NOMINEES FOR ELECTION TO THE BOARD
Each of the proposed director nominees
iswill be an incumbent director. Each director nominee elected at the
20202023 Annual Meeting will hold office until the close of the
20212024 Annual Meeting of Shareholders, his or her successor is duly elected or appointed, or such director’s earlier resignation or removal.
The results from the
20192022 election of directors are as follows:
| | | | | | | | | | | | |
Name | | For | | | Withheld | | | Broker Non-Votes | |
Richard U. De Schutter | | | 183,421,746 | | | | 1,800,334 | | | | 85,239,464 | |
D. Robert Hale | | | 183,370,521 | | | | 1,851,559 | | | | 85,239,464 | |
Dr. Argeris (Jerry) N. Karabelas | | | 182,737,951 | | | | 2,484,129 | | | | 85,239,464 | |
Sarah B. Kavanagh | | | 181,279,743 | | | | 3,942,337 | | | | 85,239,464 | |
Joseph C. Papa | | | 179,484,034 | | | | 5,738,046 | | | | 85,239,464 | |
John A. Paulson | | | 183,706,997 | | | | 1,515,083 | | | | 85,239,464 | |
Robert N. Power | | | 177,484,848 | | | | 7,737,232 | | | | 85,239,464 | |
Russel C. Robertson | | | 180,800,755 | | | | 4,421,325 | | | | 85,239,464 | |
Thomas W. Ross, Sr. | | | 180,675,227 | | | | 4,546,853 | | | | 85,239,464 | |
Andrew C. von Eschenbach, M.D. | | | 183,612,142 | | | | 1,609,938 | | | | 85,239,464 | |
Amy B. Wechsler, M.D. | | | 183,402,429 | | | | 1,819,651 | | | | 85,239,464 | |
Thomas J. Appio | | | 208,484,011 | | | 4,473,053 | | | 70,926,205 |
Richard U. De Schutter(1) | | | 204,019,165 | | | 8,937,899 | | | 70,926,205 |
Brett M. Icahn | | | 202,357,292 | | | 10,599,772 | | | 70,926,205 |
Dr. Argeris N. Karabelas(1) | | | 201,356,292 | | | 11,600,478 | | | 70,926,205 |
Sarah B. Kavanagh | | | 204,141,525 | | | 8,815,539 | | | 70,926,205 |
Steven D. Miller | | | 203,021,418 | | | 9,935,646 | | | 70,926,205 |
Dr. Richard C. Mulligan | | | 195,477,842 | | | 17,479,222 | | | 70,926,205 |
Joseph C. Papa(2) | | | 176,759,880 | | | 36,197,184 | | | 70,926,205 |
Robert N. Power | | | 153,014,215 | | | 59,942,849 | | | 70,926,205 |
Russel C. Robertson | | | 199,201,436 | | | 13,755,628 | | | 70,926,205 |
Thomas W. Ross, Sr. | | | 199,710,479 | | | 13,246,585 | | | 70,926,205 |
Amy B. Wechsler, M.D. | | | 204,605,343 | | | 8,351,721 | | | 70,926,205 |
(1)
| On February 28, 2023, Mr. De Schutter and Dr. Karabelas notified the Company of their decision to retire from the Board, effective at the 2023 Annual Meeting. The retirement of each of Mr. De Schutter and Dr. Karabelas was not the result of any dispute or disagreement with the Company or the Board on any matter relating to the operations, policies or practices of the Company. |
(2)
| On June 23, 2022, Mr. Papa resigned from the Board. Mr. Papa's decision to resign from the Board was not due to any dispute or disagreement with the Company, its management or the Board on any matter relating to the Company's operations, policies, or practices. The Board appointed Mr. Paulson to rejoin the Board to fill the resulting vacancy and to serve as the Non-Executive Chairperson of the Board, effective upon Mr. Papa's resignation. |
The following narratives provide details about each of the director nominees’ background and experience, and summarizes the specific attributes, competencies and characteristics that led to the determination of the Nominating and Corporate Governance Committee and the Board to nominate such individual as a director for election by the shareholders at the
Annual Meeting. In addition, the narrative lists the number of meetings of the Board and any applicable committee each director nominee attended during
20192022 and any public company directorships, other than with the Company, held by the nominees during the past five years. The narrative also sets out (i) the number of securities of the Company each director nominee beneficially owned, controlled or directed, directly or indirectly, as of March
2, 2020;17, 2023; (ii) the aggregate value of such securities based on the
$23.09$ per share closing price of our Common Shares on March
2, 2020,17, 2023, as reported on the
NYSE,NYSE; and (iii) the progress of each director nominee toward the director share ownership requirement established by the Board. For further detail regarding the share ownership requirement for
non-employee Directors, see the discussion in the section titled “Statement of Corporate Governance Practices — Directors’ Share Ownership” on page
28.26. For further detail regarding the share ownership requirement for Mr.
Papa,Appio, see the discussion in the section titled “Compensation Discussion and Analysis — Other Compensation Governance Practices — Share Ownership Guidelines” on page
53.56.
Mr. De Schutter has served on the Board since January 2017. He is currently a corporate director. Prior to his retirement, Mr. De Schutter served as the Chairman and CEO of DuPont Pharmaceuticals Company from July 2000 until its acquisition by Bristol-Myers Squibb in October 2001. Mr. De Schutter was also a director and Chief Administrative Officer of Pharmacia Corporation, which was created through the merger of Monsanto Company and Pharmacia & Upjohn in 2000. Prior to this merger, Mr. De Schutter was a director, Vice Chairman and Chief Administrative Officer for Monsanto. From 1995 to 1999, he served as Chairman and CEO of G.D. Searle & Co., Monsanto’s wholly owned pharmaceutical subsidiary. Mr. De Schutter earned a Bachelor of Science degree in 1963, and a Master of Science Degree in Chemical Engineering in 1965 from the University of Arizona.
Mr. De Schutter has served as a director of AuVen Therapeutics, a private equity company focused on the healthcare industry, since 2007. He has also served as a director of Applied Silver, Inc., a private biotechnology company, since 2016, and has served as a director of Sermonix Pharmaceuticals Inc., a private biotechnology company, since April 2019. He previously served as Chairman of Incyte Corporation, a pharmaceutical company, from 2003 to 2015.
Director Qualifications:
The Board has determined that Mr. De Schutter’s many years of experience in senior management and board positions of publicly-traded companies, his service as a director of private healthcare and biotechnology companies, and his extensive insight and knowledge of the pharmaceutical industry and healthcare related issues qualify him to serve as a member of the Board and the committees on which he serves.
12
Mr. Richard U. De Schutter
Arizona, USA
Age 79
Independent
Stock Ownership:
TABLE OF CONTENTS
254,811 Common Shares — $5,883,586
29,439 Restricted Share Units (“RSUs”) (comprised of 18,806 vested RSUs — $434,231, and 10,633 unvested RSUs — $245,516)
Age: 61
New Jersey, USA
Director Since: 2022
Non-Independent
Committees:
• Science & Technology Committee | • | | Mr. Appio has been the Chief Executive Officer of the Company since May 2022. He previously served as the Company’s President & Co-Head Bausch + Lomb/ International and Executive Vice President, Company Group Chairman, International. Prior to joining Bausch Health in 2013, Mr. Appio served in several positions with Bausch + Lomb, including as Vice President, North Asia/Japan and as Managing Director, Greater China and Japan. Prior to joining Bausch + Lomb, Mr. Appio served 23 years with Schering-Plough in a wide range of leadership and operations responsibilities. Mr. Appio holds a Bachelor of Science in Accounting from Arizona State University, W.P. Carey School of Business.
| | | Stock Ownership:
• 194,862 Common Shares — $1,480,051
• 695,999 RSUs (comprised of 695,999 unvested RSUs — $5,289,592)
• 482,201 Stock Options
• Total Equity Value at Risk: $1,480,051 based on the value of the Common Shares beneficially owned by Mr. Appio (but excluding all options and unvested RSUs).
Mr. Appio is subject to share ownership guidelines under the terms of his employment agreement with the Company, as further described in the section titled “Compensation Discussion and Analysis — Other Compensation Governance Practices – Share Ownership Guidelines” on page 56.
2022 Meeting Attendance:1 $6,317,817,
• Board: 9/9
Qualifications:
The Board has determined that Mr. Appio’s extensive management experience and demonstrated leadership with the Company is a valuable contribution to the Board. |
TABLE OF CONTENTS
Age: 43
Florida, USA
Director Since: 2021
Independent
Committees:
• Nominating & Corporate Governance (Chair)
• Finance & Transactions Committee | | | Mr. Icahn was appointed to the Board on March 17, 2021 pursuant to the Nomination Agreement described under “Certain Transactions” beginning on page 80. Since October 2020, he has been a portfolio manager for Icahn Capital LP, a subsidiary of Icahn Enterprises L.P., a diversified holding company engaged in a variety of businesses, including investment, automotive, energy, food packaging, metals, real estate and home fashion. Mr. Icahn has held a variety of investment advisory roles at Icahn Enterprises L.P. since 2002, including as an investment strategy consultant from 2017 to October 2020, and as portfolio manager of the Sargon Portfolio from 2010 to 2017.
Mr. Icahn joined the board of directors of Bausch + Lomb Corporation, a publicly traded eye health company, in May 2022, and has served on the board of Icahn Enterprises L.P., a private entity since October 2020. He has also been a director of Dana Inc., a supplier of automotive products and services, since January 2022. Mr. Icahn was previously a director of Nuance Communications, Inc., a provider of voice and language solutions, from October 2013 to March 2016, and Newell Brands Inc., a publicly traded global marketer of consumer and commercial products, since March 2018 to March 2023. Mr. Icahn also previously served on the boards of American Railcar Industries, Inc., Take-Two Interactive Software Inc., The Hain Celestial Group, Inc. and Voltari Corporation. Mr. Carl C. Icahn, the founder and controlling shareholder of Icahn Enterprises L.P., has or previously had non-controlling interests in Nuance Communications, Inc., Hain Celestial Group, Inc. and Take-Two Interactive Software Inc. Mr. Icahn received a B.A. from Princeton University. | | | Stock Ownership:
• 8,389 Common Shares — $63,756
• 17,424 Restricted Share Units (“RSUs”) (comprised of 17,424 vested RSUs — $132,514, and 34,387 unvested RSUs — $261,341)
• Total Equity Value at Risk: $196,270 representing 1,264%39% of both the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 196% of the annual Board retainer. Mr. Icahn has until March 17, 2026 to achieve the expected minimum equity ownership under such share ownership guidelines.
2022 Meeting Attendance:
• Board: 13/13
• Finance & Transactions Commit tee: 13/13
• Special Transactions Committee: 2/2
Qualifications:
The Board has determined that Mr. Icahn’s experience at the Icahn entities, and his service as a director of multiple public company boards, and his tenure as a Portfolio Manager provide him with expertise in investing and capital allocation, which qualifies him to serve as a member of the Board and the committees on which he serves. |
TABLE OF CONTENTS
Age: 66
Ontario, Canada
Director Since: 2016
Independent
Committees:
• Audit & Risk Committee
• Finance & Transactions Committee | | | Ms. Kavanagh has served on the Board since July 2016. She is currently a corporate director. From 2011 through May 2016, Ms. Kavanagh served as a Commissioner of the Ontario Securities Commission, where she also served as chairperson of the audit committee starting in 2014. Between 1999 and 2010, Ms. Kavanagh served in various senior investment banking roles at Scotia Capital Inc., including Vice-Chair and Co-Head of Diversified Industries Group, Head of Equity Capital Markets, and Head of Investment Banking. Prior to Scotia Capital, she held several senior financial positions with operating companies. She started her career as an investment banker with a multinational bank in New York. Ms. Kavanagh graduated from Harvard Business School with a Master of Business Administration and received a Bachelor of Arts degree in Economics from Williams College.
Ms. Kavanagh joined the board of directors of Bausch + Lomb Corporation, a publicly traded eye health company, in May 2022. Since 2013, Ms. Kavanagh has been a director of Hudbay Minerals Inc., a publicly traded Canadian mining corporation Ms. Kavanagh previously served as a member of the board of trustees of WPT Industrial REIT, a publicly traded open-ended real estate investment trust, from 2013 to October 2021. In addition to her public company directorships, she is a director of AST and Cymax Technology Group and also serves as a director of Sustainable Development Technology Canada. She completed the Directors Education Program at the Institute of Corporate Directors in 2011. | | | Stock Ownership:
• 0 Common Shares — $0
• 117,447 Restricted Share Units (“RSUs”) (comprised of 83,060 vested RSUs — $631,256 and 34,387 unvested RSUs — $261,341)
• Total Equity Value at Risk: $631,256, representing 126% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines fornon-employee directors Directors and 6,318% 631% of the director’s annual Board retainer.
2022 Meeting Attendance:
• Board: 13 /13
• Audit & Risk Committee: 8/8
• Nominating & Corporate Governance Committee: 6/6
• Finance & Transactions Committee: 13/13
• Special Transactions Committee: 2/2
Qualifications:
The Board has determined that Ms. Kavanagh’s extensive experience of complex financial and capital market issues at various banking institutions, and her in-depth knowledge of financial and operational matters qualify her to serve as a member of the Board and the committees on which she serves. |
2019 Meeting Attendance:
TABLE OF CONTENTS
Talent and Compensation Committee — 5/5
Finance and Transactions Committee — 7/7
Age: 34
Florida, USA
Director Since: 2021
Independent
Committees:
• Audit & Risk Committee
• Finance & Transactions Committee (Chair) | | | Mr. Miller has served on the Board since March 2021 pursuant to the Nomination Agreement described under “Certain Transactions” beginning on page 80. Since October 2020, Mr. Miller has been a portfolio manager for Icahn Capital LP, a subsidiary of Icahn Enterprises L.P., a diversified holding company engaged in a variety of businesses. Prior to joining Icahn Capital L.P., Mr. Miller was an analyst in the Distressed and Special Situations investment group in the New York office of BlueMountain Capital Management, LLC from 2013 to 2019. Mr. Miller represented BlueMountain on the Ad Hoc Group of Puerto Rico Electric Power Authority Bondholders from 2014 to 2019, and from 2011 to 2013 he was an analyst in the Distressed Products Group in the New York office of Goldman, Sachs & Co. Mr. Miller received a B.S. summa cum laude from Duke University in 2011.
Mr. Miller has served as a director of Conduent Incorporated, a publicly traded business process services company, since February 2021, and Xerox Holdings Corporation, a publicly traded office equipment company, since May 2021. Mr. Miller was previously a director of Herc Holdings Inc., a publicly traded equipment rental supplier, from May 2022 to March 2023 | | | Stock Ownership:
• 68,4891 | TheCommon Shares — $520,516
• 51,823 Restricted Share Units (“RSUs”) (comprised of 17,436 vested RSUs — $132,514, and 34,387 unvested RSUs — $261,341)
• Total Equity Value at Risk calculationRisk: $653,030 representing 131% of both the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for each directornon-employee Directors and 653% of the annual Board re tainer.
2022 Meeting Attendance:
• Board: 13/13
• Finance & Transactions Committee: 13/13
• Special Transactions Committee: 2/2
Director Qualifications:
The Board has determined that Mr. Miller’s experience as a portfolio manager and securities analyst has provided him with experience in investing and finance and complex debt matters, respectively, which qualifies him to serve as a member of the Board and the committees on which he serves. |
TABLE OF CONTENTS
Age: 68
Massachusetts, USA
Director Since: 2022
Independent
Committees:
• Nominating & Corporate Governance
• Science & Technology Committee (Chair) | | | Dr. Mulligan has served on the Board since May 2022. Dr. Mulligan is currently the Mallinckrodt Professor of Genetics, Emeritus, at Harvard Medical School, after serving as the Mallinckrodt Professor of Genetics and Director of the Harvard Gene Therapy Initiative from 1996 to 2013. Dr. Mulligan also currently serves as Executive Vice Chairman of the Board of Sana Biotechnology, Inc. a public biotechnology company, and a director of Biogen Inc., a public biotechnology company. Prior to Harvard, Dr. Mulligan was a professor of Molecular Biology at the Massachusetts Institute of Technology, a member of the Whitehead Institute for Biomedical Research and chief scientific officer of Somatix Therapy Corporation, a drug discovery and development company that he founded. Dr. Mulligan was a founding partner of Sarissa Capital Management LP from 2013 to 2016 and from March 2017 to October 2018 served as Portfolio Manager at Icahn Capital LP. He was named a MacArthur Foundation Fellow in 1981. | | | Stock Ownership:
• 2,317 Common Shares — $17,609
• 34,387 Restricted Share Units (“RSUs”) (comprised of 0 vested RSUs held by— $0, and 34,387 unvested RSUs — $261,341)
• Total Equity Value at Risk: $17,609 representing 4% of the relevant director. It does not includeCompany’s current aggregate amount of $500,000 required under the valueshare ownership guidelines for non-employee Directors and 18% of any options (as applicable) or unvested RSUs.the annual Board retainer. Dr. Mulligan has until May 10, 2027 to achieve the expected minimum equity ownership under such share ownership guidelines.
2022 Meeting Attendance:1
• Board: 9/9
• Science & Technology Committee: 2/2
Qualifications:
The Board has determined that Dr. Mulligan’s extensive experience in the biotechnology and life sciences industries and international reputation in academia qualifies him to serve as a member of the Board and the committees on which he serves. |
Mr. Halehas served on the Board since August 2015. He is a Partner of ValueAct Capital Management, L.P. (“ValueAct Capital”), a governance-oriented investment fund which invests in a concentrated portfolio of public companies and works collaboratively with management and the board of directors on matters such as strategy, capital structure, M&A and talent management. During his tenure at ValueAct Capital as a Partner, and formerly as a Vice President and Associate, Mr. Hale has worked on investments in the pharmaceutical, medical device, information technology and business services industries. Prior to joining ValueAct Capital in January 2011, Mr. Hale was a Principal with The Parthenon Group, a strategy consultancy firm, working with corporate and private equity clients in industries such as investment management, media, education and retail in both the Boston and Mumbai offices of Parthenon’s strategic consulting practice. He also worked in an investment role at Parthenon’s long-short public equity vehicle, Strategic Value Capital.
Mr. Hale has served as a director of Olympus Corporation, a manufacturer of optics and reprography products, since June 2019. He previously served as a director of MSCI, Inc., a provider of equity, fixed income, hedge fund stock market indexes and multi-asset portfolio analysis tools, from March 2015 to September 2016.
Director Qualifications:
The Board has determined that Mr. Hale’sin-depth knowledge of complex financial and global capital market issues, his proven leadership experience in investment and governance positions and his extensive knowledge of financial and operational matters qualify him to serve as a member of the Board and the committees on which he serves.
Mr. D. Robert Hale
California, USA
Age 35
Independent
Stock Ownership:
17,931,594 Common Shares — $414,040,505
10,633 RSUs (comprised of 10,633 unvested RSUs — $245,516)
Total Equity Value at Risk: $414,040,505, representing 82,808% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines fornon-employee directors and 414,041% of the director’s annual retainer.
2019 Meeting Attendance:
Talent and Compensation Committee — 5/5
Finance and Transactions Committee — 7/7
Dr. Karabelashas served on the Board since June 2016. Since December 2001, Dr. Karabelas has been a Partner at Care Capital, LLC (“Care Capital”), a life sciences venture firm with $500M under management. Prior to his work at Care Capital, Dr. Karabelas was the founder and Chairman at Novartis BioVenture Fund, and served as Head of Healthcare and CEO of Worldwide Pharmaceuticals for Novartis Pharma AG. Prior to joining Novartis, Dr. Karabelas was Executive Vice President of SmithKline Beecham, where he was responsible for U.S. and European operations, regulatory and strategic marketing.
Dr. Karabelas has been a director of REGENEXBIO Inc., a clinical-stage biotechnology company, since May 2015, and has served on the board of Braeburn Pharmaceuticals, Inc., a privately-held specialty pharmaceuticals company, since 2015. Dr. Karabelas previously served as Chairman of Inotek Pharmaceuticals Corporation, a clinical-stage biopharmaceutical company (which merged with Rocket Pharmaceuticals, Inc. in 2017), from June 2012 to June 2016.
Director Qualifications:
The Board has determined that Dr. Karabelas’s many years of experience in senior management positions, his strong knowledge of strategic and regulatory issues, his insight into international operations and his international perspective on the pharmaceutical industry and healthcare related issues qualify him to serve as a member of the Board and the committees on which he serves.
Dr. Argeris (Jerry) N. Karabelas
New Hampshire, USA
Age 67
Independent
Stock Ownership:
4,000 Common Shares — $92,360
66,646 RSUs (comprised of 56,013 vested RSUs — $1,293,340 and 10,633 unvested RSUs — $245,516)
Total Equity Value at Risk: $1,385,700, representing 277% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines fornon-employee directors and 1,386% of the director’s annual retainer.
2019 Meeting Attendance:
Talent and Compensation Committee — 5/5
Science and Technology Committee — 4/4
1
| Dr. Mulligan was appointed to the Board on the IPO Closing Date and his Board and Board Committee meeting attendance is based on meetings held after that date. |
Ms. Kavanaghhas served on the Board since July 2016. She is currently a corporate director. From 2011 through May 2016, she served as a Commissioner of the Ontario Securities Commission, where she also served as chairperson of the audit committee starting in 2014. Between 1999 and 2010, Ms. Kavanagh served in various senior investment banking roles at Scotia Capital Inc., including Vice-Chair andCo-Head of Diversified Industries Group, Head of Equity Capital Markets, and Head of Investment Banking. Prior to Scotia Capital, she held several senior financial positions with operating companies. She started her career as an investment banker with a bulge bracket firm in New York. Ms. Kavanagh graduated from Harvard Business School with a Master of Business Administration and received a Bachelor of Arts degree in Economics from Williams College.
Since 2013, Ms. Kavanagh has been a director of Hudbay Minerals Inc., a Canadian mining corporation, and a member of the board of trustees of WPT Industrial REIT, an open-ended real estate investment trust. In addition to her public company directorships, she is a director of AST and AST Trust Company (Canada) (formerly Canadian Stock Transfer Company) and also serves as a director of Sustainable Development Technology Canada. She completed the Directors Education Program at the Institute of Corporate Directors in 2011.
Director Qualifications:
The Board has determined that Ms. Kavanagh’s extensive experience of complex financial and capital market issues at various banking institutions, and herin-depth knowledge of financial and operational matters qualify her to serve as a member of the Board and the committees on which she serves.
Sarah B. Kavanagh
Ontario, Canada
Age 63
Independent
Stock Ownership:
64,378 RSUs (comprised of 53,745 vested RSUs — $1,240,972 and 10,633 unvested RSUs — $245,516)
Total Equity Value at Risk: $1,240,972, representing 248% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines fornon-employee directors and 1,241% of the director’s annual retainer.
2019 Meeting Attendance:
Audit and Risk Committee — 8/8
Nominating and Corporate Governance Committee — 4/4
Finance and Transactions Committee — 7/7
Mr. Papahas been Chairman of the Board and Chief Executive Officer of the Company since May 2016. Mr. Papa has more than 35 years of experience in the pharmaceutical, healthcare and specialty pharmaceutical industries, including 20 years of branded prescription drug experience. He served as the CEO of Perrigo Company plc (“Perrigo”) from 2006 to April 2016, where he also served as Chairman from 2007 to April 2016. Prior to joining Perrigo, Mr. Papa served from 2004 to 2006 as Chairman and CEO of the Pharmaceutical and Technologies Services segment of Cardinal Health, Inc. From 2001 to 2004, he served as President and Chief Operating Officer of Watson Pharmaceuticals, Inc. (“Watson”). Prior to joining Watson, Mr. Papa held management positions at DuPont Pharmaceuticals, Pharmacia/Searle and Novartis AG. Mr. Papa served as a director of Smith & Nephew plc, a developer of advanced medical devices, from 2008 to April 2018.
Director Qualifications:
The Board has determined that Mr. Papa’s extensive experience as a chief executive officer of a public company, where he demonstrated leadership capability and extensive knowledge of complex financial and operational issues facing large organizations, and his understanding of operations and financial strategy in challenging environments, qualify him to serve as a member of the Board. Additionally, Mr. Papa’s knowledge of the pharmaceutical industry and business, combined with his drive for innovation and excellence, position him well to serve as the Chairman of the Board.
Mr. Joseph C. Papa
New Jersey, USA
Age 64
Not Independent
Stock Ownership:
463,719 Common Shares — $10,707,272
458,861 RSUs (comprised of 458,861 unvested RSUs — $10,595,100)
Total Equity Value at Risk: $10,707,272, based on the value of the Common Shares beneficially owned by Mr. Papa (but excluding all options and unvested RSUs).
Mr. Papa is subject to share ownership guidelines under the terms of his employment agreement with the Company, as further described in the section titled “Compensation Discussion and Analysis — Other Compensation Governance Practices — Share Ownership Guidelines” on page 53.
2019 Meeting Attendance:
TABLE OF CONTENTS
Mr. Paulson has served on the Board since June 2017. Mr. Paulson is the President and Portfolio Manager of Paulson & Co. Inc., anSEC-registered investment management company specializing in global mergers, event arbitrage and credit strategies, which he founded in 1994.
Prior to forming Paulson & Co. Inc., Mr. Paulson was a Partner of Gruss Partners and a Managing Director in mergers and acquisitions at Bear Stearns. Mr. Paulson received his undergraduate degree from New York University in 1978 and his Master of Business Administration from Harvard Business School in 1980.
Mr. Paulson has been a director of BrightSphere Investment Group plc, an asset management holding company, since November 2018. He also currently serves as a member of the advisory board of Harvard Business School. Mr. Paulson previously served as a director of American International Group Inc., a multinational finance and insurance corporation, from May 2016 to June 2017.
Director Qualifications:
The Board has determined that the skills and expertise that Mr. Paulson acquired founding and leading Paulson & Co. Inc., including hisin-depth knowledge of financial transactions and leadership abilities, qualify him to serve as a member of the Board and the committee on which he serves.
Age: 67
New York, USA
Director Since: 20171
Independent
Chairperson of the Board | | | Mr. Paulson rejoined the Board as our Non-Executive Chairperson on June 23, 2022, after resigning, as previously announced, on the IPO Closing Date. Mr. Paulson previously served on the Board from June 2017 through May 2022. Mr. Paulson is the President and Portfolio Manager of Paulson & Co. Inc., an investment management company specializing in global mergers, event arbitrage and credit strategies, which he founded in 1994. Prior to forming Paulson & Co. Inc., Mr. Paulson was a Partner of Gruss Partners and a Managing Director in mergers and acquisitions at Bear Stearns. Mr. Paulson received his undergraduate degree from New York University in 1978 and his Master of Business Administration from Harvard Business School in 1980.
Mr. Paulson joined the board of directors of Bausch + Lomb Corporation, a publicly traded eye health company, in May 2022. Mr. Paulson has been a director of BrightSphere Investment Group Inc., a publicly traded asset management holding company, since November 2018, and has served as Chairman since April 2020. Mr. Paulson previously served as a member of the advisory board of Harvard Business School, from June 2008 to June 2022, and as a director of American International Group Inc., a multinational finance and insurance corporation, from May 2016 to June 2017. | | | Stock Ownership:
• 26,439,035 Common Shares — $200,936,666
• 142,290 RSUs (comprised of 107,903 vested RSUs — $820,063, and 34,387 unvested RSUs — $261,341)
• Total Equity Value at Risk: $201,756,729, representing 40,351% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 201,757% of the annual Board retainer.
2022 Meeting Attendance:1
• Board: 11/11
• Finance & Transactions Committee: 2/2
• Special Transactions Committee: 2/2
Qualifications:
The Board has determined that the skills and expertise that Mr. Paulson acquired founding and leading Paulson & Co. Inc., including his in-depth knowledge of financial transactions and leadership abilities, qualify him to serve as a member of the Board and the committee on which he serves. |
Mr. Powerhas served on the Board since August 2008. He is currently a corporate director. From 2009 to 2011, Mr. Power was a faculty member at The Wharton School of Business, University of Pennsylvania, where he taught multinational marketing. Mr. Power has over 25 years’ experience working in the pharmaceutical and biotechnology industry, which he gained serving in a number of leadership positions with Wyeth from 1985 through 2007, including Director — New Product Development, Managing Director — U.K./Ireland, Vice President — Global Marketing, President — Europe, Middle East, Africa, President — International and Executive Vice President — Global Business Operations. Mr. Power also has completed the Director Professionalism course offered by the National Association of Corporate Directors.
