annual cash incentive bonuses,opportunity under our 2021 Bonus Plan, which was adopted under the terms of our Incentive Bonus Plan. The 2021 Bonus Plan is intended to motivate our executive officers towards achievement ofto achieve the annual financial and operational performance targetsobjectives set by the compensation committee. In particular, our cash bonus plansCompensation Committee that are consistent with and support our annual operating plan. Specifically, our 2021 Bonus Plan is designed to reward our executivesexecutive officers for the achievement of shorter-termour short-term financial goals, principally relating to the achievement of revenue and new patient targets, operating expense or income targets (exclusive of non-cash, share-based compensation and other accounting adjustments) andas well as operational performance goals. TargetGenerally, target performance objectives for our short-term financial goals are generally developed through our annual financial planning process, whereby weduring which management and our Compensation Committee assess our future operating environment and build projections on anticipated results, whichresults. Such target goalsperformance objectives are then reviewed and approved by the compensation committeeCompensation Committee and set forth in objective terms in our annual cash bonus plan.
The details of the 2021 Bonus Plan described in the sections below relate solely to executive officers with a title of vice president or higher. For fiscal 2021, our Board approved the 2021 Bonus Plan in March 2021 with the terms and conditions described below.
Target Annual Cash Bonus Opportunities
For purposes of the 2021 Bonus Plan, our Compensation Committee approved the target annual cash bonus planopportunity for our CEO and our other executive officers, including the other NEOs. The target bonus opportunities for level were maintained at the beginningsame levels as in 2020 (as expressed as a percentage of base salary) after reviewing compensation peer group and other market data presented by Compensia, the Compensation Committee's independent compensation consultant at the time, and each of Messrs. Flynn, Patterson, and Sylvain received an increase in their target bonus percentage from fiscal 2020 in connection with their promotions in fiscal 2021, which increased bonus percentage will apply for the full fiscal year. For fiscal 2015,The target annual cash bonus opportunities (expressed as a percentage of base salary) for our NEOs were as follows: | | | | | | | | | | | | | | |
| Name | | 2021 Target Cash Bonus (%) | | Change from 2020 (%) |
| Kevin R. Sayer | | 125 | % | | 0 | % |
| Jereme M. Sylvain | | 75 | % | | 25 | % |
| Quentin S. Blackford | | 75 | % | | 0 | % |
| Paul Flynn | | 75 | % | | 25 | % |
| Jacob S. Leach | | 75 | % | | 0 | % |
| Chad M. Patterson | | 75 | % | | 25 | % |
2021 Executive Annual Cash Bonus Design and Performance Measures
In March 2021, in a manner consistent with our past practice, the
compensation committee identified productCompensation Committee selected organic revenue as
athe primary
metric of the 2015 Bonus Plan (the “2015 Plan”), as adjusted,measure to be used to determine executive annual cash bonuses since it is a key
measureindicator of
our progress towards profitability as well as our growth in terms of customers and
their utilization of our
products.products (the “Revenue Component”). In addition,
the Compensation Committee selected our Non-GAAP Operating margin as
a second key measure to be used to determine annual cash bonuses to provide incentive to increase our
business matures andoperating income as we continue to work towards achieving and maintaining profitability
(the “Non-GAAP Operating Margin Component”). The Non-GAAP Operating Margin Component includes our Non-GAAP Operating Margin as adjusted to exclude (i) amortization of acquired intangible assets, (ii) business transition and related costs, (iii) non-cash collaborative research and development fees associated with milestone and incentive payments, (iv) COVID-19 related costs, (v) intellectual property litigation costs, and (vi) litigation settlement costs incurred by us and approved by our Board (as adjusted, the
compensation committee included an operating income target“Non-Operating Margin”). See Appendix A for the calculation of Non-GAAP Operating Margin. Together, these two metrics comprise 80% of the 2021 Bonus Plan. In addition, given the importance of continuing to develop our pipeline and commercialize our products, the Compensation Committee selected operational performance milestones (described below) as a
separate metric of the 2015 Plan to incentivize actions to increase our operating income and to further our drive to achieve GAAP-based profitability. As the third
metric of our 2015 Plan, a portion of the bonus payable under the 2015 Plan was based on achieving certain performance milestones, as detailed below, since continued development of our technology and commercialization will also add to our overall value.Named Executive Officers Bonus
For our named executive officers, the amount of any bonus awarded under the 2015 Plan was predicated on achieving targeted product and service revenue goals, targeted operating loss goals, and performance milestones. Under the 2015 Plan, the target bonus amounts for our named executive officers were as outlined below. Generally, 60% of any bonus paid under the 2015 Plan to named executive officers was based on achieving certain annual revenue goalsmeasure (the “Revenue Component”), 20% was based on achieving targeted operating income goals (the “Operating Results Component”) and 20% was based on achieving certain performance milestones (the “Performance“Strategic Initiative Component”). In addition, the 2015 Plan included two stretch goals, both identified at the time that the 2015 Plan was approved by the Board, pursuant to which any bonus amount otherwise payable could be increased by an additional 25% if both such stretch goals were achieved.
The maximum amount that could be achieved wereawarded if we to achieveachieved the top end of both the Revenue Component, as well as the Non-GAAP Operating ResultsMargin Component, and each of the performance milestones in the PerformanceStrategic Initiative Component and both of the stretch goals would be 200%175% of a givenan executive officer’s target annual cash bonus amount. The changes in the target bonus percentages for Messrs. Sayer, Roper, Baloopportunity as set forth below.
Fiscal 2021 Bonus Plan Formula and
Doubleday were as a result of their promotions to CEO, Senior Vice President, Executive Vice President and Executive Vice President, respectively. | | | | | | | | | | |
Name | | Title | | Target Bonus | | | Change from 2014 | |
Kevin Sayer | | President & CEO | | | 125 | % | | | 25 | % |
Jess Roper | | SVP & CFO | | | 50 | % | | | 25 | % |
Andrew Balo | | EVP, Clinical, Regulatory and Quality | | | 75 | % | | | 50 | % |
Richard Doubleday | | EVP, Chief Commercial Officer | | | 75 | % | | | 50 | % |
Steven R. Pacelli | | EVP, Strategy & Corporate Development | | | 75 | % | | | 0 | % |
| | | | | | | | | | | | |
Short-Term Incentive Plan Goals | |
Component | | | Revenue | | | | Operating Income | | | | Performance Milestones | |
Weighting | | | 60% | | | | 20% | | | | 20% | |
Results
Under the 20152021 Bonus Plan, no portion of the annual cash bonus attributable to the Revenue Component was to be paid unless we met a specified minimum organic revenue target level for fiscal 20152021 of $340 million. Upon achievement$2.10 billion which represents an increase of this minimum revenue target, each named executive officer was to receive a bonus award of 100% of their targeted annual bonus attributable to the Revenue Component. If we exceeded our fiscal 2015 revenue target, each of the named executive officers was to receive bonuses at various stepped up amounts up to a maximum of 175% of their targeted annual bonus attributable to the Revenue Component. The revenue target of $340 million was established at a level that required more than 31% growth9.0% over the productorganic revenue totalof fiscal 2020. These Revenue Component targets were increasedfrom our targets last year to account for 2014. Weand incentivize our continued growth and success. Our Compensation Committee believed the 20152021 organic revenue target to be challenging but achievable, but it would have required excellentrequiring strong performance byfrom each of our named executive officers. During 2015,fiscal 2021, we generated productoverachieved our target organic revenue of approximately $400.7 milliongoal with $2.42 billion, representing a growth rate of 56%approximately 26%. Accordingly, the named executive officers and other eligible employees received a bonus of 175% of the targeted annual bonus opportunity attributable toAt these achievement levels, the Revenue Component.Component was achieved at a level of 133% by the 2021 Bonus Plan's terms.
Under the
20152021 Bonus Plan, no portion of the annual
cash bonus attributable to the
Non-GAAP Operating
ResultsMargin Component was to be paid unless we met
an operating incomea specified minimum Non-GAAP Operating Margin Component target for fiscal
20152021 of
$60 million, as adjusted to exclude (i) any acquisition charges or (ii) for any additional targeted strategic investment related expenses incurred by the Company and approved by the Board; (iii) and any non-cash share-based compensation and other non-cash charges and (iv) impact of the adoption of any new accounting pronouncements. Upon achievement of this operating incomeat least 10.00%. The Non-GAAP Operating Margin target
each named executive officer would receive a bonus award of 100% of their target annual bonus attributable to the Operating Results Component. If we achieved operating income results that were more favorable in fiscal 2015 than our operating income target, the named executive officers would receive bonuses at various stepped up amounts up to a maximum of 175% of their target annual bonus attributable to the Operating Results Component. The operating income target of $70 million was established at a level that
weour Compensation Committee believed to be achievable, but would
have required nearly 90% growth from $36.9 million, as adjusted, in 2014,require the Non-GAAP Operating Margin to meaningfully grow, and would
have required excellentrequire strong performance by each of our
named executive officers. During
2015,fiscal 2021, we exceeded our
operating incomeNon-GAAP Operating Margin Component target
bylevel finishing the year with
$73.4 million, as adjusted, in operating income,a Non-GAAP Operating Margin of 15.14%, and accordingly,
the namedour executive officers,
including the NEOs, received
a bonusan award of
125%150% of
thetheir target annual
cash bonus opportunity attributable to the
Non-GAAP Operating
ResultsMargin Component.
See Appendix A for the calculation of Non-GAAP Operating Income.
Under the PerformanceStrategic Initiative Component, bonus amountsawards were to be paid to the namedour executive officers, including the NEOs, for achieving specifiedone or more pre-established corporate performance milestones. Eligible participants received 20%Each participant in the 2021 Bonus Plan was eligible to receive an award equal to a certain percentage of their target annual cash bonus opportunity attributable to the PerformanceStrategic Initiative Component for our achievement of each of fourthree corporate performance milestones selected by us duringour Compensation Committee for fiscal 2015. We achieved our first2021. These corporate performance milestone by launching our cloud-based software platform, called Clarity, during 2015. We achieved our second performance milestone by filing an application with themilestones were as follows:
(1)Completion of U.S. Food and Drug Administration, or FDA, seeking approvalregulatory filings for our G5 Mobile system innext-generation CGM product;
(2)Launch of our next-generation CGM product outside the first quarter of 2015. We also achieved our third performance milestone, which was to enable reimbursement for at least 25 million covered lives through pharmacy benefit channels. We did not achieve our fourth milestone which was filing an application with the FDA or filing for a CE Mark, for our auto-applicator / transmitter system. Accordingly, eligible participants received 75%U.S.; and
(3)Completion of the target annual bonus opportunity attributabledesign plan related to the Performance Component or 15%. a pipeline product.
These
corporate performance milestones were designed to
requiredirectly impact our ability to advance our product portfolio, increase revenue and increase the overall value of the Company in the future. They also required improvement upon past levels of performance, and as such,
weour Compensation Committee considered them significantly challenging to achieve.
Finally, to provide further incentive
During fiscal 2021, the Compensation Committee determined that we achieved Milestones #1 and #3. Accordingly, our executive officers, including the NEOs, earned 105% of their target annual cash bonus opportunity attributable to the named executive officers concerning our objective to substantially increase our revenues during 2015, via Strategic Initiative Component.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fiscal 2021 Annual Cash Bonus Payout Formula |
| | | | | | | | | | | |
| Component | | | | | Revenue Component | + | Non-GAAP Operating Margin Component | + | Strategic Initiative Component | = | Annual Cash Bonus % |
| | | | | | | | | | | |
| Weighting | | | | | 60% | | 20% | | 20% | | 100% |
| | | | | | | | | | | |
| | | | | | | | | | | |
The following table presents information relating to the various components targets and potential for the minimum and maximum achievement under the 20152021 Bonus Plan. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bonus Component | | Revenue(1) | | | Operating
Income(1) | | | Performance
Milestones(2) | | | Total | |
Weighting | | | 60% | | | | 20% | | | | 20% | | | | 100% | |
Maximum Achievement (A) | | | 175% | | | | 175% | | | | 100% | | | | | |
Stretch Goal Multiplier (B) | | | | | | | | | | | | | | | | |
Stretch Goal #1 (max of 112.5%)(3) | | | 112.5% | | | | 112.5% | | | | 112.5% | | | | | |
Stretch Goal #2 (max of 112.5%) | | | Not Met | | | | Not Met | | | | Not Met | | | | | |
Total Achievement (A x B) | | | 197% | | | | 197% | | | | 113% | | | | 180% | |
| | | | | | | | |
Name | | Target
Bonus | | | Earned
Bonus | | | Target
Bonus | | | Earned
Bonus | | | Target
Bonus | | | Earned
Bonus | | | Target
Bonus | | | Earned
Bonus | |
Kevin Sayer | | $ | 300,000 | | | $ | 590,625 | | | $ | 100,000 | | | $ | 140,625 | | | $ | 100,000 | | | $ | 84,375 | | | $ | 500,000 | | | $ | 815,625 | |
Jess Roper | | $ | 78,000 | | | $ | 153,563 | | | $ | 26,000 | | | $ | 36,563 | | | $ | 26,000 | | | $ | 21,938 | | | $ | 130,000 | | | $ | 212,063 | |
Andrew Balo | | $ | 139,500 | | | $ | 274,641 | | | $ | 46,500 | | | $ | 65,391 | | | $ | 46,500 | | | $ | 39,234 | | | $ | 232,500 | | | $ | 379,266 | |
Richard Doubleday | | $ | 139,500 | | | $ | 274,641 | | | $ | 46,500 | | | $ | 65,391 | | | $ | 46,500 | | | $ | 39,234 | | | $ | 232,500 | | | $ | 379,266 | |
Steven R. Pacelli | | $ | 139,500 | | | $ | 274,641 | | | $ | 46,500 | | | $ | 65,391 | | | $ | 46,500 | | | $ | 39,234 | | | $ | 232,500 | | | $ | 379,266 | |
(1) | 2015 Achievement on revenue and operating income components reflect maximum 175% and 125%, respectively, achievement on plan (as described above). |
(2) | 2015 Achievement on performance milestone components reflects 75% achievement of specific performance milestones described above. |
(3) | Revenue, operating income and performance milestone bonus components increased by 12.5% | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2021 Theoretical Annual Cash Bonus Payout | | Performance Metrics/Components | | Fiscal 2021 Target Performance | | Multiplier
(%) | | Weighting
(%) | | Maximum Bonus Payout (%) (1) | | | | | | | | | | Revenue Component ($ Billions) (2) | | | | | | | | | | Minimum | | $2.10 | | 50 | % | | 60 | % | | 105 | % | | Maximum | | $2.50 or greater | | 175 | % | | | | | | | | | | | | | Non-GAAP Operating Margin Component (%) | | | | | | | | | | Minimum | | 10.00% | | 50 | % | | 20 | % | | 35 | % | | Maximum | | 16.00% or greater | | 175 | % | | | | | | | | | | | | | Strategic Initiative Components | | | | | | | | | | Strategic Initiative Milestone #1 | | | | 175 | % | | 10 | % | | 18 | % | | Strategic Initiative Milestone #2 | | | | 175 | % | | 5 | % | | 9 | % | | Strategic Initiative Milestone #3 | | | | 175 | % | | 5 | % | | 9 | % | | | | | | | | | | | | Total Maximum Annual Cash Bonus % (1) | | 175 | % | | | | | | | | | | (1) The sum or product of the performance metrics/components may not equal the totals due to rounding. | (2) For the Revenue Component, target revenue excluded non-CGM revenue acquired in conjunction with Dexcom’s acquisition of its distributor in Australia and New Zealand. |
The following table presents information relating to reflect additional achievement of stretch goal related to revenue growth (as described above). |
We believe the 2015various components and actual achievement under the 2021 Bonus Plan.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2021 Actual Annual Cash Bonus Payout |
| Performance Metrics/Components | | Fiscal 2021 Performance | | Multiplier
(%) | | Weighting
(%) | | Fiscal 2021 Bonus Payout (%)(1) |
| | | | | | | | |
Revenue Component ($ Billions) (2) | | $2.42 | | 133 | % | | 60 | % | | 80 | % |
| | | | | | | | |
| Non-GAAP Operating Margin Component (%) | | 15.14% | | 150 | % | | 20 | % | | 30 | % |
| | | | | | | | |
| Strategic Initiative Milestone #1 | | Achieved | | 138 | % | | 10 | % | | 14 | % |
| Strategic Initiative Milestone #2 | | Not Achieved | | — | % | | 5 | % | | — | % |
| Strategic Initiative Milestone #3 | | Achieved | | 138 | % | | 5 | % | | 7 | % |
| | | | | | | | |
| | Total Actual Annual Cash Bonus % (1) | | 131 | % |
| | | | | | | | |
(1) The sum or product of the performance metrics/components may not equal the totals due to rounding. |
(2) Fiscal 2021 Revenue Component performance excludes non-CGM revenue acquired in conjunction with Dexcom’s acquisition of its distributor in Australia and New Zealand. |
The following table presents information relating to the various components and actual achievement under the 2021 Bonus Plan for each NEO.
