UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.                )

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Preliminary Proxy Statement

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Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under§240.14a-12

Edwards Lifesciences Corporation

 

(Name of Registrant as Specified In Its Charter)

 

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

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LOGOLOGO

Edwards Lifesciences Corporation 20202022 Notice of Annual Meeting and Proxy Statement


    LOGOLOGO  

Edwards Lifesciences Corporation

 

One Edwards Way

Irvine, California 92614

Phone: 949.250.2500

www.edwards.com

 

     LOGO

     LOGO

  

March 25, 202022, 2022

 

Dear Fellow Stockholders:

 

On behalf of the Edwards Board of Directors, it is my pleasure to invite you to attend our 20202022 Annual Meeting of Stockholders. The meeting

After another year of unprecedented challenges to communities, organizations and patients around the world, I am proud of Edwards’ continued dedication in providing innovative solutions for patients fighting cardiovascular disease and continuing to build trust among customers, colleagues and patients with the goal of improving the quality of life for our patients.

Inspired by our Credo, our employees recognize the importance and urgency in our work. In order to do the important work we do, we must attract the best and the brightest talent, which we have done by prioritizing diversity, inclusion and belonging. We continue to make strides with this purpose in mind in our actions and when we set our goals.

We continued to outperform the market in 2021 by delivering total stockholder returns of 42%, with 3-year and 5-year returns of 154% and 315%, respectively. Further, we met our financial goals with sales of $5.23 billion, representing 18% growth. Our performance is driven by the improvement of each of our four business units in 2021, leading us on a path of growth that we believe will continue.

We were able to deliver another great year of performance because we continued to execute on our patient-focused innovation strategy and focused on creating what we call the “triple win”: better outcomes for patients and improved quality of life, at a lower cost for the health-care system. Looking forward, we will continue to innovate for patients in need, which is a large group that we expect to impact significantly as our business and our offerings expand.

I look forward to reviewing our 2021 performance and our long-term growth strategy further at our Annual Meeting, which will be held virtually via webcast at our corporate headquarters located at One Edwards Way, Irvine, California, on Thursday, May 7, 2020,www.proxydocs.com/EW, beginning at 10:00 a.m. PT. RegistrationPT on Tuesday, May 3, 2022. A replay and a transcript of the entire Annual Meeting will beginbe made available at 9:00 a.m. http://ir.edwards.com. Edwards will not hold an in-person meeting in order to ensure the health and well-being of our stockholders, employees and Board during the pandemic.

 

Details of the business to be conducted at the Annual Meeting are included in the attached Notice of 20202022 Annual Meeting of Stockholders and Proxy Statement. Stockholders may also may access the Notice of 20202022 Annual Meeting of Stockholders and the Proxy Statement via the Internet at www.edwards.com.

 

At the Annual Meeting, I look forward to reviewing our exceptional 2019 performance, as our focused innovation strategy and long-term investments continue to deliver strong results.

2019 was another successful year for Edwards Lifesciences — sales and profitability grew by double digits, and this year’s medical breakthroughs and continued enhancements to the patient experience build our confidence for what’s ahead. These achievements have continued to translate into strong returns for our stockholders as well: in 2019 we achieved total stockholder returns of 52%, bringing3-year and5-year returns to 149% and 266%, respectively, well outpacing the broader market.

Sustainability is essential to our long-term success, and it is integrated within our business’ core strategy. This integration has enabled us to deliver on our sustainability commitments, while driving further growth and innovation in our efforts in combating structural heart disease.

We remain laser-focused on structural heart disease and critical care, and we believe this approach is a key differentiator for Edwards. We believe there is an incredible amount of growth possible within this space, and our focused strategy provides for a tremendous opportunity for Edwards Lifesciences to continue to create value and improve the quality of life for patients around the world.

Thank you for your continued interest in Edwards. We look forward to seeing you at the Annual Meeting.

 

Sincerely,

 

LOGO

Michael A. Mussallem

Chairman of the Board and

Chief Executive Officer


 

 

     LOGO

     LOGO
  

Dear Fellow Stockholders:

 

On behalf of the Board of Directors, I would like to thank you for your continued investment insupport of Edwards.

 

It has truly been an honorI am honored to servecontinue my service as the Board’s Lead Independent Director, working alongside my fellow directors to effectively oversee and support Edwards’ long-term strategy and mission to improve the quality of Edwards’ Board. I will be retiring atlife for patients around the 2020 Annual Meeting,world. Through our comprehensive evaluation and refreshment processes, Edwards maintains a qualified Board of Directors that continually works to ensure the representation of a diversity of backgrounds, skillsets and independent perspectives. At Edwards, we believe that diverse perspectives lead to better decisions; it also makes our Company more adaptable to the evolving business environment and, as a result, better prepared for our long-term success.