Director Qualifications:
The Board has determined that Mr. Power’s extensive experience in the pharmaceutical industry and international business is a valuable contribution to the Board. In addition, his experience in general management, strategic planning, working with Research and Development (“R&D”) organizations, business development, product marketing, merging and streamlining of organizations and his demonstrated leadership in a multi-billion-dollar business qualify Mr. Power as a member of the Board and the committees on which he serves.
Mr. Robert N. Power
Pennsylvania, USA
Age 63
Independent
Stock Ownership:
6,601 Common Shares — $152,417
76,141 RSUs (comprised of 65,508 vested RSUs — $1,512,580 and 10,633 unvested RSUs — $245,516)
Total Equity Value at Risk: $1,664,997, representing 333% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines fornon-employee directors and 1,665% of the director’s annual retainer.
2019 Meeting Attendance:
Audit and Risk Committee — 8/8
Nominating and Corporate Governance Committee — 4/4
Science and Technology Committee — 4/4
1
| Mr. Paulson rejoined the Board as our Non-Executive Chairperson on June 23, 2022, after resigning, as previously announced, on the IPO Closing Date. |
Mr. Robertsonhas served on the Board since June 2016. He is currently a corporate director. From 2013 through August 2016, Mr. Robertson served as Executive Vice President and Head, Anti-Money Laundering, at BMO Financial Group (“BMO”), a diversified financial services organization. Prior to that role, he served as Executive Vice President, Business Integration, at BMO Financial Group, and as Vice Chair at BMO Financial Corp. from 2011. He joined BMO as interim Chief Financial Officer, BMO Financial Group in 2008 and was appointed Chief Financial Officer, BMO Financial Group in 2009. Before joining BMO, Mr. Robertson spent over 35 years as a Chartered Public Accountant. In this capacity, he held various senior positions with a number of major accounting firms, including Vice Chair, Deloitte & Touche LLP in Toronto, Canada, from 2002 to 2008, and Canadian Managing Partner, Arthur Andersen LLP, from 1994 to 2002. Mr. Robertson holds a Bachelor of Arts degree (Honours) from the Ivey School of Business at the University of Western Ontario.
Mr. Robertson has served on the board of Hydro One Limited, an electricity transmission and distribution utility serving the Canadian province of Ontario, since August 2018, and since 2012 has served on the board of Turquoise Hill Resources, a Canadian mineral exploration and development company. Mr. Robertson previously served on the board of Virtus Investment Partners, Inc., a multi-manager asset management business, from 2013 to August 2016.
Director Qualifications:
The Board has determined that Mr. Robertson’s extensive experience of complex financial matters at Deloitte & Touche LLP and Arthur Andersen LLP,in-depth knowledge of financial and accounting matters and leadership capabilities in senior finance positions qualify him to serve as a member of the Board and as Chairman of the Audit and Risk Committee.
Mr. Russel C. Robertson
Ontario, Canada
Age 72
Independent
Stock Ownership:
93,983 RSUs (comprised of 83,350 vested RSUs — $1,924,552 and 10,633 unvested RSUs — $245,516)
Total Equity Value at Risk: $1,924,552, representing 385% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines fornon-employee directors and 1,925% of the director’s annual retainer.
2019 Meeting Attendance:
Audit and Risk Committee — 8/8
Nominating and Corporate Governance Committee — 4/4
Mr. Rosshas served on the Board since March 2016 and was appointed our Lead Independent Director in June 2016. He has served as the President of Volcker Alliance since July 2016, where he also serves as a director. He is President Emeritus of the University of North Carolina (“UNC”), having served as President from 2011 to January 2016. Mr. Ross currently serves as the Sanford Distinguished Fellow in Public Policy at the Duke University Sanford School of Public Policy. Prior to becoming President of the UNC system, Mr. Ross served as President of Davidson College, Executive Director of the Z. Smith Reynolds Foundation, director of the North Carolina Administrative Office of the Courts, a Superior Court judge, chief of staff to U.S. Congressman Robin Britt, a member of the Greensboro, NC law firm Smith, Patterson, Follin, Curtis, James & Harkavy, and Assistant Professor of Public Law and Government at UNC Chapel Hill’s School of Government.
Director Qualifications:
The Board has determined that Mr. Ross’s demonstrated leadership in senior management positions, extensive experience with corporate governance responsibilities and complex knowledge of legal, compliance and operational issues qualify him to serve as a member of the Board and the committees on which he serves.
Mr. Thomas W. Ross, Sr.
North Carolina, USA
Age 69
Independent
Stock Ownership:
9,000 Common Shares — $207,810
67,742 RSUs (comprised of 57,109 vested RSUs — $1,318,647 and 10,633 unvested RSUs — $245,516)
Total Equity Value at Risk: $1,526,457, representing 305% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines fornon-employee directors and 1,526% of the director’s annual retainer.
2019 Meeting Attendance:
Audit and Risk Committee — 8/8
Nominating and Corporate Governance Committee — 4/4
TABLE OF CONTENTS
Dr. von Eschenbach has served on the Board since October 2018. Dr. von Eschenbach has been the President of Samaritan Health Initiatives, Inc., a health care policy consultancy, and an Adjunct Professor at University of Texas MD Anderson Cancer Center, since 2010. From 2005 to 2009, Dr. von Eschenbach served as Commissioner of the U.S. Food and Drug Administration (the “FDA”). He was appointed Commissioner of the FDA after serving for four years as Director of the National Cancer Institute at the National Institutes of Health. As a researcher, clinician and administrator, Dr. von Eschenbach served fortwenty-six years at the University of Texas MD Anderson Cancer Center as Chairman of Urology, Director of the Prostate Cancer Research Program and Executive Vice President and Chief Academic Officer. He earned a B.S. from St. Joseph’s University and a medical degree from Georgetown University School of Medicine in Washington, D.C., where he completed a residency in surgery and urology and then a fellowship in urologic oncology.
Dr. von Eschenbach has served as a director of private biotechnology companies Banyan Biomarkers, Inc. and Celularity, Inc. since 2012 and February 2018, respectively, and as a director of Wren Therapeutics, Ltd, a private biopharmaceutical company, since November 2019. Dr. von Eschenbach also been a member of the board of the Regan Udall Foundation of the FDA, anon-profit organization formed to advance regulatory science, since December 2018. From 2011 to 2013, Dr. von Eschenbach served as a director of BioTime, Inc., a clinical-stage biotechnology company, and as a director of Elan Corporation Plc, a pharmaceutical company which was acquired by Perrigo in 2013.
Director Qualifications:
The Board has determined that Dr. von Eschenbach’s broad experience serving as a director of public and private companies andnon-profit organizations in the pharmaceutical and healthcare industries, as well as serving as an advisor and consultant to entities engaged in policy development in the pharmaceutical industry, qualify him to serve as a member of the Board and the committee on which he serves.
Age: 66
Pennsylvania, USA
Director Since: 2008
Independent
Committees:
• Talent & Compensation Committee (Chair)
• Nominating & Corporate Governance | | | Mr. Power has served on the Board since August 2008. He is currently a corporate director. From 2009 to 2011, Mr. Power was a faculty member at The Wharton School of Business, University of Pennsylvania, where he taught multinational marketing. Mr. Power has over 25 years’ experience working in the pharmaceutical and biotechnology industry, which he gained serving in a number of leadership positions with Wyeth from 1985 through 2007, including Director — New Product Development, Managing Director — U.K./Ireland, Vice President — Global Marketing, President — Europe, Middle East, Africa, President — International and Executive Vice President — Global Business Operations. Mr. Power also has completed the Director Professionalism course offered by the National Association of Corporate Directors. Mr. Power has a B.S. in statistics from the State University of New York and an M.S. in biostatistics from the Medical College of Virginia- Virginia Commonwealth University. | | | Stock Ownership:
• 6,601 Common Shares — $50,168
• 129,210 Restricted Share Units (“RSUs”) (comprised of 94,823 vested RSUs — $720,655, and 34,387 unvested RSUs — $261,341)
• Total Equity Value at Risk: $770,822, representing 154% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 771% of the annual Board retainer.
2022 Meeting Attendance:1
• Board: 13/13
• Audit & Risk Committee: 8/8
• Nominating & Corporate Governance Committee: 6/6
• Talent & Compensation Committee: 4/4
• Science & Technology Committee: 1/1
Qualifications:
The Board has determined that Mr. Power’s extensive experience in the pharmaceutical industry and international business is a valuable contribution to the Board. In addition, his experience in general management, strategic planning, working with Research and Development organizations, business development, product marketing, merging and streamlining of organizations and his demonstrated leadership in a multi-billion-dollar business qualify Mr. Power as a member of the Board and the committees on which he serves. |
Dr. Wechsler has served on the Board since June 2016. She has been a practicing dermatologist in New York City since 2005. Dr. Wechsler is the author of The Mind-Beauty Connection, published by Simon & Schuster in 2008. She is board certified in both dermatology and psychiatry and is also an Adjunct Clinical Professor in Psychiatry at the Weill Cornell Medical College. As an expert on skin health, Dr. Wechsler serves as an advisor for Chanel Skin Care and is also a certified trainer and well-known KOL Speaker, qualified to teach physicians and other medical professionals in the use of various dermatological products. Dr. Wechsler is an active member of several medical professional organizations, including the American Academy of Dermatology, the American Psychiatric Association, the American Academy of Child and Adolescent Psychiatry, the Independent Doctors of New York, The Physicians Scientific Society, and The Skin Cancer Foundation. Dr. Wechsler completed her residency in psychiatry and a fellowship in child and adolescent psychiatry at New York Presbyterian Hospital’s Payne Whitney Clinic. She also completed a residency in dermatology at SUNY Downstate Medical Center.
Director Qualifications:
The Board has determined that Dr. Wechsler’s many years of experience as a board-certified dermatologist and psychiatrist, her strong knowledge of medical products to assist patients with their medical needs and her insight into the medical field and pharmaceutical industry and healthcare related issues qualify her to serve as a member of the Board and on the committees on which she serves.
Amy B. Wechsler, M.D.
New York, USA
Age 50
Independent
Stock Ownership:
88,874 RSUs (comprised of 78,241 vested RSUs — $1,806,585 and 10,633 unvested RSUs — $245,516)
Total Equity Value at Risk: $1,806,585, representing 361% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines fornon-employee directors and 1,807% of the director’s annual retainer.
2019 Meeting Attendance:
Talent and Compensation Committee — 4/5
Science and Technology Committee — 4/4
1
| On the IPO Closing Date, Mr. Power was appointed to the Talent and Compensation Committee and resigned from the Science and Technology Committee. |
TABLE OF CONTENTS
Age: 75
Ontario, Canada
Director Since: 2016
Independent
Committees:
• Audit & Risk Committee (Chair) | | | Mr. Robertson has served on the Board since June 2016. He is currently a corporate director. From 2013 through August 2016, Mr. Robertson served as EVP and Head, Anti-Money Laundering, at BMO Financial Group (“BMO”), a diversified financial services organization. Prior to that role, he served as EVP, Business Integration, at BMO Financial Group, and as Vice Chair at BMO Financial Corp. from 2011. He joined BMO as interim Chief Financial Officer, BMO Financial Group in 2008 and was appointed Chief Financial Officer, BMO Financial Group in 2009. Before joining BMO, Mr. Robertson spent over 35 years as a Chartered Public Accountant. In this capacity, he held various senior positions with a number of major accounting firms, including Vice Chair, Deloitte & Touche LLP in Toronto, Canada, from 2002 to 2008, and Canadian Managing Partner, Arthur Andersen LLP, from 1994 to 2002. Mr. Robertson holds a Bachelor of Arts degree (Honours) from the Ivey School of Business at the University of Western Ontario.
Mr. Robertson joined the board of directors of Bausch + Lomb Corporation, a publicly traded eye health company, in May 2022. Mr. Robertson has served on the board of Hydro One Limited, a publicly traded electricity transmission and distribution utility serving the Canadian province of Ontario, since August 2018. Mr. Robertson previously served on the board of Turquoise Hill Resources, a publicly traded Canadian mineral exploration and development company, from 2012 to December 2022, and Virtus Investment Partners, Inc., a multi-manager asset management business, from 2013 to August 2016. | | | Stock Ownership:
• 0 Common Shares — $0
• 177,416 Restricted Share Units (“RSUs”) (comprised of 143,029 vested RSUs — $1,087,020, and 34,387 unvested RSUs — $261,341)
• Total Equity Value at Risk: $1,087,020, representing 217% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 1087% of the annual Board re tainer.
2022 Meeting Attendance:
• Board: 13/13
• Audit & Risk Committee: 8/8
• Nominating & Corporate Gover nance Committee: 6/6
Qualifications:
The Board has determined that Mr. Robertson’s extensive experience of complex financial matters at Deloitte & Touche LLP and Arthur Andersen LLP, in-depth knowledge of financial and accounting matters and leadership capabilities in senior finance positions qualify him to serve as a member of the Board and as Chairman of the Audit and Risk Committee. |
TABLE OF CONTENTS
Age: 72
North Carolina, USA
Director Since: 2016
Independent
Committees:
• Talent & Compensation Committee | | | Mr. Ross has served on the Board since March 2016. He served as our Lead Independent Director from June 2016 through June 2022. Mr. Ross joined the board of directors of Bausch + Lomb Corporation, a publicly traded eye health company, in May 2022. He served as president of the Volcker Alliance from July 2016 until December 2021. He continues to serve as a Senior Advisor to the Volcker Alliance as well as a director on the Alliance board. He is President Emeritus of the University of North Carolina (“UNC”), having served as President from 2011 to January 2016. Mr. Ross was named the Sanford Distinguished Fellow in Public Policy at the Duke University Sanford School of Public Policy in 2016. Prior to becoming President of the UNC system, Mr. Ross served as President of Davidson College, Executive Director of the Z. Smith Reynolds Foundation, director of the North Carolina Administrative Office of the Courts, a Superior Court judge, chief of staff to U.S. Congressman Robin Britt, a member of the Greensboro, NC law firm Smith, Patterson, Follin, Curtis, James & Harkavy, and Assistant Professor of Public Law and Government at UNC Chapel Hill’s School of Government. Mr. Ross holds a B.A. in Political Science from Davidson College and a J.D. from University of North Carolina School of Law. | | | Stock Ownership:
• 11,500 Common Shares — $87,400
• 120,811 Restricted Share Units (“RSUs”) (comprised of 86,424 vested RSUs — $656,822, and 34,387 unvested RSUs — $261,341)
• Total Equity Value at Risk: $744,222, representing 149% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 744% of the annual Board retainer.
2022 Meeting Attendance:
• Board: 13/13
• Audit & Risk Committee: 8/8
• Nominating & Corporate Governance Committee: 6/6
• Special Transactions Committee: 2/2
Qualifications:
The Board has determined that Mr. Ross’s demonstrated leadership in senior management positions, extensive experience with corporate governance responsibilities and complex knowledge of legal, compliance and operational issues qualify him to serve as a member of the Board and the committees on which he serves. |
None of the directors or director nominees of the Company were selected for nomination at the Annual Meeting pursuant to any arrangement or understanding. None of the directors or director nominees are related by blood, marriage or adoption to one another or to any executive officer of the Company.TABLE OF CONTENTS
Age: 53
New York, USA
Director Since: 2016
Independent
Committees:
• Talent & Compensation Committee
• Science & Technology Committee | | | Dr. Wechsler has served on the Board since June 2016. She has been a practicing dermatologist in New York City since 2005. Dr. Wechsler is the author of The Mind-Beauty Connection, published by Simon & Schuster in 2008. She is board certified in both dermatology and psychiatry and is also an Adjunct Clinical Professor in Psychiatry at the Weill Cornell Medical College. As an expert on skin health, Dr. Wechsler serves as an advisor for Chanel Skin Care and is also a certified trainer and well-known KOL Speaker, qualified to teach physicians and other medical professionals in the use of various dermatological products. Dr. Wechsler is an active member of several medical professional organizations, including the American Academy of Dermatology, the American Psychiatric Association, the American Academy of Child and Adolescent Psychiatry, the Independent Doctors of New York, The Physicians Scientific Society, and The Skin Cancer Foundation. Dr. Wechsler completed her residency in psychiatry and a fellowship in child and adolescent psychiatry at New York Presbyterian Hospital’s Payne Whitney Clinic, and completed a residency in dermatology at SUNY Downstate Medical Center. Dr. Wechsler is currently pursuing a Master of Business Administration at Columbia Business School. | | | Stock Ownership:
• 7,645 Common Shares —$58,102
• 136,654 Restricted Share Units (“RSUs”) (comprised of 94,622 vested RSUs — $719,127 and 34,387 unvested RSUs — $)
• Total Equity Value at Risk: $777,229, representing 155% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 777% of the annual Board retainer.
2022 Meeting Attendance:
• Board: 13/13
• Talent & Compensation Committee: 8/8
• Science & Technology Committee: 3/3
Qualifications:
The Board has determined that Dr. Wechsler’s many years of experience as a board-certified dermatologist and psychiatrist, her strong knowledge of medical products to assist patients with their medical needs and her insight into the medical field and pharmaceutical industry and healthcare related issues qualify her to serve as a member of the Board and on the committees on which she serves. |
TABLE OF CONTENTS
STATEMENT OF CORPORATE GOVERNANCE PRACTICES
The Board is committed to sound and effective corporate governance practices with the goal of ensuring the Company’s financial strength and overall business success. Our governance practices are periodically assessed against those practices suggested by recognized governance authorities and are designed to maintain alignment with shareholder interests and key governance best practices.
The Board believes that, in order to be effective, our Board must be able to operate independently of management. As described in our Corporate Governance Guidelines, available on our website at
www.bauschhealth.com (under the tab “Investors” and under the subtab “Corporate
Governance-Governance — Corporate Governance Documents”), a sufficient number of directors must satisfy the applicable tests of independence, such that the Board complies with all independence requirements under corporate and securities laws and stock exchange requirements applicable to the Company. The Corporate Governance Guidelines further provide that the Nominating and Corporate Governance Committee, as well as the Board, reviews the relationships that each director has with the Company in order to satisfy itself that these independence criteria have been met. On an annual basis, as part of our disclosure procedures, all directors complete a questionnaire pertaining to, among other things, share ownership, family and business relationships, and director independence standards. The Board must then disclose in the Company’s annual management proxy circular and proxy statement the identity of each of the independent directors and the basis for the Board’s determination for each of the directors who are not independent.
The
As of the date of the Meeting, the Board
is currentlywill be comprised of
eleventen members. The Board has determined that
tennine of our
eleventen current directors (or
91%90%) are “independent directors” within the meaning of applicable regulatory and stock exchange requirements in Canada and the United States, as none of them have a material relationship with the Company that could be reasonably expected to interfere with their exercise of independent judgment. The
tennine independent directors currently on the board are: Mr.
Ross (Lead Independent Director),Icahn, Ms. Kavanagh, Mr.
De Schutter, Mr. Hale,Miller, Dr.
Karabelas, Ms. Kavanagh,Mulligan, Mr. Paulson, Mr. Power, Mr.
Ross, Mr. Robertson,
Dr. von Eschenbach, and Dr. Wechsler.
None of our current directors (all of whom are director nominees) have entered into employment, service or similar contracts with us, with the exception of Mr.
Papa. On April 25, 2016, Mr. Papa entered into an employment agreementAppio, as further discussed in the section titled “Compensation Discussion and Analysis – Arrangements with
the Company as its Chairman of the Board and CEO.Our NEOs” on page 53. For this reason, the Board has determined that
heMr. Appio is not an independent director and will not be eligible to serve on the Audit and Risk Committee, the Talent and Compensation Committee, or the Nominating and Corporate Governance Committee.
Board Leadership Structure
Our Corporate Governance Guidelines provide
In connection with the resignation of Mr. Papa as CEO and director, the Board appointed Mr. Paulson as the Non-Executive Chairperson of the Board. With Mr. Paulson serving as the Non-Executive Chairperson of the Board, there was no need for a Lead Independent Director and Mr. Ross resigned that ourposition, but remained a director. With the roles of Chairperson and CEO separated, the Board may determine from timedetermined to timehave the most effective leadership structure forChairperson in a presiding capacity, coordinating the Company, including whether the same individual should serve both as Chairmanactivities of the Board and perform the Chief Executive Officer (“CEO”). Mr. Papa, our CEO , also serves as Chairman of the Board. Due to thein-depth knowledge of the Company’s operations gained by serving as CEO, Mr. Papa is well positioned to identify and lead Board deliberations regarding important matters relating to the Company’s operations, strategic priorities, and overall development. The Board believes that serving as both CEO and Chairman of the Board enables Mr. Papa to facilitate effective communication between Company management and the Board and to ensure key issues and recommendations are brought to the attention of the Board. The Board believes that this leadership structure, in conjunction with the appointment of a Lead Independent Director, is the most effective for the Company at this time, and that the existing corporate governance practices effectively achieves independent oversight and management accountability.
Our Corporate Governance Guidelines also provide that, if the same individual serves as Chairman of the Board and CEO, or if the Chairman of the Board is otherwise not independent, our Board shall appoint a Lead Independent Director. Our independent directors annually appoint a Lead Independent Director. Mr. Ross has been appointed to serve as Lead Independent Director each year since June 2016.
The responsibilities of the Lead Independent Director areduties set forth in the Company’s Position Description for the Lead Independent Director,Chairperson of the Board, which is posted on the Company’s website at www.bauschhealth.com (under the tab “Investors” and under the subtab “Corporate Governance-Governance — Corporate Governance Documents”). These responsibilities include: (i) fostering processes that allowleading, managing and organizing the Board to function independently of management and encouraging open and effective communication between the Board and management of the Company; (ii) providing input to the Chairman on behalf of the independent directors with respect to Board agendas; (iii) presiding at all meetings of the Board at which the Chairman is not present, as well as regularly scheduled executive sessions of independent directors; (iv) in the case of a conflict of interest involving a director, if appropriate, asking the conflicted director to leave the room during discussion concerning such matter and, if appropriate, asking such director to recuse him or herself from voting on the relevant matter; (v) communicatingconsistent with the Chairman and the CEO, as appropriate, regarding meetings of the independent directors and resources and information necessary for the Boardapproach to effectively carry out its duties and responsibilities; (vi) serving as liaison between the Chairman and the independent directors; (vii) being available to directors who have concerns that cannot be addressed through the Chairman; (viii) calling meetings of the independent directors, as needed or when appropriate; and (ix) performing other functions as may reasonably be requestedcorporate governance adopted by the Board from time to time; (ii) guiding the Board’s deliberations so that appropriate strategic and policy decisions are made; (iii) promoting cohesiveness among the Directors; (iv) satisfying himself or the Chairman. In the event the Company appoints an independent Chairman of the Board,herself that the responsibilities of the Lead Independent Director will be assumedBoard and its committees are well understood by the independent Chairman ofDirectors; and (v) acting as spokesperson for the Board.
Meetings of Independent Directors
The Corporate Governance Guidelines provide that at any meeting of the Board, the independent directors of the Board shallmay meet in executive session at any meeting of the Board, and that an opportunity shall be provided during the meeting for any member of the Board to make such a request. Consequently, theThe independent directors currentlygenerally meet in executive sessions chaired bywithout management present during their regularly scheduled board and committee meetings, and on an as-needed basis during ad hoc meetings. Mr. Paulson, our Lead Independent Director, at a majorityChairperson of ourthe Board, meetings.presides over executive sessions of the Board, and the committee chairs, all of whom are independent, preside over executive sessions of the Committees. During 2019,2023, our independent directors held executive sessions at each of the four regularly-scheduledregularly scheduled Board meetings.
TABLE OF CONTENTS
The Board meets regularly, at least four times per year, including at least once annually to review our strategic plan. Additional meetings can be called when necessary. From January 1,
20192022 to December 31,
2019,2022, the Board had four regularly scheduled meetings and
twonine ad hoc meetings to review specific matters. All agendas for Board and Board committee meetings are set by the
ChairmanChairperson of the Board in consultation with the Board committee Chairpersons, as necessary.
As required by the Company’s Articles, at least 50% of the directors then in office must be present in order to transact business at any Board meeting.
AtAll incumbent directors attended at least
81% of our directors participated in each94% of the
total Board
and Committee meetings
held during 2019.on which he or she served in 2022.
During
2019,2022, the Board had
fivesix standing committees: the Audit and Risk Committee, the Talent and Compensation Committee, the Nominating and Corporate Governance Committee, the Finance and Transactions Committee,
and the Science and Technology
Committee.Committee, and Special Transactions Committee, which was dissolved on October 25, 2022.
Directors are expected to attend and participate in substantially all meetings of the Board and of all committees on which they serve. The Board and Board committee attendance records of ourfor all directors atwho served on the Board and committee meetings held during 20192022 are set forth below.
| | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % |
Thomas J. Appio(1) | | | 12 | | | 100% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Richard U. De Schutter | | | 12 | | | 100% | | | — | | | — | | | 8 | | | 100% | | | — | | | — | | | 12 | | | 92% | | | — | | | — | | | 2 | | | 100% | | | 34 | | | 94% |
Brett M. Icahn | | | 13 | | | 100% | | | — | | | — | | | — | | | — | | | — | | | — | | | 13 | | | 100% | | | — | | | — | | | 2 | | | 100% | | | 28 | | | 100% |
Dr. Argeris N. Karabelas | | | 13 | | | 100% | | | — | | | — | | | 8 | | | 100% | | | — | | | — | | | — | | | — | | | 3 | | | 100% | | | 2 | | | 100% | | | 26 | | | 100% |
Sarah B. Kavanagh | | | 13 | | | 100% | | | 8 | | | 100% | | | — | | | — | | | 6 | | | 100% | | | 13 | | | 100% | | | — | | | — | | | 2 | | | 100% | | | 42 | | | 100% |
Steven D. Miller | | | 13 | | | 100% | | | — | | | — | | | — | | | — | | | — | | | — | | | 13 | | | 100% | | | — | | | — | | | 2 | | | 100% | | | 28 | | | 100% |
Dr. Richard C. Mulligan(1) | | | 9 | | | 100% | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 2 | | | 100% | | | — | | | — | | | 11 | | | 100% |
Joseph C. Papa(3) | | | 7 | | | 100% | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 7 | | | 100% |
John A. Paulson(1)(3) | | | 11 | | | 100% | | | — | | | — | | | — | | | — | | | — | | | — | | | 2 | | | 100% | | | — | | | — | | | 2 | | | 100% | | | 15 | | | 100% |
Robert N. Power(2) | | | 13 | | | 100% | | | 8 | | | 100% | | | 4 | | | 100% | | | 6 | | | 100% | | | — | | | — | | | 1 | | | 100% | | | — | | | — | | | 32 | | | 100% |
Russel C. Robertson | | | 13 | | | 100% | | | 8 | | | 100% | | | — | | | — | | | 6 | | | 100% | | | — | | | — | | | — | | | — | | | — | | | — | | | 27 | | | 100% |
Thomas W. Ross, Sr. | | | 13 | | | 100% | | | 8 | | | 100% | | | — | | | — | | | 6 | | | 100% | | | — | | | — | | | — | | | — | | | 2 | | | 100% | | | 29 | | | 100% |
Andrew C. von Eschenbach(1) | | | 4 | | | 100% | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 1 | | | 100% | | | — | | | — | | | 5 | | | 100% |
Amy B. Wechsler, M.D. | | | 13 | | | 100% | | | — | | | — | | | 8 | | | 100% | | | — | | | — | | | — | | | — | | | 3 | | | 100% | | | — | | | — | | | 24 | | | 100% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Board
6 Meetings | | | Audit
and Risk
Committee
8 Meetings | | | Talent and
Compensation
Committee
5 Meetings | | | Nominating
and
Corporate
Governance
Committee
4 Meetings | | | Finance and
Transactions
Committee
7 Meetings | | | Science and
Technology
Committee
4 Meetings | | | Overall | |
Director | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | |
Richard U. De Schutter | | | 6/6 | | | | 100 | % | | | — | | | | — | | | | 5/5 | | | | 100 | % | | | — | | | | — | | | | 7/7 | | | | 100 | % | | | — | | | | — | | | | 18/18 | | | | 100 | % |
D. Robert Hale | | | 6/6 | | | | 100 | % | | | — | | | | — | | | | 5/5 | | | | 100 | % | | | — | | | | — | | | | 7/7 | | | | 100 | % | | | — | | | | — | | | | 18/18 | | | | 100 | % |
Dr. Argeris (Jerry) N. Karabelas | | | 6/6 | | | | 100 | % | | | — | | | | — | | | | 5/5 | | | | 100 | % | | | — | | | | — | | | | — | | | | | | | | 4/4 | | | | 100 | % | | | 15/15 | | | | 100 | % |
Sarah B. Kavanagh | | | 6/6 | | | | 100 | % | | | 8/8 | | | | 100 | % | | | — | | | | — | | | | 4/4 | | | | 100 | % | | | 7/7 | | | | 100 | % | | | — | | | | — | | | | 25/25 | | | | 100 | % |
Joseph C. Papa | | | 6/6 | | | | 100 | % | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 6/6 | | | | 100 | % |
John A. Paulson | | | 5/6 | | | | 83 | % | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 6/7 | | | | 86 | % | | | — | | | | — | | | | 11/13 | | | | 85 | % |
Robert N. Power | | | 6/6 | | | | 100 | % | | | 8/8 | | | | 100 | % | | | — | | | | — | | | | 4/4 | | | | 100 | % | | | — | | | | — | | | | 4/4 | | | | 100 | % | | | 22/22 | | | | 100 | % |
Russel C. Robertson | | | 6/6 | | | | 100 | % | | | 8/8 | | | | 100 | % | | | — | | | | — | | | | 4/4 | | | | 100 | % | | | — | | | | — | | | | — | | | | — | | | | 18/18 | | | | 100 | % |
Thomas W. Ross, Sr. | | | 5/6 | | | | 83 | % | | | 8/8 | | | | 100 | % | | | — | | | | — | | | | 4/4 | | | | 100 | % | | | — | | | | — | | | | — | | | | — | | | | 17/18 | | | | 94 | % |
Andrew C. von Eschenbach | | | 6/6 | | | | 100 | % | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 4/4 | | | | 100 | % | | | 10/10 | | | | 100 | % |
Amy B. Wechsler, M.D. | | | 5/6 | | | | 83 | % | | | — | | | | — | | | | 4/5 | | | | 80 | % | | | — | | | | — | | | | — | | | | — | | | | 4/4 | | | | 100 | % | | | 13/15 | | | | 87 | % |
(1)
| On the IPO Closing Date, Mr. Appio and Dr. Mulligan joined the Board and Dr. von Eschenbach and Mr. Paulson resigned from the Board. Dr. Mulligan joined the Science & Technology Committee. |
(2)
| On the IPO Closing, Mr. Power resigned from the Science & Technology Committee and joined the Talent & Compensation Committee. |
(3)
| On June 23, 2022, Mr. Papa resigned from the Board and Mr. Paulson rejoined the Board as the Non-Executive Chairperson. |
(4)
| On October 25, 2022, the Board dissolved the Special Transactions Committee. |
Although we do not have a formal policy requiring our directors to attend our Annual Meetings of Shareholders, we expect all directors to attend the Annual Meeting absent exceptional circumstances. All directors attended the 2019The 2022 Annual Meeting of Shareholders.Shareholders was attended by all directors who were serving on the Board at that time and we anticipate that our directors will attend this year’s virtual Meeting.