| | | | | | | | | | | | | | | | | | | | | | | |
| Name | Salary
($) | Target 2021 Bonus as a Percent of Salary (%) | Target 2021 Bonus ($) | Actual 2021 Bonus as a Percent of Target Bonus (%) | Individual Multiplier (%) | Actual 2021 Bonus Paid ($) | |
| Kevin R. Sayer | 900,000 | | 125 | % | 1,125,000 | | 131 | % | 100 | % | 1,473,750 | | |
| Jereme M. Sylvain | 379,500 | | 75 | % | 284,625 | | 131 | % | 100 | % | 372,859 | | |
| Quentin S. Blackford | 600,000 | | 75 | % | 450,000 | | 131 | % | — | % | — | | (1) |
| Paul Flynn | 373,973 | | 75 | % | 280,480 | | 131 | % | 100 | % | 367,428 | | |
| Jacob S. Leach | 450,000 | | 75 | % | 337,500 | | 131 | % | 100 | % | 442,125 | | |
| Chad M. Patterson | 373,750 | | 75 | % | 280,313 | | 131 | % | 100 | % | 367,209 | | |
(1) Mr. Blackford left the named executive officers was an instrumental element in driving our strong performance in 2015, during which our product revenue grew by 56% from 2015 to approximately $400.7 million.company effective September 17, 2021.
Equity
Incentive ProgramsAwards
Because of the direct relationship between the value of our equity awards and the fair market value of our common stock, we believe that granting stock options or restricted stock unitstime- and performance-based RSU awards is the best method of motivating our executive officers and employees in a manner that is consistent with thealigns their interests of our Company and our stockholders. In 2015, we issued restricted stock units to our named executive officers in lieu of stock options to reduce to some extent the dilution to our common stock, and to conserve shares in our incentive equity pool during another year in which we added significantly to our headcount. The compensation committee’s philosophy for long-term equity incentive compensation is to align the interests of our named executive officers with our long-term strategic direction and the interests of our stockholders, to helpand helps reduce the possibility that our named executive officersthey make business decisions that favor short-term results or individual compensation at the expense of long-term value. As a result,value creation.
In fiscal 2021, the compensation committee’s approach isCompensation Committee continued to awardgrant time-based restricted stock unitsRSU awards (as set forth in the table below) to our named executive officers. Weofficers, including our NEOs, in lieu of stock options to better manage the dilution to our common stock, and to conserve the shares of our common stock in our incentive equity pool during another year in which we significantly added to our headcount. Our Board and the Compensation Committee believe this award structure ensures continued focus on the long-term value of our business, aligns the interests of our executive officers with those of our stockholders and helps to retain highly talented executivesexecutives.
Additionally, for our Section 16 Officers, we elected to grant a percentage of their total annual equity award value (at target as set forth in the table below) in the form of PSUs that are earned and vest upon achievement of both an operational goal in fiscal 2021 (tied to aligncertain product sales) and modified by a multiplier which is calculated based on the Total Shareholder Return (“TSR”) of Dexcom’s common stock relative to the TSR of the constituents of the Nasdaq Composite Index (“Index”) from January 1, 2021 through December 31, 2023 (“2021 PSU Performance Period”) as well as their interestcontinued employment on the last date of such period. The operational goal ranged between 40% (for minimum performance) to 160% (of maximum performance) of target and the operational goal for 2021 was achieved at 116%, resulting in banked shares (as set forth in the table below) that will be multiplied by the three-year relative TSR modifier at the end of the 2021 PSU Performance Period (December 31, 2023). The TSR modifier ranges from a minimum of 0% to a maximum of 125% and the total payout under the 2021 PSU award, reflective of the operational goal achievement, ranges from 0% to 145% of the target award. The actual TSR performance will be determined in 2024, and the PSU will be earned and paid out, based on the metrics achieved, at that time, subject to continued employment on the last day of the 2021 PSU Performance Period.
| | | | | | | | | | | |
| Name | Annual Equity Award Value PSU
(%) | PSU Target Shares
(#) | PSU Shares Banked based on operational goal achievement
(#) |
| Kevin R. Sayer | 50 | % | 13,445 | | 15,607 | |
| Jereme M. Sylvain | 20 | % | 1,326 | | 1,539 | |
| Quentin S. Blackford | 35 | % | 4,034 | | — | |
| Paul Flynn | 20 | % | 1,409 | | 1,636 | |
| Jacob S. Leach | 20 | % | 1,793 | | 2,081 | |
| Chad M. Patterson | 20 | % | 1,409 | | 1,636 | |
In fiscal 2020, the Compensation Committee granted 13,706 shares to our CEO (at target) in the form of PSUs that are earned and vest upon achievement of both an operational goal in 2020 (tied to certain product sales) and our three-year relative
TSR performance versus the Index from January 1, 2020 through December 31, 2022 (“2020 PSU Performance Period”) the three-year period following the date of grant, as well as our CEO's continued employment on the last date of such period. The operational goal was achieved at approximately 132%, resulting in 18,144 shares that will be multiplied by the three-year relative TSR modifier at the end of the 2020 PSU Performance Period (December 31, 2020). The three-year TSR performance metric will act as a modifier with thosea minimum target of 0% and a maximum of 125%. The actual TSR performance will be determined in 2023, and the PSU will be earned and paid out, based on the metrics achieved, at that time, subject to the CEO’s continued employment on the last day of such period and certification by our stockholders overCompensation Committee.
On January 18, 2022, the
long-term.
Compensation Committee certified the performance achieved for the period ended December 31, 2021 and approved shares with respect to the PSU granted to our CEO in fiscal 2019, which were eligible to be earned and vest upon achievement of both an operational goal in 2019 (tied to certain product sales) and our three-year relative TSR performance versus the Index during from January 1, 2019 through December 31, 2021 (��2019 PSU Performance Period”), as set forth in the table below.
| | | | | | | | | | | | | | |
| NEO | Target Award
(#) | Operational Goal Achieved
(%) | Actual Award
(#) |
| Kevin R. Sayer | 19,293 | | 160 | % | 38,586 | |
The compensation committeeproduct sales goals applicable to the PSUs, which are different from the 2021 Bonus Plan performance measures, pertain to confidential company development and business plans, the disclosure of which in any additional granularity would result in competitive harm to the company. The Board believed that this goal would require a high level of executive officer performance in order to be achieved. Likewise, the product sales goals applicable to the PSUs has increased and become more challenging to achieve each year that the Company has granted the PSUs.
The Compensation Committee grants equity awards to our executive officers based upon prior performance, the importance of retaining their services and with the goal of providing each executive officer with an incentive to manage from the perspective of an owner with an equity stake in the business to help us attain our long-term goals.
We intend ourThe Compensation Committee also regards equity
award program to be the primary vehicle for offering long-term incentives and rewarding our executive officers and other key employees. We also regard our equity award programawards as a key retention tool. The retentive aspect of our equity award program is a very important factor in our determination of the type of award to grant and the number of shares underlying the equity award that are granted.
We also evaluateThe Compensation Committee considers the number
and value of vested and unvested equity awards currently held by our executive officers in determining
the need for, and size of, additional
grants. We may utilize various forms ofawards. Typically, we grant equity awards
as and when we deem appropriate, particularly in response to
changes in tax and accounting treatment of awards or specific feedback from key stockholders.The compensation committee plans to continue to utilize restricted stock units as a means to recruit, retain, reward and motivate our executive officers in fiscal 2016, in order to provide an incentive to them to spend an extended portion of time with us and to build value over time. However, in light of competitive compensation data for 2014 that we reviewed in 2015, the increase in our stock price, and our desire to minimize dilution to existing stockholders, we elected to reduce the restricted stock unit grant target amounts in 2015 by approximately 50% across the company, including for our named executive officers. For example, our CEO received 182,813 restricted stock units in 2014, and in 2015 our CEO received 90,000 restricted stock units. Furthermore, in 2016, again based on competitive compensation data for 2015, we elected to further reduce the restricted stock unit grant target amounts by approximately 16% across the Company.
Grants to newly hired executive officers are approved by the compensation committee and are effective on the grant dates consistent with our equity award policy. We typically grant restricted stock units to certain of our executive officers annually in conjunction with the release of our fiscal year-end earnings results.
In addition to annual equity awards, the Company made supplemental RSU awards to the NEOs, other than the CEO, of the Company. The awards were made to maintain stability in the executive leadership team, particularly given the dynamic job market, including the difficult recruiting and retention landscape, and considering recent executive departures, the Committee believed it was necessary to grant these supplemental awards. The awards were designed to address retention issues in the context of turnover at our Company and in our sector as well as general demand for qualified individuals in light of hiring by competitors and from newly public companies. In determining the size and scope of the supplemental awards the Committee considered the appropriate equity vehicle, members of the leadership team as well as the impact on dilution and the Company’s burn rate. The supplemental awards were made in the form of RSUs that vest over a three-year period, with half of the awards vesting after two years and the remainder vesting on a quarterly basis through the third anniversary of the date of grant.The number of RSUs granted in December 2021 as part of the supplemental award to NEOs is provided in the table below.
With respect to our NEOs, the following table illustrates the change in the size and value of our annual equity awards to our NEOs between fiscal 2020 and fiscal 2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Fiscal 2021 Equity Awards | | Fiscal 2020 Equity Awards | | |
| Name | PSU Shares
(#) | RSU Shares
(#) | Total Shares
(#) | Grant
Date Value
($) | | PSU Shares
(#) | RSU Shares
(#) | Total Shares
(#) | Grant
Date Value
($) | Change in Total Shares
(%) | Change in Grant Date Value
(%) |
| Kevin R. Sayer | 13,445 | | 13,445 | | 26,890 | | 9,596,745 | | | 13,706 | | 25,453 | | 39,159 | | 11,178,402 | | (31) | % | (14) | % |
| Jereme M. Sylvain | 1,326 | | 8,226 | | 9,552 | | 3,955,721 | | | — | | 5,483 | | 5,483 | | 1,571,208 | | 74 | % | 152 | % |
| Quentin S. Blackford | 4,034 | | 7,491 | | 11,525 | | 4,177,209 | | | — | | 12,727 | | 12,727 | | 3,647,049 | | (9) | % | 15 | % |
| Paul Flynn | 1,409 | | 8,559 | | 9,968 | | 4,104,640 | | | — | | 5,874 | | 5,874 | | 1,683,253 | | 70 | % | 144 | % |
| Jacob S. Leach | 1,793 | | 10,096 | | 11,889 | | 4,792,343 | | | — | | 11,748 | | 11,748 | | 3,366,507 | | 1 | % | 42 | % |
| Chad M. Patterson | 1,409 | | 8,559 | | 9,968 | | 4,104,640 | | | — | | 5,092 | | 5,092 | | 1,459,164 | | 96 | % | 181 | % |
On average, including our CEO, the equity awards granted to our NEOs in fiscal 2021 increased 34% in terms of the aggregate number of shares of our common stock subject to the awards assuming target level of achievement of our PSUs and increased 87% in terms of grant date fair value compared to the equity awards granted to such NEOs in fiscal 2020.
Overall, the Compensation Committee considers the management of our aggregate dilution in fiscal 2021 both with respect to our NEOs and our overall company budget and the need to maintain market competitive awards and reward performance when granting equity awards.
With respect to our executive officers, initial restricted stock unit grantsRSU awards provided at the time of hire typically vest over a four -yearfour-year period in four equal annual installments. Subsequent restricted stock unit grantsRSU awards granted to our executive officers typically vest over a 36-month periodthree years in equal annual installments from the date of grant as follows: 33% shall vest 12 months from the grant date, with the remaining balance vesting in four equal installments every six months thereafter.In March 2015, we made restricted stock grants under our 2005 Equity Incentive Plan to our named executive officers as outlined below. Restricted stock unitsgrant. The RSU awards granted to the named executive officersNEOs in fiscal 2021 were all granted with a typicalthat three -year vesting schedule.
| | | | | | |
Name
| | Title
| | # of RSUs | |
Kevin Sayer
| | President & CEO | | | 90,000 | |
Jess Roper
| | SVP & CFO | | | 40,000 | |
Andrew Balo
| | EVP, Clinical, Regulatory and Quality | | | 47,500 | |
Richard Doubleday
| | EVP, Chief Commercial Officer | | | 47,500 | |
Steven R. Pacelli
| | EVP, Strategy & Corporate Development | | | 45,000 | |
Perquisites and Certain Other Benefits
We limit the perquisites that we make available For PSUs granted to our executive officersCEO in an effortfiscal 2021, the PSUs vest upon achievement of both the operational goal during the first year of the grant and goals tied to conserve our financial resources. three-year relative TSR performance versus the Index during the years 2021-2023, as well as our CEOs continued employment, with the amount earned to be determined and settled at the end of the full 3-year performance period. For additional details regarding the PSU, please see the discussion above earlier in this section titled “
Equity Awards.” Health and Welfare Benefits
Except for certain severance and change
ofin control agreements
and the eligibility to participate in our executive non-qualified deferred compensation plan, each as described below, our
executivesexecutive officers are not entitled to any benefits that are not otherwise available to all of our employees. In addition, we do not provide pension arrangements, or maintain non-qualified defined benefit plans,
or other deferred compensation plans, post-retirement health coverage (aside from COBRA benefits), or similar benefits for our
executives or employees.executive officers. Our health and insurance plans are the same for all employees.