TABLE OF CONTENTS
The Board is responsible for the overall stewardship of the Company and its business, including supervising the management of the Company’s business and affairs. The Board discharges this responsibility directly and through delegation of specific responsibilities to committees of the Board and to our officers. Under the charter of the Board (the “Board Charter”), the Board has established committees to assist with its responsibilities. Our current standing Board committees are: the Audit and Risk Committee, the Talent and Compensation Committee, the Nominating and Corporate Governance Committee, the Finance and Transactions Committee, and the Science and Technology Committee.
Under the Board Charter, the Board is responsible for, among other things, the following corporate governance-related matters: (i) overseeing the Company’s performance and the quality, depth and continuity of management needed to meet the Company’s strategic objectives; (ii) developing and approving the Company’s approach to and practices regarding corporate governance; (iii) succession planning; (iv) overseeing orientation and education programs for new directors and ongoing education opportunities for continuing directors; (v) reviewing, discussing and approving the Company’s strategic planning and organizational structure and supervising management to oversee that the strategic planning and organizational structure preserve and enhance the business of the Company and the Company’s underlying value; (vi) approving and assessing compliance with all significant policies and procedures by which the Company is operating, including the
Company’s StandardsBausch Health Code of
Business Conduct (as described below); (vii) reviewing the Company’s principal risks and assessing whether appropriate systems are in place to manage such risks; and (viii) ensuring the integrity and adequacy of the Company’s internal controls.
The Board Charter is attached to this Proxy Statement as Exhibit A and is available on our website at
www.bauschhealth.com (under the tab “Investors” and under the subtab “Corporate Governance – Corporate Governance Documents”).
The Board has developed written position descriptions for the ChairmanChairperson of the Board, the CEO, the Lead Independent Director, and the Chairpersons of each of the Audit and Risk Committee, the Nominating and Corporate Governance Committee, the Talent and Compensation Committee, the Finance and Transactions
Committee, and the Science and Technology Committee. The position descriptions are reviewed annually and are posted on our website at www.bauschhealth.com (under the tab “Investors” and under the subtab “Corporate Governance-Governance — Corporate Governance Documents”).
Orientation and Continuing Education
The Nominating and Corporate Governance Committee oversees the Board’s continuing education program, which was developed to assist directors in maintaining or enhancing their skills and abilities as directors and updating their knowledge and understanding of the Company and the pharmaceutical industry. New directors are oriented to the roles of the Board and individual directors and the business and affairs of the Company through discussions with the incumbent directors and the Company’s management by periodic presentations from senior management on major business, industry and competitive issues. Management and outside advisors provide information and education sessions to the Board and its committees as necessary to keep the directors
up-to-date with, among other things, (i) disclosure and corporate governance requirements and best practices; (ii) the Company, its business and the environment in which it
operates,operates; and (iii) developments in the responsibilities of directors. The Board may invite representatives of various business units to Board meetings to discuss business strategy and market analysis, as well as make
on-site visits of the operations of the Company at the various facilities of the Company. Directors may also attend outside conferences and seminars that are relevant to their roles at the Company’s expense, with the approval of the Chairman of the Board. In
2019,2022, our directors participated in
an outside
seminarsseminar on environmental, social and
conferences on educational topics that included managing corporate risksgovernance (“ESG”) and
litigation,the Company’s annual compliance training, and certain directors participated in educations sessions related to (i) personal development, taxes, and accounting; (ii) financial reporting; (iii) climate
change, healthcare industry dynamics, financechange; (iv) product recalls; (vi) litigation; and
audit matters, diversity,(vii) the Inflation Reduction Act and
issues of general importance to board members.the 340B Program.
Ethical Business Conduct
Standards of Business Conduct
We have a written code of business conduct and ethics the Standards(the “Code of Business Conduct (the “Standards”)Conduct), that applies to all employees (including our officers) and directors of the Company and its worldwide subsidiaries. Among other things, the Standards areCode of Conduct is designed to deter wrongdoing and promote honest and ethical conduct, including (i) the ethical
TABLE OF CONTENTS
handling of actual or apparent conflicts of interest; (ii) full, fair, accurate, timely and understandable public disclosure; (iii) compliance with applicable laws and regulations; (iv) protection of the Company’s assets; and (v) maintaining a harassment-free work environment.
Our employees and directors are required to maintain an understanding of, and ensure their compliance with, the
Standards.Code of Conduct, which we review annually. Supervisors are responsible for maintaining awareness of the
Standards,Code of Conduct, and for reporting any deviations from the
Standards.Code of Conduct. The
StandardsCode of Conduct also
requirerequires the Company to conduct regular audits to test compliance with the
Standards.Code of Conduct. Subject to Board approval, responsibility for the establishment and periodic review and update of the
StandardsCode of Conduct falls within the mandate of the Audit and Risk Committee.
All individuals subject to the
StandardsCode of Conduct are obligated to promptly report violations and potential violations of law, the
Standards,Code of Conduct, or
applicable policies of the
Company referenced in the Standards.Company. Such violations or suspected violations may be reported to the appropriate Company representative, or anonymously and confidentially through the Company’s business ethics hotline. All potential violations must in turn be reported to the Company’s General Counsel or Chief Compliance & Ethics Officer. The Board has established reporting procedures in order to encourage employees and directors to raise concerns regarding matters addressed by the
StandardsCode of Conduct on a confidential basis free from discrimination, retaliation or harassment. Employees of the Company who violate the
StandardsCode of Conduct may face disciplinary actions, including dismissal.
In addition to our Code of
Conduct, we maintain additional policies and procedures that provide specific requirements governing the day-to-day behavior of our personnel. Examples include: (1) our Global Anti-Bribery Policy, establishing our commitment to complying with anti-bribery and anti-corruption laws in all countries in which we operate; (2) our Business Ethics
Our Standards also include Reporting Policy, describing the way in which employees, contractors and third-parties can raise concerns regarding a Codevariety of Ethics for the CEO and Senior Finance Executives (the “Codematters, including violations of Ethics”), which is designed to deter wrongdoing and promote (i) honest and ethical conduct in the practice of
financial management, (ii) full, fair, accurate, timely and understandable disclosure, and (iii) compliance with all applicable laws and regulations. Violationslaw or of the Code of Ethics are reported toConduct, (3) our US Healthcare Compliance Policy outlining the General Counsel or Chief Compliance & Ethics Officer. Failure to observelegal and ethical standards under which we operate in the termsUnited States, (4) our Insider Trading and Black Out Policies, ensuring that individuals only trade in Company securities when permitted by applicable law, and never when in possession of the Codematerial non-public information, and (5) various region and country-level policies regarding interactions with healthcare providers and other customers, including ethical review and approval of Ethics may result in disciplinary action, including dismissal.
promotional materials.
The foregoing description of the
Standards, including the Code of
Ethics,Conduct is intended as a summary only, and does not purport to be complete. It is subject to, and qualified in its entirety by, reference to all of the provisions of the
Standards,Code of Conduct, a copy of which is available on our website at
www.bauschhealth.com (under the tab “Investors” and under the subtab “Corporate
Governance-Governance – Governance Documents”).
These documents areIt is also available in print to shareholders upon request. Shareholders may submit their request to Investor Relations, Bausch Health Companies Inc., 2150 Saint
ElzearElzéar Blvd. West, Laval,
QuebecQuébec H7L 4A8, Canada.
We intend to satisfy any disclosure requirements regarding amendments to, or waivers of, any provision of the
Standards, including the Code of
Ethics,Conduct , by posting such information on the Company’s website at
www.bauschhealth.com (under the tab “Investors” and under the subtab “Corporate Governance – Governance Documents”).
Directors’ Share Ownership
To support the alignment of directors’ interests with our interests and those of our shareholders, the Board has adopted share ownership guidelines for ournon-employee directors. The directors’ share ownership guidelines, which are set forth in our Corporate Governance Guidelines, provide that eachnon-employee director is expected to hold or control Common Shares, vested restricted or deferred share units, or a combination thereof, valued at five (5) times the annual Board cash retainer not later than the fifth anniversary of his or her first election or appointment to the Board. Based on the current annual cash retainer of the Board of $100,000, the minimum value of equity each of ournon-employee directors are required to hold is $500,000. Messrs. Icahn and Miller, who were appointed to the Board on March 17, 2021, will have until March 17, 2026 to meet the director share ownership requirements described in this paragraph. Dr. von Eschenbach,Mulligan who was appointed to the Board on October 29, 2018,May 10, 2022, will have until October 29, 2023May 10, 2027 to meet the director share ownership requirements described in this paragraph. All of our othernon-employee directors as of March 17, 2023 have satisfied the minimum equity ownership requirement based on the $23.09$7.60 per share closing price of our Common Shares on March 2, 2020,17, 2023, as reported on the NYSE.
TABLE OF CONTENTS
Mr.
PapaAppio is excluded from the share ownership guidelines for
non-employee directors. He is subject to share ownership guidelines established by our Talent and Compensation Committee, as further discussed in the section titled “Compensation Discussion and Analysis – Other Compensation Governance Practices – Share Ownership Guidelines” on page
53.56.
Our Board participatesrecognizes the importance of effective risk oversight in risk management oversight, with a view of supporting the achievement of organizational objectives, including strategic objectives, improving long-term organizational performance and enhancing shareholder value. In addition,
The BHC management is responsible for identifying, assessing and managing our exposure to various risks. The global Enterprise Risk Management (“ERM”) office, which reports to our Executive Vice President, General Counsel, was established to assist with this process. Our ERM office routinely meets with the Company’s Executive Leadership Team and members of senior leadership to (i) identify emerging risks across the Company’s operations; (ii) review, assess and prioritize identified risks; and (iii) develop risk mitigation plans, and each quarter provides the Audit and Risk Committee assistswith updates on these activities. Risks identified through this process include those related to our R&D pipeline, strategic planning, debt and finance, human capital, IT and cybersecurity, business disruption, and legal and compliance.
While our executive officers and members of our senior leadership team are responsible for our day-to-day risk management, including identifying risks and implementing risk mitigation plans, our Board is responsible for promoting a culture of risk management within the Board in monitoringCompany and overseeing the Company’s Standardsprincipal risks and assessing whether appropriate systems are in place to manage such risks. The Board exercises its risk management,oversight responsibilities both directly as well as through its standing committees. The Board committees regularly review and discuss risk topics that fall under the duties and responsibilities described in their committee charters, as summarized below, and report to the Board any significant risks identified during their review. The Board discusses those risks, and also receives regular reports regarding material legal, IT and cybersecurity, commercial, finance and business development matters.
Committees and Oversight
The Audit and Risk Committee, in addition to its oversight of the ERM office as described above, oversees risks relating to (i) financial statements, reporting and internal controls; (ii) information technology, information security and cybersecurity; (iii) compliance and ethics programs, including with respect to cybersecurity risks, provides oversight for the Company’s global ethics and healthcare compliance program, and oversees the Company’s receipt and handling of business ethics reports received pursuant tothrough the Company’s Business Ethics Reporting Program. Various other committees of the Board also have responsibility for monitoring risk management in specific areas. For example, thereporting program; and (iv) legal and regulatory issues.
The Talent and Compensation Committee
annually reviewsoversees risks related to human capital and
discusses with management the relationship betweencompensation, including (i) the Company’s compensation policies and
practicespractices; (ii) the Company’s incentive and
itsequity compensation plans; (iii) workforce staffing; and (iv) executive and senior leadership succession. For additional information regarding the Talent and Compensation Committee’s oversight of risk
management, including the extentrelating to
which thosecompensation policies and practices,
create risks for the Company. Seesee “Talent and Compensation Committee — Compensation Risk Determination”
below. Inon page 57. The Nominating and Corporate Governance Committee provides oversight with respect to risks related to the Company’s corporate governance, including: (i) the composition, size, structure, and effectiveness of the Board and its committees; (ii) director succession; (iii) director independence; and (iv) the Company’s corporate governance policies and practices.
The Finance and Transactions Committee oversees risks relating to the Company’s (i) debt; (ii) credit and liquidity; (iii) capital structure; and (iv) business development activities.
The Science and Technology Committee oversees risks relating to (i) the Company’s product pipeline; (ii) R&D initiatives; and (iii) regulatory matters.
Information Security
Our information security and risk management team is responsible for the operationalization of information security and data privacy practices and is overseen by the Executive Leadership Team and the Audit and Risk Committee of the Board, both of which receive quarterly updates. Bausch Health has implemented an information security program based on the NIST Cybersecurity Framework, an industry better practice. The program has clearly defined responsibilities for information security, a governance structure, and risk management framework to enable informed
TABLE OF CONTENTS
decision making on information security matters. Multiple layers of technical controls have been implemented in addition to a response capability to identify and contain any cyber incidents which may occur. Bausch Health provides information security simulations and training for employees throughout the year.
ESG and Sustainability; Board Oversight
Our vision is to continue to be a trusted health care partner, and our mission is improving people’s lives with our health care products. Bausch Health’s mission is supported by the following five guiding principles that are foundational to our success and future growth, and provide direction for the company:
(iv)
| quality health care outcomes; and |
Our mission and five guiding principles define how we approach ESG matters. Based on them, we have framed our ESG work around five key ESG commitment areas:
(i)
| operate with integrity; |
(ii)
| respect the environment; |
(iii)
| advance global health and patient care; |
(iv)
| improve our communities; and |
(v)
| support employee growth and well-being. |
We believe that focusing on these commitment areas is integral to the success of the Company and the health of the communities we operate in and serve. We have also incorporated our ESG commitments into our corporate strategic priorities such that ESG initiatives impact the variable remuneration paid to employees and members of executive management under our short-term incentive plans. Additional information about our ESG practices and programs is available on our website at https://www.bauschhealth.com/ (under the tab “Responsibility/ESG”).
Board Oversight of ESG Matters
Each of the Board, the Audit and Risk Committee, the Nominating and Corporate Governance Committee, periodically providesand the Talent and Compensation Committee shares responsibility for oversight with respect to risks associated withof various aspects of our corporate governanceESG practices and programs. Our Talent and Compensation Committee oversees our human capital management programs, and the processes, policies and practices, includinggovernance related to our Corporate Governance Guidelines. Theexecutive compensation practices. Our Audit and Risk Committee oversees our compliance and ethics program. Finally, our Nominating and Corporate Governance Committee also oversees our Board governance practices, environmental and reviews evaluations ofsustainability programs, and corporate governance policies. In its oversight role, the Board receives periodic updates from each of these standing committees and from management, and a complete ESG status update is provided to the Nominating and Corporate Governance Committee quarterly, including on the Company’s environmental and sustainability efforts and programs.
Key Areas of Focus and Progress
Below are a few examples of initiatives we have undertaken with respect to each of our Board committees.five ESG commitment areas:
I. Operate with Integrity |
1. Corporate Governance | | | • We have implemented a broad system of internal controls and polices.
• We provide annual corporate governance training for employees. Our Board provides independent leadership of the Company, and our Non-Executive Chairperson of the Board provides independent leadership of the Board.
• The Audit and Risk Committee oversees our compliance and ethics programs. |
TABLE OF CONTENTS
| | | |
2. Patient Access & Pricing | | | • Our management-level Patient Access and Pricing Team works to enable patients to have access to the Company’s products at cost consistent with their ability to pay. We also offer a variety of copay support programs across our major product lines, including in gastroenterology, neurology and dermatology, which can reduce eligible patients’ monthly out of pocket costs for our products. In addition, we offer a patient assistance program in the United States, and product donation programs in other markets, which provide no-cost access to our products for patients who are otherwise unable to obtain the products through applicable insurance or reimbursement systems |
| | | |
3. Commitment to Diversity and Inclusion | | | • Through consistent and increased efforts, we attract, develop and retain talented people with a variety of perspectives from all backgrounds and cultures. We believe that working in an environment that enables them to apply their collective talents to our shared principles and commitments will enable us to deliver the greatest value to our customers and the patients we serve. |
II. Respect the Environment |
1. EHS+S Organization | | | • Our global Environment, Health, Safety + Sustainability (“EHS+S”) organization provides the leadership and guidance to enable our regional sites around the world to achieve a more sustainable state, while reducing the adverse impact of our manufacturing operations on the environment. |
| | | |
2. Carbon Emissions | | | • We monitor and continue to make progress to reduce carbon emissions within our global manufacturing operations. We remain committed to satisfying the requirements to monitor and/or disclose relevant information surrounding our carbon emissions as may be required by the Security and Exchange Commission and/or the European Union Corporate Sustainability Reporting Directive. |
| | | |
3. Energy and Water Usage | | | • Our Energy Efficiency Group helps us continue to make progress to reduce overall energy usage at our global manufacturing sites by assessing and investigating our energy use and energy reduction efforts. Among other things, we have undertaken a series of energy audits in our manufacturing facilities that are designed to identify opportunities to reduce consumption.
• With a series of energy recommendations now identified, our facilities are progressing with the implementation of these initiatives. The projects under development include LED lighting upgrades, the introduction of heat recovery systems and the replacement of HVAC equipment with more energy efficient alternatives. |
| | | |
III. Advance Global Health & Patient Care |
1. Philanthropy | | | • In the past year, we have continued our proud tradition of supporting initiatives aimed at disease prevention, improving patient outcomes and lives, and education. In 2022, Bausch Health, among other initiatives, has:
○ Contributed millions of dollars’ worth of financial and product donations to charitable health organizations:
○ Funded scholarship programs for students with dermatological and gastrointestinal conditions: and
○ Partnered with Global Giving, a non-profit organization, to match employee contributions in support of Ukraine citizens impacted by the Russia conflict. |
| | | |
2. Patient Safety and Health Advocacy | | | • We invest millions of dollars each year to support provider education, research grants and charitable organizations devoted to improving patient care and quality of life and advancing the safety and effectiveness of health care products. |
| | | |
TABLE OF CONTENTS
IV. Improve our Communities |
1. Community Enrichment | | | • We believe the Company’s long-term success is linked directly to our ability to make a positive difference in our communities. As such, we support community enrichment activities, such as volunteering, investing in scholarship programs, and donating to local charities. |
| | | |
V. Employee Growth and Well-Being |
1. Health and Safety | | | • On an ongoing basis, we measure how well we are fostering the health and safety of our employees through our Days Away Rate (“DAR”), which is a standard used in our industry to capture the number of days that our employees are away from work as a result of a work-related injury or illness. For the year 2022, Bausch Health’s, excluding its publicly traded subsidiary Bausch + Lomb, DAR was 17 days per 100 employees. This was higher than the goal we established for DAR of less than 7 days per 100 employees but was favorable to our industry’s average DAR of 24 days per 100 employees. The higher than target DAR was primarily attributable to two extended absences and DAR stabilized and trended downward in the 2nd half of 2022. |
| | | |
2. Diversity, Equity & Inclusion | | | • We are dedicated to fostering an inclusive work environment where everyone feels welcomed, supported and valued for their talents and contributions. Our Bausch Health Diversity, Equity & Inclusion (“DE&I”) strategy centers on connecting our employees to our Company, each other, and our communities to cultivate a sense of trust, respect and belonging for all.
• We strive to advance candid conversations among employees regarding such key topics as inclusion, racism and gender equality. Through our diversity and inclusion training and education efforts, all employees have been provided with educational tools and resources to understand how to talk about these topics at work and how to become more aware of unconscious biases they may have. During 2022, all employees were invited to participate in interactive workshops on various topics including equitable leadership, understanding and managing conflict styles, building awareness, skills and confidence to support LGBTQ+ colleagues, and creating and fostering inclusive environments. |
| | | |
3. Employee Health and Wellness | | | • We recognize that physical, emotional and financial wellbeing are significant contributors to our employees’ success at work and home. We aim to support our employees in their everyday life by centering programs and activities around these three pillars of wellbeing. Across each of these pillars, we offer a range of resources to help our employees be healthy and feel successful in both their professional and personal lives, including through employee assistance programs. |
| | | |
4. Talent Development | | | • We are committed to the development of our employees and believe that our success coincides with our employees’ achievements of personal and professional goals.
• Through our Employee Development Framework, we endeavor to support our employees’ interests to grow to their full potential, achieve career goals, and contribute to the success of our Company.
• We empower employees to explore roles that are of interest and gain insights into their strengths and development needs. We provide a variety of development programs to support our employees at every stage of their career and incorporate individual development plans that aim to help our employees reach their career goals. |
TABLE OF CONTENTSUnder the supervision of our Board, our management is responsible for assessing and managing our exposure to various risks. We have a global Enterprise Risk Management (“ERM”) office that reports to our Executive Vice President and General Counsel. The objectives of the ERM office include, but are not limited to, managing known risks through assessments and action plans, identifying emerging risks and reporting on the ERM process and risk findings to the Audit and Risk Committee on a quarterly basis.
During
2019,2022, the Board had
fivesix standing committees: the Audit and Risk Committee, the Talent and Compensation Committee, the Nominating and Corporate Governance Committee, the Finance and Transactions Committee,
and the Science and Technology
Committee, and the Special Transactions Committee.
No memberOn October 25, 2022, the Board dissolved the Special Transactions Committee, the duties of
anywhich committee
is presently an employee ofwere assumed by the
Company or its subsidiaries.Board. The specific responsibilities of each of the Audit and Risk Committee, the Talent and Compensation Committee, the Nominating and Corporate Governance Committee, the Finance and Transactions Committee, and the Science and Technology Committee are identified in the respective committee’s charter. Copies of the charters for each of the foregoing committees are available on our website at www.bauschhealth.com (under the tab “Investors” and under the subtab “Corporate Governance — Corporate Governance Documents”) and are also available in print to shareholders upon request submitted to Investor Relations, Bausch Health Companies Inc., 2150 Saint
ElzearElzéar Blvd. West, Laval,
QuebecQuébec H7L 4A8, Canada.
The
ChairmanChairperson of the Board and the Chairperson of each of the Audit and Risk Committee, the Talent and Compensation Committee and the Nominating and Corporate Governance Committee are expected to be available to respond to questions from shareholders at the
Annual Meeting.
The table below sets forth each current director’s membership on our
standing Board committees.
| | Audit and Risk
Committee | | | Talent and
Compensation
Committee | | | Nominating and
Corporate
Governance
Committee | | | Finance and
Transactions
Committee | | | Science and
Technology
Committee |
Richard U. De Schutter
Thomas J. Appio | | | | ✓ | | | | ✓ | | | | | | | ✔ |
D. Robert Hale
Brett M. Icahn | | | | ✓ | | | | Chairperson | Chairperson | | | ✔ | | | |
Dr. Argeris (Jerry) N. Karabelas
| | | | Chairperson | | | | | | ✓ |
Sarah B. Kavanagh | | ✓ | ✔ | | | ✓ | | ✓ | | | | ✔ | | | |
Joseph C. Papa(1)
Steven D. Miller | | | ✔ | | | | | | | | | Chairperson | | | |
Dr. Richard C. Mulligan | | | | | | | | | ✔ | | | | | | Chairperson |
John A. Paulson(1) | | | | | | | | ✓ | | | | | | | |
Robert N. Power | | ✓ | | | | Chairperson | | | ✔ | ✓ | | | | | |
Russel C. Robertson | | Chairperson | Chairperson | | | ✓ | | | | | | | | | |
Thomas W. Ross, Sr.(2)
| | ✓ | | | | ✓✔ | | | | | | | | | |
Andrew C. von Eschenbach, M.D
| | | | | | | | | | Chairperson |
Amy B. Wechsler, M.DM.D. | | | | ✓ | | ✔ | | | | ✓ | | | | | ✔ |
(1)
| ChairmanChairperson of the Board
|
(2) | Lead Independent Director
|
The Audit and Risk Committee is comprised of fourthree independent directors: Mr. Robertson (Chairperson), Ms. Kavanagh, Mr. Power and Mr. Ross.Miller. The responsibilities, powers and operation of the Audit and Risk Committee are set out in the written charter of the Audit and Risk Committee. Pursuant to the Audit and Risk Committee Charter, each member of the Audit and Risk Committee is an independent director as defined and required by applicable regulatory and stock exchange rules. The Board has concluded that each member of the Audit and Risk Committee is “financially literate” as defined under National Instrument52-110 — Audit Committeesand as required under NYSE rules, and each of Mr. Robertson and Ms. Kavanagh qualify as an “audit committee financial expert” under the regulations promulgated by the U.S. Securities and Exchange Commission (the “SEC”).
The Audit and Risk Committee operates pursuant to the Audit and Risk Committee Charter. Its responsibilities include, among other things, responsibility for reviewing and recommending to the Board our annual financial statements and management’s discussion and analysis of results of operation and financial condition (“MD&A”) and reviewing and approving our interim financial statements and MD&A. As contemplated in the Audit and Risk Committee Charter, the Audit and Risk Committee periodically meets with our internal auditor and with our external auditorsauditor without management being present. The Audit and Risk Committee also recommends to the Board the external auditorsauditor to be nominated for approval by the Company’s shareholders, as well as the compensation of the external auditors.auditor. The Audit and Risk Committee Charter provides that the Audit and Risk Committee must establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing practices.
TABLE OF CONTENTS
In accordance with the Audit and Risk Committee Charter, the Audit and Risk Committee also provides assistance to the Board in fulfilling its oversight function, including with respect to: (i) the quality and integrity of our financial statements; (ii) compliance with our
StandardsBausch Health Code of
Business Conduct, and legal and regulatory requirements, including with respect to disclosure of financial information; (iii) the qualifications, performance and independence of our external auditor; (iv) the performance of our senior finance employees and internal audit function; (v) internal controls and certifications; (vi) monitoring the appropriateness and effectiveness of the Company’s risk management systems and policies, including evaluating on a regular basis the effectiveness and prudence of senior management in managing the Company’s operations and the risks to which it is exposed; and (vii) overseeing the Company’s compliance programs, policies and procedures, and investigating compliance matters.