Perquisites and Other Personal Benefits
We limit the perquisites and other personal benefits that we make available to our executive officers in an effort to conserve our financial resources. We have adopted a tax equalization policy for employees on international assignment, including Mr. Flynn. The tax equalization policy is intended to absorb the favorable and unfavorable tax consequences resulting from international assignments and to keep an international assignee’s tax obligation approximately the same as if assignee had worked solely in his or her home country. Mr. Flynn’s home country is Canada, and he is currently on assignment in the United States. The effect of the tax equalization policy on Mr. Flynn’s compensation for 2021 has not yet been determined; however, Mr. Flynn was required to make payments to the Company under the tax equalization policy with respect to compensation paid in 2020. Pursuant to the tax equalization policy, the Company pays the costs of preparation for each assignee’s necessary income tax returns, provided that the assignee uses the Company’s designated tax provider.
| | | | | | | | | | | | | | |
| Post-Employment Compensation |
In June 2017, the Board adopted a Severance and Change
in Control Plan and a form of
Participation Agreement (collectively, the "Severance & Change in Control
Our Plan") that was available for our CEO and other executive officers, including our other NEOs. At the end of fiscal year 2021, all of our NEOs other than Mr. Blackford, were participants in the Severance & Change in Control Plan. Additionally, as the end of fiscal year 2021, Messrs. Sayer and Leach were entitled to certain acceleration benefits pursuant to Termination Agreements entered into with the Company in connection with the termination of Messrs. Sayer and Leach's prior severance agreements, which acceleration benefits are no longer applicable as of March 22, 2022. The prior severance agreements, Termination Agreements and change of control agreementsSeverance & Change in Control Plan are described in greater detail below in the section entitled “—Employment, Severance and Change in Control Agreements”.
The Severance & Change in Control Plan is designed to facilitate our ability to attract and retain
executivesour executive officers as we compete for talent in a
marketplacemarket where such protections are commonly offered.
The severance benefits described below are designedFurther, the plan enables us to
ease an executive officer’s transition due to an unexpected employment termination by us due to ongoing changes in our employment needs. The material terms of our change of control agreements were determined following an analysis of the change of control arrangements with other similar companies. Our change of control agreements encourage executives to remain focused on our business in the event of rumored or actual fundamental corporate changes.In December 2008, the compensation committee approved a form of Amended and Restated Executive Change of Control and Severance Agreement (collectively, the “Change of Control Agreements”) that was entered into by each of our CFO, our other named executive officers and our other executive officers ranking vice president and above. Please see the section titled “Employment, Severance and Change of Control Agreements” below for additional detail on the terms of our Change of Control Agreements. We entered into the Change of Control Agreements as part of our ongoing, periodic review of our compensation and benefits programs, in recognition of the importance to us and to our stockholders of avoidingavoid the loss and distraction of key management personnel that may occur if such key personnel are concerned about their job security in connection with actual or rumored corporate changes, and to help us attract and retain qualified executives who could have other job alternatives that may appear to them to be less risky without these arrangements.
The post-employment payments and benefits described in the section entitled “—Employment, Severance and Change in Control Arrangements” below are designed to ease an executive officer’s transition due to an unexpected employment termination by us due to ongoing changes in our employment needs, as well as a termination of employment following a change in control of our Company. The material terms of our Severance & Change in Control Plan were determined following an analysis of the post-employment compensation arrangements with other similar companies. Our Severance & Change in Control agreements encourage our executive officers to remain focused on our business in the event of rumored or actual fundamental corporate changes. Please see the section entitled “Employment, Severance and Change in Control Arrangements” below for additional detail on the terms of our Severance & Change in Control Plan.
We believe the structure of
this change of control arrangementthe Severance & Change in Control Plan protects stockholder value by allowing us the opportunity to deliver an intact and motivated management team to any potential acquirer. If we did not offer any benefits in connection with a change
ofin control, our
executivesexecutive officers could be less motivated to pursue a potential acquisition or continue working for us during a transition after an acquisition, even if such a transaction would benefit our stockholders, because of the possibility that they would lose the potential value of their unvested
equity compensation or future cash compensation upon an acquisition. As a result, we believe that these benefits further incentivize our executive officers to continue to create value for us and our stockholders.
The amounts payable upon a
named executive officer’sNEO’s termination of employment or upon a change
in control of
control areour Company have been calculated on an estimated basis and
are set forth in the section entitled “Employment, Severance and Change
ofin Control Arrangements” below.
Stock Ownership Guidelines
| | | | | | | | | | | | | | |
| Stock Ownership Guidelines and CEO Holding Requirement |
We grant stock options and restricted stock unitsRSU awards with the intent of aligning the interests of our employees, including our named executive officers, with the interests of our stockholders. Accordingly, we adoptedIn fiscal 2019, our Board updated the stock ownership guidelines in 2010 that require our executive officers to retain ownership of a material portionamount of our common stock.stock within three years of becoming an executive officer. Under these guidelines, each of our executive officers areis required to own shares of our common stock with an aggregate market value equal to three times his or her current base salary. Ownership levels are determined by including shares of common stock acquired through open market or Employee Stock Purchase Plan purchases, shares vested and unvested pursuant to restricted stock unit grants,RSU awards, as well as the in-the-money“in-the-money” value of vested stock options. Notwithstanding the foregoing, executive officers may sell enough shares to cover their income tax liability on vested equity awards.
As of the record date eachMarch 31, 2022, all of our namedNEOs who have served three years or more as executive officers met thewere in compliance with these stock ownership requirements.guidelines. Executive officers are expected, absent unusual circumstances, to maintain compliance with their target ownership levels.
In addition, our CEO is required to
hold 100%retain all shares received as a result of
net after-tax shares issued upon the exercise
or settlement of
any stock
optionsoption or
time-based RSU granted after April 8, 2015, net of the
vestingapplicable exercise price and tax withholdings, for a period of
restrictedno less than twelve months from the date of such exercise or settlement. Notwithstanding the foregoing, the CEO may sell shares that are held for less than twelve months to cover any tax payments relating to such equity awards that the CEO is required to make. In addition, the Compensation Committee may waive the twelve-month requirement for sales made by the CEO in response to a financial, medical or other personal emergency. This holding requirement further aligns our CEO’s interests with the long-term interests of our stockholders and is in addition to the requirement for the CEO and other NEOs to maintain stock
units for at least 12 months.ownership equal to three times his or her annual salary.
Our Insider Trading Policy, among other things, establishes periods of time during which employees, including our executive officers, may and may not trade shares of
DexCom’sour common stock.
ItIn addition, it also prohibits
our employees,
including our executive officers and the non-employee members of our Board from engaging in
hedgingacquiring, selling, or
pledging transactions involving DexCom stock.Compensation Recovery
trading in any interest or position relating to the future price of Company securities, such as a put option, a call option or a short sale (including a short sale “against the box”). We do not allow employees to hedge our equity securities pursuant to this policy. For additional information, see “Corporate Governance - Anti-Hedging.”
| | | | | | | | | | | | | | |
| Compensation Recovery (“Clawback”) Policy |
Our compensation recovery (“
Clawback”clawback”) policy provides that our Board may require the forfeiture, recovery or reimbursement of cash and equity incentive compensation from an executive officer in the event
the officer’shis or her fraud or intentional illegal conduct is determined by our Board to have materially contributed to a restatement of
DexCom’sour Company’s financial results.
Accounting and Section 162(m)
| | | | | | | | | | | | | | |
| Tax and Accounting Considerations |
Tax
ConsiderationsDeduction Limitation
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the amount that we may deduct from our federal income taxes for remuneration paid
to our named executive officers (other than our CFO)certain executives to $1 million dollars per executive officer per
year, unless certain requirements are met. Section 162(m) provides an exception from this deduction limitation for certain forms of “performance-based compensation,” as well as foryear. While the
gain recognized by covered executive officers upon the exercise of qualifying compensatory stock options. We anticipate that we will get a tax deduction against taxable income for any compensation paid that is less than $1 million, plus any amounts that would otherwise be taxable as ordinary income to executives on the exercise of non-statutory stock options. However, while our compensation committeeCompensation Committee is mindful of the benefit to us of the full deductibility of compensation,
our compensation committeehowever it believes that it should not be constrained by the requirements of Section 162(m) where those requirements would impair flexibility in compensating our executive officers in a manner that can best promote our corporate objectives. Therefore,
our compensation committeethe Compensation Committee has not adopted a policy that requires that all compensation be deductible.
Our compensation committeeInstead, the Compensation Committee intends
to continue to compensate our executive officers in a manner consistent with the best interests of
DexComour company and our stockholders.
Accounting Considerations
We follow FASB ASC Topic 718 for our stock-based compensation awards. FASB ASC Topic 718 requires us to measure the compensation expense for all share-based payment awards made to our employees and members of our Board, including stock options to purchase shares of our common stock and other stock awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the executive compensation tables required by the federal securities laws, even though the recipient of the awards may never realize any value from their awards.
| | |
| Compensation Committee Report |
The material in this report is not “soliciting material,” is not deemed “filed” with the
Securities and Exchange Commission,SEC, and is not to be incorporated by reference into any filing of
DexComDexcom under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
The
compensation committeeCompensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the
compensation committeeCompensation Committee recommended to the Board
of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.
| | |
| Compensation Committee |
| Bridgette P. Heller (Chair)* |
| Steven R. Altman |
| Karen Dahut** |
| Barbara Kahn** |
*Committee Chair since March 1, 2021
**Committee Member since March 1, 2021
Compensation CommitteeTableofContentsEric Topol, M.D., Chairman
Steven R. Altman
Mark Foletta
Jonathan Lord, M.D.
Jay Skyler, M.D.
SUMMARY OF EXECUTIVE COMPENSATION
Summary Compensation Table
| | | | | |
| |
| SUMMARY OF EXECUTIVE COMPENSATION |
| |
| | | | | | | | | | | | | | |
| Summary Compensation Table |
The following table presents compensation information for each of the three years ended December 31,
2015, 20142021, 2020 and
2013,2019, awarded to, earned by or paid to our
Chief Executive Officer, Chief Financial OfficerCEO, our CFO, and each of our
three other most highly compensated executive officers. We refer to these executive officers as our named executive
officers. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | | Salary ($) | | | Bonus ($) | | | Stock
Awards
($)(1) | | | Option
Awards
($)(1) | | | Non-Equity
Incentive Plan
Compensation
($)(2) | | | All Other
Compensation
($)(3) | | | Total ($) | |
Kevin Sayer | | | 2015 | | | $ | 400,000 | | | | — | | | $ | 5,363,010 | | | | — | | | $ | 815,625 | | | $ | 22,985 | | | $ | 6,601,620 | |
Chief Executive Officer | | | 2014 | | | | 325,000 | | | | — | | | | 7,112,850 | | | | — | | | | 624,000 | | | | 21,981 | | | | 8,083,831 | |
and President | | | 2013 | | | | 325,000 | | | | — | | | | 2,335,350 | | | | — | | | | 629,688 | | | | 18,465 | | | | 3,308,503 | |
| | | | | | | | |
Jess Roper | | | 2015 | | | $ | 260,000 | | | | — | | | $ | 2,383,560 | | | | — | | | $ | 212,063 | | | $ | 16,489 | | | $ | 2,872,112 | |
Senior Vice President and | | | 2014 | | | | 248,850 | | | | — | | | | 1,422,570 | | | | — | | | | 191,116 | | | | 15,736 | | | | 1,878,272 | |
Chief Financial Officer | | | 2013 | | | | 237,000 | | | | — | | | | 467,070 | | | | — | | | | 183,675 | | | | 13,065 | | | | 900,810 | |
| | | | | | | | |
Andrew Balo | | | 2015 | | | $ | 310,000 | | | | — | | | $ | 2,830,478 | | | | — | | | $ | 379,266 | | | $ | 22,524 | | | $ | 3,542,268 | |
EVP, Clinical, Regulatory and Quality | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Richard Doubleday | | | 2015 | | | $ | 310,000 | | | | — | | | $ | 2,830,478 | | | | — | | | $ | 379,266 | | | $ | 22,861 | | | $ | 3,542,605 | |
EVP, Chief Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Steven R. Pacelli | | | 2015 | | | $ | 310,000 | | | | — | | | $ | 2,681,505 | | | | — | | | $ | 379,266 | | | $ | 22,861 | | | $ | 3,393,632 | |
EVP-Strategy and | | | 2014 | | | | 296,400 | | | | — | | | | 3,366,749 | | | | — | | | | 426,816 | | | | 21,830 | | | | 4,111,795 | |
Corporate Development | | | 2013 | | | | 284,885 | | | | — | | | | 1,115,067 | | | | — | | | | 414,141 | | | | 18,515 | | | | 1,832,608 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and
Principal Position | Fiscal Year | Salary
($) | | Bonus
($) | Stock Awards ($)(1) | | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total
($) |
Kevin R. Sayer Chairman, President & Chief Executive Officer
| 2021 | 900,000 | | | — | | 9,596,745 | | (5) | | 1,473,750 | | 14,829 | | 11,985,324 | |
| 2020 | 800,000 | | | — | | 11,178,402 | | (6) | | 1,710,001 | | 115,753 | | 13,804,156 | |
| 2019 | 691,150 | | | — | | 8,186,558 | | (7) | | 1,382,300 | | 19,365 | | 10,279,373 | |
Jereme M. Sylvain EVP, Chief Financial Officer | 2021 | 379,500 | | | — | | 3,955,721 | | (5) | | 372,859 | | 30,800 | | 4,738,880 | |
Quentin S. Blackford Former Chief Operating Officer and Former Chief Financial Officer | 2021 | 425,753 | | (4) | | — | | 4,177,209 | | (5) | | — | | 18,892 | | 4,621,854 | |
| 2020 | 562,823 | | | — | | 3,647,036 | | | 830,094 | | 88,568 | | 5,128,521 | |
| 2019 | 516,780 | | | — | | 2,640,181 | | | 620,136 | | 29,799 | | 3,806,896 | |
Paul Flynn EVP, Global Revenue
| 2021 | 373,973 | | | — | | 4,104,640 | | (5) | | 367,428 | | 20,118 | | 4,866,159 | |
| | | | | | | | | |
| | | | | | | | | |
Jacob S. Leach EVP, Chief Technology Officer | 2021 | 450,000 | | | — | | 4,792,343 | | (5) | | 442,125 | | 23,805 | | 5,708,273 | |
| 2020 | 409,406 | | | — | | 3,366,495 | | | 525,063 | | 69,618 | | 4,370,582 | |
| | | | | | | | |
Chad M. Patterson EVP, Global Marketing | 2021 | 373,750 | | | — | | 4,104,640 | | | 367,209 | | 29,534 | | 4,875,133 | |
| | | | | | | | | |
| | | | | | | | | |
(1)These amounts reflect the grant date fair value of stock awards granted during 2019, 2020 and 2021 computed in accordance with FASB ASC Topic 718. For a discussion of our valuation assumptions, see Note 1 and Note 9 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 14, 2022.
(2)Pursuant to applicable SEC rules, the annual cash bonuses, earned under the 2021 Bonus Plan, by our NEOs are set forth under the caption “Non-Equity Incentive Plan Compensation.” Other bonuses, such as sign-on bonuses and other discretionary bonuses, are listed separately under the caption “Bonus.” A description of amounts earned under the 2021 Bonus Plan are described in the section above entitled “Compensation Discussion and Analysis—Fiscal 2021 Compensation—Elements—2021 Bonus Plan.” Amounts reflect amounts actually paid.
(3)Amounts representing All Other Compensation for the fiscal year ended 2021 are detailed within the table below:
| | | | | | | | | | | | | | | | | | | | |
| Name | | Company Paid Health Insurance Premium Costs
($) | | Other ($)(1) | | Total All Other Compensation
($) |
| Kevin R. Sayer | | 14,133 | | | 696 | | | 14,829 | |
| Jereme M. Sylvain | | 21,131 | | | 9,669 | | | 30,800 | |
| Quentin S. Blackford | | 11,217 | | | 7,675 | | | 18,892 | |
| Paul Flynn | | 5,290 | | | 14,828 | | | 20,118 | |
| Jacob S. Leach | | 14,133 | | | 9,672 | | | 23,805 | |
| Chad M. Patterson | | 20,125 | | | 9,409 | | | 29,534 | |
(1) These amounts represent premiums paid to various employee life insurance policies as well as matching contributions on the NEO's behalf under our 401(k) Plan and miscellaneous other amounts, including $6,428 in fees for tax preparation services provided to Mr. Flynn pursuant to our policies for cross border services
(4)Mr. Blackford left the company effective September 17, 2021 and his 2021 salary is prorated to reflect time in position.
(5)The amount reported for the PSU award in the table above is based on the target number of shares subject to the award. If the PSU award was instead valued based on the maximum outcome of the applicable performance conditions on the date of grant (which is 200% of target), the total amount for the PSU award reported in this column and the value of all stock awards granted in 2021 would increase, as reflected in the table below. As noted above in "-Equity Awards," the operational goal was achieved at 116% of target (out of a maximum opportunity of 160% of target), so the maximum PSUs that could be earned will be 145% of target even though the maximum opportunity was 200% of target on the date of grant.
| | | | | | | | | | | | |
| Name | | PSU award value on 200% maximum outcome
($) | RSU award grant value
($) | Total grant value PSU (at 200% maximum outcome) and RSU grant date value
($) |
| Kevin R. Sayer | | 10,264,962 | 4,464,264 | 14,729,226 |
| Jereme M. Sylvain | | 1,012,372 | 3,449,535 | 4,461,907 |
| Quentin S. Blackford | | 3,079,870 | 2,637,274 | 5,717,144 |
| Paul Flynn | | 1,075,741 | 3,566,770 | 4,642,511 |
| Jacob S. Leach | | 1,368,916 | 4,107,885 | 5,476,801 |
| Chad M. Patterson | | 1,075,741 | 3,566,770 | 4,642,511 |
(6)The amount reported for the PSU award in the table above is based on the target number of shares subject to the award. If the PSU award was instead valued based on the maximum outcome of the applicable performance condition, the total amount for the PSU award reported in this column would increase to $8,586,782 and the value of all stock awards granted to Mr. Sayer in 2020 would increase to $15,471,793.
(7)The amount reported for the PSU award in the table above is based on the target number of shares subject to the award. If the PSU award was instead valued based on the maximum outcome of the applicable performance condition, the total amount for the PSU award reported in this column would increase to $6,108,897 and the value of all stock awards granted to Mr. Sayer in 2019 would increase to $11,241,007.
(1) | These amounts reflect the grant date fair value | | | | | | | | | | | | | |
Grants of stock awards and options granted during 2013, 2014 and 2015 computed in accordance with FASB ASC Topic 718. For a discussion of our valuation assumptions, see Notes 1 and 8 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission on February 23, 2016.Plan-Based Awards |
(2) | Amounts were earned under the incentive bonus plan described in the section above entitled “Compensation Discussion and Analysis—Details and Elements of our 2015 Compensation—Bonus Plan.” |
(3) | These amounts represent premiums paid to various employee health and life insurance policies as well as miscellaneous other amounts. |
Grants of Plan-Based Awards
The following table provides information with regard to potential cash bonuses paid or payable in
20152021 under our
performance-based, non-equity incentive plan,2021 Bonus Plan and
our A&R 2015 EIP with regard to each equity award granted to each named executive officer during fiscal
2015. | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Grant
Date | | | Estimated Possible Payouts Under
2015 Bonus Plan | | | All Other
Stock
Awards:
Number
of RSUs
Granted(2) | | | Grant Date
Fair Value
of Option
Awards(3) | |
Name | | | Threshold(1) | | | Target(1) | | | Maximum(1) | | | |
Kevin Sayer | | | N/A | | | $ | 400,000 | | | $ | 500,000 | | | $ | 1,000,000 | | | | | | | | | |
| | | 3/8/15 | | | | | | | | | | | | | | | | 90,000 | | | $ | 5,363,010 | |
| | | | | | |
Jess Roper | | | N/A | | | $ | 104,000 | | | $ | 130,000 | | | $ | 260,000 | | | | | | | | | |
| | | 3/8/15 | | | | | | | | | | | | | | | | 40,000 | | | $ | 2,383,560 | |
| | | | | | |
Andrew Balo | | | N/A | | | $ | 186,000 | | | $ | 232,500 | | | $ | 465,000 | | | | | | | | | |
| | | 3/8/15 | | | | | | | | | | | | | | | | 47,500 | | | $ | 2,830,478 | |
| | | | | | |
Richard Doubleday | | | N/A | | | $ | 186,000 | | | $ | 232,500 | | | $ | 465,000 | | | | | | | | | |
| | | 3/8/15 | | | | | | | | | | | | | | | | 47,500 | | | $ | 2,830,478 | |
| | | | | | |
Steven R. Pacelli | | | N/A | | | $ | 186,000 | | | $ | 232,500 | | | $ | 465,000 | | | | | | | | | |
| | | 3/8/15 | | | | | | | | | | | | | | | | 45,000 | | | $ | 2,681,505 | |
(1) | Represents threshold, target and maximum potential payments under the incentive bonus plan described in the section above entitled “Compensation Discussion and Analysis—Details and Elements of our 2015 Compensation—Bonus Plans.” |
(2) | These restricted stock unit awards were made under our 2005 Equity Incentive Plan and vest over a36-month period from the date of grant as follows: 33% shall vest 12 months from the grant date, and the remaining balance shall vest in four equal installments every six months thereafter. |
(3) | These amounts reflect the grant date fair value of the restricted stock units granted during 2015 computed in accordance with ASC Topic 718. For a discussion of our valuation assumptions, see Notes 1 and 82021. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Possible Payouts Under 2021 Non-Equity Incentive Plan Awards(1) | | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | | All Other Stock Awards: Number of RSUs Granted | | Grant Date Fair Value of Stock Awards(4) | | Name | Grant Date | Grant
Approval Date | Threshold ($)(2) | Target
($) | Maximum
($) | | Threshold
(#) | Target
(#) | Maximum
(#) | | (#) | | ($) | | Kevin R. Sayer | | | | | | | | | | | | | | 2021 Bonus Plan Award | | — | | 1,125,000 | | 1,968,750 | | | — | | — | | — | | | — | | | — | | | 2021 PSUs | 3/8/2021 | 3/4/2021 | — | | — | | — | | | 2,689 | | 13,445 | | 26,890 | | | — | | | 5,132,481 | | | 2021 RSUs | 3/8/2021 | 3/4/2021 | — | | — | | — | | | — | | — | | — | | | 13,445 | | (5) | 4,464,264 | | | | | | | | | | | | | | | 9,596,745 | | | Jereme M. Sylvain | | | | | | | | | | | | | | 2021 Bonus Plan Award | | — | | 284,625 | | 498,094 | | | — | | — | | — | | | — | | | — | | | 2021 PSUs | 3/8/2021 | 3/4/2021 | — | | — | | — | | | 265 | | 1,326 | | 2,652 | | | — | | | 506,186 | | | 2021 RSUs | 3/8/2021 | 3/4/2021 | — | | — | | — | | | — | | — | | — | | | 5,301 | | (5) | 1,866,265 | | | 2021 RSUs | 12/15/2021 | 12/15/2021 | — | | — | | — | | | — | | — | | — | | | 2,925 | | (6) | 1,583,270 | | | | | | | | | | | | | | | 3,955,721 | | | Quentin S. Blackford | | | | | | | | | | | | | | 2021 Bonus Plan Award | | — | | 450,000 | | 787,500 | | | — | | — | | — | | | — | | | — | | | 2021 PSUs | 3/8/2021 | 3/4/2021 | — | | — | | — | | | 807 | | 4,034 | | 8,068 | | | — | | | 1,539,935 | | | 2021 RSUs | 3/8/2021 | 3/4/2021 | — | | — | | — | | | — | | — | | — | | | 7,491 | | (5) | 2,637,274 | | | | | | | | | | | | | | | 4,177,209 | | | Paul Flynn | | | | | | | | | | | | | | 2021 Bonus Plan Award | | — | | 280,480 | | 490,840 | | | — | | — | | — | | | — | | | — | | | 2021 PSUs | 3/8/2021 | 3/4/2021 | — | | — | | — | | | 282 | | 1,409 | | 2,818 | | | — | | | 537,870 | | | 2021 RSUs | 3/8/2021 | 3/4/2021 | — | | — | | — | | | — | | — | | — | | | 5,634 | | (5) | 1,983,500 | | | 2021 RSUs | 12/15/2021 | 12/15/2021 | — | | — | | — | | | — | | — | | — | | | 2,925 | | (6) | 1,583,270 | | | | | | | | | | | | | | | 4,104,640 | | | Jacob S. Leach | | | | | | | | | | | | | | 2021 Bonus Plan Award | | — | | 337,500 | | 590,625 | | | — | | — | | — | | | — | | | — | | | 2021 PSUs | 3/8/2021 | 3/4/2021 | — | | — | | — | | | 359 | | 1,793 | | 3,586 | | | — | | | 684,458 | | | 2021 RSUs | 3/8/2021 | 3/4/2021 | — | | — | | — | | | — | | — | | — | | | 7,171 | | (5) | 2,524,615 | | | 2021 RSUs | 12/15/2021 | 12/15/2021 | — | | — | | — | | | — | | — | | — | | | 2,925 | | (6) | 1,583,270 | | | | | | | | | | | | | | | 4,792,343 | | | Chad M. Patterson | | | | | | | | | | | | | | 2021 Bonus Plan Award | | — | | 280,313 | | 490,547 | | | — | | — | | — | | | — | | | — | | | 2021 PSUs | 3/8/2021 | 3/4/2021 | — | | — | | — | | | 282 | | 1,409 | | 2,818 | | | — | | | 537,870 | | | 2021 RSUs | 3/8/2021 | 3/4/2021 | — | | — | | — | | | — | | — | | — | | | 5,634 | | (5) | 1,983,500 | | | 2021 RSUs | 12/15/2021 | 12/15/2021 | — | | — | | — | | | — | | — | | — | | | 2,925 | | (6) | 1,583,270 | | | | | | | | | | | | | | | 4,104,640 | |
(1)Represents threshold, target and maximum potential payments under the 2021 Non-Equity Incentive Plan Awards (also referred to as the 2021 Bonus Plan) described in the section above entitled “Compensation Discussion and Analysis—Fiscal 2021 Compensation Elements—2021 Management Bonus Plan.” (2)The threshold payout amounts under the 2021 Non-Equity Incentive Plan are zero because if one or more of the three performance measure targets selected by the Compensation Committee are not met, no payment would be due.