The Audit and Risk Committee Charter provides that no member of the Audit and Risk Committee may hold 10% or more of the Company’s outstanding Common Shares or serve simultaneously on the audit committee of more than two other public companies, unless the Board determines that such simultaneous service would not impair his or her ability to serve effectively on the Audit and Risk Committee.
Talent and Compensation Committee
The Talent and Compensation Committee is comprised of
fourthree independent directors:
Dr. KarabelasMr. Power (Chairperson), Mr.
De Schutter, Mr. Hale,Ross, and Dr. Wechsler. The responsibilities, powers and operation of the Talent and Compensation Committee are set out in the written charter of the Talent and Compensation Committee. In accordance with the Talent and Compensation Committee Charter, each member of the Talent and Compensation Committee is an independent director as defined and required by applicable regulatory and stock exchange rules.
As described in the Talent and Compensation Committee Charter, the key responsibilities of the Talent and Compensation Committee include: (i) reviewing and approving corporate goals and objectives in connection with the compensation of our CEO, evaluating the CEO’s performance in light of those goals and objectives, and (either as a committee or together with the other independent directors who satisfy the independence,“non-employee” “non-employee” and “outside director” requirements under the Talent and Compensation Committee Charter) determining and approving the compensation of the CEO based on such evaluation; (ii) reviewing and approving each element of total compensation for all officers (as such term is defined in Rule16a-1(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)); (iii) reviewing and approving arrangements with executive officers relating to their employment relationships with us; (iv) reviewing talent management and succession planning materials for key roles; (v) providing strategic supervision of our benefit plans, programs and policies; and (vi) reviewing and recommending to the Board for approval the Compensation Discussion & Analysis to be included in the Company’s annual management proxy circular and proxy statement and/or annual report on Form10-K, and preparing the Talent and Compensation Committee Report.
For details on the philosophy and approach adopted by the Talent and Compensation Committee with respect to compensation of our officers, please see “Compensation Discussion and Analysis” beginning on page
39.39.
The Talent and Compensation Committee has the authority to retain and compensate any consultants and advisors it considers necessary to fulfill its mandate. It shall, annually or on an
as-needed basis, specify the work to be performed by, and agree on the associated fees to be paid to the compensation consultants. It shall also review annually the work performed and fees paid. In addition, the Talent and Compensation Committee Charter provides that the Talent and Compensation Committee shall report to the Board, on an annual basis, the nature of any additional work or
non-Board based services conducted by any such compensation consultant and associated fees paid, if approved by the Chairperson of the Talent and Compensation Committee.
Periodically, and at least annually, the Talent and Compensation Committee selects and retains independent consultants to conduct comprehensive reviews and assessments of our policies, procedures and internal controls for setting compensation of the CEO and other members of senior management. The consultant prepares and submits relevant information and analyses to the Talent and Compensation Committee. As discussed below under “Compensation Discussion and Analysis,” in 2019,2022, the Talent and Compensation Committee retained Pay Governance LLC (“Pay Governance”), as its independent consultant to provide advice on compensation matters.matters, including in connection with the B+L IPO. Pay Governance’s services included the following: (i) periodically reviewing our executive compensation programs, including base salary, short-term incentives, equity-based incentives, total cash compensation levels and total direct compensation of certain senior positions, against those of
TABLE OF CONTENTS
a peer group; (ii) advising the Talent and Compensation Committee with regard to the compensation packages of the CEO and other members of senior management; (iii) reviewing the proxy and specifically the Compensation Discussion and Analysis; and (iv) preparing materials for and attending select Talent and Compensation Committee Meetings. Pay Governance did not provide any additional services to the Company during the fiscal year
2019.2022. The Talent and Compensation Committee has assessed, at the relevant times, the independence of Pay Governance and concluded that its engagement of Pay Governance did not raise any conflict of interest with the Company or any of the Company’s directors or executive officers.
The Talent and Compensation Committee considers the advice and analysis of the independent compensation consultants, together with other factors the Talent and Compensation Committee considers appropriate (including feedback from shareholders and corporate governance groups, market data, knowledge of the comparator group and personal knowledge and experience of the Talent and Compensation Committee members), in reaching its decisions and making compensation determinations for the CEO and executive officers.
The Board regularly undertakes a thorough review of succession planning for the members of the Company’s Executive Committee,Leadership Team, including our CEO, over the course of the year, led by the efforts of the Talent and Compensation Committee. The Talent and Compensation Committee continuously reviews the Executive CommitteeLeadership Team and key positions within the Company to ensure the continuity and comprehensiveness of succession planning companywide.company-wide. Among other factors, the Talent and Compensation Committee considers the level of representation of women in executive officer and managerial positions when making appointments and during succession planning by taking into account the overall number of women currently serving in such roles at the Company and by actively considering women candidates for such positions when they become available; however, the Company does not have a specific target number or date by which to achieve a specific level of representation of women in executive officer and managerial positions, as it considers a multitude of factors in determining the best person for any position. Women currently lead a substantial portion of our businesses and
global functions, in the following roles: EVP andExecutive Vice President, General Counsel (who also serves as an executive officer of the Company); SVP and Chief Human Resources Officer; President, Diversified Products; SVP, HeadVPs of functional areas, including Finance, HR, and Legal, International; SVP, Global Head of Ethics and Compliance; VP, International Vision Care; andas well as, VPs of Marketing and/or Sales for various lines of business. Currently, one (representing 17%30%) of the Company’s executive officers is a woman.
The Board regularly receives exposure to executives, managers and other personnel in the organization by having the executives and managers participate in Board meetings and present on the Company’s business and strategy. The Board’s participation in these events provides significant exposure to the Company’s leadership team and strategic focus, which greatly enhances the Board’s ability to conduct succession planning, as well as to gain insight as it oversees organization risk and strategy.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is comprised of
fourthree independent directors: Mr.
PowerIcahn (Chairperson)
, Ms. Kavanagh, Mr. Robertson Dr. Mulligan and Mr.
Ross.Power. The responsibilities, powers and operation of the Nominating and Corporate Governance Committee are set out in the committee’s written charter. As required by the Nominating and Corporate Governance Committee Charter, each member of the Nominating and Corporate Governance Committee is an independent director as defined and required by applicable regulatory and stock exchange rules.
As described in the Nominating and Corporate Governance Committee Charter, the key responsibilities of the Nominating and Corporate Governance Committee include: (i) identifying individuals qualified to become directors and recommending to the Board new nominees for election by shareholders or for appointment by the Board, and engaging the services of third party search firms to assist in identifying such individuals; (ii) providing recommendations to the Board regarding the competencies and skills the Board should possess, and the qualifications of its directors; (iii) recommending for Board approval, if appropriate, revisions to our corporate governance practices and procedures; (iv) developing new charters for any new committees established by the Board, if not otherwise mandated by the Board; (v) monitoring relationships and communication between management and the Board and monitoring emerging best practices in corporate governance; (vi) reviewing the composition and mandate of the Board and each committee of the Board annually and, if appropriate, recommending to the Board any changes it considers desirable with respect thereto; and (vii) overseeing our orientation process for new directors and our continuing education program for all directors.
TABLE OF CONTENTS
The Nominating and Corporate Governance Committee annually develops and recommends processes for assessing the performance and effectiveness of the Board and the committees of the Board and reports the results of such assessments to the Board on an annual basis. Pursuant to these processes established by the Nominating and Corporate Governance Committee and adopted by the Board, the Board and each committee conduct annual self-assessments of their performance and effectiveness. The self-assessments include a review of the compliance of the Board and each committee with their respective charters, the adequacy of information provided, the skills and experience of the members, and other matters. The results of the individual directors’ surveys are compiled by the Chairperson of the Nominating and Corporate Governance Committee and presented to the Lead Independent director and Chairman of the Board for discussion. Following these discussions, the Chairperson of the Nominating and Corporate Governance Committee provides a report to the full Board identifying the opportunities for improvement identified in the self-assessment process. The Board has previously conducted periodic peer reviews of the directors to supplement the annual Board and committee self-assessments and will do so again when the Board determines peer reviews will add value to these annual self-assessments. The Nominating and Corporate Governance Committee also makes recommendations to the Board regarding director compensation and may retain advisors to assist with evaluating and making these recommendations. For additional information regarding the compensation of our
non-employee directors, and the role of the Nominating and Corporate Governance Committee in reviewing and recommending changes to
non-employee director compensation, please see “Director Compensation” beginning on page
69.74.Finance and Transactions Committee
The Finance and Transactions Committee is
currently comprised of
four independent directors:three directors, two of whom are independent: Mr.
HaleMiller (Chairperson), Mr.
De Schutter,Icahn and Ms.
Kavanagh, and Mr. Paulson.Kavanagh. It was established to assist the Board in providing fiduciary oversight and strategic advice with respect to the Company’s significant transactional and financing activities, and monitoring the overall financial condition of the Company, including the impact of these activities on the Company’s financial condition.
Science and Technology Committee
The Science and Technology Committee is comprised of
fourthree independent directors: Dr.
von EschenbachMulligan (Chairperson),
Dr. Karabelas, Mr.
Power,Appio, and Dr. Wechsler. The Science and Technology Committee was established to provide oversight and strategic advice with respect to the Company’s research and development programs and pipeline, and the Company’s strategic direction and development in research and development and technology.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
Each of Dr. Karabelas, Mr. De Schutter, Mr.
Hale,Power, and Dr. Wechsler, representing all of the directors who served on the Talent and Compensation Committee during
2019,2022, and Mr. Ross, who currently serves on the Talent and Compensation Committee, is (i) a
non-employee director for purposes of Rule
16b-3 of the Exchange Act, as amended, (ii) an “outside director” under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), to the extent
applicable,applicable; and (iii) an independent director. None of the members of the Talent and Compensation Committee is a current or former officer of the Company. There were no compensation committee interlocks with other companies in
20192021 within the meaning of Item 407(e)(4)(iii) of Regulation
S-K. See “Certain Transactions — Certain Related-Party Transactions” on page
7680 for a description of related-party transactions.
The executive officers of the Company are as follows:
Name
Thomas J. Appio | | Age
| 61 | Title
|
Joseph C. Papa
| | 64 | | Chairman of the Board and
Chief Executive Officer |
Paul S. Herendeen
Tom G. Vadaketh | | 64 | 60 | | | Executive Vice President, and Chief Financial Officer |
Christina M. Ackermann
Seana Carson | | 55 | 51 | | | Executive Vice President, and General Counsel |
Thomas J. Appio
| | 58 | | President &Co-Head Bausch + Lomb/International |
Joseph F. Gordon
| | 56 | | President &Co-Head Bausch + Lomb/International |
William D. Humphries
| | 53 | | President, Ortho Dermatologics |
Below is a description of each executive officer who is not also a director nominee of the Company.
PAUL S. HERENDEEN
TOM G. VADAKETH joined Bausch Health in January 2022, and has been ourserved as Executive Vice President, Chief Financial Officer since the IPO Closing Date. Prior to joining Bausch Health, Mr. Vadaketh served as Executive Vice President and Chief Financial Officer since August 2016. Priorof eResearch Technology, Inc., from September 2018 to joining Bausch Health,December 2021. In that role, he was responsible for leading the Finance function including controllership, treasury, taxation and financial planning. Mr. Vadaketh also served as Executive Vice President and Chief Financial Officer of Cambrex Corporation and Chief Financial Officer of The Crosby Group. Prior to the CFO role, Mr. Vadaketh served in various positions of Zoetis Inc. for two years. From 2005 to 2013increasing responsibility at Procter & Gamble and Tyco International. Mr. Vadaketh received his degree from 1998 to 2001,the Institute of Chartered Accountants in England and Wales (ACA) and an M.B.A from Manchester Business School. He is a Certified Public Accountant. Mr. HerendeenVadaketh joined the Board of Directors of Kimball Electronics as a member of the Audit Committee starting in September 2022.
SEANA CARSON joined Bausch Health in November of 2006, and has served as
CFO at Warner Chilcott, a specialty pharmaceuticals company. He rejoined Warner Chilcott after four years as EVP and CFO of MedPointe Pharmaceuticals, a privately held healthcare company, where heExecutive Vice President, General Counsel since the IPO Closing Date. Ms. Carson formerly served as
CFO from 2001 until 2005. Prior toSenior Vice President, Head of Legal International. In that
Mr. Herendeen spent nine years as a principal investor at both Dominion Income Management and Cornerstone Partners, where he worked on investments as well as mergers and acquisitionsrole, Ms. Carson was responsible for the
firmsinternational legal function. Ms. Carson also served as Senior Vice President and
their portfolio companies. He spent the early part of hisChief Compliance Officer for over 12 years. Before joining Bausch Health, Ms. Carson began her career
in banking and public accounting, having held various positionsas an Associate with the
investment banking group of Oppenheimer & Company, the capital markets group of Continental Bank CorporationNorton Rose Fulbright international legal firm. Ms. Carson received her law degree from Queens University in Ontario and
as a
senior auditor with Arthur Andersen & Company. Mr. Herendeen earned a Master of Business Administrationbachelor’s degree from the University of
Virginia’s Darden School of Business and holds a bachelor’s degree in Business Administration from Boston College.CHRISTINA M. ACKERMANN has been our Executive Vice President and General Counsel since August 2016. Prior to joining Bausch Health, Ms. Ackermann was part of the Novartis group of companies for the 14 years, most recently serving as Senior Vice President, General Counsel for Alcon, where she was responsible for the Legal, Intellectual Property and Compliance functions. She previously served as Global Head, Legal and General Counsel at Sandoz, the generics division of Novartis, from 2007 to 2012. She joined Novartis Pharma in 2002 as Head, Legal Technical Operations and Ophthalmics and assumed the role of Head Legal General Medicine in July 2005. Before Novartis, Ms. Ackermann served in Associate General Counsel roles with Bristol Myers Squibb and DuPont Pharmaceuticals, as well as in private practice, where she focused on securities and mergers & acquisitions. Ms. Ackermann has a Post Graduate Diploma in EC Competition Law from King’s College, the University of London, U.K., a Bachelor of Laws from Queen’s University, Kingston, Canada, and attended York University, Toronto, Ontario, for her undergraduate studies in Math, Political Sciences and Fine Arts.
THOMAS J. APPIO has been our President &Co-Head Bausch + Lomb/International since August 2018, and was previously our Executive Vice President, Company Group Chairman, International from August 2016 until July 2018. Prior to joining Bausch Health in 2013, Mr. Appio served in several positions with Bausch + Lomb, including as Vice President, North Asia/Japan and as Managing Director, Greater China and Japan. Prior to joining Bausch + Lomb, Mr. Appio served 23 years with Schering-Plough in a wide range of leadership and operations responsibilities. Mr. Appio has spent over 20 years working in the Asia Pacific region. Mr. Appio holds a Bachelor of Science in Accounting from Arizona State University, W.P. Carey School of Business.
JOSEPH F. GORDON has been our President &Co-Head Bausch + Lomb/International since August 2018. He previously served as our President, Consumer and Vision Care from December 2016 through July 2018 and as General Manager of U.S. Consumer from August 2013 to November 2016. Prior to joining Bausch Health in 2013, Mr. Gordon served in various positions with Bausch + Lomb, where he most recently served as Vice President,
Western Ontario. Sales and Marketing, Global Consumer from January 2011 to July 2013. Earlier in his career, he led sales and marketing organizations within Pfizer Inc., and Wyeth, a pharmaceutical company purchased by Pfizer Inc. in 2009. Mr. Gordon holds a Bachelor of Science in Economics from Rutgers University.
WILLIAM D. HUMPHRIES has been our President, Ortho Dermatologics since August 2018, and was previously our Executive Vice President, Company Group Chairman, Dermatology from January 2017 through July 2018. Prior to joining Bausch Health, Mr. Humphries was CEO of Merz North America from March 2012 until December 2016, where he oversaw strategic direction and collaboration among three North American companies: Merz Pharmaceuticals, LLC, Merz Aesthetics, Inc. and Merz Pharma Canada, Ltd. Prior to joining Merz, he served as the President of Stiefel, a leader in global dermatology and skin health, where he spearheaded two major acquisitions, and led the global integration of Stiefel into GlaxoSmithKline. Previously, Mr. Humphries held multiple senior executive roles within Allergan, Inc., concluding as Vice President of the U.S. Skincare business. Mr. Humphries has been a director of Clearside Biomedical, Inc., a late-stage clinical biopharmaceutical company, since January 2012, and has also served as a director of Aclaris Therapeutics, Inc., adermatologist-led biopharmaceutical company, since September 2016. He holds a Bachelor of Arts from Bucknell University and a Master of Business Administration from Pepperdine University.
None of the executive officers of the Company were selected pursuant to any arrangement or understanding, other than their respective employment agreements with the Company. None of the executive officers are related by blood, marriage or adoption to one another or to any director or nominee for director of the Company.
OWNERSHIP OF THE COMPANY’S SECURITIES
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial ownership of our Common Shares and the percentage of Common Shares owned beneficially by holders of more than 5% of our outstanding Common Shares as of March
2, 2020. | | | | | | | | |
Identity of Owner or Group | | Number of Shares
and Nature of
Beneficial
Ownership | | | Percentage of
Class(1) | |
FIL Ltd | | | 26,947,455 | (2) | | | 7.63 | % |
Pembroke Hall, 42 Crow Lane, Hamilton, Bermuda, HM19 | | | | | | | | |
Paulson & Co., Inc. | | | 20,839,035 | (3) | | | 5.90 | % |
1251 Avenue of the Americas, New York, NY 10020 | | | | | | | | |
VA Partners I, LLC | | | 17,942,227 | (4) | | | 5.08 | % |
One Letterman Drive, Building D, Fourth Floor, San Francisco, CA 94129 | | | | | | | | |
17, 2023 (unless otherwise noted).
Mr. Carl C. Icahn
c/o Icahn Associates Holding LLC, 16690 Collins Ave., Suite PH-1,
Sunny Isles Beach, FL 33160
| | | 34,721,118(2) | | | 9.55% |
Paulson & Co. Inc.
1251 Avenue of the Americas, New York, NY 10020
| | | 26,439,035(3) | | | 7.27% |
Mr. Alex Meruelo
c/o 2500 E. Second Street, Reno,
Nevada 89595, Attn: Management Office
| | | 19,604,777(4) | | | 5.39% |
GoldenTree Asset Management, L.P.
300 Park Avenue, 21st Floor, New York, NY 10022
| | | 19,421,054(5) | | | 5.34% |
This table is based upon information supplied by the principal shareholders,
Schedules 13D and 13G filedfilings with the SEC, and
“early warning reports” and similar regulatory filings
filed on SEDAR and on the Canadian System for the Electronic Disclosure by Insiders. Unless otherwise indicated in the footnotes to this table, we believe that the shareholders named in the table have sole voting and investment power with respect to the Common Shares indicated as beneficially owned.
(1)
| Based on 353,356,114363,602,888 Common Shares outstanding on March 2, 2020. 17, 2023. |
(2)
| Based solely on information contained in a Schedule 13G13D/A filed by Mr. Carl C. Icahn with the SEC on February 7, 2020, FIL LimitedMarch 11, 2021 (“FIL”the Schedule 13D/A”), Mr. Icahn and the following entities associated with Mr. Icahn may be deemed to beneficially own, in the aggregate, 34,109,152 Common Shares (including 29,076,005 Common Shares underlying forward contracts): Icahn Partners Master Fund LP (“Icahn Master”), Icahn Offshore LP (“Icahn Offshore”), Icahn Partners LP (“Icahn Partners”), Icahn Onshore LP (“Icahn Onshore”), Icahn Capital LP (“Icahn Capital”), IPH GP LLC (“IPH”), Icahn Enterprises Holdings L.P. (“Icahn Enterprises Holdings”), Icahn Enterprises G.P. Inc. (“Icahn Enterprises GP”), and Beckton Corp. (“Beckton”). According to the Schedule 13D/A, Icahn Master has sole voting power over 24,790,338 Common Shares and sole dispositive power over 26,947,455with respect to 14,169,189 Common Shares; Icahn Offshore has shared voting and dispositive power with respect to 14,169,189 Common Shares; Icahn Partners has sole voting and dispositive power with respect to 19,939,963 Common Shares; Icahn Onshore has shared voting and dispositive power with respect to 19,939,963 Common Shares; and Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Becton and Mr. Icahn each have shared voting and dispositive power with respect to 34,109,152 Common Shares. TheBased on information contained in a Schedule 13G also reports that Fidelity (Canada) Asset Management ULC beneficially owns 5% or more of the Common Shares. Pandanus Partners, L.P. (“Pandanus”) owns shares of FIL’s voting stock. While the percentage of total voting power represented13F filed by these shares of FIL voting stock may fluctuate as a result of changes inMr. Icahn on February 14, 2023, the total number of sharesCommon Shares as to which Mr. Icahn had voting authority as of FIL voting stock outstanding from time to time, it normally represents more than 25% and less than 48.5% of the total votes which may be cast by all holders of FIL voting stock. Pandanus Associates, Inc. acts as general partner of Pandanus. Pandanus is owned by trusts for the benefit of members of the Johnson family, including FIL’s Chairman, Abigail P. Johnson, but disclaims that any such member is a beneficial owner of the securities reported on the Schedule 13G. December 31, 2022 was 34,721,118. |
According to the Schedule 13D/A, each of Icahn Offshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn may be deemed to indirectly beneficially own (as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended, the “Act”) the Common Shares which Icahn Master directly beneficially owns. Each of Icahn Offshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn disclaims beneficial ownership of such Common Shares for all other purposes. Each of Icahn Onshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn may be deemed to indirectly beneficially own (as that term is defined in Rule 13d-3 under the Act) the Common Shares which Icahn Partners directly beneficially owns. Each of Icahn Onshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and
Mr. Icahn disclaims beneficial ownership of such Common Shares for all other purposes.
The address for each of Icahn Master, Icahn Offshore, Icahn Partners, Icahn Onshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, and Beckton is 16690 Collins Avenue, Sunny Isles Beach, FL 33160.
(3)
| According to information provided to the Company by Paulson & Co., Inc. on February 28, 2020,March 17, 2023, it has the sole voting and dispositive power with respect to vote and sole power to dispose of 20,839,035 of our26,439,035 Common Shares. According to information provided to the Company by Paulson & Co., Inc. on March 17, 2023, Mr. Paulson may be deemed an indirect beneficial owner of these Common Shares, which are directly owned by investment funds which he manages. Mr. Paulson disclaims beneficial ownership of these Common Shares, except to the extent he has a pecuniary interest therein. |
(4)
| According toBased on the information provided tocontained in a Schedule 13G filed by Mr. Alex Meruelo with the Company by VA Partners I, LLCSEC on March 2, 2020, VA Partners I, LLC has the sole power to vote and dispose of 17,931,594 of our Common Shares. This number includes 16,983,241 Common Shares owned directly by ValueAct Capital Master Fund, L.P. and 948,353 Common Shares owned directly by ValueActCo-Invest Master Fund, L.P. These sharesApril 23, 2021. Mr. Meruelo may be deemed to be indirectly beneficially ownedown 19,604,777 Common Shares, consisting of (i) 18,096,977 shares held for the account of the Alex Meruelo Living Trust dated August 6, 1996, of which Mr. Meruelo is the sole trustee, including 11,399,000 shares underlying call options currently exercisable, (ii) 1,236,900 shares held for the account of Monterey Insurance Company, Inc., of which Mr. Meruelo is the sole shareholder, including 458,000 shares underlying call options currently exercisable, (iii) 175,000 shares in the account of Liset Meruelo, the spouse of Mr. Meruelo, (iv) 5,000 shares in the joint account of Liset Meruelo and her mother, (v) 37,400 shares in the account of Alexander Meruelo, an adult child of Mr. Meruelo, including 21,500 shares underlying call options currently exercisable, (vi) 31,000 shares in the account of Alexis Meruelo, an adult child of Mr. Meruelo and (vii) 22,500 shares in the account of Lisette Meruelo, an adult child of Mr. Meruelo. Mr. Meruelo disclaims ownership of the Common Shares held in the accounts of Liset Meruelo and her mother, and his adult children.
|
(5)
| Based on information contained in a Schedule 13G filed by (i) VA Partners I, LLC as General Partner of ValueAct Capital Master Fund, L.P. and ValueAct CapitalCo-Invest, L.P.GoldenTree Asset Management LP (“GT LP”), (ii) ValueAct Capital Management, L.P. as the manager of ValueAct Capital Master Fund, L.P. and ValueAct CapitalCo-Invest, L.P., (iii) ValueAct CapitalGoldenTree Asset Management LLC (“GT LLC”) and Steven A. Tananbaum on February 13, 2023, as General Partner of ValueAct Capital Management, L.P., (iv) ValueAct Holdings, L.P.that date each of GT LP and GT LLC may be deemed to beneficially own an aggregate of 19,421,054 Common Shares and Mr. Tananbaum may be deemed to beneficially own an aggregate of 19,753,054 Common Shares (including 332,000 Ordinary Shares as to which Mr. Tananbaum is the majority ownerholder of record). According to the membership interestsSchedule 13G, the Common Shares reported include 19,421,054 Common Shares held of VA Partners I,record by certain managed accounts (collectively, the “Accounts”) for which GT LP serves as investment manager. In addition, Mr. Tananbaum is the managing member of GT LLC, (v) ValueAct Holdings II, L.P. aswhich is the sole ownergeneral partner of the membership interestsGT LP. As a result of ValueAct Capital Management,these relationships, each of GT LP, GT LLC and as the majority owner of the limited partnership interests of ValueAct Capital Management, L.P., and (vi) ValueAct Holdings GP, LLC as General Partner of ValueAct Holdings, L.P. and ValueAct Holdings II, L.P. This total includes the transferMr. Tananbaum may be deemed to ValueAct Capital Master Fund, L.P. of 9,885 Common Shares, which were previously awarded to Mr. Hale as compensation for his services as a director and held by him pursuant to an agreement with ValueAct Capital for the benefit of the limited partners of ValueAct Capital Master Fund, L.P. The number reported above also includes 10,633 RSUs that will vest within 60 days of March 2, 2020. Mr. Hale is a Partner of ValueAct Holdings GP, LLC and disclaimsshare beneficial ownership of these Common Shares except to the extentsecurities held of his pecuniary interest therein.record by the Accounts. |
TABLE OF CONTENTS
The following table sets forth, as of March
2, 202017, 2023 (unless otherwise noted below), certain information regarding the beneficial ownership of our Common Shares and the percentage of Common Shares beneficially owned by (i) each director and each director
nominee,nominee; (ii) each executive officer named in the Summary Compensation Table on page
5659 (together, the “named executive officers,” or “NEOs”)
,; and (iii) all directors and
current executive officers as a group. None of the shares held by directors and executive officers included in the table are pledged as security.