(3)These PSUs were granted pursuant to our A&R 2015 EIP and are earned and vest upon achievement of both an operational goal in 2021 (tied to certain product sales) and our three-year relative TSR performance versus the Nasdaq Composite Index from January 1, 2021 through December 31, 2023 Performance Period as well as continued employment on the last date of such period. If minimum operational and TSR goals are not achieved, no shares will vest. The “Threshold” column reflects the number of PSUs that will be earned (20% of "Target") if the minimum operational (40%) and minimum TSR (50% ) are achieved. The “Target” column reflects the number of PSUs that will be earned if both the operating and TSR goals are achieved at target levels (100%), and the “Maximum” column reflects the maximum number of PSUs that could be earned if the highest level of operational (160%) and TSR (125%) performance is achieved. The operational multiplier ranges from a minimum of 40% to a maximum of 160% and the TSR modifier ranges from a minimum of 0% to a maximum of 125% and the total payout under the 2021 PSU award ranges from 0% to 200% of the target award. The operational goal for fiscal 2021 was achieved at 116%, resulting in banked shares that will be multiplied by the three-year relative TSR modifier at the end of the Performance Period, for a maximum payout of shares reflected in the table below. The actual TSR performance will be determined in 2024, and the PSU will be earned and paid out, based on the metrics achieved, at that time. | | | | | | | | | | | | | Name | | PSU Shares Banked based on operational goal achievement
(#) | Maximum Shares Payout Based on PSU Tranche Achieved
(#) | | Kevin R. Sayer | | 15,607 | | 19,509 | | | Jereme M. Sylvain | | 1,539 | | 1,924 | | | Quentin S. Blackford | (1) | — | | — | | | Paul Flynn | | 1,636 | | 2,044 | | | Jacob S. Leach | | 2,081 | | 2,602 | | | Chad M. Patterson | | 1,636 | | 2,044 | | | | | | | (1) Mr. Blackford left the company effective September 17, 2021. |
(4)These amounts reflect the grant date fair value of the PSUs and RSUs granted during 2021 computed in accordance with ASC Topic 718. For a discussion of our valuation assumptions, see Note 1 and Note 9 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 14, 2022. (5)These RSUs awards were granted under our A&R 2015 EIP and vest over three years in equal annual installments from the date of grant. (6)These RSUs awards were granted under our A&R 2015 EIP and vest over three years from the date of grant as follows: 50% of the total number of RSUs vesting on December 15, 2023 and 12.5% of the total number of RSUs vesting on each of March 8, 2024, June 8, 2024, September 8, 2024 and December 15, 2024.
| | | | | | | | | | | | | | | Outstanding Equity Awards at December 31, 2015, filed with the Securities and Exchange Commission on February 23, 2016.2021 |
Outstanding Equity Awards at December 31, 2015
The following table provides information regarding each vested and unvested stock option and stock awardawards held by each named executive officer as of December 31, 2015. | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | | Stock Awards | | | | | Number of Securities
Underlying
Unexercised Options | | | Option
Exercise
Price(1) | | | Option
Expiration
Date | | | Number of
Shares
That Have
Not Vested | | | Market
Value of
Shares
That Have
Not Vested(2) | | Name | | Vested | | | Unvested | | | | | | Kevin Sayer | | | | | | | | | | | | | | | | | | | 190,000 | (3) | | $ | 15,560,810 | | | | | 55,806 | | | | — | | | $ | 4.58 | | | | 05/19/2019 | | | | | | | | | | | | | 31,464 | | | | — | | | | 7.63 | | | | 05/19/2018 | | | | | | | | | | | | | 63,649 | | | | — | | | | 8.79 | | | | 11/06/2017 | | | | | | | | | | Jess Roper | | | | | | | | | | | | | | | | | | | 60,000 | (3) | | $ | 4,913,940 | | Andrew Balo | | | | | | | | | | | | | | | | | | | 80,834 | (3) | | $ | 6,620,224 | | | | | 3,927 | | | | — | | | $ | 9.80 | | | | 03/12/2020 | | | | | | | | | | | | | 84,999 | | | | — | | | | 3.19 | | | | 12/11/2018 | | | | | | | | | | Richard Doubleday | | | | | | | | | | | | | | | | | | | 85,834 | (3) | | $ | 7,029,719 | | Steven R. Pacelli | | | | | | | | | | | | | | | | | | | 92,437 | (3) | | $ | 7,570,498 | | | | | 8,927 | | | | — | | | $ | 9.80 | | | | 03/12/2020 | | | | | | | | | | | | | 2,855 | | | | — | | | | 7.63 | | | | 05/19/2018 | | | | | | | | | | | | | 9,637 | | | | — | | | | 7.79 | | | | 08/02/2017 | | | | | | | | | | | | | 4 | | | | — | | | | 11.33 | | | | 08/08/2016 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | Grant Date | | Type | | Number of Shares That Have Not Vested
(#) | | Market Value of Shares That Have Not Vested ($)(1) | | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested
(#) | | Equity Incentive Plan Awards: Market Value of Unearned Shares That Have Not Vested ($)(1) | | Kevin R. Sayer | 3/8/2019 | | RSU | | 5,972 | | (2) | 3,206,665 | | | — | | | — | | | 3/8/2019 | | PSU | | | | — | | | 38,586 | | (3) | 20,718,753 | | | 3/8/2020 | | RSU | | 16,968 | | (6) | 9,110,968 | | | — | | | — | | | 3/8/2020 | | PSU | | | | — | | | 27,412 | | (4) | 14,718,873 | | | 3/8/2021 | | RSU | | 13,445 | | (6) | 7,219,293 | | | — | | | — | | | 3/8/2021 | | PSU | | | | — | | | 26,890 | | (5) | 14,438,586 | | | | | | | 36,385 | | | 19,536,926 | | | 92,888 | | | 49,876,212 | | | | | | | | | | | | | | | Jereme M. Sylvain | 3/8/2019 | | RSU | | 804 | | (2) | 431,708 | | | — | | | — | | | 3/8/2020 | | RSU | | 3,654 | | (6) | 1,962,015 | | | — | | | — | | | 3/8/2021 | | RSU | | 5,301 | | (6) | 2,846,372 | | | — | | | — | | | 3/8/2021 | | PSU | | — | | | — | | | 2,652 | | (5) | 1,423,991 | | | 12/15/2021 | | RSU | | 2,925 | | (6) | 1,570,579 | | | — | | | — | | | | | | | 12,684 | | | 6,810,674 | | | 2,652 | | | 1,423,991 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Paul Flynn | 3/8/2019 | | RSU | | 1,378 | | (2) | 739,917 | | | — | | | — | | | 3/8/2020 | | RSU | | 3,916 | | (6) | 2,102,696 | | | — | | | — | | | 3/8/2021 | | RSU | | 5,634 | | (6) | 3,025,176 | | | — | | | — | | | 3/8/2021 | | PSU | | — | | | — | | | 2,818 | | (5) | 1,513,125 | | | 12/15/2021 | | RSU | | 2,925 | | (6) | 1,570,579 | | | — | | | — | | | | | | | 13,853 | | | 7,438,368 | | | 2,818 | | | 1,513,125 | | | | | | | | | | | | | | | Jacob S. Leach | 3/8/2019 | | RSU | | 2,498 | | (2) | 1,341,301 | | | — | | | — | | | 3/8/2020 | | RSU | | 7,832 | | (6) | 4,205,392 | | | — | | | — | | | 3/8/2021 | | RSU | | 7,171 | | (6) | 3,850,468 | | | — | | | — | | | 3/8/2021 | | PSU | | — | | | — | | | 3,586 | | (5) | 1,925,503 | | | 12/15/2021 | | RSU | | 2,925 | | (6) | 1,570,579 | | | — | | | — | | | | | | | 20,426 | | | 10,967,740 | | | 3,586 | | | 1,925,503 | | | | | | | | | | | | | | | Chad M. Patterson | 3/8/2019 | | RSU | | 575 | | (2) | 308,746 | | | — | | | — | | | 3/8/2020 | | RSU | | 3,394 | | (6) | 1,822,408 | | | — | | | — | | | 3/8/2021 | | RSU | | 5,634 | | (6) | 3,025,176 | | | — | | | — | | | 3/8/2021 | | PSU | | — | | | — | | | 2,818 | | (5) | 1,513,125 | | | 12/15/2021 | | RSU | | 2,925 | | (6) | 1,570,579 | | | — | | | — | | | | | | | 12,528 | | | 6,726,909 | | | 2,818 | | | 1,513,125 | |
(1)The market value of unvested equity awards as of December 31, 2021 is calculated by multiplying the number of shares subject to such awards by the closing price of our common stock on December 31, 2021, which was $536.95. (2)The total RSUs granted vest over a 36-month period from the date of grant as follows: 33% shall vest twelve months from the grant date, and the remaining balance shall vest in four equal installments every six months thereafter. (3)Number of shares earned and certified by our Compensation Committee on January 18, 2022. The number of PSUs earned is based on the operational goal and is modified by a multiplier resulting from Dexcom's relative TSR for the three-year period ending December 31, 2021 versus the Nasdaq Composite Index and vested on January 18, 2022. (4)Number of shares based on achievement of maximum goals. The 2020 operational goal for these PSUs was achieved at maximum. The number of PSUs achieved based on the operational goal, will be modified by a multiplier resulting from Dexcom's relative TSR for the three-year period ending December 31, 2022 versus the Nasdaq Composite Index, and the resulting earned portion of these PSUs will vest following the conclusion of the three-year performance period and certification by our Compensation Committee. (5)Number of shares based on achievement of maximum goals. The 2021 operating goal for these PSUs was achieved between target and maximum goals. The number of PSUs achieved based on the operational goal, will be modified by a multiplier resulting from Dexcom's relative TSR for the three-year
period ending December 31, 2023 versus the Nasdaq Composite Index, and the resulting earned portion of these PSUs will vest following the conclusion of the three-year performance period and certification by our Compensation Committee. (6)The total RSUs granted vest over three years in equal annual installments from the date of grant.
(1) | The amount reported represents the fair market value of a share of our common stock, as determined by our Board of Directors, on the option’s grant date. Please see “Compensation Discussion | | | | | | | | | | | | | | 2021 Option Awards Exercises and Analysis—Details and Elements of Our 2015 Compensation—Equity Incentive Programs” above for a discussion of how we determined the fair market value of our common stock. For a discussion of our valuation assumptions, see Notes 1 and 8 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission on February 23, 2016.Stock Vested |
(2) | Represents the fair market value of the unvested restricted stock units as of December 31, 2015 calculated by multiplying the number of units that have not vested by the closing price of our common stock on December 31, 2015, which was $81.90 less the par value of our common stock. |
(3) | Restricted stock units vest over a 36-month period from the date of grant as follows: 33% shall vest 12 months from the grant date, and the remaining balance shall vest in four equal semi-annual installments over the following 24 months. |
2015 Option Exercises and Stock Vested
The following table shows stock optionsoption awards exercised by our named executive officers in fiscal 20152021 as well as stock awards that vested during fiscal 2015. | | | | | | | | | | | | | | | | | | | | Number of Shares
Acquired on
Exercise | | | Value Realized on
Exercise(1) | | | Number of Shares
Acquired on Vesting | | | Value Realized on
Vesting(2) | | Kevin Sayer | | | — | | | $ | — | | | | 145,834 | | | $ | 10,430,102 | | Jess Roper | | | 71,500 | | | | 4,903,338 | | | | 29,271 | | | | 2,092,230 | | Andrew Balo | | | 128,074 | | | | 8,156,454 | | | | 50,625 | | | | 3,596,670 | | Richard Doubleday | | | 35,000 | | | | 1,877,651 | | | | 50,937 | | | | 3,675,912 | | Steven Pacelli | | | 278,709 | | | | 17,221,402 | | | | 71,311 | | | | 5,076,895 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | Number of Shares Acquired on Exercise
(#) | | Value Realized on Exercise
($) | | Number of Shares Acquired on Vesting
(#) | | Value Realized on Vesting
($) | | | Kevin R. Sayer | — | | | — | | | 33,852 | | | 13,445,155 | | | | Jereme M. Sylvain | — | | | — | | | 4,711 | | | 2,211,760 | | | | Quentin S. Blackford | — | | | — | | | 32,394 | | | 15,150,867 | | | | Paul Flynn | — | | | — | | | 7,518 | | | 2,995,700 | | | | Jacob S. Leach | — | | | — | | | 13,928 | | | 5,539,595 | | | | Chad M. Patterson | — | | | — | | | 4,616 | | | 1,788,305 | | |
(1) | Value realized on exercise of option awards is calculated as the difference between the sale price on the date of exercise and the exercise price per share multiplied by the number of shares exercised. | | | Executive Nonqualified Deferred Compensation Plan |
On May 31, 2019, our board of directors adopted an executive deferred compensation plan, with an effective date of April 1, 2019. The executive deferred compensation plan is a non-qualified deferred compensation plan that allows eligible executives, including each of our NEOs, to defer receipt of taxable income and thereby defer income taxes and assist in saving for retirement. Under the executive deferred compensation plan each eligible executive is permitted to elect to defer receipt of a portion (up to 75%) of such executive’s base salary and up to 100% of such executive’s annual cash bonus. Dollar amounts that are deferred are credited to an executive’s plan account and are notionally invested in investments selected by such executive from among those the plan administrator offers, and the account is credited with the gains or losses from such investment. Additionally, we reserve the right to make discretionary or matching credits to such accounts, in our sole discretion, and if made, such credits would be subject to vesting conditions determined by the plan administrator. The plan is “unfunded,” which means there are no specific assets set aside by us in connection with the plan. Upon the executive’s separation from us, the amount in such executive’s account is paid either in a single lump sum or in equal annual installments over a period of up to ten years, based on the payment election made by the executive at the time the payment was initially deferred. The following table provides information about contributions to, aggregate earnings and account balances under our executive deferred compensation plan. Other than Jereme Sylvain and Chad Patterson, none of the other Named Executive Officers participated in our executive deferred compensation plan for 2021. | | | | | | | | | | | | | | | | | | | Name | Executive Contributions in Last FY ($) (1) | Registrant Contributions in Last FY
($) | Aggregate Earnings in Last FY ($) (2) | Aggregate Withdrawals/Distributions
($) | Aggregate Balance at Last Fiscal Year End
($) | | Jereme M. Sylvain | 186,430 | | — | | — | | — | | 186,430 | | | Chad M. Patterson | 54,656 | | — | | 2,513 | | — | | 57,169 | |
(1)The amount of the contributions made by the Named Executive Officer, as reported above, is also included in the Named Executive Officer’s compensation reported in the Summary Compensation Table for 2021 either as “Salary” or “Non-Equity Incentive Plan Compensation.” (2)The amount in this column represents earnings by funds in which investments were made under the Deferred Compensation Plan. The aggregate earnings are not reported in the Summary Compensation Table.
(2) | Value realized on vesting of stock awards is calculated as the difference between the closing price of our common stock on the vest date less the par value of our common stock multiplied by the number of common stock shares acquired on vesting. | | | | | | | | | | | | | | | Employment, Severance and Change in Control Arrangements |
Employment,
Severance & Change in Control Plan On June 1, 2017, our Board adopted the Severance & Change in Control Plan after considering market data and to harmonize certain severance and change in control provisions across our executive officers. As of the end of fiscal year 2021, all of our NEOs were participants in the Severance & Change in Control Plan. Prior to September 9, 2021, Messrs. Sayer and Leach were parties to Amended and Restated Executive Change of Control & Severance Agreements with the Company (the “Prior Severance Agreements”) and were not participants in the Severance and Change in Control Plan. In September 2021, the Compensation Committee and Messrs. Sayer and Leach terminated the Prior Severance Agreements pursuant to Termination Agreements and Messrs. Sayer and Leach became participants in the Severance & Change in Control Plan, along with the rest of our NEOs. The Termination Agreements preserved each of Messrs. Sayer and Leach’s eligibility for 12 months of acceleration that was provided in the Prior Severance Agreements in the event that the executive’s employment is terminated without “Cause” or due to a “constructive termination” (each as defined in the Prior Severance Agreement), with respect to only the executive’s outstanding time-based restricted stock unit award granted in March 2019 (which became fully vested by their terms in March 2022), subject to the executive’s timely execution of a release of claims. Under the terms of the Severance & Change in Control ArrangementsWe have entered into change of control arrangements withPlan, each of our named executive officers (theare eligible to receive certain severance benefits if the executive's employment is terminated involuntarily, other than due to Cause, death or Disability (as those terms are defined in the Severance & Change in Control Plan), or if the executive resigns their employment for Good Reason (as defined in a Participation Agreement for such executive) (each, a “Qualifying Termination”) within twelve months following a Change in Control (or during the three months prior to a Change in Control assuming execution of a definitive agreement for such Change in Control) (such periods of time the “Change in Control Period”) or outside of the Change in Control Agreements”). ThePeriod, provided, that, a resignation for Good Reason is not a Qualifying Termination outside of the Change of Control Period and if a definition of Good Reason does not exist in such Participation Agreement for such Participating Executive, then no payment for Good Reason shall be made.
Outside of Change in Control Period. Under the terms of the Severance & Change in Control Plan, upon a Qualifying Termination other than during a Change in Control Period, the executive will be entitled to the following severance benefits: (1) a cash severance payment, payable in a lump sum, equal to twelve months of the executive’s base salary at the rate in effect when the Qualifying Termination occurred, (2) a pro-rata portion of the executive’s annual bonus that we determine was actually earned at the conclusion of the bonus performance period (determined based on the number of days the executive is employed during the bonus performance period) and (3) if executive elects to continue his health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) following the termination of his employment, then we will pay the executive’s monthly premium under COBRA until the earliest of (A) twelve months (or 18 months for Mr. Sayer), (B) the date when the executive receives similar coverage with a new employer or (C) the expiration of the executive’s continuation coverage under COBRA (or cash payment in lieu of payment of COBRA premiums under the same terms). During Change in Control Period. Under the terms of the Severance & Change in Control Plan, upon a Qualifying Termination during a Change in Control Period, the executive will be entitled to the following severance benefits: (1) a cash severance payment, payable in a lump sum, equal to twelve months of the executive’s base salary (or 18 months for Mr. Sayer) at the rate in effect when the Qualifying Termination occurred (or immediately prior to a reduction in the base salary that gave rise to termination for Good Reason) or when the Change in Control occurred, whichever is greater, (2) the greater of (A) the pro-rata portion of the executive’s annual bonus that we determine was actually earned at the conclusion of the bonus performance period (determined based on the number of days the executive is employed during the bonus performance period) and (B) 100% of the executive’s “target” annual bonus at the rate in effect when the Qualifying Termination occurred, (3) if executive elects to continue his health insurance coverage under the COBRA following the termination of his employment, then we will pay the executive’s monthly premium under COBRA until the earliest of (A) twelve months (or 18 months for Mr. Sayer), (B) the date when the executive receives similar coverage with a new employer or (C) the expiration of the executive’s continuation coverage under COBRA (or shall make cash payment in lieu of payment of COBRA premiums under the same terms), and (4) (A) all equity awards, including but not limited to stock options, stock bonus awards, restricted stock, RSUs or stock appreciation rights, but other than performance-based equity awards, shall become fully vested as of the date of the Qualifying Termination and (B) all of the executive’s equity awards that would vest only upon satisfaction of performance criteria including the PSUs (“performance awards”) shall vest in accordance with the terms set forth in the applicable agreement. Under the Severance & Change in Control Plan, our obligation to make any severance payments or provide vesting acceleration is expressly conditioned upon the executive’s execution and delivery of a general release and waiver of all claims.
As previously noted, Mr. Blackford resigned his employment in September 2021, and he is no longer eligible for any benefits under the Severance & Change in Control Plan, and he did not receive any benefits under the Severance & Change in Control Plan in connection with his resignation. Prior Severance Agreements. Because the Prior Severance Agreements provide thatwere in effect for Messrs. Sayer and Leach for part of fiscal 2021, we have included their terms below for informational purposes. As noted above, as of the end of fiscal 2021, the Prior Severance Agreements were no longer in effect and the severance entitlements for Messrs. Sayer and Leach were governed by the Severance & Change in Control Plan and the Termination Agreements. Under the Prior Severance Agreements, in the event of a change ofin control while the executive is employed by us, or in the event that the executive is involuntarily terminated without cause during the period that begins (1) 90 days prior to the earlier of (i) the execution of a letter of intent relating to a change ofin control transaction, or (ii) the execution of a definitive agreement with respect to a change ofin control transaction, in either case provided that the change of control with the party to the letter of intent or definitive agreement is consummated within two years following such execution, and ends (2) on the date such change ofin control becomes effective, the vesting of all of the shares subject to all options and restricted stock unitsRSUs held by the executive granted prior to the date of the Prior Severance Agreements and any other stock awards that the Board of Directors determines should be subject to the Change of Control Agreementssuch agreement will be accelerated in full. The Change of ControlPrior Severance Agreements also provide that, in the event we terminate the executive without cause or the executive resigns due to a constructive termination, the executive will receive a lump sum payment equal to twelve months salary as severance and twelve months of vesting acceleration of all of the shares subject to all options and RSUs held by the executive prior to the date of the Prior Severance Agreements and any other stock awards that the Board of Directors determines should be subject to the Change of Control Agreement.such agreement. In each case, our obligation to make any severance payments or provide vesting acceleration is expressly conditioned upon the executive’s execution and delivery of a general release and waiver of all claims. The Severance Entitlements at Fiscal Year End 2021.At the end of fiscal year 2021, the Severance & Change ofin Control Plan and the Termination Agreements, representas applicable for Messrs. Sayer and Leach, represented the complete and exclusive statement of agreement between the executivesNEOs and us with respect to vesting acceleration or severance, and supersedessuch agreements supersede any other agreements or promises made to the executives with respect to vesting acceleration or severance. The acceleration provisions of Mr. Sayer's PSUs granted in 2019 and 2020 the NEO’s PSUs granted in 2021 are described separately below. Mr. Sayer's 2019 and 2020 PSUs Mr. Sayer’s PSUs granted in March 2018, March 2019 and March 2020 provide that in the event a change in control occurs while the performance periods are on-going, the corporate operational goal will be deemed achieved at the target level (if the operational performance period has not already been completed) and the TSR goal will be calculated as of the change in control. In the event a change in control occurs after the operational performance period but before the end of the overall performance period, the corporate operational goal will be deemed achieved at the actual achievement level and the TSR goal will be calculated as of the change in control. The resulting number of PSUs will vest over a time-based vesting schedule that corresponds with the PSU’s three-year performance period. Such resulting March 2019 and March 2020 time-vesting PSUs will be eligible for the accelerated vesting provisions in the event of certain terminations in connection with a change in control under the Severance & Change in Control Plan. 2021 PSUs The PSU Award Agreements for the PSUs granted to the NEOs in 2021 provide for the following treatment upon a Change in Control (as defined in the PSU Award Agreement): •If the Change in Control occurred before December 31, 2021, the end of the corporate operational goal performance period, the number of earned PSUs will be equal to the number of PSUs that would be earned based on the target level of operational performance multiplied by the TSR multiplier based on TSR performance from January 1, 2021, through the closing of the Change in Control. •If the Change in Control occurs after December 31, 2021, but prior to December 31, 2023 (the end of the TSR performance period), the number of earned PSUs will be equal to the number of PSUs that were earned based on actual operational performance multiplied by the TSR multiplier based on TSR performance from January 1, 2021, through the closing of the Change in Control. The number of PSUs so earned in connection with a Change in Control will be treated like unvested time-based RSUs under the Severance & Change in Control Plan. In addition, pursuant to the terms of the PSU Award Agreements, if an acquirer refuses to assume, convert, replace or substitute such unvested time-based RSUs upon a Change in Control, 100% of such unvested time-based RSUs will accelerate on the Change in Control.
PSUs and the Termination Agreements Prior to the execution of the Termination Agreements, Mr. Sayer’s March 2019 and March 2020 PSUs and Messrs. Sayer and Leach’s 2021 PSUs were eligible for acceleration as to one-third of the number of Earned PSUs (as calculated and defined under the applicable PSU award agreements) in the event of certain terminations outside of a change in control under the Prior Severance & Change in Control Agreement.Such acceleration was waived pursuant to the Termination Agreements and is no longer applicable. Potential Payments Upon a Termination or Change in Control The following table summarizesillustrates the potential payments and benefits payableour NEOs would be entitled to each of our named executive officers upon termination of employment or a changeChange in our controlControl ("CIC”) under each situation listed below, modeling, in each situation, thebelow. The potential payments assume that the termination and/or termination resulting from a CIC occurred on December 31, 2021, and, benefits ifwhere applicable, use the closing price of our Common Stock of $536.95 on December 31, 2021. The table is merely an illustrative example of the impact of a hypothetical termination of employment or change in control and qualifying termination. The amounts that would actually be paid upon a termination of employment can only be determined at the time of such termination, based on the facts and circumstances then prevailing. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash Severance
($) | | Non-Equity Incentive Pay ($) (3) | | PSUs ($) (4) | | RSUs
($) | | Continuation of Medical Benefits ($)(7) | | Total
($) | | Kevin R. Sayer | | | | | | | | | | | | | Termination Reason: | | | | | | | | | | | | | Termination without Cause or for Good Reason | 900,000 | (1) | 1,473,750 | | — | | 3,206,665 | (5) | 24,993 | | 5,605,408 | | | | | | | | | | | | | | CIC or Qualifying Termination (Double Trigger) | 1,350,000 | (2) | 1,473,750 | | 43,011,384 | | 19,536,926 | (6) | 37,489 | | 65,409,549 | | Jereme M. Sylvain | | | | | | | | | | | | | Termination Reason: | | | | | | | | | | | | | Termination without Cause or for Good Reason | 379,500 | (1) | 372,859 | | — | | — | | 27,703 | | 780,062 | | | | | | | | | | | | | | CIC or Qualifying Termination (Double Trigger) | 379,500 | (1) | 372,859 | | 1,005,549 | | 6,810,674 | (6) | 27,703 | | 8,596,285 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Paul Flynn | | | | | | | | | | | | | Termination Reason: | | | | | | | | | | | | | Termination without Cause or for Good Reason | 373,973 | (1) | 367,428 | | — | | 739,917 | (5) | 5,290 | | 1,486,608 | | | | | | | | | | | | | | CIC or Qualifying Termination (Double Trigger) | 373,973 | (1) | 367,428 | | 1,068,491 | | 7,438,368 | (6) | 5,290 | | 9,253,550 | | Jacob S. Leach | | | | | | | | | | | | | Termination Reason: | | | | | | | | | | | | | Termination without Cause or for Good Reason | 450,000 | (1) | 442,125 | | — | | 1,341,301 | (5) | 24,993 | | 2,258,419 | | | | | | | | | | | | | | CIC or Qualifying Termination (Double Trigger) | 450,000 | (1) | 442,125 | | 1,359,691 | | 10,967,741 | (6) | 24,993 | | 13,244,550 | | Chad M. Patterson | | | | | | | | | | | | | Termination Reason: | | | | | | | | | | | | Termination without Cause or for Good Reason | 373,750 | (1) | 367,209 | | — | | — | | 22,477 | | 763,436 | | | | | | | | | | | | | | CIC or Qualifying Termination (Double Trigger) | 373,750 | | (1) | 367,209 | | 1,068,491 | | 6,726,910 | (6) | 22,477 | | 8,558,837 |
(1)Represents twelve months of base salary under the terms of the Severance & Change in Control Plan. (2)Represents 18 months of base salary under the terms of the Severance & Change in Control Plan. (3)Represents bonus payout under the 2021 Bonus Plan under the terms of the Severance & Change in Control Plan, as described above. (4)Represents the value, based on the closing price of our common stock on December 31, 2021 of $536.95, of accelerated vesting of outstanding March 2019 PSU, March 2020 PSU and March 2021 PSU awards based on actual achievement of the operational goal multiplied by the TSR Performance Modifier calculated as of December 31, 2021 under the terms of the PSUs and the Severance & Change in Control Plan.
(5)Represents the value of twelve months of accelerated vesting of the named executive officers, employment had been terminatedofficer’s March 2019 RSU awards, under the terms of the Termination and Waiver Agreement with respect to benefits under the Prior Severance & Change in Control Agreements, based on the closing price of our common stock on December 31, 2015. | | | | | | | | | | | | | | | | | | | | Involuntary Termination of
Employment Not For
Cause or Constructive Termination | | | Termination of
Employment Upon a
Change of Control | | | | | Type of Payment or Benefit: | | | Type of Payment or Benefit: | | Name | | Severance | | | Accelerated
Restricted Stock
Units | | | Severance | | | Accelerated
Restricted
Stock Units | | Kevin Sayer | | $ | 400,000 | | | $ | 9,827,880 | (1) | | $ | 400,000 | | | $ | 15,560,810 | (1) | Jess Roper | | $ | 260,000 | | | $ | 2,866,465 | (1) | | $ | 260,000 | | | $ | 4,913,940 | (1) | Andrew Balo | | $ | 310,000 | | | $ | 3,992,576 | (1) | | $ | 310,000 | | | $ | 6,620,224 | (1) | Richard Doubleday | | $ | 310,000 | | | $ | 4,402,071 | (1) | | $ | 310,000 | | | $ | 7,029,719 | (1) | Steven R. Pacelli | | $ | 310,000 | | | $ | 4,758,578 | (1) | | $ | 310,000 | | | $ | 7,570,498 | (1) |
(6)Represents the value of accelerated vesting of all outstanding restricted stock units of the named executive officer based on the closing price of our common stock on December 31, 2021 of $536.95 under the terms of the Severance & Change in Control Plan. (7)Amounts shown include continuation of health benefits and COBRA premiums, as applicable under the terms of the Severance & Change in Control Plan. The amounts associated with health benefits are calculated using 2021 enrollment rates and severance agreement terms, if applicable.