| | | | | | | | |
Identity of Owner or Group | | Number of
Shares
and Nature of
Beneficial
Ownership(1)(2)(3) | | | Percentage
of Class(4) | |
Named Executive Officers, Directors and Director Nominees | | | | | | | | |
Christina M. Ackermann | | | 201,295 | | | | * | |
Thomas J. Appio | | | 249,705 | | | | * | |
Richard U. De Schutter | | | 284,250 | | | | * | |
D. Robert Hale(5) | | | 17,942,227 | | | | 5.08 | % |
Paul S. Herendeen | | | 1,337,706 | | | | * | |
William D. Humphries | | | 356,534 | | | | * | |
Dr. Argeris (Jerry) N. Karabelas | | | 70,646 | | | | * | |
Sarah B. Kavanagh | | | 64,378 | | | | * | |
Joseph C. Papa | | | 1,317,691 | | | | * | |
John A. Paulson(6) | | | 20,894,967 | | | | 5.91 | % |
Robert N. Power | | | 82,742 | | | | * | |
Russel C. Robertson | | | 93,983 | | | | * | |
Thomas W. Ross, Sr. | | | 76,742 | | | | * | |
Andrew C. von Eschenbach, M.D. | | | 17,465 | | | | * | |
Amy B. Wechsler, M.D. | | | 88,874 | | | | * | |
Directors and executive officers of the Company as a group (16 persons) | | | 43,233,503 | | | | 12.14 | % |
Christina M. Ackermann(5) | | | 358,285 | | | * |
Thomas J. Appio | | | 1,463,322 | | | * |
Seana Carson | | | 540,114 | | | * |
Richard U. De Schutter(6) | | | 383,565 | | | * |
Sam A. Eldessouky | | | 380,514 | | | * |
Brett M. Icahn | | | 60,190 | | | * |
Argeris N. Karabelas | | | 123,715 | | | * |
Sarah B. Kavanagh | | | 117,447 | | | * |
Steven D. Miller(6) | | | 120,312 | | | * |
Richard C. Mulligan | | | 36,704 | | | * |
Joseph C. Papa(5) | | | 3,072,039 | | | * |
John A. Paulson(7) | | | 26,581,325 | | | 7.3% |
Robert N. Power | | | 135,811 | | | * |
Russel C. Robertson | | | 177,416 | | | * |
Thomas W. Ross, Sr. | | | 132,311 | | | * |
Robert A. Spurr(8) | | | 112,741 | | | * |
Tom G. Vadaketh | | | 738,790 | | | * |
Amy B. Wechsler, M.D | | | 136,654 | | | * |
Directors, director nominees and current executive officers of the Company as a group (14 persons) | | | 30,747,676 | | | 7.3% |
*
| Less than 1% of the outstanding Common Shares. |
(1)
| This table is based on information supplied by current executive officers and directors.the individuals identified above. We believe that Common Shares shown as beneficially owned are those as to which the named persons possess sole voting and investment power. However, under the laws of California and certain other states, personal property owned by a married person may be community property, which either spouse may manage and control, and we have no information as to whether any Common Shares shown in this table are subject to community property laws. |
(2)
| The amounts reported include the following vested RSUs which are payable in Common Shares followingin connection with the applicable director’s separation of service from the Company: Mr. De Schutter, 18,806;46,876; Mr. Icahn, 17,414; Dr. Karabelas, 56,013;85,328; Ms. Kavanagh, 53,745;83,060; Mr. Miller, 17,436; Mr. Paulson, 45,079;107,903; Mr. Power, 65,508;94,823; Mr. Robertson, 83,350;143,029; Mr. Ross, 57,109; Dr. von Eschenbach, 5,832;86,424; Dr. Wechsler, 78,241.94,387. These vested RSUs represent either or both of the following: (i) director fees paid in RSUs, pursuant to the election of the applicable director to defer such fees; and (ii) annual grants of RSUs, for which delivery of Common Shares underlying the RSUs was deferred pursuant to the election of the applicable director. For further information regarding director compensation, see the section titled “Director Compensation” beginning on page 69.74. |
(3)
| The amounts reported include (i) the following stock options that are exercisable currently or will become exercisable within 60 days of March 2, 2020: Ms. Ackermann, 151,182; Mr. Appio, 118,340; Mr. Herendeen, 1,159,655; Mr. Humphries, 165,622; Mr. Papa, 816,088; and all executive officers as a group (and excluding our directors, who do not receive stock options), 2,511,583; and (ii) the following unvested RSUs that will vest within 60 days of March 2, 2020: Ms. Ackermann, 6,819; Mr. Appio, 7,387; |
| 17, 2023: Mr. De Schutter, 10,633;34,387; Mr. Hale, 10,633; Mr. Herendeen, 19,889;Icahn, 34,387; Dr. Karabelas, 10,633;34,387; Ms. Kavanagh, 10,633;34,387; Mr. Papa, 37,884;Miller, 34,387; Dr. Mulligan, 34,387; Mr. Paulson, 10,633;34,387; Mr. Power, 10,633;34,387; Mr. Robertson, 10,633;34,387; Mr. Ross, 10,633; Dr. von Eschenbach, 10,633;34,387; Dr. Wechsler, 10,633;34,387; and all directors and current executive officers as a group, 182,855. 378,257. |
(4)
| Applicable percentage ownership is based on 353,356,114363,602,888 Common Shares outstanding on March 2, 2020.17, 2023. In computing the number of Common Shares beneficially owned by a person and the percentage ownership of that person, we deemed outstanding all Common Shares subject to options, warrants, rights or conversion privileges held by that person that are currently exercisable or exercisable within 60 days of March 2, 2020.17, 2023. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Under Rule13d-3 of the SEC, certain Common Shares may be deemed to be beneficially owned by more than one person (if, for example, a person shares the power to vote or the power to dispose of the Common Shares). |
(5)
| According to information provided toIn connection with the Company by VA Partners I, LLC on March 2, 2020, VA Partners I, LLC hasB+L IPO, Mr. Papa ceased serving as our Chairperson of the sole power to voteBoard and disposeChief Executive Officer and became the Chairperson and Chief Executive Officer of 17,931,594Bausch + Lomb and Ms. Ackermann ceased serving as our Executive Vice President, General Counsel and Head of our Common Shares. This numberCommercial Operations and became Executive Vice President & General Counsel and President, Ophthalmic
|
TABLE OF CONTENTS
Pharmaceuticals of Bausch + Lomb. Mr. Papa ceased to be employed with B+L on March 6, 2023. The amount in the table above reported for Mr. Papa is based on information available to the Company as of March 6, 2023. The amount in the table above reported for Ms. Ackermann is based on information available to the Company as of March 17, 2023.
(6)
| The amounts reported includes 16,983,24110,000 Common Shares owned directlyindirectly by ValueAct Capital Master Fund, L.P.Mr. Miller through an individual retirement arrangement and 948,35313,500 Common Shares owned directlyindirectly by ValueActCo-Invest Master Fund, L.P. These shares may be deemed to be indirectly beneficially owned by (i) VA Partners I, LLC as General Partner of ValueAct Capital Master Fund, L.P. and ValueAct CapitalCo-Invest, L.P., (ii) ValueAct Capital Management, L.P. as the manager of ValueAct Capital Master Fund, L.P. and ValueAct CapitalCo-Invest, L.P., (iii) ValueAct Capital Management, LLC as General Partner of ValueAct Capital Management, L.P., (iv) ValueAct Holdings, L.P. as the majority owner of the membership interests of VA Partners I, LLC, (v) ValueAct Holdings II, L.P. as the sole owner of the membership interests of ValueAct Capital Management, LLC and as the majority owner of the limited partnership interests of ValueAct Capital Management, L.P., and (vi) ValueAct Holdings GP, LLC as General Partner of ValueAct Holdings, L.P. and ValueAct Holdings II, L.P. This total includes the transfer to ValueAct Capital Master Fund, L.P. of 9,885 shares, which were previously awarded to Mr. Hale as compensation forDe Schutter through his services as a director and held by him pursuant to an agreement with ValueAct Capital for the benefit of the limited partners of ValueAct Capital Master Fund, L.P. Mr. Hale is a Partner of ValueAct Holdings GP, LLC and disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein.spouse. |
(6)(7)
| According to information provided to the Company by Paulson & Co., Inc. on February 28, 2020,March 17, 2023, it has the sole power to vote and sole power to dispose of 20,839,03526,439,035 of our Common Shares. Mr. Paulson may be deemed an indirect beneficial owner of these Common Shares, which are directly owned by investment funds which he manages. Mr. Paulson disclaims beneficial ownership of these Common Shares, except to the extent he has a pecuniary interest therein. This number also includes 220 Common Shares owned indirectly as a Uniform Gift to Minors Act custodian for minor children. |
(8)
| On June 1, 2022, we announced that BHC eliminated the position of President, U.S. Businesses, held by Robert A. Spurr, effective June 10, 2022. The amount in the table above reported for Mr. Spurr is the balance on information available to the Company as of June 10, 2022. |
DELINQUENT SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCEREPORTS
Section 16(a) of the Exchange Act requires the Company’s executive officers and directors, and persons who own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the SEC and the NYSE. Such executive officers, directors and shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.
Based solely upon its review of the copies of such forms it received, or written representations from certain reporting persons for whom no such forms were required, the Company believes that during fiscal year 2019,2022, all executive officers, directors and 10% beneficial owners of the Company timely filed all forms required by Section 16(a) except for the following: Dr. Wechsler and Messrs. De Schutter, Paulson and Robertson each filed one late Form 4, each relating to a single transaction..
EXECUTIVE COMPENSATION AND RELATED MATTERS
COMPENSATION DISCUSSION AND ANALYSIS
Upon the completion of the B+L IPO, we announced our new leadership team, including the following individuals, each of whom is one of our NEOs for 2022:
Thomas J. Appio, Chief Executive Officer
Tom G. Vadaketh, Executive Vice President and Chief Financial Officer
Seana Carson, Executive Vice President and General Counsel
| • | Robert A. Spurr, former President, U.S. Pharmaceutical Business(1) |
In addition, in connection with the B+L IPO, (i) Joseph C. Papa, our former Chairman of the Board and Chief Executive Officer, ceased serving in that role and became the Chairman and Chief Executive Officer of Bausch + Lomb(2), (ii) Sam A. Eldessouky, our former Executive Vice President and Chief Financial Officer, ceased serving in that role and became Executive Vice President and Chief Financial Officer of Bausch + Lomb, and (iii) Christina M. Ackermann, our former Executive Vice President, General Counsel and Head of Commercial Operations, ceased serving in that role and became Executive Vice President & General Counsel and President, Ophthalmic Pharmaceuticals of Bausch + Lomb.
Upon the occurrence of the B+L IPO in May 2022, Mr. Appio succeeded Mr. Papa as Chief Executive Officer of BHC, Mr. Vadaketh succeeded Mr. Eldessouky as Executive Vice President and Chief Financial Officer of BHC and Ms. Carson succeeded Ms. Ackermann as Executive Vice President and General Counsel of BHC.
Pursuant to SEC rules, each of Messrs. Papa and Eldessouky (in their capacity as our former Chief Executive Officer and Chief Financial Officer, respectively) and Ms. Ackermann (in her capacity as one of our former executive officers), are also one of our NEOs for 2022 (whom we refer to as the “Former B+L NEOs”).
This Compensation Discussion and Analysis (“CD&A”) section describes
ourBHC’s compensation
approachprogram and
programsthe compensation decisions made by the BHC Talent and Compensation Committee for our
named executive officers (“NEOs”) for 2019. Ourcurrent NEOs for
2019 are:Joseph C. Papa, Chairman2022 and, for the Former B+L NEOs, for the period from January 1, 2022 through the time of the BoardB+L IPO in May 2022. From and Chief Executive Officer
Paul S. Herendeen, Executive Vice President and Chief Financial Officer
Christina M. Ackermann, Executive Vice President and General Counsel
Thomas J. Appio, President &Co-Headafter the date of the B+L IPO, the Bausch + Lomb/International
Lomb Talent and Compensation Committee (the “B+L TCC”) made all compensation decisions with respect to the Former B+L NEOs for the period from the B+L IPO date through December 31, 2022. In addition, because B+L is our majority-owned subsidiary, all of the compensation that the Former B+L NEOs earned from B+L in 2022 is included in the executive compensation disclosure that follows. However, the CD&A that follows is focused on the BHC TCC’s compensation decisions for 2022. For more information about the compensation decisions specific to B+L, see the proxy statement filed by B+L with the SEC on March 13, 2023, which may be accessed at https://www.sec.gov/edgar/searchedgar/companysearch.html (which we refer to as the “B+L 2023 Proxy Statement”).2022 was a transformative year for BHC and our business, particularly due to the B+L IPO and our associated significant leadership transition. As a result of this period of transition and transformation, our 2022 compensation program does not reflect our normalized, go-forward approach to our executive compensation program. In 2023, we expect to return our normalized compensation program and will continue to place an emphasis of pay-for-performance by granting a significant portion of our NEOs’ compensation in the form of “at-risk” variable compensation, including by reintroducing PSUs into our annual equity award mix.
TABLE OF CONTENTS
William D. Humphries, President, Ortho Dermatologics
20192022 Business Results
In 2019
2022 was a transformative year for BHC. Under new leadership effective as of the B+L IPO, we
deliveredexecuted on our
“pivot to offense” strategy, with eight consecutive quarters of total company organic growthstrategic priorities, and
our first full year of reported revenue growth since 2015. We repaid approximately $900 million of debt using cash generated from operations in 2019, while increasing our investment in R&D by 14%, or $58 million. We achieved the following financial results for
2019:2022 (reflected on a consolidated basis): GAAP Revenues of $8.6 billion
$8,124MGAAP Net IncomeLoss of ($1.788) billion
225M)| • | Adjusted EBITDA attributable to Bausch Health (non-GAAP) of $3,022M(1) |
| • | GAAP Cash Used by Operations of $728M(2) |
GAAP Cash FlowWe also continued to make progress on our strategic alternatives by de-levering BHC (excluding B+L) significantly through a debt exchange and multiple open market repurchase initiatives. We reduced debt principal net of unrestricted cash by $3.2B post-B+L IPO and unrestricted B+L from Operations of $1.5 billion
BHC in accordance with the Company’s indentures.Adjusted EBITDA(non-GAAP) of $3.57 billion
Please see Appendix 1 for a reconciliation of our GAAP tonon-GAAP financial measures and related disclosures.
Our Compensation Philosophy
Bausch Health’s compensation philosophy is designed to attract, retain, and motivate
talented executives, including our NEOs, who are committed to the ongoing transformation of
our companyBHC and to improving people’s lives through our products. Our compensation program is
intendeddesigned to retain our critical leaders through the transition of BHC, to link executive compensation to long-term business performance,
while providingand provide compensation opportunities that are competitive as compared to our peers and align the interests of our executives with those of our shareholders. Our programs also balance appropriate
risk takingrisk-taking and incorporate shareholder feedback.
A significant portion of total compensation is linked to satisfying our financial
targets andtargets. Our strategic initiatives
in additionfocus on areas that are critical to
achieving positive total returnsour success, including an emphasis on fostering an inclusive work environment where everyone feels welcomed, supported and valued for their talents and contributions through our Diversity, Equity & Inclusion (“DE&I”) strategy, and identifying and addressing current and emerging environmental, social, and governance (“ESG”) trends that help us understand the needs of our patients and customers and provide us with the ability to
shareholders.enrich the communities and natural environments where we live and work.
In determining the appropriate mix of base salary and incentive pay (including annual cash incentives and long-term equity) for our NEOs, the
BHC Talent and Compensation Committee seeks to balance:
Attractingattracting and retaining our executives with the stability of a competitive base salary;
Promotingpromoting pay-for-performance, as we believe thatour compensation program should emphasize incentive pay that appropriately rewards executives for their contribution to our overall performance; and
Aligningaligning compensation with company performance and shareholder value creation through the use of performance-basedwith equity compensation awards.
In allocating between short-term and long-term compensation, the BHC Talent and Compensation Committee seeks to establish a balance between rewarding past performance and recognizing potential future contributions. In that respect, the BHC Talent and Compensation Committee designs our annual incentive program to reward executives who achievefor the achievement of pre-determined financial metrics and strategic priorities, and it grants equity awards under our long-term incentive program to provide an opportunity for additional compensation based on delivering on our long-term performance and shareholder value creation.
The compensation opportunity provided to our NEOs is primarily performance-based. In
2019, 89%2022, 90% of our CEO’s and
77%79%, on average, of our other NEOs’ compensation opportunity was
performance-based pay, subject to the achievement of annual and long-term performance goals, including the growth of our Common Share price over time.at-risk variable incentive compensation.
Shareholder-Friendly Compensation Practices
We maintain the following shareholder-friendly compensation practices, which further align the interests of our executives with those of our shareholders and balance appropriate risk taking.
TABLE OF CONTENTS
| • | Share ownership guidelines — All NEOs are subject to significant share ownership guidelines. Pursuant to our Share Ownership Guidelines, our CEO is required to hold Common Shares equivalent to 6 times his base salary, and our other NEOs are required to hold Common Shares the equivalent to 3 times their base salary. |
| • | Holding requirements — Our CEO and NEOs are required to hold 50% of their net shares that vest under our long-term incentive plans until they satisfy our Share Ownership Guidelines. |
| • | Capped award payouts — We set maximum award levels under our annual and long-term incentive program, with award payouts capped at 200%. |
| • | Clawback — The Board may exercise its discretion to require any employee who receives equity-based compensation to reimburse bonus, incentive or equity-based compensation awarded in the event of (1) a material restatement or adjustment to our financial statements or (2) detrimental conduct by the employee that has caused material financial, operational, or reputational harm to us. |
| • | Double trigger acceleration following a change in control — No unvested equity awards accelerate on a “single-trigger” basis in connection with a change in control. Instead, unvested equity awards accelerate on a “double-trigger” basis upon a qualifying termination of employment in connection with a change in control. |
| • | Limited severance — Our severance arrangements provide a cash severance payment as follows: for our NEOs, a cash severance payment equal to one and a half times annual base salary and annual target incentive and two times in the event of termination following a change in control; and for our CEO, a cash severance payment of two times annual base salary and annual target incentive. |
| • | Independent compensation consultant — The BHC Talent and Compensation Committee has engaged an independent compensation consultant that has no other ties to us or to our management. |
| • | Shareholder engagement — We are committed to ongoing engagement with our shareholders through structured, engaged investor outreach that enables us to obtain ongoing feedback on our compensation program. |
| • | Performance-based equity — We grant performance share units with rigorous absolute and relative performance goals, which align the interests of our executives with our shareholders. |
Share ownership guidelines — All NEOs are subject to significant share ownership guidelines. Pursuant to our Share Ownership Guidelines, our CEO is required to hold 6 times base salary, and our other NEOs are required to hold 3 times base salary.
Holding requirements — In connection with his hiring, our CEO was required to purchase $5,000,000 of Common Shares, and our other NEOs are required to hold 50% of their net shares that vest under our long-term incentive plans, until they satisfy our Share Ownership Guidelines.
Performance-based equity — We grant performance share units with rigorous absolute and relative performance goals, which align the interest of our executives with our shareholders.
Capped award payouts — We set maximum award levels under our annual incentive program and performance share units, with award payouts capped at 200%. In addition, payout for the portion of performance share units based on total shareholder return (“TSR”) performance are capped at 100% if absolute TSR is negative over the performance period.
Clawback — The Board may exercise its discretion to require any employee who receives equity-based compensation to reimburse bonus, incentive or equity-based compensation awarded in the event of (1) a material restatement or adjustment to our financial statements or (2) detrimental conduct by the employee which has caused material financial, operational, or reputational harm to us.
Double trigger following a change in control — No unvested equity awards accelerate upon a change in control, unless a qualifying event results in the termination of employment.
Limited severance — Our severance arrangements are modest, providing a cash severance payment for our NEOs equal to one times annual base salary and annual target incentive (two times in the event of termination following a Change in Control, and for our CEO).
Independent compensation consultant — The Talent and Compensation Committee has engaged an independent compensation consultant that has no other ties to us or to our management.
Shareholder engagement — We are committed to ongoing engagement with our shareholders through structured, engaged investor outreach that enables us to obtain ongoing feedback on our compensation program.
| • | No hedging — Our anti-hedging policy prohibits officers, directors and certain “designated employees” (as designated by the General Counsel in consultation with the CEO) from engaging in hedging, short selling, or monetization transactions with our Common Shares. |
| • | No pledging — Our anti-pledging policy prohibits officers, directors and designated employees from holding our securities in a margin account where the securities are subject to margin sales or pledging our securities as loan collateral. The anti-pledging policy exempts any margin accounts in existence at the time the policy was adopted by BHC. None of our NEOs or directors hold our securities in margin accounts subject to margin sales or pledging as loan collateral. |
| • | No repricing of underwater options — Repricing of stock options is expressly prohibited by BHC’s Amended and Restated 2014 Omnibus Incentive Plan (the “2014 Plan”). |
| • | No excise tax gross-ups — We will not gross-up any excise tax that may be triggered as a result of a change in control severance payment under Section 280G and 4999 of the Internal Revenue Code of 1986 (the “Code”). |
| • | No single trigger vesting or payments — We do not provide for “single trigger” equity award vesting or other “single trigger” payments or benefits upon a change in control. |
| • | No dividend or dividend equivalents on unearned incentive awards. |
TABLE OF CONTENTS
No hedging — Our anti-hedging policy prohibits officers, directors and employees from engaging in hedging, short selling, or monetization transactions with our Common Shares.
No pledging — Our anti-pledging policy prohibits officers, directors and employees from holding our securities in a margin account where the securities are subject to margin sales or pledging our securities as loan collateral. The anti-pledging policy exempts any margin accounts in existence at the time the policy was adopted by the Company. None of our NEOs or directors hold our securities in margin accounts subject to margin sales or pledging as loan collateral.
| • | No supplemental executive retirement plan — Executives are only eligible to participate in our tax-qualified Retirement Savings Plan (or, in the case of our Canadian-based executives, the Canadian equivalent) that is provided on the same terms to all employees. |
| • | No automatic or guaranteed annual salary increases. |
No repricing of underwater options — Repricing of stock options is expressly prohibited by our Omnibus Incentive Plan.
No excise taxgross-ups — We will notgross-up any excise tax that may be triggered as a result of a change in control severance payment.
No single trigger vesting — We do not provide for “single trigger” equity award vesting or other “single trigger” payments or benefits upon a change in control.
No dividend or dividend equivalents on unearned incentive awards
No supplemental executive retirement plan — Executives are only eligible to participate in ourtax-qualified Retirement Savings Plan that is provided on the same terms to all employees.
No automatic or guaranteed annual salary increases
20192022 Shareholder Engagement
At our
20192022 Annual Meeting
of Shareholders, we held a
non-binding advisory vote with respect to the compensation of our NEOs (commonly referred to as a
“say-on-pay” “say-on-pay” vote)
with approximately 93%. Approximately 65% of the total shareholders’ votes cast voted in favor of our executive compensation program. We
believe these favorable results indicate strongwere disappointed to receive the low-level of support
for continuingof our
current executive compensation program.Since2022 say-on-pay proposal. In June 2022, we proactively reached out to shareholders representing 59% of our 2016 Annual Meetingoutstanding shares. The BHC Talent and Compensation Committee members engaged with shareholders representing approximately 24% of Shareholders, we have had significant dialogue and engagementour outstanding shares.
The table below highlights the key topics discussed with our shareholders in order to solicit feedback on our compensation philosophy2022 and underlying programs through direct engagement with shareholders and during investor meetings and conferences. Members of ourdescribes the specific actions the BHC Talent and Compensation Committee directly engaged with 8 shareholders in April 2019 representing approximately 19%took to be responsive to our shareholders’ views.
Our long-term incentive program should include a PSU component | | | • In 2022, given the difficulty of setting PSU metrics in anticipation of the B+L IPO and related leadership transition, we did not incorporate PSUs into our 2022 long-term incentive program.
• We are committed to a pay-for-performance philosophy and have reintroduced PSUs as a significant part of our 2023 long-term incentive program on terms consistent with those in years prior to 2022.
• For 2023, PSUs comprise 60% of our CEO’s and 40% of our other NEOs’ long-term equity incentive mix, respectively.
|
PSUs should incorporate a performance metric that is focused on BHC’s debt management | | | • Our 2023 long-term incentive program utilizes Adjusted Operating Cash Flow as a performance metric.
• We believe the Adjusted Operating Cash Flow performance metric will align with the priority of creating flexibility to service debt, manage working capital and improve profitability without creating a bias to use cash to paydown debt instead of investing in our business. |
PSUs should also be subject to a Total Shareholder Return (TSR) performance metric | | | • We have incorporated a relative TSR performance modifier into our 2023 PSU grants.
• We believe that the combination of the Adjusted Operating Cash Flow performance metric (which serves as a meaningful input to value creation) and the relative TSR modifier (which provides an output measure of value creation) under our long-term incentive program, provide a direct link between our executive’s pay and performance and promote long-term shareholder value creation. |
2022 was a transformative year for BHC and our business, particularly due to the B+L IPO and our associated significant leadership changes. As a result of
this period of transition and transformation, our
outstanding shares at that time. Consistent with2022 compensation program does not reflect our
favorable“say-on-pay” results, shareholders continuednormalized, go-forward approach to
provide their support during these meetings for how our executive compensation
program. In 2023, we expect to return our normalized compensation program
has evolved in recent years.(taking into consideration feedback we have received from our shareholders), and we will continue to place an emphasis of pay-for-performance. The BHC Talent and Compensation Committee iscontinues to evaluate our compensation program design to ensure its ongoing alignment with our long-term goals and the interests of our shareholders without incenting inappropriate risk taking.
The BHC Talent and Compensation Committee and our management team are committed to ongoingcontinued engagement with shareholders to understand their viewpoints and to discuss and demonstrate the important connection between
TABLE OF CONTENTS
our
shareholderscompensation program and
shareholder interests. Going forward, we will continue to
solicitmaintain an active dialogue with shareholders and
considerevaluate feedback on issues of importance to them. Additionally, the
feedback received fromBoard has recommended that we continue to hold an annual advisory say-on-pay vote for our shareholders
regardingto approve our executive compensation program.
See Proposal No. 3 of this proxy statement for additional information regarding the advisory frequency of say-on-pay vote that our shareholders are being asked to vote on at this year’s annual meeting.
Role of the Talent and Compensation Committee
Our Board’s
The BHC Talent and Compensation Committee, which is comprised entirely of independent directors, is responsible for implementing, monitoring, and evaluating our executive compensation philosophy and objectives and oversees the compensation program for senior executives. The BHC Talent and Compensation Committee reviews and approves, or recommends to the Board for approval, all components of executive pay and reports its decisions to the Board. The Board, with the assistance of the BHC Talent and Compensation Committee, reviews or approves matters related to executive compensation on anas-needed basis. The Committee’s responsibilities and
authority are described fully in the Committee’s charter, which is available on our website at www.bauschhealth.com (under the tab “Investors” and under the subtab “Corporate Governance — Corporate Governance Documents”).
Our CEO makes recommendations to the
BHC Talent and Compensation Committee for base salary, annual incentive awards and equity grants for each NEO (other than the CEO, whose compensation is determined solely by the
BHC Talent and Compensation Committee or recommended to the Board for approval). Our CEO and Chief Human Resources Officer also provide recommendations to the Committee on other elements of our compensation program for senior executives, including, for example, the design and metrics under our annual and long-term incentive programs.
Our CEO also leads a process each year to establish the collective strategic priorities of the senior executive team, and then, with each executive,
agree onestablishes individual performance goals that tie to the achievement of these strategic priorities. These strategic priorities are shared with the
BHC Talent and Compensation Committee and their input is considered before they are finalized.
Role of the Independent Compensation Consultant
In
2019,2022, the
BHC Talent and Compensation Committee again engaged the services of Pay Governance as its independent consultant to provide advice on executive
and director compensation
matters.matters, including in connection with the B+L IPO. Pay Governance reported directly to the
BHC Talent and Compensation Committee, which instructed
the consultantsPay Governance to give it objective advice and without influence by management, and to provide such advice for the benefit of the Board and our shareholders. Pay Governance did not provide any other services to
the Company or its management.BHC in 2022. The
BHC Talent and Compensation Committee has evaluated Pay Governance’s independence by considering the requirements adopted by the NYSE and the SEC and has determined that no conflict of interest exists.
Each year, the BHC Talent and Compensation Committee reviews its peer group to determine if any changes should be made in order to ensure our peers reflect the businesses in which we compete for talent, and include relevant comparators, such as industry, business focus, and revenue.
TABLE OF CONTENTS
For 2019,
In April 2022, the
BHC Talent and Compensation Committee reviewed the recommendation of its independent compensation consultant, Pay Governance,
and did notto make
anysignificant changes to
theBHC’s peer group
that includesto be better aligned to BHC after the
following companies: | | |
Alexion Pharmaceuticals, Inc.
Allergan plc
Amgen Inc.
Biogen Inc.
Bristol-Myers Squibb Company
Celgene Corporation
Eli Lilly and Company
| | Endo International plc
Jazz Pharmaceuticals plc
Mallinckrodt plc
Mylan N.V.
Perrigo Company plc
United Therapeutics Corporation
Zoetis Inc. |
As a resultB+L IPO and in anticipation of recent andthe full distribution of B+L. When evaluating potential upcoming changes to certain members of our peer group, includingpeers, the completed acquisition of Celgene by Bristol-Myers Squibb and the announcement that AbbVie will acquire Allergan, theBHC Talent and Compensation Committee focused on companies in the pharmaceutical, biotechnology, healthcare equipment and healthcare supplies sectors, with particular focus on pharmaceutical and biotechnology companies, and also considered the amount of revenue achieved by the companies in order to include companies of similar size. After the review, the BHC Talent and Compensation Committee approved the following peer companies for 2022:
Biogen Inc. | | | Jazz Pharmaceuticals |
BioMarin | | | Organon |
Elanco | | | Perrigo |
Endo | | | Teva |
Horizon Therapeutics | | | United Therapeutics |
Incyte | | | Viatris |
In 2023, the BHC Talent and Compensation Committee will again review this peer group to determine whatif any changes should be made in 2020.made.
SinceBecause we hire executives largely from within the pharmaceutical, industry,medical device, and healthcare technology industries, we use data from this peer group to benchmark pay levels, as well as pay practices. In addition to proxy data for the above companies, the BHC Talent and Compensation Committee also utilizes the Willis Towers Watson’sWatsons Pharmaceuticals and Health Sciences Survey to supplement this data both in terms of pay levels as well as pay practices.
The
BHC Talent and Compensation Committee references the median of the market data as a guide when making decisions. Market data is one element that the
BHC Talent and Compensation Committee uses to make pay decisions. Multiple factors are considered in determining total compensation opportunity, including our compensation philosophy, the executive’s role and responsibility,
retaining executives during the transition of BHC, the executive’s past performance, internal equity, and expected contributions and experience in the role.
Key Components of
BHC’s Executive Compensation
The components of executive compensation for our NEOs, as described in more detail below, include (i) base salary; (ii) incentive pay (including annual cash incentive and long-term equity incentives); (iii) retirement and welfare benefits; and (iv) executive benefits and perquisites.
Program
Base Salary | | | Fixed - Cash | | | To attract and retain top performing executives, we provide base salaries that are competitive to the external market and recognize the contributions, experience, skills and responsibilities of our executives. |
Annual Incentives | | | Variable - Cash | | | To align executive pay to annual achievement of certain financial targets and strategic priorities, we provide annual incentive bonuses that are paid based on BHC’s achievement of objective annual financial performance metrics and strategic priorities. |
Long-Term Incentives | | | Variable - Equity | | | To align executive pay with long-term company performance and shareholder value and to retain our executives, we grant equity-based awards that provide an opportunity for additional compensation based on delivering on our long-term performance and shareholder value creation. |
Base Salary
We set our base salaries at competitive levels necessary to attract and retain top performing senior executives, including our NEOs. Base salaries provide an amount of fixed compensation to each senior executive for the performance of their core duties.
Base salaries are periodically reviewed as part of our performance review process, as well as upon a promotion or other change in job responsibilities. To the extent base salaries are adjusted, the amount of any such adjustment would reflect a review of competitive market data, consideration of relative levels of pay internally, individual performance of the executive, and any other circumstances that the BHC Talent and Compensation Committee determines are relevant.
TABLE OF CONTENTS
The
NEOsNEOs’ Base Salaries,
as approved by the BHC Talent and Compensation Committee in 2022, are as follows:
| | | | | | | | | | | | |
NEO | | 2018 Salary | | | 2019 Salary | | | % Increase | |
Joseph C. Papa | | $ | 1,500,000 | | | $ | 1,500,000 | | | | No Change | |
Paul S. Herendeen | | $ | 1,000,000 | | | $ | 1,000,000 | | | | No Change | |
Christina M. Ackermann | | $ | 660,000 | | | $ | 700,000 | | | | 6 | % |
Thomas J. Appio | | $ | 750,000 | | | $ | 775,000 | | | | 3 | % |
William D. Humphries | | $ | 750,000 | | | $ | 750,000 | | | | No Change | |
Effective March 28, 2020,
Thomas J. Appio | | | 1,000,000 | | | 1,000,000 | | | No Change |
Tom G. Vadaketh | | | N/A(1) | | | 600,000 | | | N/A |
Seana Carson | | | 506,590 | | | 506,590 | | | No Change |
Robert A. Spurr | | | 700,000 | | | 700,000 | | | No Change |
Joseph C. Papa | | | 1,600,000 | | | 1,600,000 | | | No Change |
Sam A. Eldessouky | | | 700,000 | | | 700,000 | | | No Change |
Christina M. Ackermann | | | 750,000 | | | 750,000 | | | No Change |
(1)
| Mr. Vadaketh joined BHC on January 3, 2022. |
For 2023, based on
the immediate and significant positive impact of each of their individual performance since assuming leadership of BHC effective as of the B+L IPO in 2022, and after a review of
the competitive market data
relative levelsfor the median of
pay internally, and individual performance,their peers, the Talent and Compensation Committee
will increaseincreased Mr.
Papa’sAppio’s base salary
20% to
$1,600,000, which is a 7% increase$1,200,000; Mr. Vadaketh’s base salary 12.5% to $675,000 and
the first change madeMs. Carson’s base salary 9.6% to
Mr. Papa’s salary since he was hired in 2016. Ms. Ackermann’s salary will be increased to $750,000, which is a 7% increase. No changes were made to the other NEOs’ salaries.$555,000.
Annual Incentive Program
Our 2019
In the beginning of 2022, the BHC Talent and Compensation Committee established separate 2022 annual incentive programprograms for the senior executives who would lead BHC (the “2019“2022 BHC AIP”) providesand B+L (the “2022 B+L AIP”), respectively. The BHC Talent and Compensation Committee determined that Messrs. Appio, Vadaketh and Spurr and Ms. Carson were eligible to participate in the 2022 BHC AIP and Messrs. Papa and Eldessouky and Ms. Ackermann were eligible to participate in the 2022 B+L AIP. Each of the 2022 BHC AIP and 2022 B+L AIP provided an opportunity for our senior executives, including ourthe NEOs, to earn an annual incentive bonus, paid in cash, based on the achievement of certain financial targets and strategic priorities. In the beginning of 2023, the BHC Talent and Compensation Committee determined whether the financial metrics and strategic priorities for the 2022 BHC AIP had been achieved and the B+L TCC determined whether the financial metrics and strategic priorities for the 2022 B+L AIP had been achieved.
20192022 Annual Incentive Program Opportunity
The NEOs annual incentive
targetstarget for 2022, as a percentage of base salary, are as follows:
NEO
Thomas J. Appio | | Incentive Target | 2022 BHC AIP | | | 120% |
Tom G. Vadaketh | | | 2022 BHC AIP | | | 60% |
Seana Carson | | | 2022 BHC AIP | | | 60% |
Robert A. Spurr | | | 2022 BHC AIP | | | 80% |
Joseph C. Papa | | | 1502022 B+L AIP | % | | 150% |
Paul S. Herendeen
Sam A. Eldessouky | | | 1202022 B+L AIP | % | | 80% |
Christina M. Ackermann | | | 802022 B+L AIP | % |
Thomas J. Appio
| | | 80 | % |
William D. Humphries
| | | 80 | % 80% |
2019 Annual Incentive ProgramFor our senior executives, including our
current NEOs, the
annual incentive program2022 BHC AIP is based on
BHC’s performance against
pre-established financial targets and strategic priorities approved by the
Board.BHC Talent and Compensation Committee. Performance against financial targets makes up 75% of the total payout, while performance against strategic priorities makes up 25% of the total payout.
In 2017, the Talent and Compensation Committee adopted
We utilize Adjusted EBITDA
(non-GAAP) and Revenue as the
two financial metrics
rewarded under
the Annual Incentive Program, whichour AIP because these are
two of the key
financial metrics
that our
shareholdersinvestors use to assess our performance. We believe these metrics focus our NEOs on delivering both organic growth, as well as
the Company’sBHC’s bottom line for our shareholders.
The Company’sBHC’s strategic priorities are intended to focus the organization on the key initiatives that will drive shareholder value over time.
As previously disclosed, for 2019,
For purposes of the 2022 BHC AIP, the performance of all our entire senior executive team, including all of ourcurrent NEOs, was measured against the Company’s overallBHC’s Adjusted EBITDA (non-GAAP) and Revenue performance for 75% of their total payout. Adjusted EBITDA (non-GAAP) makes up 75%60% of this financial portion of their payout and Revenue makes up 25%40% of this financial portion of their payout. Company-wideConsistent with prior years, strategic priorities comprise the remaining 25% of their payout. This approach rewards our senior executive team for collectively working towards our mission of improving people’s lives with our health care products, across all segments of our business.
TABLE OF CONTENTS
For
2019,2022, the threshold, target, and stretch performance and corresponding payouts were as follows, with award payouts capped at 200% of incentive
target: | | | | | | | | | | | | |
| | | EBITDA/EBITA | | | Revenue | | | | |
| | | Performance versus Plan | | | Payout | |
Below Threshold | | | <90 | % | | | <95 | % | | | 0 | % |
Threshold | | | 90 | % | | | 95 | % | | | 10 | % |
Target | | | 100 | % | | | 100 | % | | | 100 | % |
Stretch | | | 110 | % | | | 105 | % | | | 200 | % |
Above Stretch | | | >110 | % | | | >105 | % | | | 200 | % |
target.
Below Threshold | | | <90% | | | <93% | | | 0% |
Threshold | | | 90% | | | 93% | | | 10% |
Target | | | 100% | | | 100% | | | 100% |
Stretch | | | 110% | | | 107% | | | 200% |
Above Stretch | | | >110% | | | >107% | | | 200% |
The BHC Talent and Compensation Committee determines whether the financial metrics and strategic priorities have been achieved. In addition, it retains the ability to reduce or eliminate payouts for individual executives, including the NEOs, even if financial metrics and strategic priorities are met, as well as to increase payouts based on individual performance. In making these decisions, the BHC Talent and Compensation Committee may consider factors such as the performance of the individual executive against their individual objectives in support of strategic priorities or additional financial metrics applicable to the business or functional area for which the NEO is responsible.
20192022 BHC AIP Financial Objectives
In
The financial targets for 2022 were established at the beginning of
2019,2022 by the
BHC Board
approved the Company’sbased on BHC’s budget for
the full-year,fiscal year 2022, including Adjusted EBITDA
(non-GAAP) and Revenue
targets.targets (the “2022 BHC Financial Targets”). These same
financial metrics2022 BHC Financial Targets were reviewed and approved by the
BHC Talent and Compensation Committee to determine achievement under the
Annual Incentive Program.2022 BHC AIP.
For our NEOs, the
financial targetsBHC 2022 Financial Targets are based on attaining budget (to receive a payout at target) or stretch targets (to receive a payout above target) for Adjusted EBITDA and
Adjusted Revenue, as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial Metric(1) | | Weighting | | | Threshold | | | Target | | | Stretch | | | Actual | | | Achieved | | | Payout(2) | |
Adjusted EBITDA | | | 75 | % | | $ | 3,063B | | | $ | 3,403B | | | $ | 3,743B | | | $ | 3,581B | | | | 105.2 | % | | | 152 | % |
Revenue(3) | | | 25 | % | | $ | 8,078B | | | $ | 8,503B | | | $ | 8,928B | | | $ | 8,618B | | | | 101.4 | % | | | 127 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 146 | % |
Adjusted EBITDA (non-GAAP)(1) | | | 60% | | | $2.156B | | | $2.396B | | | $2.636B | | | $2.236B | | | 93.3% | | | 20.0% |
Revenue(4) | | | 40% | | | $3.989B | | | $4.289B | | | $4.589B | | | $4.134B | | | 96.4% | | | 19.4% |
| | | | | | | | | | | | | | | | | | | | | 39.4% |
(1)
| Adjusted EBITDA is a non-GAAP financial measure and may not be comparable to similar measures used by other companies. Please see Appendix 1 for a reconciliation of ournon-GAAP financial measures to GAAP financial measures and related disclosures. |
(2)
| In determining final payout versusThe Financial targets and the 2019actual results under the 2022 BHC AIP were determined without reference to, and do not reflect in the table above, the financial plan,performance of B+L or our Solta Medical business in 2022. At the beginning of 2022, the BHC Talent and Compensation Committee established three separate 2022 annual incentive programs for the senior executives of BHC, B+L, and our Solta Medical business in 2022, each of which provided for annual incentive payouts based on the performance of the applicable executive’s business against the pre-established Adjusted EBITDA(non-GAAP) and Revenue targets in 2022 for such business. As a result, the targets and results under the 2022 BHC AIP reflected in the table above reflect only the financial targets and actual results for BHC (and do not reflect targets or results attributable to performance of B+L or our Solta Medical business for 2022).
|
(3)
| In determining the 2022 Financial Targets and final payouts for purposes of the 2022 BHC AIP, the BHC Talent and Compensation Committee reviewed and approved certain modifications to the previously reported results for Adjusted EBITDA (non-GAAP) and Revenues metrics for purposes of the 2022 BHC AIP relating to certain external factors outside of management’s control (e.g. foreign exchange, or an earlier or later than anticipated loss of exclusivity and approved adjustments)exclusivity). The Talent and Compensation Committee also reviewed our 2019 Adjusted EBITDA results as compared to our 2018 Adjusted EBITDA results, to ensure they exceeded the prior year (otherwise a reduction in payout would have been applied). |
(3)(4)
| Revenue for these purposes is the same as GAAP revenue, except that the exchange rates are those used for the Annual Incentive Plan. 2022 BHC AIP. |
Based on the foregoing results, the Talent and Compensation Committee certified that the total payout based on the Company’sBHC’s Adjusted EBITDA (non-GAAP) and Revenue was 146%39.4% for all NEOs for 75% ofparticipating in the total payout.2022 BHC AIP.
TABLE OF CONTENTS
20192022 BHC Strategic Priorities
In the beginning of
2019,2022, the
BHC Talent and Compensation Committee reviewed and approved the following strategic priorities, which make up the remaining 25% of our NEOs’ payout:
| | | | | | | | |
Strategic Priority | | Weighting | | | Payout | |
Continue to make Bausch Health a great place to work by recruiting, engaging, developing, rewarding and retaining talent | | | 25 | % | | | 160 | % |
Drive operational excellence across the enterprise | | | 25 | % | | | 150 | % |
Increase size, breadth, and value of product pipeline | | | 25 | % | | | 140 | % |
Further develop “paths to win” across the enterprise | | | 25 | % | | | 100 | % |
| | | | | | | | |
| | | Total | | | | 138 | % |
Create a vision for the organization, providing clarity and direction for leaders and employees on how we will create value, what we will achieve and how we will get there | | | 20% | | | 130% |
Cultivate a high-performance, results oriented culture that values diversity, equality and inclusion (DEI). Focus on recruiting, engaging, developing, rewarding and retaining our employees | | | 20% | | | 160% |
Accelerate growth and drive operational excellence across the enterprise to optimize sales and EBITA | | | 20% | | | 140% |
Increase size, breadth, and depth of product pipeline through R&D and strategic Business Development investment activities | | | 20% | | | 130% |
Accomplish key milestones required to separate B+L into an independent company | | | 20% | | | 180% |
| | | Total | | | 148% |
Achievement for each initiative was reviewed
and determined by the
BHC Talent and Compensation Committee
and credit was determined based on results against each initiative, including the following:
We continued to make Bausch Health
Create a great place to work by (i) improving or maintainingvision for the organization, providing clarity and direction for leaders and employees on how we will create value, what we will achieve and how we will get there
Set our employee retention rates year over year across the company,new mission values and continuing to improve salesforce retention in the United States to a level below our targetbehaviors framework as well as industry levels (ii) delivering strong employee engagement surveybranding which will be rolled out aligned to timing of the full distribution of B+L.
Increased Government Relations outreach and executed regular updated meetings with all national health plans and PBMs.
Cultivate a high-performance, results further increasing the sustainable engagementoriented culture that values diversity, equality and inclusion (DEI). Focus on recruiting, engaging, developing, rewarding and retaining our employees
In 2022, we hired and onboarded seventeen percent of our workforce, and (iii) deployingworkforce. Introduced a global HR system across 55 countriesapproach to pay and performance with all employees using one central system.
Launched learning platform for approximately 22,000 employees on timeUS sales force and on budget, while further standardizing global processes.increased learning and development opportunities for all leaders.
We droveEnhanced our website to publish ESG data and developed and deployed new ESG policies.
Accelerate growth and drive operational excellence across the Company by (i) reducing finished goods/raw material inventory, eliminating additional SKUs,enterprise to optimize sales and deliveringEBITA
Identified and initiated implementation on 3 key initiatives for Xifaxan growth.
Manufacturing operations successfully met demand and delivered favorable financial results despite very difficult global supply chain and inflationary conditions. Exceeded 2022 Quality savings target across manufacturing networks and continuous improvement
programs, all of which well exceeded targets set, and (ii) enhancing our operational excellence program, as we further embed our total quality culture.We increased theverification.
Increase size, breadth, and valuedepth of our product pipeline through R&D and strategic Business Development investment activities
Reviewed and refined R&D pipeline to focus on core programs and reduce costs related to non-core programs.
Filed new drug application for IDP-126 with the FDA.
Accomplish key milestones required to separate B+L into an independent company
B+L IPO executed.
Completed open market repurchases as well as a debt exchange to reduce net debt by (i) exceeding planned filings$3.2B since the B+L IPO. The lock ups have expired, and approvals, (ii) meeting expectations on phase III, early stage, and late stage projects, and (iii) acquiring multiple new assets,we have now achieved the target leverage ratios pending further conditions that need to be satisfied.
TABLE OF CONTENTS
2022 B+L AIP
For B+L senior executives, including the
assets of Synergy Pharmaceuticals Inc., which strategically enhanced our Salix business.We further developed “paths to win” by (i) growing our “Significant Seven” which collectively grew by 68% in 2019, and certain of our other key products such as products like BIOTRUE®, BAUSCH + LOMB ULTRA®, PRESERVISION®, ENVISTA® IOL, THERMAGE FLX®, APLENZIN®, TRULANCE® and XIFAXAN®, and (ii) demonstrating our pivot to offense strategy by continuing to pay down our debt, which was further repaid by $900 million in 2019, while enhancing our strategic planning process with increased focus on key products and market segments.
Our strong results and achievements for these Company-wide strategic priorities resulted in a payout of 138%, for 25% ofFormer B+L NEOs, the total payout.
2019 Annual Incentive Program Payouts
Based on this performance againstpre-established financial targets (146% payout, comprising 75% of the total payout) and strategic priorities (138% payout, comprising 25% of the total payout) as approved by the Board, the following total payouts were approved for our NEOs:
| | | | | | | | | | | | | | | | |
NEO | | Incentive
Target (%) | | | Incentive Target
($) | | | Bonus
Payout | | | Bonus Payout as
% of Target(1) | |
Joseph C. Papa | | | 150 | % | | $ | 2,250,000 | | | $ | 3,240,000 | | | | 144 | % |
Paul S. Herendeen | | | 120 | % | | $ | 1,200,000 | | | $ | 1,728,000 | | | | 144 | % |
Christina M. Ackermann | | | 80 | % | | $ | 560,000 | | | $ | 806,400 | | | | 144 | % |
Thomas J. Appio | | | 80 | % | | $ | 620,000 | | | $ | 892,800 | | | | 144 | % |
William D. Humphries | | | 80 | % | | $ | 600,000 | | | $ | 864,000 | | | | 144 | % |
(1) | Bonus Payout as % of Target2022 B+L AIP is shown at the nearest whole percent.
|
The Talent and Compensation Committee did not make any further adjustments to the payouts as calculated above based on B+L’s performance against thesepre-established financial targets and strategic priorities approved by the BHC Board.
2020 Performance against financial targets makes up 80% of the total payout, while performance against strategic priorities makes up 20% of the total payout.
The financial targets under the 2022 B+L AIP were established at the beginning of 2022 by the BHC Board based on B+L’s budget for fiscal year 2022, including Adjusted EBITDA (non-GAAP) and Revenue targets (the “2022 B+L Financial Targets”). These same 2022 B+L Financial Targets were reviewed and approved by the B+L TCC to determine achievement under the 2022 B+L AIP. The 2022 B+L Financial Targets for Mr. Papa were as follows:
Adjusted EBITDA (non-GAAP)(1)(2) | | | 60% | | | $787M | | | $875M | | | $963M | | | $786M | | | 89.8% | | | 0% |
Revenue(2) | | | 40% | | | $3.749B | | | $4.031B | | | $4.313B | | | $3.995B | | | 99.1% | | | 35% |
| | | | | | | | | | | | | | | | | | | | | 35% |
For all other Former B+L NEOs, the 2022 B+L Financial Targets are based on attaining budget (to receive a payout at target) or stretch targets (to receive a payout above target) for Adjusted EBITDA and Revenues, are as follows:
Adjusted EBITDA (non-GAAP)(1)(2) | | | 60% | | | $752M | | | $835M | | | $919M | | | $786M | | | 94.1% | | | 25% |
Revenue(2) | | | 40% | | | $3.749B | | | $4.031B | | | $4.313B | | | $3.995B | | | 99.1% | | | 35% |
| | | | | | | | | | | | | | | | | | | | | 60% |
(1)
| Adjusted EBITDA is a non-GAAP measure. Please see Appendix 1 for additional information and a reconciliation of non-GAAP financial measures to the most comparable GAAP financial measures. |
(2)
| In determining the 2022 B+L Financial Targets and final payouts for purposes of the 2022 B+L AIP, the B+L TCC reviewed and approved certain modifications to the previously reported results for FY 2022 Adjusted EBITDA (non-GAAP) and FY 2022 Revenues metrics for purposes of the 2022 B+L AIP relating to certain external factors outside of management’s control (e.g. foreign exchange and exclusion of other material non-recurring items). |
Following the end of 2022, the B+L TCC determined achievement of the 2022 B+L Financial Targets and the applicable strategic priorities under the 2022 B+L AIP.
For more information about the 2022 B+L AIP and the payout determinations approved by the B+L TCC for the Former B+L NEOs, please refer the B+L 2023 Proxy Statement.
2022 Annual Incentive Program
DesignFor 2020,Payouts
Based on the
entire senior executive team, including all of our NEOs, will continue to be measured against the Company’s overall Adjusted EBITDA and Revenue performance for 75%achievement of the
NEOs total payout. As we continue to focus on driving organic growth while delivering on our bottom line commitments, we are shiftingapplicable financial performance metrics and the
weighting of the Adjusted EBITDA and Revenue metrics as follows: Adjusted EBITDA will be weighted 60% (versus 75%), and Revenue will be weighted 40% (versus 25%). Company-wide strategic priorities
will continue to comprisefor 2022, the
remaining 25% oftotal payouts approved by the
payout.Long-Term Incentive Program
TheBHC Talent and Compensation Committee introduced a newfor Messrs. Appio and Vadaketh and Ms. Carson under the 2022 BHC AIP and by the B+L TCC for Messrs. Papa and Eldessouky and Ms. Ackermann under the 2022 B+L AIP were as follows:
Thomas J. Appio | | | 2022 BHC AIP | | | 1,200,000 | | | 798,000 | | | 66.5% |
Tom G. Vadaketh | | | 2022 BHC AIP | | | 360,000 | | | 239,472 | | | 66.5% |
Seana Carson | | | 2022 BHC AIP | | | 303,954 | | | 202,190 | | | 66.5% |
Joseph C. Papa | | | 2022 B+L AIP | | | 2,400,000 | | | 1,128,000 | | | 47% |
Sam A. Eldessouky | | | 2022 B+L AIP | | | 560,000 | | | 375,200 | | | 67% |
Christina M. Ackermann | | | 2022 B+L AIP | | | 600,000 | | | 402,000 | | | 67% |
BHC’s Long-Term Incentive Program
The BHC Talent and Compensation Committee believes that our executive compensation program should emphasize pay-for-performance and deliver a significant portion of our NEOs’ compensation in 2017 (the “LTIP”the form of long-term equity incentive awards that align our NEOs’ interests with company performance and shareholder value creation.
TABLE OF CONTENTS
Given the transformation and transition of BHC and our business in 2022 (including in connection with the B+L IPO), the BHC Talent and Compensation Committee determined to award each of Messrs. Appio and Vadaketh and Ms. Carson annual equity incentive awards for 2022 that were granted 50% in the form of time-based restricted stock units (“RSUs”) for our senior executives, includingand 50% in the form of time-based stock options (“Stock Options”). The BHC Talent and Compensation Committee determined not to grant any performance-based restricted stock units (“PSUs”) to our NEOs in 2022 in light of the pending B+L IPO and the challenge of setting PSU metrics in the midst of this transformational time for BHC.
In 2023, we reintroduced PSUs to better align theour long-term incentive compensation program by granting our CEO’s annual equity compensation awards with Bausch Health’s business strategy and plan to transform the Company, as well as to align with pharmaceutical industry practices pertaining
to these grants. This program provides an opportunity for our senior executives to be granted a balanced portfolio of Performance Share Units (“PSUs”), Restricted Share Units (“RSUs”), and Stock Options.
2019 Grants to NEOs
For 2019, all of our NEOs received 2019 LTIP awards, which were granted for our CEO 60% in the form of PSUs 20%and 40% in the form of RSUs, and for all other NEOs, 40% in the form of PSUs, 40% in the form of RSUs and 20% in the form of Stock OptionsOptions. The PSUs granted by the BHC Talent and forCompensation Committee in early 2023 will be earned and vest based on achievement of an Adjusted Operating Cash Flow metric and Relative Total Shareholder Return modifier performance metric. For additional details regarding our 2023 long-term incentive program, see page 50 below.
The Former B+L NEOs did not receive any BHC equity awards in 2022. Instead, the
otherFormer B+L NEOs
40%received B+L founder equity awards, as described in
PSUs, 30%more detail on page 49 below. 2022 BHC Equity Awards
In early 2022, the BHC Talent and Compensation Committee approved the 2022 annual BHC equity awards to each of Messrs. Appio, Vadaketh, Spurr and Ms. Carson, which, as described above, were granted 50% in
the form of RSUs and
30%50% in
the form of Stock Options, with the following approximate
grant date fair market values.
| | | | |
NEO | | Grant Date Fair
Market Value | |
Joseph C. Papa | | $ | 10,000,000 | |
Paul S. Herendeen | | $ | 4,000,000 | (1) |
Christina M. Ackermann | | $ | 1,750,000 | |
Thomas J. Appio | | $ | 1,750,000 | |
William D. Humphries | | $ | 1,250,000 | |
Thomas J. Appio | | | $7,500,000 |
Tom G. Vadaketh | | | $2,150,000 |
Seana Carson | | | $1,650,000 |
Robert A. Spurr | | | $1,750,000 |
2019 Performance Share Units
PSUs provide senior executives with the right to receive Common Shares at a future date, assuming performance againstpre-determined metrics are achieved, specifically our Return on Tangible Capital (“ROTC”) and relative TSR.
As previously disclosed, the Talent and Compensation Committee determined that, starting in 2019, the senior executive team would have a portion of their PSU grant based solely on performance against relative TSR (versus absolute TSR), with any payout capped at 100% if absolute TSR is negative over the three-year period, in order to align more closely with external pay practices while maintaining a strong focus on aligning shareholder interests and our NEOs’ long-term compensation. In addition, the ROTC and TSR PSU metrics would be equally weighted 50% each for all NEOs, including the CEO, in order to further align the approach across the senior executive team.
For 2019, ROTC and TSR each comprised a portion of the total PSU award, with the number of PSUs that may be achieved capped at 200%. The value ultimately received is based on our performance against these metrics, which are two key measures of our long-term performance, as well as the growth of our Common Share price over time. 2019 PSUs vest in February
2022
subject to continued employment and achievement of minimum performance criteria.Return On Tangible Capital Metrics
For 2019, ROTC comprised 50% of the total PSU award granted to all NEOs. ROTC is measured over three years, from 2019 through 2021. ROTC performance is measured each year; for 2019,one-third of the PSUs achieved was based on 2019 performance,one-third will be based on 2020 performance, andone-third will be based on 2021 performance.
Starting in 2019, the Talent and Compensation Committee updated the ROTC calculation by weighting the two components that comprise ROTC – Net Operating Profit After Taxes (“NOPAT”) (75%) and Net Operating Assets (25%) – with a higher weighting on the profitability component of this calculation. The following ROTC goals were set at the beginning of 2019 and apply to the grants made to our NEOs in 2019. Goals for 2020 were set at the beginning of 2020 and will be disclosed in the 2021 proxy statement. Goals for 2021 will be set at the beginning of 2021.
RSUs | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial Metric | | Weighting | | | Threshold | | | Target | | | Stretch | | | Actual | | | Achieved | | | Payout | |
NOPAT | | | 75 | % | | $ | 2,583B | | | $ | 2,870B | | | $ | 3,157B | | | $ | 3,031B | | | | 105.6 | % | | | 156 | % |
Net Operating Assets | | | 25 | % | | $ | 1,186B | | | $ | 1,078B | | | $ | 970B | | | $ | 1,200B | | | | 88.7 | % | | | 0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 117 | % |
The Talent and Compensation Committee has determined that based on our combined NOPAT and Net Operating Asset results, 117% of the ROTC PSUs were achieved for 2019. The number of PSUs ultimately delivered in 2022 for this portion of the 2019 award is dependent on ROTC performance for 2019, 2020, and 2021.