(1) | Represents the value of accelerated vesting of the named executive officer’s restricted stock units. The closing price of our common stock on December 31, 2015 was $81.90 per share. | | | | | | | | | | | | | | | Chief Executive Officer Pay Ratio |
Equity
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of our CEO, Mr. Sayer. For 2021, the median of the annual total compensation of all our employees (excluding our CEO) was $63,500 (ii) the annual total compensation for our CEO was $11,985,324; and (iii) the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all our employees (excluding our CEO) for 2021 is 189:1. We believe this ratio, which was calculated in a manner consistent with Item 402(u) of Regulation S-K, to be a reasonable estimate, based upon the assumptions described below. Calculation Methodology We identified the employee with compensation at the median of the compensation of all of our employees ("median employee") by considering our employee population as of December 31, 2021 ("employee population determination date") as summarized below. We identified the median employee for all our employees because of the global growth of our employment population, which we believed could result in a significant change to our CEO pay ratio results. The methodology we used to determine the median employee for 2021 is described below and is substantially the same methodology that we previously used to determine the median employee. For 2021, we considered all individuals who were employed by us on a world-wide basis (including our consolidated subsidiaries) on the employee population determination date, other than our CEO, whether employed on a full-time, part-time, seasonal or temporary basis, as applicable. We did not include any contractors or other non-employee workers in our employee population. To identify our median employee, we chose to use a consistently-applied compensation measure, which we selected as base salary for 2021. For employees paid other than in U.S. dollars, we converted their compensation to U.S. dollars using the applicable exchange rates in effect on December 31, 2021. For permanent employees hired during 2021, we annualized their base salary or wages as if they had been employed for the entire measurement period. We did not make any cost-of-living adjustment. Our employee population as of our determination date consisted of approximately 6,100 individuals in the United States and in our international locations (excluding approximately 200 employees acquired in connection with our acquisition of Australasian Medical & Scientific Limited and New Zealand Medical and Scientific Limited in the fiscal quarter ended September 30, 2021) who were employed by us on a full-time, part-time, or seasonal basis, including employees on a leave of absence. Contractors and other non-employees were not included in our employee population. Using this methodology, we identified the individual at the median of our employee population. We then calculated the annual total compensation for this individual using the same methodology we use to calculate the amount reported for our CEO in the “Total” column of the 2021 Summary Compensation Plan InformationTable as set forth in this Proxy Statement. Because SEC rules for identifying the median of the annual total compensation of all employees allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their employee population and compensation practices, the pay ratio reported by other companies may not be comparable to our pay ratio, as other companies have different employee populations and compensation practices and may have used different methodologies, exclusions, estimates and assumptions in calculating their pay ratios. As explained by the SEC when it adopted these rules, the rule was not designed to facilitate comparisons of pay ratios among different companies, even companies within the same industry, but rather to allow stockholders to better understand and assess each particular company’s compensation practices and pay ratio disclosures.
| | | | | | | | | | | | | | | | Equity Compensation Plan Information |
The following table provides certain information as of December 31, 2015,2021, with respect to all of our equity compensation plans in effect on that date. | | | | | | | | | | | | | Plan category | | Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
(in thousands)(a) | | | Weighted-average
exercise price of
outstanding options,
warrants and rights
(b) | | | Number of securities
remaining available for future issuance under
equity compensation plans
(excluding securities reflected in column(a))
(in thousands)
(c) | | Equity compensation plans approved by stockholders(1)(2) | | | 1,271 | | | $ | 7.56 | | | | 5,166 | | Equity compensation plans not approved by stockholders(3) | | | — | | | | — | | | | — | | Total | | | 1,271 | | | $ | 7.56 | | | | 5,166 | |
(1) | Includes | | | | | | | | | | | | | | | | | | | | | Plan category | | Number of securities to be issued orupon exercise of outstanding options, warrants and rights (in thousands) (#)(1) | | Weighted-average exercise price of outstanding options, warrants and rights ($)(2) | | Number of securities remaining available for future issuance pursuant to the 2005 Equity Incentive Plan, the 2015 Equity Incentive Plan and the 2015 Employee Stock Purchase Plan. 3,666,028 shares under column (c) are attributable to our 2015 Equity Incentive Plan and 1,500,000 are attributable to our 2015 Employee Stock Purchase Plan. |
(2) | Shares reserved for future issuance under the 2015 Equity Incentive Plan may be granted as restricted stock, restricted stock units, options or other equity awards. |
(3) | As of December 31, 2015, we did not have any equity compensation plans that were(excluding securities reflected in column (a))(#)(3) | | | (a) | | (b) | | (c) | Equity compensation plans approved by stockholders(1)(2) | | — | | | — | | | 4,984,301 | | Equity compensation plans not approved by our stockholders.stockholders(3) | | — | | | — | | | — | | | Total | | — | | | — | | | 4,984,301 | |
(1)Includes securities issued or available for future issuance pursuant to the 2005 Equity Incentive Plan, the A&R 2015 EIP and the 2015 Employee Stock Purchase Plan. 4,195,666 shares under column (c) are attributable to our A&R 2015 EIP and 788,635 are attributable to our 2015 Employee Stock Purchase Plan. (2)Shares reserved for future issuance under the A&R 2015 EIP may be granted as restricted stock, RSUs, options or other equity awards. (3)As of December 31, 2021, we did not have any equity compensation plans that were not approved by our stockholders. | | | | | | | | | | | | | | | | Risks from Compensation Policies and Practices |
The Compensation Policies and PracticesThe compensation committeeCommittee reviews our compensation policies and practices to determine areas of resulting risk and the actions that we have taken, or should take, to mitigate any such identified risk. Based on the compensation committee’sCompensation Committee’s review of our compensation policies and practices, we do not believe that any risks relating from our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on our business.
CERTAIN TRANSACTIONS WITH RELATED PERSONS
| | | | | | | | | CERTAIN TRANSACTIONS WITH RELATED PERSONS | | |
During 2015, in addition to his role as Executive Chairman of our Board, Mr. Gregg was employed as an executive officer, leading our external efforts and, as an officer, was paid $2,739,769, including $2,085,615 of stock awards computed in accordance with FASB ASC Topic 718, $428,203 of bonus earned under the incentive bonus plan described in the section above entitled “Compensation Discussion and Analysis” and $15,951 in premiums paid to employee health and life insurance policies. Mr. Gregg’s base salary as an employee is $210,000. As of December 31, 2015, Mr. Gregg had 126,408 unvested restricted stock units and options to purchase 30,000 shares of our common stock. In June 2007, we entered into an Employment Agreement with Mr. Gregg, as amended in December 2008 (the “Gregg Employment Agreement”). Under the Gregg Employment Agreement, in the event we terminate Mr. Gregg’s employment without cause or he is constructively terminated, he will receive 12 months’ salary as severance and full acceleration of the vesting of all of the shares subject to all options and restricted stock units held by him and any other stock awards that the Board of Directors determines should be subject to the provisions of the Gregg Employment Agreement. In the event of Mr. Gregg’s death or disability, there will be full acceleration of the vesting of all of the shares subject to all options and restricted stock units held by him and any other stock awards that the Board of Directors determines should be subject to the provisions of the Gregg Employment Agreement. In addition, all stock options and restricted stock units granted to Mr. Gregg, whether currently outstanding or granted in the future, will immediately vest upon a change of control.During 2015,2021, we employed Mr. Gregg’s son-in-law, Jake LeachSayer’s son, Erick Sayer, as our Senior Vice President of Research and Development. During 2015, Mr. LeachManager, Legal Counsel. Erick Sayer was paid $397,868$234,490 in base salary and bonus, and was granted 40,000 restricted stock units. In addition, we employed Mr. Gregg’s daughter-in-law, Leah Baccitich, as our Corporate and Compliance Counsel. During 2015, Ms. Baccitich was paid $117,039 in base salary and bonus, and was granted 1,649 restricted stock units.
cash compensation. Other than the employment of Mr. Gregg, Mr. Leach and Ms. Baccitich,Erick Sayer, since January 1, 2015,2021 there has not been, nor is there currently proposed, any transaction or series of transactions to which we were or will be a party in which the amount involved exceeds $120,000 and in which any director, nominee for director, executive officer, holder of more than 5%five percent of our common stock, or any member of their immediate family had or will have a direct or indirect material interest. Our audit committeeAudit Committee reviews the fairness and determines approval of any proposed transaction between us and management or other related parties (other than transactions that are subject to review by the compensation committee)Compensation Committee) that are brought to the attention of the audit committee.Audit Committee. In addition, our Code of Conduct and Ethics sets forth factors that should be considered in determining whether there may be a direct or indirect material interest, such as the size and nature of the person’s interest; the nature of our relationship with the other individual or entity; and whether the person has access to confidential DexComDexcom information. | | | | | | | | | STOCKHOLDER PROPOSALS FOR ANNUAL MEETING | | |
STOCKHOLDER PROPOSALS FOR ANNUAL MEETINGRequirements for Stockholder Proposals to Be Considered for Inclusion in DexCom’sDexcom’s Proxy Materials. Stockholders of DexComDexcom may submit proposals on matters appropriate for stockholder action at meetings of DexCom’sDexcom’s stockholders in accordance with Rule 14a-8 promulgated under the Exchange Act. For such proposals to be included in DexCom’sDexcom’s proxy materials relating to its 20172023 Annual Meeting of Stockholders, all applicable requirements of Rule 14a-8 must be satisfied and such proposals must be received by DexComDexcom no later than December 15, 2016.10, 2022. Such proposals should be delivered to DexCom, Inc., Attn: Secretary, 6340 Sequence Drive, San Diego, CACalifornia 92121. Requirements for Stockholder Proposals to be Brought Before the Annual Meeting. DexCom’s bylaws Dexcom’s Bylaws provide that, except in the case of proposals made in accordance with Rule 14a-8, for stockholder nominations to the Board of Directors or other proposals to be considered at an annual meetingAnnual Meeting of stockholders,Stockholders, the stockholder must have
given timely notice thereof in writing to the Secretary of DexComDexcom not less than seventy-five calendar days nor more than one hundred and five calendar days day prior to the first anniversary of the preceding year’s annual meeting.Annual Meeting. To be timely for the 20172023 Annual Meeting of Stockholders, a stockholder’s notice must be delivered or mailed to and received by DexCom’sDexcom’s Secretary at the principal executive offices of DexComDexcom between February 3, 20172023 and March 5, 2017.2023. However, in the event that the annual meetingAnnual Meeting is called for a date that more than thirty (30) days before or more than sixty (60) days after such anniversary date, to be timely notice by the stockholder must be delivered not earlier than the close of business on the one hundred and fifth day prior to such annual meetingAnnual Meeting and not later than the close of business on the later of the seventy-fifth day prior to such annual meetingAnnual Meeting or the close of business on the tenth day following the day on which public announcement of the date of such meeting is first made by DexCom.Dexcom. A stockholder’s notice to DexCom’sDexcom’s Secretary must set forth the information required by DexCom’s bylawsDexcom’s Bylaws with respect to each matter the stockholder proposes to bring before the annual meeting.HOUSEHOLDING OF PROXY MATERIALS
Annual Meeting. | | | | | | | | | HOUSEHOLDING OF PROXY MATERIALS | | |
The SEC has adopted rules that permit companies and intermediaries (such as brokers, banks or other agents) 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,” potentially means extra convenience for stockholders and cost savings for companies. This year, a number of broker, banks or other agents with account holders who are stockholders of DexComDexcom will be “householding” our proxy materials. A single proxy statementProxy 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 broker, bank or other agent 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 statementProxy Statement and annual report,Annual Report, please notify your broker, bank or other agent, and direct a written request for the separate proxy statementProxy Statement and annual reportAnnual Report to American Stock Transfer & Trust Company at 59 Maiden Lane, Plaza Level, New York, New York, 10038. Stockholders whose shares are held by their broker, bank or other agent as nominee and who currently receive multiple copies of the proxy statementProxy Statement at their address that would like to request “householding” of their communications should contact their broker, bank or other agent. OTHER MATTERS
Our Board of Directors knows of no other matters that will be presented for consideration at the annual meeting.Annual Meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment. ANNUAL REPORTS
A copy of our annual reportAnnual Report to stockholders, which includes financial statements, has been posted on the Internet, along with this Proxy Statement, each of which is accessible by following the instructions in the Notice. We have filed our annual reportAnnual Report on Form 10-K for the fiscal year ended December 31, 20152021 with the SEC on February 23, 2016.14, 2022. It is available free of charge at the SEC’s web site at www.sec.gov. Upon written request by a DexComDexcom stockholder, we will mail without charge a copy of our Form 10-K, including the financial statements and financial statement schedules, but excluding exhibits to the Form 10-K. Exhibits to the Form 10-K are available upon payment of a reasonable fee, which is limited to our expenses in furnishing the requested exhibit.
Requests for copies of our annual reportAnnual Report to stockholders or our annual reportAnnual Report on Form 10-K should be directed to Investor Relations, DexCom, Inc., 6340 Sequence Drive, San Diego, California 92121.By Order of the Board of Directors
Kevin Sayer
President and Chief Executive Officer
San Diego, California
April 6, 2016
| | | DEXCOM, INC
6340 Sequence Drive
SAN DIEGO, CA 92121
| | VOTE BY INTERNET - www.proxyvote.com
UseBy Order of the Internet to transmit your voting instructionsBoard of Directors
| | | Kevin R. Sayer | Chairman, President and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.Chief Executive Officer ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
| | DexCom, Inc. | | San Diego, California | | April 8, 2022 |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
xTableofContentsKEEP THIS PORTION FOR YOUR RECORDS
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | APPENDIX A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote FOR the following:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1. | | Election of Directors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nominees | | | | | | | | | | | | | | For | | Against | | Abstain | | | | | | | | | | | | | 1a Steven R. Altman
| | | | | | | | | | | | ¨
| | ¨
| | ¨
| | | | | | | | | | | | | 1b Barbara E. Kahn
| | | | | | ¨
| | ¨
| | ¨
| | | | | | | | | | | | | 1c Jay S. Skyler | | | | | | ¨
| | ¨
| | ¨
| | | | | | | | | | | The Board of Directors recommends you vote FOR proposals 2 and 3.
| | | | For
| | Against
| | Abstain
| | | | | | | | | | | 2.
| | To ratify the selection by the audit committee of our Board of Directors of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016.
| | | | | | | | | | | | | | ¨
| | ¨
| | ¨
| | | | | | | | | | | 3.
| | Advisory resolution to approve executive compensation.
| | | | | | | | | | | | | | ¨
| | ¨
| | ¨
| | | | | | | | | | | | | | | | | | | | | | | | | | NOTE: Such other business as may properly come before the meeting or any adjournment thereof. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For address change/comments, mark here. | | | | | | | | | | | | | | | | | | ¨ | | | | | | | | | | | (see reverse for instructions) | | | | | | | | | | | | | | Yes | | No | | | | | | | | | | | | | Please indicate if you plan to attend this meeting
| | | | | | | | | | | | | | ¨
| | ¨
| | | | | | | | | | | | | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.