Total Shareholder Return Metrics
For 2019, relative TSR comprised 50% of the total PSU award granted to all NEOs. The relative TSR performance period is three years, from January 1, 2019 through December 31, 2021, and is measured as compared to the NYSE ARCA PHARMACEUTICAL INDEX peers. The following targets were set at the beginning of 2019 and apply to grants made in 2019:
| | | | | | | | |
| | | Percentile | | | Payout | |
Below Threshold | | | <30 | % | | | 0 | % |
Threshold | | | 30 | % | | | 50 | % |
Target | | | 50 | % | | | 100 | % |
Stretch | | | 80 | % | | | 200 | % |
Above Stretch | | | >80 | % | | | 200 | % |
TSR is calculated as the stock price appreciation for the 20 days preceding the beginning of the performance period as compared to the 20 days preceding the end of the performance period, plus dividends and distributions made or declared (assuming such dividends or distributions are reinvested in the Common Shares of the Company) during the performance period. Further, if our absolute TSR is negative over the three-year period, any payout will in no event exceed 100%.
2019 Restricted Share Units
RSUs provide senior executives with the right to receive Common Shares at a future date. The value ultimately received is based on the growth of our Common Share price over time. RSUs vestone-third per year, assuming on each of the first three anniversaries of the grant date, subject to continued employment.
2019employment through such date.
Stock optionsOptions provide senior executives the opportunity to purchase our Common Shares at a price equal to the market price at the time of the grant. The value ultimately received is based on the growth of our Common Share price over time. Stock optionsOptions vestone-third per year, and on each of the first three anniversaries of the grant date, subject to continued employment through such date. The Stock Options will remain exercisable until the 10-year anniversary of the grant date.
B+L Long-Term Incentive Program
The B+L Board of Directors approved a long-term incentive program for 2022 that provided for the grant of founder equity awards granted to the Former B+L NEOs in May 2022 in connection with the B+L IPO (the “B+L Founder Awards”), which were granted in the form of RSUs and Stock Options.
Founder Awards Granted to the Former B+L NEOs For 2022, the Former B+L NEOs received Founder Awards in connection with the B+L IPO, which were granted 50% in the form of RSUs (the “B+L Founder RSUs”) and 50% in the form of Stock Options (the “B+L Founder Stock Options”), with the following approximate values.
Joseph C. Papa | | | $17,000,000 |
Sam A. Eldessouky | | | $4,500,000 |
Christina Ackermann | | | $3,000,000 |
TABLE OF CONTENTS
The B+L Founder RSUs will vest 50% on each of the second and third anniversaries of the grant date or, if later, upon of B+L’s full separation from BHC or a
ten-year term, change in control of B+L, assuming continued
employment.2017employment through the applicable vesting date. The B+L Founder Stock Options will vest ratably on the first three anniversaries of the grant date, or, if later, upon B+L’s full separation from BHC or a change in control of the Company, subject to continued employment from the grant date. The B+L Founder Stock Options will remain exercisable until the ten-year anniversary of the grant date.
BHC CEO Mr. Appio B+L Founder RSU Award In appreciation of his leadership as the former President, Co-Head of B+L international and in recognition of the integral role he plays in the successful separation of B+L into an independent company, the B+L TCC granted Mr. Appio a B+L Founder RSU Award in the amount of $1,000,000. The B+L Founder RSU Award granted by B+L to Mr. Appio will vest on the same schedule described above for the Former B+L NEOs and unless otherwise determined by the B+L Talent and Compensation Committee will also be subject to forfeiture if the full distribution of B+L does not occur on or prior to December 31, 2023.
2020 and 2021 BHC Performance Share Unit Vesting
In January 2020,early 2022, the BHC Talent and Compensation Committee approved the following changes in light of the separation of the BHC and B+L businesses in connection with the B+L IPO, due to the difficulty of assessing the achievement of the PSU performance metrics following the B+L IPO, in order to provide consistent treatment of these grants for both leadership teams, and based on input from Pay Governance regarding common market practice for similar situations: (i) BHC Return on Tangible Capital (“ROTC”) performance in respect of the 2022 performance period and the 2023 performance period applicable to the PSUs granted in 2017each of 2020 and 2021, as applicable, would be deemed to Ms. Ackerman,be achieved at target as of the closing of the B+L IPO in May 2022, (ii) the last day of the TSR performance period applicable to such PSUs was the date of the closing of the B+L IPO in May 2022, with actual achievement of the TSR performance metrics measured by the BHC Talent and Compensation Committee through such date, and (iii) the 2021 ROTC PSUs would service vest early on March 3, 2023 (versus March 3, 2024) as required under Section 409A of the Internal Revenue Code.
Based on the foregoing, the following summarizes the level of achievement and resulting payout of the BHC PSUs granted to our NEOs in 2020 and 2021:
2020 BHC PSUs
The 2020 ROTC award was calculated using the average of actual performance for 2020 (65%) and 2021 (123%), and target performance (100%) for 2022, resulting in a payout of 96%.
The 2020 TSR award was measured relative to BHC’s peers in the ARCA index at the time of the closing of the B+L IPO, using a 20-day stock price trail. BHC’s TSR ranked 20 of 23 peers (13th percentile), resulting in a payout of 0%.
On February 27, 2023, the BHC PSUs granted in 2020 to Messrs. Appio, Papa and HumphriesEldessouky and Mses. Carson and Ackermann vested based on their continued employment through the vesting date. As previously disclosed,
2021 BHC PSUs
The 2021 ROTC award was calculated using the average of actual performance for 2017, ROTC comprised 75%2021 (123%), and target performance (100%) for 2022 and 2023, resulting in a payout of 107%.
The 2021 TSR award was measured relative to BHC’s peers in the ARCA index at the time of the
total PSU award and TSR comprised 25%closing of the
total PSU award, with the numberB+L IPO, using a 20-day stock price trail. BHC’s TSR ranked 17 of
PSUs that could be achieved capped at 200%.ROTC was measured over three years, from 2017 through 2019. As previously disclosed, 2017 and 2018 ROTC were achieved at 200%25 peers (33rd percentile), and as disclosed above, 2019 ROTC was achieved at 117%. The
average of these three years resultedresulting in a final ROTC payout of 172% for58% of the 2017 ROTC PSUs. This appliedtarget award.
On March 3, 2023, the PSUs granted in 2021 to
the grants made to Ms. Ackermann, and Messrs. Appio,
Papa and
Humphries.TSR was measured on both an absoluteEldessouky and relative basis on January 6, 2020 for Ms.Mses. Carson and Ackermann and Mr. Appio. The following absolute stock price targets were set at the beginning of 2017vested based on our Common Share price at that time ($14.65)their continued employment through the vesting date.
These 2020 and
applied to these grants. | | | | |
Stock Price in 2020 | | PSUs Achieved | |
Less than $19.53 | | | 0 | % |
$19.53 | | | 25 | % |
$29.30 | | | 100 | % |
$58.60 | | | 200 | % |
Greater than $58.60 | | | 200 | % |
Based on the $28.86 closing price of our Common Shares on January 6, 2020, this resulted in a final payout of 96% for Ms. Ackermann and Mr. Appio.
TSR was measured on both an absolute and relative basis for Mr. Humphries on January 2, 2020 (Mr. Humphries’ third anniversary with the Company). The following absolute stock price targets were set at the beginning of 2017 based on our Common Share price at that time ($14.63) and applied to his grant.
| | | | |
Stock Price in 2020 | | PSUs Achieved | |
Less than $19.51 | | | 0 | % |
$19.51 | | | 25 | % |
$29.27 | | | 100 | % |
$58.53 | | | 200 | % |
Greater than $58.53 | | | 200 | % |
Based on the $29.91 closing price of our Common Shares on January 2, 2020, this resulted in a final payout of 102% for Mr. Humphries.
Since our TSR over the measurement period was above the 50th percentile ranking of the TSR for NYSE ARCA PHARMACEUTICAL INDEX, the 100% cap was not applied.
These 20172021 PSUs were delivered to Ms. Ackermann, Messrs. Appio and Humphries in February 2020,and March 2023, respectively, as shown in the Outstanding Equity Awards at Fiscal Year End Table beginning on page 60.63.
2023 BHC Long-Term Incentive Program As noted above, in early 2023, the BHC Talent and Compensation Committee approved our 2023 long-term incentive program, including granting our CEO’s annual equity compensation awards 60% in the form of PSUs and 40% in
TABLE OF CONTENTS
the form of RSUs and for all other NEOs, 40% in the form of PSUs, 40% in the form of RSUs and 20% in the form of Stock Options. After taking into account shareholder feedback during 2022, the BHC Talent and Compensation Committee has decided to measure 2023 PSUs using a balanced approach, measuring performance based on achievement of an Adjusted Operating Cash Flow metric and Relative Total Shareholder Return modifier performance metric. The BHC Talent and Compensation Committee determined that Adjusted Operating Cash Flow aligns with BHC’s priorities of creating flexibility to service debt, manage working capital and improve profitability and Relative Shareholder Return aligns the program with the interest of shareholders.
B+L Separation Bonus Opportunity
In October 2020, the BHC Talent and Compensation Committee approved Messrs. Appio’s, Spur’s and Eldessouky’s, and Mses. Carson’s and Ackermann’s eligibility for a performance-based separation bonus, which requires the achievement of pre-determined milestones related to the separation transaction. Payment is made in cash, with 50% conditioned upon meeting internal readiness criteria for the separation of the two companies and the remaining 50% conditioned upon the successful close of the B+L separation transaction. The first 50% was paid in October 2021. Payment is subject to continued employment, except in limited circumstances. The total amount of the remaining unvested separation bonuses is $250,000 for each of Mr. Appio, Mr. Eldessouky, Ms. Ackermann and $50,000 for Ms. Carson. In connection with his termination of employment, Mr. Spurr received the remaining unvested separation bonus of $250,000.
BHC Retention Program
In order to retain and incentivize certain members of our senior leadership team who are critical to positioning BHC for long-term future growth during the transformation of the company, on September 5, 2022, the BHC Talent and Compensation Committee approved a retention program for certain of BHC’s executive officers (including Mr. Vadaketh and Ms. Carson). Under the retention program, each of Mr. Vadaketh and Ms. Carson were granted a one-time award of BHC RSUs (the “BHC Retention RSU Grant”) under the 2014 Plan. Mr. Vadaketh received a BHC Retention RSU Grant with an aggregate grant date value of $2,150,000 and Ms. Carson received a BHC Retention RSU Grant with an aggregate grant date value of $1,650,000. The BHC Retention RSU Grants will generally vest ratably on each of the first three anniversaries of the grant date subject to continuous employment with BHC (except the BHC Retention RSU Grant will fully vest earlier upon the executive’s termination of employment due to death, disability, involuntary termination without “cause” or resignation for “good reason”). The value ultimately received is based on the growth of our Common Share price over time.
In light of the announced departure of B+L’s CEO, Mr. Papa, and Herendeenin order to retain the members of the executive leadership team who are essential to B+L’s future success, on July 25, 2022, the B+L TCC (and not the BHC Talent and Compensation Committee) approved a retention program that includes the Former B+L NEOs (other than Mr. Papa) (the “B+L Retention Program”).
Under the B+L Retention Program, the severance benefits payable to the Former B+L NEOs (other than Mr. Papa) were not awarded 2017 PSUs.updated to provide that, in the event of an involuntary termination of the Former B+L NEO’s employment by B+L without “cause” or the NEO’s resignation for “good reason” (as described below), in each case within one-year following B+L’s appointment of Mr. Papa’s successor (a “qualifying termination”), then (i) the Former B+L NEO will be eligible to receive a cash severance payment equal to two times the sum of his or her annual base salary and annual target incentive award, plus payment of his or her annual cash bonus award for the year of termination (based on actual achievement of applicable performance goals and prorated based on the number of days employed during the year prior to termination) and (ii) with respect to the B+L Founder Awards, (a) the B+L Founder RSUs will vest and be settled on a pro-rata basis (based on his or her period of service prior to the termination date relative to the original three year vesting period associated with such awards), but the shares received upon settlement will be nontransferable until the earliest to occur of (A) the date BHC completes the spin-off distribution of B+L, (B) a “change in control” of B+L, (C) the date the Board determines that BHC will no longer pursue the spin-off distribution of the B+L (a “Strategy Change”) and (D) the two-year anniversary of the Former B+L NEO’s termination of employment (such applicable date, the “Unrestricted Date”) and (b) the B+L Founder Stock Options will vest and become exercisable on the Unrestricted Date on a pro-rata basis (based on his or her period of service prior to the date of his or her termination of employment relative to the original three year vesting period associated with such awards), and the B+L Founder Stock Options will be exercisable for two years following the later of the
TABLE OF CONTENTS
Unrestricted Date and the date of his or her termination of employment. Solely for purposes of the above-described severance benefits, “good reason” is defined pursuant to the terms of the executive’s existing employment agreement with B+L, except that a Strategy Change was added as an additional event giving rise to “good reason”. All other terms and conditions under each Former B+L NEO’s employment agreement with B+L remain unchanged.
In addition, each of Former B+L NEOs (other than Mr. Papa) was granted a one-time award of 35,000 RSUs under the Retention Program (the “B+L Retention RSU Grant”) pursuant to B+L’s 2022 Omnibus Incentive Plan. The B+L Retention RSU Grant will generally vest in one-third installments on each of the first three anniversaries of the grant date subject to the NEO’s continuous employment with B+L (except the B+L Retention RSU Grant will fully vest earlier upon the Former B+L NEO’s termination of employment due to death, disability, involuntary termination without “cause” or resignation for “good reason”).
BHC’s Matching Share Program
As previously disclosed, as of August 1, 2018,
Senior Leaders, including our NEOs,
becameare eligible to participate in
the Bausch Health CompaniesBHC’s Matching Share Program. Under this program,
sharesCommon Shares purchased on the open market by recipients are matched with one Matching
Restricted Stock UnitRSU (“MRSU”) issued under the 2014 Plan. Generally, MRSUs granted for a period of three years may not exceed the value of 50% of the sum of the NEO’s annual base salary and target annual cash bonus, less any shares sold within the past six months (excluding any shares sold to cover a tax obligation resulting from a vesting event).
Subject to the provisions of the 2014 Plan and applicable award agreements, MRSUs vestpro-rata over a three-year period, provided that the recipient is employed through the applicable vesting dates. Vesting ceases upon a termination of employment (except in limited circumstances), and any MRSUs that do not become vested prior to the recipient’s termination of employment or that do not become vested according to the provisions of the terms of the award are forfeited.
In 2019, as previously disclosed, Messrs. Papa and HumphriesThe Former B+L NEOs were no longer eligible to participate in the plan effective at the time of the B+L IPO. None of our NEOs or the Former B+L NEOs purchased shares under this program and received MRSU grants, as shown in the Grants of Plan-Based Awards Table beginning on page 58.
2020 Long-Term Incentive Program Design
As mentioned above, the Talent and Compensation Committee has approved continuing the current, balanced portfolio approach for 2020, consistent with shareholder feedback regarding long-term orientation and the alignment of shareholder interests and NEO long-term compensation. The ROTC and TSR metrics will continue to be equally weighted 50% each for all NEOs, including the CEO, in order to align the approach across the senior executive team.
during 2022.
Retirement and Welfare Benefits
The retirement and welfare benefit programs are a necessary element of the total compensation package to ensure a competitive position in attracting and maintaining a committed workforce. Participation in these programs is not tied to performance.
Our specific contribution levels to these programs are adjusted annually to maintain a competitive position while considering costs.
U.S. Retirement Savings Plan — All employees of BHC and B+L in the United States, including our NEOs in the U.S., are eligible to participate in atax-qualified retirement savings plan (the “Retirement Savings Plan”) under Section 401(k) of the Internal Revenue Code (“Code”).Code. Eligible employees are able to contribute to the Retirement Savings Plan, on abefore-tax basis, up to 75% of their eligible compensation, subject to the limit prescribed by the Code. In 2019,2022, we matched 100% of the first 3% of pay and 50% on the next 3% of pay that is contributed to the Retirement Savings Plan. All employee contributions to the Retirement Savings Plan are fully vested upon contribution; matching contributions vest ratably over three years.
Canadian Retirement Savings Plan — All employees in Canada, including Ms. Carson, are eligible to participate in a tax-qualified retirement savings plan under The Canada Revenue Agency (the “Canadian Retirement Savings Plan”). Eligible employees are able to contribute to the Canadian Retirement Savings Plan, on a before-tax basis, up to 85% of their eligible compensation subject to the limits prescribed by the Canada Revenue Agency. In 2022 BHC made a base contribution of 3% of base salary and bonus and we could match 100% of the employee’s contribution up to a maximum of 2% of base salary and bonus that is contributed to the Canadian Retirement Savings Plan. All employee contributions to the Canadian Retirement Savings Plan are fully vested upon contribution.
Welfare Plans — Our executives are also eligible to participate in our broad-based welfare benefits plans (including medical, dental, vision, life insurance and disability plans) upon the same terms and conditions as other employees.
Executive Benefits and Perquisites
We provide our NEOs with limited perquisites and other personal benefits that the
BHC Talent and Compensation Committee believes are reasonable and consistent with our overall compensation program to better attract and retain superior employees for key positions. The Talent and Compensation Committee periodically reviews the levels of perquisites and other personal benefits provided to our NEOs. The Talent and Compensation Committee intends to maintain only those perquisites and other benefits that it determines to be necessary components of total compensation and that are not inconsistent with shareholder interests.
The
BHC Talent and Compensation Committee
permits the Chairman and CEOpermitted Mr. Papa to use
ourBHC’s aircraft for his business travel and, on a limited basis, for personal travel up through the time of the B+L IPO. Certain travel for immediate family members was also permitted, as reported on page 60 in footnote 5(B) to the Summary Compensation Table. We did not gross up the income tax incurred by Mr. Papa resulting from his personal use of the aircraft. The BHC Talent and Compensation Committee believes that making the company aircraft available to Mr. Papa allowed him to serve shareholder interests by efficiently and securely conducting business during and when traveling.Following the B+L IPO, the B+L TCC also permitted Mr. Papa to use the company aircraft for his business travel and, on a limited basis, for personal travel. Certain travel for immediate family members is also permitted, as reported on page
5760 in footnote
45(B) to the Summary Compensation Table.
We doB+L does not gross up the income tax incurred by Mr. Papa resulting from his personal use of
ourthe aircraft.
The Talent and Compensation Committee believes that making our aircraft available to our Chairman and CEO allows him to serve shareholder interests by efficiently and securely conducting business during and when traveling.As previously disclosed, the Talent and Compensation Committee introduced an executive physical program in 2019 for our NEOs. The Talent and Compensation Committee believes that this program aligns with its philosophy regarding perquisites by providing our NEOs with a convenient program to annually monitor their health, while allowing them to maintain their focus onday-to-day business operations and our ongoing transformation.
Attributed costs of the personal benefits described above for our NEOs for the fiscal year ended December 31, 20192022 are included in the column entitled “All Other Compensation” of the Summary Compensation Table on page 56.
59.
Arrangements with Our NEOS
Mr.
Papa’sAppio’s Employment Agreement
In
April 2016,March 2017, we entered into an employment agreement with Mr.
Papa.Appio, which was amended in connection with his appointment to CEO effective as of the B+L IPO (the “Appio Agreement”). The initial
three-year term of
Mr. Papa’s agreementthe Appio Agreement commenced on
May 2, 2016 and continues until the fifth anniversary of the commencement date. Beginning at the expiration of the initialSeptember 1, 2021. The term
the term will
continue to automatically renew for successive
one-year periods unless either party gives notice of
non-renewal.Cash Compensation
Pursuant to
his agreement,the Appio Agreement, Mr.
PapaAppio receives
aan initial annual base salary
of $1,000,000 and a target annual incentive opportunity equal to
150%120% of his base salary, with a maximum annual incentive opportunity equal to 200% of his annual target incentive.
Equity Compensation
In connection with entering into his employment agreement,promotion to CEO, Mr. PapaAppio received (i) 373,367 RSUs and (ii) an option to acquire Common Sharesinitial equity grant with a grant-date fair value equal to $10,000,000 at an exercise price equal to the fair marketaggregate approved value of our Common Shares on$5,000,000, 50% in the dateform of grant. Additionally, pursuant to his employment agreement, Mr. Papa was required to purchase $5,000,000 worthPSUs and 50% in the form of Common Shares by no later than the first anniversary of his commencement date. Mr. Papa satisfied this obligation.
RSUs. As provided for under the RSU award agreement, 50% (186,684) of these RSUs vested on May 2, 2018, the second anniversary of his commencement date, based onpre-determined individual goals relating to (i) succession planning, (ii) government relations, (iii) employee relations, (iv) customer relations and (v) shareholder relations being achieved. The remaining 50% will vest on the fourth anniversary of his commencement date subject to Mr. Papa’s continued employment through the vesting date.
Options. The options vest 25% on each of the first four anniversaries following the commencement date, subject to Mr. Papa’s continued employment with the Company through the applicable vesting date.
FutureRSUs. Ongoing equity grants for Mr. Papa are at the sole discretion of the Board or theBHC Talent and Compensation Committee.
Termination
Mr. Appio’s expatriate assignment from New Jersey to China ended as of
EmploymentDecember 31, 2021, in connection with his appointment as CEO effective upon the B+L IPO; however, due to the continued COVID related lockdowns in China, BHC continued to maintain Mr. Appio’s residence in China and accordingly, Mr. Appio was liable for taxes in China. For 2022, BHC continued to provide for (i) Mr. Appio’s Company-paid housing in China; (ii) tax equalization, with Mr. Appio responsible for actual taxes due in the United States and BHC responsible for any taxes due in non-U.S. jurisdictions in which Mr. Appio earns taxable income; and (iii) tax preparation services. These benefits are reported in the “All Other Compensation” column of the Summary Compensation Table on page 59, including reimbursement related to the taxes on imputed income for these expatriate assignment benefits, as described on page 60 in footnote 5(D) to such table.
The consequences of Mr.
Papa’sAppio’s termination of employment, whether or not in connection with a “change in control,” are described in “Potential Payments Upon Termination or Change in Control,” beginning on page
64.Holding Requirements
Pursuant to his employment agreement, 66.
Mr. Papa is restricted from selling, assigning, transferring or otherwise disposing of Common Shares acquired pursuant to equity awards granted to him in accordance with the employment agreement (net of any shares sold or withheld by us in payment of the exercise price or tax withholding obligations) until the fourth anniversary of his commencement date (or, if later, in the case of all of Mr. Papa’s options, the first anniversary of the exercise date or vesting date and, in the case of 50% of Mr. Papa’s options, the second anniversary of the exercise date or vesting date). In addition, Mr. Papa is restricted from selling, assigning, transferring or otherwise disposing of Common Shares he purchases pursuant
to the employment agreement until the fourth anniversary of the purchase date. Notwithstanding the foregoing, all sales restrictions will lapse upon a “change of control” (excluding any change of control following which Mr. Papa serves as the chief executive officer of the ultimate parent company), Mr. Papa’s death, disability and involuntary termination of employment without “cause” or for “good reason,” or, in the case of the purchased shares, Mr. Papa’s voluntary termination of employment.
Restrictive Covenants
Mr. PapaAppio is subject to customary restrictive covenants, includingnon-competition andnon-solicitation covenants during his employment and for two years following a termination of employment for any reason.
Mr.
Herendeen’sVadaketh’s Employment Agreement
In August 2016,October 2021, we entered into an employment agreement with Mr. Herendeen.Vadaketh (the “Vadaketh Agreement”). The initial three-year term of Mr. Herendeen’sVadaketh’s agreement commenced on August 22, 2016January 3, 2022 and automatically renewed on August 22, 2019. Thecontinues until the third anniversary of the date of the commencement of his employment. Beginning at the expiration of the initial term, the Vadaketh Agreement will continue to automatically renew for successiveone-year periods unless either party gives notice ofnon-renewal.
TABLE OF CONTENTS
Pursuant to
his agreement,the Vadaketh Agreement, Mr.
HerendeenVadaketh receives
aan annual base salary
of $600,000 and a target annual incentive opportunity equal to
120%60% of his base salary, with a maximum annual incentive opportunity equal to 200% of his annual target incentive.
In connection with entering into the Vadaketh Agreement, Mr. Vadaketh received a one-time cash sign-on bonus of $500,000 and a one-time initial equity grant with an aggregate value of $3,000,000, 50% in the form of RSUs and 50% in the form of stock options. Ongoing equity grants are at the sole discretion of the
BHC Talent and Compensation Committee.
The consequences of Mr.
Herendeen’sVadaketh’s termination of employment, whether or not in connection with a “change in control,” are described in “Potential Payments Upon Termination or Change in Control,” beginning on page
64.66.
Mr. HerendeenVadaketh is subject to customary restrictive covenants, includingnon-competition andnon-solicitation covenants during his employment and for one year following a termination of employment for any reason.
Ms. Carson’s Employment Agreement
In December 2021, we entered into an employment agreement with Ms. Carson in connection with her appointment as the General Counsel of BHC effective as of the B+L IPO (the “Carson Agreement”).
Pursuant to the Carson Agreement, Ms. Carson receives an annual base salary of $665,000 CAD and a target annual incentive opportunity equal to 60% of her base salary, with a maximum annual incentive opportunity equal to 200% of her annual target incentive. In connection with entering into the Carson Agreement, Ms. Carson received a one-time equity grant with an aggregate value of $250,000 in the form of RSUs. Ongoing equity grants are at the sole discretion of the BHC Talent and Compensation Committee.
The consequences of Ms. Carson’s termination of employment, whether or not in connection with a “change in control,” are described in “Potential Payments Upon Termination or Change in Control,” beginning on page 66. Ms. Carson is subject to customary restrictive covenants, including non-competition and non-solicitation covenants during her employment and for one year following termination of employment for any reason.
Mr. Spurr’s Employment Agreement and Separation Agreement In May 2020, we entered into an employment agreement with Mr. Spurr, which was amended in connection with his appointment as President, U.S. Businesses in 2021 (as amended, the “Spurr Agreement”). The initial three-year term of the Spurr Agreement commenced September 1, 2021. The term would automatically renew for successive one-year periods unless either party gives notice of non-renewal. Pursuant to the Spurr Agreement, Mr. Spurr receives an annual base salary of $700,000 and a target annual incentive opportunity equal to 80% of his base salary, with a maximum annual incentive opportunity equal to 200% of his annual target incentive. In connection with his promotion to President, U.S. Businesses, Mr. Spurr received an equity grant with an aggregate approved value of $500,000, 50% in the form of RSUs and 50% in the form of stock options. Ongoing equity grants are at the sole discretion of the Talent and Compensation Committee.
On June 1, 2022, we entered into a separation agreement with Mr. Spurr in connection with his termination of employment by BHC without cause due to BHC’s elimination of the position of President, U.S. Businesses on June 1, 2022 (the “Spurr Separation Agreement”). In connection with his termination of employment, subject to his execution and nonrevocation of a release of claims in favor of BHC and his continued compliance with any restrictive covenants to which he is subject, Mr. Spurr was entitled to (i) a lump sum payment equal to the product of (x) 1.5 multiplied by (y) the sum of Mr. Spurr’s annual base salary plus his target annual bonus, (ii) a prorated portion of his annual bonus for the year in which his termination of employment occurred and (iii) continued coverage under BHC’s health, medical, dental and vision policies at the active employee rates for a period of one year following his termination of employment. In addition, Mr. Spurr was also entitled to receive the second installment of his B+L Separation Bonus in accordance with its existing terms.
Mr. Papa’s Employment Agreement and Separation Agreement In April 2016, BHC entered into an employment agreement with Mr. Papa, which was assigned to B+L upon the closing of the B+L IPO (the “Papa Agreement”). The initial term of the Papa Agreement commenced on May 2, 2016, and continued until the fifth anniversary of the commencement date. Beginning at the expiration of the initial term, the term automatically renewed for successive one-year periods.
Pursuant to the Papa Agreement, Mr. Papa received an annual base salary of $1,500,000 and a target annual incentive opportunity equal to 150% of his base salary, with a maximum annual incentive opportunity equal to 200% of his
TABLE OF CONTENTS
annual target incentive. Ongoing equity grants for Mr. Papa were at the sole discretion of the Board or the Talent and Compensation Committee (in each case, since the B+L IPO date, the Board of Directors of B+L and the B+L TCC).
On July 20, 2022, B+L announced that the Board of Directors of B+L begun a search for a new Chief Executive Officer. On February 15, 2023, B+L announced the appointment of Mr. Saunders as Chief Executive Officer of B+L, effective March 6, 2023. He replaced Mr. Papa, who stepped down from his role as Chief Executive Officer on March 6, 2023. Mr. Papa continued to serve as Chief Executive Officer until such date (March 6, 2023) (such period, the “Interim Period”). During the Interim Period, Mr. Papa continued to receive the same compensation and benefits and remained eligible to continue to vest in his equity awards. In connection with the foregoing, B+L and Mr. Papa entered into a separation agreement which was approved by the B+L TCC (and not the BHC Talent and Compensation Committee) effective as of July 19, 2022 (the “Papa Separation Agreement”), which provided for the terms of Mr. Papa’s separation from B+L following the Interim Period. Consistent with the Papa Agreement, the Papa Separation Agreement provided for a lump sum cash payment equal to two times the sum of Mr. Papa’s current base salary and target annual bonus, earned but unpaid annual bonus for the year prior to his termination date, a pro-rata annual bonus based on actual performance, and continued health benefits for two years at active employee rates. The treatment of Mr. Papa’s equity awards would be consistent with their terms for a termination due to retirement and, for Mr. Papa’s B+L program separation PSUs, by B+L without cause, except that Mr. Papa’s B+L Founder RSUs would vest upon his termination of service date (prorated based on his period of service relative to the original three year vesting period associated with such grants), but the Common Shares received upon settlement would remain fully restricted and nontransferable until the Unrestricted Date, and the B+L Founder Stock Options would remain eligible to vest (prorated based on his period of service relative to the original three year vesting period associated with such grants) upon the Unrestricted Date and exercisable for two years following the Unrestricted Date. B+L would reimburse Mr. Papa for an amount up to twenty thousand dollars in legal fees incurred by Mr. Papa in connection with the negotiation of the Papa Separation Agreement.
On December 22, 2022, B+L announced that B+L and Mr. Papa entered into the Amended and Restated Separation Agreement (the “A&R Papa Separation Agreement”) which was approved by the B+L TCC (and not the BHC Talent and Compensation Committee), pursuant to which Mr. Papa agreed to continue serving as Chief Executive Officer until at least March 4, 2023, and lasting until such date as the Board determines in its discretion or his successor is appointed, but no later than June 30, 2023. As noted above, on February 15, 2023, B+L announced the appointment of Mr. Saunders as CEO of B+L, effective March 6, 2023. In addition, pursuant to the A&R Papa Separation Agreement: (i) Mr. Papa’s severance benefits in respect of his 2023 prorated annual bonus would be, in lieu of an annual bonus based on actual performance that is prorated based on the date of his termination, an amount equal to $1,200,000, representing his target annual bonus that is prorated by fifty percent, and payable upon his termination date; and (ii) on Mr. Papa’s termination date, in lieu of prorated vesting, partial vesting of a set number of his Founder Awards, in the amount of (a) 315,592 of his Founder RSUs that would accelerate and vest, but the shares received upon settlement would still remain fully restricted and nontransferable until Unrestricted Date, and (b) 1,248,496 of his B+L Founder Stock Options that would remain eligible to vest upon the Unrestricted Date and remain exercisable for two years following the Unrestricted Date.
All of the foregoing is conditioned on Mr. Papa’s execution and nonrevocation of a release of claims upon his termination of employment and continued compliance with his restrictive covenants, which include non-competition, non-solicitation, confidentiality and non-disparagement covenants.
The consequences of Mr. Papa’s termination of employment had he separated with B+L on December 31, 2022, whether or not in connection with a “change in control,” are described in “Potential Payments Upon Termination or Change in Control,” beginning on page 66. As of the date of this Proxy Statement, Mr. Papa is no longer an employee of B+L or BHC. Mr. Eldessouky’s Employment Agreement
On June 1, 2021, we entered into an employment agreement with Mr. Eldessouky upon his appointment as CFO, which was assigned to B+L upon the closing of the B+L IPO (the “Eldessouky Agreement”). The initial three-year term of the Eldessouky Agreement commenced on June 1, 2021. The term will automatically renew for successive one-year periods unless either party gives notice of non-renewal.
Pursuant to his agreement, Mr. Eldessouky receives an annual base salary of $700,000 and a target annual incentive opportunity equal to 80% of his base salary, with a maximum annual incentive opportunity equal to 200% of his annual target incentive. In connection with his promotion to Chief Financial Officer, Mr. Eldessouky received an
TABLE OF CONTENTS
equity grant with an aggregate value of $2,000,000, 50% in the form of RSUs and 50% in the form of stock options. Ongoing equity grants are at the sole discretion of the B+L Talent and Compensation Committee.
The consequences of Mr. Eldessouky’s termination of employment, whether or not in connection with a “change in control,” are described in “Potential Payments Upon Termination or Change in Control,” beginning on page 66. Mr. Eldessouky is subject to customary restrictive covenants, including non-competition and non-solicitation covenants during his employment and for one year following termination of employment for any reason.
Ms. Ackermann’s Employment Agreement
In
On July
8, 2016, we entered into an employment agreement with Ms.
Ackermann. Ms. Ackermann’s agreementAckermann, which was assigned to B+L upon, the closing of the B+L IPO (the “Ackermann Agreement”). The Ackermann Agreement commenced on August 8, 2016.
Pursuant to her agreement, Ms. Ackermann receives
aan annual base salary
of $600,000 and a target annual incentive opportunity equal to 80% of her base salary, with a maximum annual incentive opportunity equal to 200% of her annual target incentive. Ongoing equity grants are at the sole discretion of the Talent and Compensation Committee.
The consequences of Ms. Ackermann’s termination of employment, whether or not in connection with a “change in control,” are described in “Potential Payments Upon Termination or Change in Control,” beginning on page
64.66.
Ms. Ackermann is subject to customary restrictive covenants, including
non-competition and
non-solicitation covenants during her employment and for one year following termination of employment for any reason.
Mr. Appio’s Employment Agreement
In March 2017, we entered into an employment agreement with Mr. Appio. The initial three-year term of Mr. Appio’s agreement commenced on August 17, 2016 and automatically renewed on August 17, 2019. The term will continue to automatically renew for successiveone-year periods unless either party gives notice ofnon-renewal.
Pursuant to his agreement, Mr. Appio receives a base salary and a target annual incentive opportunity equal to 80% of his base salary, with a maximum annual incentive opportunity equal to 200% of his annual target incentive. Ongoing equity grants are at the sole discretion of the Talent and Compensation Committee.
Mr. Appio is on an expatriate assignment from New Jersey to China. As a result, Mr. Appio receives (i) Company-paid housing in China, (ii) tax equalization, with Mr. Appio responsible for actual taxes due in the United States and the Company responsible for any taxes due innon-U.S. jurisdictions in which Mr. Appio earns taxable income, and (iii) tax preparation services. These benefits are reported in the “All Other Compensation” column of the Summary Compensation Table on page 56, including reimbursement related to the taxes on imputed income for these expatriate assignment benefits, as described on page 57 in footnote 4 to such table.
The consequences of Mr. Appio’s termination of employment, whether or not in connection with a “change in control,” are described in “Potential Payments Upon Termination or Change in Control,” beginning on page 64.
Mr. Appio is subject to customary restrictive covenants, includingnon-competition andnon-solicitation covenants during his employment and for one year following termination of employment for any reason.
Mr. Humphries’ Employment Agreement
In December 2016, we entered into an employment agreement with Mr. Humphries. The initial three-year term of Mr. Humphries’ agreement commenced on January 1, 2017 and automatically renewed on January 1, 2020. The term will continue to automatically renew for successiveone-year periods unless either party gives notice ofnon-renewal.
Pursuant to his agreement, Mr. Humphries receives a base salary and a target annual incentive opportunity equal to 80% of his base salary, with a maximum annual incentive opportunity equal to 200% of his annual target incentive. Ongoing equity grants are at the sole discretion of the Talent and Compensation Committee.
The consequences of Mr. Humphries’ termination of employment, whether or not in connection with a “change in control,” are described in “Potential Payments Upon Termination or Change in Control,” starting on page 64.
Mr. Humphries is subject to customary restrictive covenants, includingnon-competition andnon-solicitation covenants during his employment and for one year following termination of employment for any reason.
Other Compensation Governance Practices
Share Ownership Guidelines
The Talent and Compensation Committee believes that purchasing and holding Common Shares with one’s own money should create an incentive to manage the Company prudently. When our CEO was hired in 2016, he was required to purchase at least $5,000,000 worth of Common Shares by no later than the first anniversary of his commencement date, which he did.
The Talent and Compensation Committee has also established minimum share ownership requirements for our NEOs. Our CEO is required to hold Common Shares with a value equivalent to 6 times his base salary, and our other NEOs are required to hold Common Shares with a value equivalent to 3 times their base salary. Common Shares and unvested RSUs are included in the calculation of share ownership. NEOs have five years to achieve these guidelines and must retain 50% of their net shares vesting until this requirement is met. Mr. Papa, Mr. Herendeen, Mr.Messrs. Appio and Mr. HumphriesVadaketh and Ms. Carson have satisfied this requirement, and Ms. Ackermann is on track to achieve these guidelines within the required five-year period.requirement.
Anti-Pledging, Anti-Hedging and Clawback Policies
In 2014, we
We have adopted Anti-Hedging, Anti-Pledging, and recoupment (“Clawback”) Policies. The Anti-Hedging Policy generally prohibits officers, directors and
designated employees from engaging in new hedging or monetization transactions with
Company stock.Common Shares. This prohibition prevents officers, directors and
designated employees from owning securities without the full risks and rewards of ownership and preserves the common interests and objectives of
the CompanyBHC and its officers, directors and
employees.Designated Employees. The Anti-Pledging Policy generally prohibits officers, directors and
employeesDesignated Employees from holding our securities in a margin account where the securities are subject to margin sales or pledging our securities as loan collateral.
In February 2017, the Company amended its
The Clawback Policy
to provideprovides that the Board may exercise its discretion to require any employee who receives equity-based compensation to reimburse bonus, incentive or equity-based compensation awarded to such employees beginning in 2017 in the event of:
A material restatement or adjustment to our financial statements as a result of such employee’s knowing or intentional fraudulent or illegal misconduct; or
Such employee’s detrimental conduct that has caused material financial, operational or reputational harm to us, including (i) acts of fraud or dishonesty during the course of employment; (ii) improper conduct that causes material harm to us or our affiliates; (iii) improper disclosure of confidential material that causes material harm to us or our affiliates; (iv) the commission of a felony or crime of comparable magnitude that subjectsubjects us to material reputational harm; (v) commission of an act or omission that causes a violation of federal or other applicable securities law; or (vi) gross negligence in exercising supervisory authority.
Following a material restatement or adjustment of our financial statements, the compensation subject to clawback is the amount in excess of what would have been awarded based on the corrected performance measures, calculated on
TABLE OF CONTENTS
a
pre-tax basis. If the financial reporting measure applicable to the incentive or equity-based compensation is a stock price or TSR measure, the Board has broad authority to estimate the effect of the financial restatement on our share price in calculating recoverable compensation. In the case of detrimental conduct, the Board has the ability to recover all incentive compensation.
We may not indemnify any covered employee, directly or indirectly, for any losses incurred in connection with the recovery of any compensation under the policy, including through the payment of insurance premiums,gross-up payments or supplemental payments. The policy will continue to apply to covered employees even after they cease to be employed by us.
Compensation Risk Determination
The Talent and Compensation Committee assesses the potential risks relating to our compensation policies and practices for our employees, including those related to our executive compensation programs. Periodically, the
BHC Talent and Compensation Committee reviews and discusses with management the relationship between
the Company’sBHC’s compensation policies and practices and its risk management, including the extent to which those policies and practices create risks for
the Company,BHC, to ensure that such policies and practices support not only economic performance, but also compliance with our risk management objectives,
and to ensure that they do not encourage excessive or unnecessary risk-taking and are not reasonably likely to have a material adverse effect on
BHC. For our 2022 compensation programs, the
Company.BHC Talent and Compensation Committee determined that its compensation policies and practices appropriately comply with BHC’s risk management objectives and do not encourage excessive or unnecessary risk-taking.
Tax and Accounting Implications Tax Considerations of Our Executive Compensation
Section 162(m) of the Code generally limits the tax deductibility of annual compensation paid by public companies for certain executive officers to $1 million.
The Talent and Compensation Committee may continue to approve compensation that will not be fully-deductible in order to ensure competitive levels of total compensation for its executive officers.
Accounting for Our Stock-Based Compensation
We account for stock-based payments, including grants under each of our equity compensation plans in accordance with the requirements of FASB ASC Topic 718.
APPOINTMENT OF
AUDITORSAUDITOR
The Audit and Risk Committee recommended to the Board that PwC be put before the shareholders at the
Annual Meeting for appointment as our
auditorsauditor to serve until the close of the
20212024 Annual Meeting of Shareholders. The Board has accepted and endorsed this recommendation.
Under the BCBCA, at each annual meeting of shareholders, shareholders of a corporation appoint, by a majority of votes cast in respect of that proposal, an auditor to hold office until the close of the next annual meeting of shareholders. Notwithstanding the foregoing, if an auditor is not appointed at a meeting of shareholders, the incumbent auditor continues in office until a successor is appointed. PwC currently serves as auditor of the Company and, therefore, shall continue to serve as the Company’s auditor in the event that this proposal is not adopted by the shareholders.
Representatives of PwC will be present at the
Annual Meeting and will have an opportunity to make a statement if desired. Further, the representatives will be available to respond to appropriate shareholder questions
directed to him or her.submitted in the manner described under “Attending the Meeting — How do I ask a question at the Meeting?” on page 3.
A simple majority of votes cast at the Annual Meeting, whether
in person,virtually, or by proxy or otherwise, will be required to appoint PwC. You may either vote “For” the appointment of PwC or “Withhold” your vote with respect to such appointment. If you vote “For” the appointment of PwC, your Common Shares will be voted accordingly. If you select “Withhold” with respect to the appointment of PwC, your vote will not be counted as a vote cast for the purposes of appointing PwC.
As a shareholder of the Company, you are invited to vote with respect to the appointment of PwC as the
auditorsauditor for the Company to hold office until the close of the
20212024 Annual Meeting of Shareholders and to authorize the Board to fix the
auditors’auditor’s remuneration through the following resolution:
Resolved, that the shareholders hereby appoint PwC as
auditorsauditor for the Company to hold office until the close of the
20212024 Annual Meeting of Shareholders and the Board of Directors of the Company is hereby authorized to fix the
auditors’auditor’s remuneration.
The Board recommends that the shareholders vote FOR Proposal No. 4.5
TABLE OF CONTENTS
For fiscal years ended December 31,
20192022 and December 31,
2018,2021, PwC was our appointed auditor. Principal Auditor fee includes fees paid to PwC and affiliated PwC network firms through the world. The table below summarizes the fees (expressed in thousands of U.S. Dollars) paid by the Company and its consolidated subsidiaries to PwC during
20192022 and
2018. | | | | | | | | | | | | | | | | |
| | | 2019 | | | 2018 | |
| | | ($) | | | (%) | | | ($) | | | (%) | |
Audit Fees | | | 14,720 | | | | 84 | | | | 14,700 | | | | 76 | |
Audit-Related Fees(1) | | | 437 | | | | 3 | | | | 1,910 | | | | 10 | |
Tax Fees(2) | | | 2,298 | | | | 13 | | | | 2,495 | | | | 13 | |
All Other Fees(3) | | | 28 | | | | * | | | | 265 | | | | 1 | |
| | | | | | | | | | | | | | | | |
Total | | | 17,468 | | | | 100 | | | | 19,370 | | | | 100 | |
| | | | | | | | | | | | | | | | |
Notes:
2021.Audit Fees | | | 19,581 | | | 81 | | | 14,138 | | | 39 |
Audit-Related Fees(1) | | | 2,660 | | | 11 | | | 20,535 | | | 57 |
Tax Fees(2) | | | 1,924 | | | 8 | | | 1,598 | | | 4 |
All Other Fees(3) | | | 48 | | | * | | | 52 | | | * |
Total | | | 24,213 | | | 100 | | | 36,323 | | | 100 |
(1)
| Audit-related services are generallywere primarily related to the audits of the carve-out financials of B+L, the related B+L IPO filings and other strategic alternatives. Audit-related services also include the audits of financial statements prepared for special purposes, assignments relating to due diligence investigations, andpre-implementation review procedures and employee benefit plan audits. |
(2)
| Tax services are professional services rendered by our auditorsauditor for tax compliance and tax consulting primarily related to international transfer pricing. |
(3)
| All other fees are amounts paid for miscellaneous permissible products and services. |
The aggregate fees
billed for professional services rendered by PwC for the fiscal years ended December 31,
2019 and December 31, 2018 for2022 includes the audit of
ourthe consolidated
annualBHC financial statements and the consolidated B+L financial statements included in the BHC and B+L Form 10-Ks, respectively, and reviews of the BHC consolidated interim financial statements and B+L consolidated interim financial statements included in the respective Form 10-Qs. The aggregate fees for professional services rendered by PwC for the fiscal year ended December 31, 2021 includes the audit of the consolidated BHC financial statements and the reviews of the
BHC consolidated interim financial statements included in our
Forms10-Q,Form 10-K and Form 10-Qs. Audit fees for both years also includes the audits of our internal control over financial reporting with the objective of obtaining reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects,
services related to our financing activities, such as comfort letters and consents, or servicesthe audits that are normally provided by PwC in connection with statutory and regulatory filings
or engagements in 2019 and
2018,for services billed related to our financing activities, such as comfort letters and consents. Audit fees during the fiscal years ended December 31, 2022 and December 31, 2021 were approximately
$14.7$19.6 million and
$14.7$14.1 million, respectively.
The Audit and Risk Committee believes that the provision of the
non-audit services referenced above is compatible with maintaining PwC’s independence.
Audit-related services are generally related to audits of financial statements prepared for special purposes, employee benefit plan audits,
system pre-implementation review procedures and assignments relating to due diligence investigations and procedures.
Audit-related services primarily related to the aggregated fees billed in the respective calendar year for the special purpose financial statement audits for the years ended December 31, 2018 through December 31, 2022, including quarterly financial statement reviews for the applicable periods, and registration statement filings, consents, due diligence procedures and comfort letters associated with our eye-health and medical aesthetics businesses.
The aggregate fees billed for audit-related services rendered by PwC during the fiscal year ended December 31, 20192022 and December 31, 20182021 that are traditionally performed by the principal accountant and are reasonably related to the performance of the audit or review of the Company’s financial statements and are not included in “Audit Fees” above were approximately $0.4$2.6 million and $1.9$20.5 million, respectively.
TABLE OF CONTENTS
Tax services are professional services rendered by our
auditorsauditor for tax compliance and tax consulting primarily related to international transfer pricing. The aggregate fees billed for tax services rendered by PwC during the fiscal years ended December 31,
20192022 and December 31,
20182021 were approximately
$2.3$1.9 million and
$2.5$1.6 million, respectively.
There were insignificant amounts
paidbilled for miscellaneous permissible products and services as reported above to PwC during the fiscal years ended December 31,
20192022 and December 31,
2018.2021. PwC did not provide any financial information systems design or implementation services to the Company during
20192022 or
2018.2021.
All fees described above were approved by the Audit and Risk Committee of our Board under its
pre-approval policy.
Audit and Risk Committee’s
Pre-Approval of
Non-Audit Services
The Audit and Risk Committee chooses and appoints (through nomination to the Company’s shareholders) the Company’s auditorsauditor to audit our financial statements. The Audit and Risk Committeepre-approvesnon-audit pre-approves non-audit services that may be provided to the Company and its subsidiaries by its auditors.auditor. The Audit and Risk Committee
is not permitted to approve any engagement of the Company’s auditorsauditor if the services to be performed either fall into a category of services that are not permitted by applicable law or the services would be inconsistent with maintaining the auditors’auditor’s independence.
TABLE OF CONTENTS
SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
FOR THE
20212024 ANNUAL MEETING OF SHAREHOLDERS
A shareholder who is entitled to vote at the
20212024 Annual Meeting of Shareholders may raise a proposal for consideration at such Annual Meeting of Shareholders. We will consider such proposal for inclusion in the proxy materials for the
20212024 Annual Meeting only if our Corporate Secretary receives such proposal (at 2150 Saint
ElzearElzéar Blvd. West, Laval,
Quebec,Québec, H7L 4A8, Canada, or by facsimile
514-744-6272): (i) submitted pursuant to Rule
14a-8 of
the General Rules and Regulations promulgated under the Exchange Act, on or before
November 16, 2020,December 8, 2023, or (ii) submitted pursuant to Part 5, Division 7 of the BCBCA on or before
January 28, 2021.February 16, 2023. The use of certified mail, return receipt, is advised. In addition,
in the event the Company does not receive a
shareholder proposal
submitted pursuant to Rule 14a-8 can be submitted by
January 28, 2021, the proxysending an e-mail to
be solicited by the Board for the 2021 Annual Meeting of Shareholders will confer discretionary authority on the holders of the proxy to vote the Common Shares if the proposal is presented at the 2021 Annual Meeting of Shareholders without any discussion of the proposal in the proxy materials for that meeting.ir@bauschhealth.com.
If the date of the
20212024 Annual Meeting of Shareholders is advanced or delayed more than 30 days from the date of the Annual Meeting, shareholder proposals intended to be included in the proxy statement for the
20212024 Annual Meeting of Shareholders must be received by us within a reasonable time before we begin to print and mail the proxy statement, or provide a notice to you with respect to accessing such proxy statement on the
Internet,internet, for the
20212024 Annual Meeting of Shareholders.
The Company’s Articles provide that shareholders seeking to nominate candidates for election as directors must provide timely notice in writing to the Company’s secretary by personal delivery or facsimile transmission at the number shown on the Company’s issuer profile on SEDAR at
www.sedar.com. The purpose of this advance notice requirement is to: (i) inform the Company of nominees for election at a shareholder meeting proposed by a shareholder sufficiently in advance of such meeting; (ii) provide an opportunity to inform all shareholders of any potential proxy contest and proposed director nominees sufficiently in advance of the applicable meeting; and (iii) enable the Board to make informed recommendations or present alternatives to shareholders.
To be timely, a shareholder’s notice must be received by the Company: (i) in the case of an annual general meeting, not later than the close of business on the 50th day before the meeting date or, if the first public announcement of the date of such meeting is less than 60 days prior to the meeting date, the close of business on the 10th day following the day on which public announcement of the date of such annual general meeting was first made by the Company; and (ii) in the case of a special meeting called for the purpose of electing directors, not later than the close of business on the 15th day following the day on which public announcement of the date of the special meeting is first made by the Company. The Company’s Articles also prescribe the proper written form for a shareholder’s notice as well as additional requirements in connection with nominations. Shareholders who failed to comply with the advance notice requirements would not be entitled to make nominations for directors at the Annual General or Special Meeting of Shareholders.
COMMUNICATION WITH THE BOARD OF DIRECTORS
Shareholders and other interested parties may contact the Company’s directors or independent directors in writing, as a group or individually, by directing their correspondence to the attention of Bausch Health Investor
Relations, Bausch Health Companies Inc., 2150 Saint ElzearElzéar Blvd. West, Laval, Quebec,Québec, H7L 4A8, Canada. Shareholders and other interested parties may also contact the Company’s directors by calling the Company’s helpline in the United States and Canada at (888)451-4510. Additional international telephone numbers are included in our Business Ethics Reporting Policy, which is available on our website at www.bauschhealth.com (under the tab “Investors” and under the subtab “Corporate Governance-Governance — Governance Documents”). The Corporate Secretary will log incoming information and forward appropriate messages promptly to the director(s). Communications are distributed to the Board or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communication.
Certain items that are unrelated to the duties and responsibilities of the Board will not be distributed to the Board, such as mass mailings, product complaints, product inquiries, new product suggestions, resumes and other forms of job inquiries, surveys and business solicitations or advertisements. In addition, material that is inappropriate or unsuitable will be excluded, with the provision that any communication that is excluded must be made available to any
non-employee director upon request.
Communications that include information better addressed by the Audit and Risk Committee will be addressed directly by that Committee. The Company has specifically consulted with its stakeholders in recent years on matters
TABLE OF CONTENTS
including executive compensation. See “Compensation Discussion & Analysis — Shareholder-Friendly Compensation Practices — 2022 Shareholder Engagement” beginning on page 42 for additional information. ANNUAL REPORT AND ADDITIONAL INFORMATION
Our financial information is contained in the Company’s consolidated annual financial statements and related MD&A for the fiscal year ended December 31,
2019.2022. Our Annual Report is available on the
Internetinternet at our website at
www.bauschhealth.com (under the tab “Investors” and under the subtab “Annual Reports Archive”) or on SEDAR at
www.sedar.com or through the SEC’s electronic data system, EDGAR, at
www.sec.gov.www.sec.gov. To request a printed copy of our Annual Report or consolidated financial statements and related MD&A as of and for the year ended December 31,
2019,2022, which we will provide to you without charge, either write to Bausch Health Investor Relations at Bausch Health Companies Inc., 2150 Saint
ElzearElzéar Blvd. West, Laval,
QuebecQuébec H7L 4A8, Canada, or send an email to Bausch Health Investor Relations at
ir@bauschhealth.com.ir@bauschhealth.com. Neither the Annual Report nor the consolidated financial statements and related MD&A as of and for the year ended December 31,
20192022 form part of the material for the solicitation of proxies. Additional information relating to the Company may be found on SEDAR at
www.sedar.com or on EDGAR at
www.sec.gov.www.sec.gov.
We will bear the entire cost of solicitation, including the preparation, assembly,
Internetinternet hosting, maintaining a dedicated call line and printing and mailing the Proxy
StatementMaterials, including the management proxy circular and proxy statement and form of
Proxy Card.proxy card. In addition to soliciting proxies by telephone,
Internetinternet and mail, directors, officers or employees of the Company may, without special compensation, solicit proxies in person, by telephone, telegraph, courier service, advertisement, telecopier or other electronic means. We have retained D.F. King to assist in the solicitation of proxies. We will pay fees to D.F. King of
$10,000,$11,000, plus reasonable
out-of-pocket expenses incurred by them.
We will bear the entire cost of solicitation, including the preparation, assembly, Internet hosting, maintaining a dedicated call line, and printing and mailing the Proxy Statement and form of Proxy Card. We will pay those entities holding Common Shares in the names of their beneficial owners, such as brokers, nominees, fiduciaries and other custodians for their reasonable fees and expenses in forwarding solicitation material to their beneficial owners and for obtaining their instructions.
HOUSEHOLDING OF PROXY MATERIALS
Companies and intermediaries (e.g., brokers) are permitted under the SEC’s rules to satisfy the delivery requirements for proxy materials and annual reports with respect to two or more shareholders sharing the same
address by delivering a single management proxy circular and proxy statement addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for shareholders and cost savings for companies.
A number of brokers with account holders who are our shareholders “household” our proxy materials. A single management proxy circular and proxy statement or Notice Regarding Internet Availability of Proxy Materials, as applicable, will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If you prefer to receive multiple copies of the separate management proxy circular and proxy statement,
or Notice Regarding Internet Availability of Proxy Materials, as applicable, at the same address for the
Annual Meeting or for any future Annual Meetings of Shareholders, additional copies will be provided promptly upon written or oral request to your broker, or by contacting us at Bausch Health Companies Inc., Attn: Investor Relations, 2150 Saint
ElzearElzéar Blvd. West, Laval,
QuebecQuébec H7L 4A8, Canada, telephone
514-856-3855. 514-856-3855 or toll-free at 877-281-6642. Shareholders who currently receive multiple copies of the Proxy Statement
or Notice Regarding Internet Availability of Proxy Materials at their address and would like to request “householding” of their communications should contact their broker.
If any other matters are properly presented for consideration at the Annual Meeting, including, among other things, consideration of a motion to adjourn the Annual Meeting to another time or place in order to solicit additional proxies in favor of the recommendation of the Board, the designated proxyholders intend to vote the Common Shares represented by the Proxies appointing them on such matters in accordance with the recommendation of the Board and the authority to do so is included in the Proxy.
TABLE OF CONTENTS
As of the date this Proxy Statement, the Board knows of no other matters which are likely to come before the
Annual Meeting.
|
| | By Order of the Board of Directors, |
| | | |
| | | John A. Paulson |
Joseph C. Papa
|
Chairman
| | Chairperson of the Board and Chief Executive Officer |
Laval, Québec | | | |
April 6, 2023 | | | |
Laval, Quebec
March 16, 2020
WE WILL MAIL WITHOUT CHARGE UPON WRITTEN REQUEST A COPY OF OUR MOST RECENT ANNUAL REPORT, INCLUDING THE FINANCIAL STATEMENTS, SCHEDULES AND A LIST OF EXHIBITS. REQUESTS SHOULD BE SENT TO: CORPORATE SECRETARY, BAUSCH HEALTH COMPANIES INC., 2150 SAINT ELZEARELZÉAR BLVD. WEST, LAVAL, QUEBECQUÉBEC H7L 4A8, CANADA. THE ANNUAL REPORT IS ALSO AVAILABLE FREE OF CHARGE ON THE COMPANY WEBSITE:WWW.BAUSCHHEALTH.COM.