| | | | | | | | |
RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL MEASURES (In millions, except per share data) (Unaudited) | | | | | | | | | | | | | Twelve Months Ended
December 31, | | 2021 | | 2020 | | GAAP gross profit | $ | 1,680.5 | | | $ | 1,280.1 | | COVID-19 costs (1) | — | | | 8.1 | | | Non-GAAP gross profit | $ | 1,680.5 | | | $ | 1,288.2 | | | | | | | GAAP operating income | $ | 265.8 | | | $ | 299.5 | | | Amortization of intangible assets | 3.7 | | | 2.3 | | Business transition and related costs (2) | — | | | 0.4 | | COVID-19 costs (1) | — | | | 11.1 | | Intellectual property litigation costs (3) | 14.1 | | — | | Litigation settlement costs (4) | — | | | 6.1 | | | Non-cash collaborative research and development fee (5) | 87.1 | | | — | | | Non-GAAP operating income | $ | 370.7 | | | $ | 319.4 | | | | | | | GAAP net income | $ | 154.7 | | | $ | 493.6 | | Business transition and related costs (2) | — | | | 0.4 | | COVID-19 costs (1) | — | | | 11.1 | | | Depreciation and amortization | 102.0 | | | 67.1 | | Intellectual property litigation costs (3) | 14.1 | | — | | Litigation settlement costs (4) | 0.0 | | 6.1 | | Income from equity investments (6) | (11.6) | | | 0.0 | Loss on extinguishment of debt (7) | 1.4 | | | 5.9 | | Non-cash collaborative research and development fee (5) | 87.1 | | | — | | | Share-based compensation | 113.4 | | | 119.4 | | | Interest expense and interest income | 98.6 | | | 71.5 | | | Income tax (benefit) expense | 19.2 | | | (268.6) | | | Adjusted EBITDA | $ | 578.9 | | | $ | 506.5 | | | | | | | GAAP net income | $ | 154.7 | | | $ | 493.6 | | | | | | | Amortization of intangible assets | 3.7 | | | 2.3 | | Business transition and related costs (2) | 0.0 | | 0.4 | COVID-19 costs (1) | — | | | 11.1 | | Intellectual property litigation costs (3) | 14.1 | | | — | | Litigation settlement costs (4) | — | | | 6.1 | | Non-cash collaborative research and development fee (5) | 87.1 | | | — | | Non-cash interest expense (8) | 83.0 | | | 68.6 | | Income from equity investments (6) | (11.6) | | | — | |
| | | | | | | | | | | | Loss on extinguishment of debt (7) | 1.4 | | | 5.9 | | Adjustments related to taxes (9) | (65.7) | | | (285.5) | | | Non-GAAP net income | $ | 266.7 | | | $ | 302.5 | | | | | | GAAP diluted net income (loss) per share (10) | 1.55 | | | 5.06 | | | | | | | | | | | Amortization of intangible assets | 0.04 | | | 0.02 | | Business transition and related costs (2) | — | | | — | | COVID-19 costs (1) | — | | | 0.11 | | Intellectual property litigation costs (3) | 0.14 | | | — | | Litigation settlement costs (4) | — | | | 0.06 | | Non-cash interest expense (8) | 0.83 | | | 0.70 | | Income from equity investments (6) | (0.12) | | | — | | Loss on extinguishment of debt (7) | 0.01 | | | 0.06 | | Non-cash collaborative research and development fee (5) | 0.87 | | | — | | Adjustments related to taxes (9) | (0.66) | | | (2.93) | | | | | | Non-GAAP net income per share (11) | 2.66 | | 1.84 | | | | | | GAAP diluted weighted-average shares outstanding | 100.1 | | 97.5 | | Non-GAAP diluted weighted-average shares outstanding | 100.1 | | 97.5 |
| | | | | | | (1) | | | | | | | | | | | | | | Represents costs associated with the COVID-19 outbreak related to taking the necessary precautions for essential personnel to operate safely both in person as well as remotely. | | (2) | Business transition and related costs are primarily related to the Restructuring Plan that Dexcom announced on February 21, 2019. | | (3) | Signature [PLEASE SIGN WITHIN BOX]Represents costs related to a patent infringement lawsuit. | | (4) | Represents costs associated with a settlement of litigation and proceedings in 2020 related to a patent infringement lawsuit. | | (5) | DateRepresents expense incurred in the fourth quarter of 2021 associated with the 2018 collaboration and licensing agreement with Verily Life Sciences. | | (6) | Represents a gain from the sale of an equity investment. | | (7) | Loss on extinguishment of debt is related to the conversions and/or repurchases of our senior convertible notes. | | (8) | Non-cash interest expense represents accretion of the debt discount associated with our senior convertible notes. | | (9) | Signature (Joint Owners)For the twelve months ended December 31, 2021, tax adjustments were primarily related to the excess tax benefits from stock compensation vesting. For the twelve months ended December 31, 2020, we exclude the impact related to the Company’s valuation allowance release of $285.5 million. | | (10) | Net income used for calculating diluted earnings per share for the three months ended December 31, 2020 was $363.2 million, including an add back of $8.0 million interest expense, net of tax, under the if-converted method for our 2023 senior convertible notes. | | Date | | (11) | | | | The sum of the non-GAAP net income per share components may not equal the totals due to rounding. |
02 0000000000
0000279249_1 R1.0.1.25
Important Notice
Statement Regarding Use of Non-GAAP Financial Measures We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles, differ from GAAP measures with the Availabilitysame names, and may differ from non-GAAP financial measures with the same or similar names that are used by other companies. We believe that non-GAAP financial measures should only be used to evaluate our results of Proxy Materialsoperations in conjunction with the corresponding GAAP financial measures. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliations between these presentations, to more fully understand our business. Management believes that presentation of operating results that excludes these items provides useful supplemental information to investors and facilitates the analysis of our core operating results and comparison of operating results across reporting periods. Management also believes that this supplemental non-GAAP information is therefore useful to investors in analyzing and assessing our past and future operating performance. These non-GAAP measures may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. We believe that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with U.S. GAAP and that these measures should only be used to evaluate our results of operations in conjunction
with the corresponding GAAP measures. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand our business. Appendix A reconciles the non-GAAP financial measures in the press release to the most directly comparable financial measures prepared in accordance with GAAP. We exclude the following items from non-GAAP financial measures for non-GAAP gross profit, non-GAAP operating income (loss), non-GAAP net income (loss), and non-GAAP net income (loss) per share:
•Amortization of acquired intangible assets •Collaborative research and development fees associated with milestone and incentive payments under our collaborative research and development arrangements paid or payable by issuing shares of our common stock •Business transition and related costs associated with acquisition, integration and business transition activities, including severance, relocation, consulting, leasehold exit costs, third party merger and acquisition costs, and other costs directly associated with such activities •COVID-19 costs associated with the COVID-19 outbreak related to taking the necessary precautions for essential personnel to operate safely both in person as well as remotely. Costs incurred include items like incremental payroll costs, consulting support, IT infrastructure and facilities related costs •Income or loss from equity investments •Intellectual property litigation costs •Litigation settlement costs •Non-cash interest expense on senior convertible notes for the Annual Meeting: The Notice & Proxy Statementaccretion of the debt discount associated with our senior convertible notes •Loss on extinguishment of debt associated with repurchases and/or conversions of our senior convertible notes •Adjustments related to taxes for the excluded items above, as well as excess benefits or tax deficiencies from stock-based compensation, the one-time impact from release of valuation allowance in 2020, and Annual Report, 10K WRAP is/are available atwww.proxyvote.com.the quarterly impact of other discrete items — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
Adjusted EBITDA excludes non-cash operating charges for share-based compensation, depreciation and amortization as well as non-operating items such as interest income, interest expense, loss on extinguishment of debt, income and loss from equity investments, and income tax expense or benefit. For the reasons explained above, adjusted EBITDA also excludes non-cash collaborative research and development fees, business transition and related costs, COVID-19 costs, litigation settlement costs, and intellectual property litigation costs.
| | | | | | | | | DEXCOM, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 2016 AT 2:00 P.M.
The undersigned hereby appoints Kevin Sayer and Jess Roper, or either of them, as proxies, each with the power to appoint (his/her) substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common stock of DEXCOM, INC that the undersigned is entitled to vote at the Annual Meeting of Stockholders to be held at 2:00 P.M., PDT on May 19, 2016, at DexCom’s facilities at 6310 Sequence Drive, San Diego, California, and any adjournment or postponement thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER. WHERE NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED (1) “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES NAMED ON THE REVERSE SIDE OF THIS PROXY, (2) “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2016, (3) “FOR” APPROVAL ON A NON-BINDING ADVISORY BASIS OF THE COMPENSATION OF OUR EXECUTIVE OFFICERS AND (4) IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY POSTPONEMENT OR ADJOURNMENT OF THE ANNUAL MEETING. THE UNDERSIGNED HEREBY REVOKES ANY OTHER PROXY OR PROXIES HERETOFORE GIVEN TO VOTE OR ACT WITH RESPECT TO THE SHARES OF COMMON STOCK OF THE COMPANY HELD BY THE UNDERSIGNED. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO SIGN AND RETURN THIS PROXY, WHICH MAY BE REVOKED AT ANY TIME PRIOR TO ITS USE.
Address change/comments:
| | | | | | | | | | | APPENDIX B | | | | | | | | | |
DEXCOM, INC. RESTATED CERTIFICATE OF INCORPORATION DexCom, Inc., a corporation organized and existing under and by virtue of the Delaware General Corporation Law, hereby certifies as follows: The name of the corporation is DexCom, Inc. The date of filing its original Certificate of Incorporation with the Secretary of State was May 13, 1999. This Restated Certificate of Incorporation of the corporation attached hereto as Exhibit A, which is incorporated herein by this reference, only restates and integrates and does not further amend the provisions of the corporation’s Restated Certificate of Incorporation as theretofore amended or supplemented and there is no discrepancy between the provisions of the Restated Certificate of Incorporation of the corporation as theretofore amended and supplemented and the provisions of this Restated Certificate of Incorporation. This Restated Certificate of Incorporation was duly adopted in accordance with the provisions of Section 245 of the Delaware General Corporation Law. IN WITNESS WHEREOF, said corporation has caused this Restated Certificate of Incorporation to be signed by its duly authorized officer under the seal of the corporation this [•] day of [•], 2022. | | | | | | (If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side
DEXCOM, INC. | | | By: /s/ Kevin Sayer | | Kevin Sayer | | President and Chief Executive Officer |
0000279249_2 R1.0.1.25
RESTATED
CERTIFICATE OF INCORPORATION
OF
DEXCOM, INC. ARTICLE I The name of the corporation is DexCom, Inc. ARTICLE II The address of the corporation’s registered office in the State of Delaware is 251 Little Falls Drive in the City of Wilmington, County of New Castle, 19808. The name of its registered agent at such address is Corporation Service Company. ARTICLE III The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. ARTICLE IV The total number of shares of all classes of stock which the corporation has authority to issue is 805,000,000 shares, consisting of two classes: 800,000,000 shares of Common Stock, $0.001 par value per share, and 5,000,000 shares of Preferred Stock, $0.001 par value per share. Contingent and effective upon the filing of this Restated Certificate of Incorporation, every one (1) share of Common Stock outstanding or held in treasury will automatically, without any further action by the Corporation or the stockholders thereof, become four (4) shares of Common Stock outstanding or held in treasury (the “Forward Stock Split”). The par value of the Common Stock shall remain $0.001 per share. The Forward Stock Split shall apply to all shares of Common Stock. The Board of Directors is authorized, subject to any limitations prescribed by the law of the State of Delaware, to provide for the issuance of the shares of Preferred Stock in one or more series, and, by filing a Certificate of Designation pursuant to the applicable law of the State of Delaware, to establish from time to time the number of shares to be included in each such series, to fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof, and to increase or decrease the number of shares of any such series (but not below the number of shares of such series then outstanding). The number of authorized shares of Preferred Stock may also be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the corporation entitled to vote, unless a vote of any other holders is required pursuant to a certificate or certificates establishing a series of Preferred Stock. Except as otherwise expressly provided in any Certificate of Designation designating any series of Preferred Stock pursuant to the foregoing provisions of this Article IV, any new series of Preferred Stock may be designated, fixed and determined as provided herein by the Board of Directors without approval of the holders of Common Stock or the holders of Preferred Stock, or any series thereof, and any such new series may have powers, preferences and rights, including, without limitation, voting rights, dividend rights, liquidation rights, redemption rights and conversion rights, senior to, junior to or pari passu with the rights of the Common Stock, the Preferred Stock, or any future class or series of Preferred Stock or Common Stock. Each outstanding share of Common Stock shall entitle the holder thereof to one vote on each matter properly submitted to the stockholders of the corporation for their vote; provided, however, that, except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Certificate of Incorporation (including any Certificate of Designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation (including any Certificate of Designations relating to any series of Preferred Stock). ARTICLE V The Board of Directors of the corporation shall have the power to adopt, amend or repeal the Bylaws of the corporation. ARTICLE VI For the management of the business and for the conduct of the affairs of the corporation, and in further definition, limitation and regulation of the powers of the corporation, of its directors and of its stockholders or any class thereof, as the case may be, it is further provided that:
(A)The conduct of the affairs of the corporation shall be managed under the direction of the Board of Directors. In addition to the powers and authority expressly conferred upon them by statute or by this Certificate of Incorporation or the Bylaws of the corporation, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the corporation. The number of directors shall be fixed from time to time exclusively by resolution of the Board of Directors. (B)Notwithstanding the foregoing provision of this Article VI, each director shall hold office until such director’s successor is elected and qualified, or until such director’s earlier death, resignation or removal. No decrease in the authorized number of directors constituting the Board of Directors shall shorten the term of any incumbent director. (C)Subject to the rights of the holders of any series of Preferred Stock, any vacancy occurring in the Board of Directors for any cause, and any newly created directorship resulting from any increase in the authorized number of directors, shall, unless (i) the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by the stockholders or (ii) as otherwise provided by law, be filled only by the affirmative vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director, and not by the stockholders. Any director elected in accordance with the preceding sentence shall, if elected to fill a vacancy not created by a newly created directorship, be elected to serve for the remainder of the term of the director being replaced or until such director’s earlier death, resignation or removal. Prior to the 2022 annual meeting of the stockholders, any director elected to fill a vacancy created by a newly created directorship shall hold office for a term expiring at the same annual meeting as other members of the class of directors into which such director is a member. Commencing with the 2022 annual meeting of stockholders, any director elected to fill a vacancy created by a newly created directorship shall hold office for a term expiring at the next annual meeting of stockholders or until such director’s earlier death, resignation or removal. No decrease in the authorized number of directors shall shorten the term of any incumbent director. (D)Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, prior to the 2022 annual meeting of the stockholders, the directors shall be divided, with respect to the time for which they severally hold office, into three classes designated as Class I, Class II and Class III, respectively, for a term expiring at the third annual meeting of stockholders after such director is elected or until such director’s earlier death, resignation or removal. Commencing with the 2022 annual meeting of stockholders, each class of directors whose term shall expire at such annual meeting of stockholders shall be elected to hold office for a term expiring at the next annual meeting of stockholders or until such director’s earlier death, resignation or removal. (E)Election of directors need not be by written ballot unless the Bylaws of the corporation shall so provide. (F)No action shall be taken by the stockholders of the corporation except at an annual or special meeting of stockholders called in accordance with the Bylaws of the corporation, and no action shall be taken by the stockholders by written consent. (G)Advance notice of stockholder nominations for the election of directors of the corporation and of business to be brought by stockholders before any meeting of stockholders of the corporation shall be given in the manner provided in the Bylaws of the corporation. Business transacted at special meetings of stockholders shall be confined to the purpose or purposes stated in the notice of meeting. ARTICLE VII To the fullest extent permitted by law, no director of the corporation shall be personally liable for monetary damages for breach of fiduciary duty as a director. Without limiting the effect of the preceding sentence, if the Delaware General Corporation Law (“GCL”) is hereafter amended to authorize the further elimination or limitation of the liability of a director, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the GCL, as so amended. Neither any amendment nor repeal of this Article VII, nor the adoption of any provision of this Certificate of Incorporation inconsistent with this Article VII, shall eliminate, reduce or otherwise adversely affect any limitation on the personal liability of a director of the corporation existing at the time of such amendment, repeal or adoption of such an inconsistent provision.
|