Our Board recognizes the importance of our sustainability initiatives and the need to provide effective oversight. We are excited about the progress made in the past year in our key focus areas of philanthropy, patient engagement, ethics and compliance, environment, and diversity and inclusion. In addition, we continued our focus on providing clear, comparable disclosure for our stakeholders in our Sustainability Report and Environmental, Health & Safety Report.

The Company and the Board has appointed Martha Marshtake seriously our commitment to serve as its next Lead Independent Director. Martha is a strong leader,good corporate governance. With this in mind, we regularly review our governance practices in light of current issues and trends. We, along with over 30 years of experiencemanagement, engage in an increasingly complex and evolving healthcare system, and we are confident that she is well-positioned to provide the independent leadership that best serves the long-term interests of Edwards and its stockholders.

The Board maintains a thoughtful and deliberate refreshment process to ensure that we have the independence, diversity and deep industry expertise necessary to continue to effectively oversee Edwards’ differentiated strategy. As a result ofrobust discussions with our robust evaluation and refreshment process, since 2014, we have appointed five new directors to the Board. In addition, Ramona Sequeira, a new director nominee, will be standing for election at this year’s Annual Meeting for the first time.

Our directors greatly value the perspectives of our stockholders and our engagement team has reached out to a significant portion of our investor base each year to solicit feedback on key topicsthat is taken into consideration when decisions are being made in the boardroom. As part of interest. Ithese discussions, stockholders have been a regular participant in these conversations, and the feedback that we’ve received has driven a numberhelped inform many of meaningful changesour recent enhancements to our governance practicespractices. For example, in 2021, we disclosed our EEO-1 data and relevant infographics on our website, in order to provide greater transparency on our workforce demographics and our progress in continuing to foster a culture of diversity, inclusion and belonging.

We look forward to continuing our conversations with you over the years, including the recent expansion of the formal Lead Independent Director role in early 2019.

This pastnext year the company has continued to deliver strong results — a testament to the strength of Edwards’ patient-focused culture and corporate strategy. By focusing on structural heart disease and critical care technologies and making significant long-term investments, Edwards has enjoyed years of double-digit sales growth. Looking towards the future, the company continues to be focused on transforming patients’ lives through breakthrough medical technologies, and we believe this determination will create value for all of the company’s stakeholders.

It has been my pleasure to serve on Edwards’ Board. Thankthank you for your trust and continued support.investment in Edwards.

 

Sincerely,

 

LOGOLOGO

Wesley W. von SchackMartha H. Marsh

Lead Independent Director


EDWARDS LIFESCIENCES CORPORATION

NOTICE OF 20202022 ANNUAL MEETING OF STOCKHOLDERS

 

Date and Time:Time  Place:LocationRecord Date
May 7, 20203, 2022  Edwards Lifesciences CorporationVirtualMarch 9, 2022
10:00 a.m. PT  One Edwards Way, Irvine, CA 92614

A live webcast of the Annual Meeting will be available at www.proxydocs.com/EW.

You will not be able to attend the Annual Meeting in person. Please see “Virtual Annual Meeting” on the following page for additional information.

Matters to be voted on at the 20202022 Annual Meeting of Stockholders (the “Annual Meeting”):

 

 Proposal     1.

Election of eight director nominees named in the attached Proxy Statement to serve until our next annual meeting of stockholders and until their respective successors are duly elected and qualified

 

 Proposal     2.

Approval, on an advisory basis, of the named executive officer compensation disclosed in the attached Proxy Statement

 

 Proposal     3.

Approval of the 2020 Nonemployee Directors Stock Incentive Program

Proposal 4.

Approval of amendment of the Certificate of Incorporation to increase the number of authorized shares of common stock for the purpose of effecting athree-for-one stock split

Proposal 5.

Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 20202022

 

 Proposal 6.     4.

AConsider a stockholder proposal, if properly presented at the Annual Meeting

We will also vote on any other business that may properly come before the Annual Meeting or any postponement or adjournment of the meeting.

     5.

Other business as may properly come before the Annual Meeting, and any postponement or adjournment of the Annual Meeting

The Proxy Statement accompanying this notice describes each of the items of business in more detail.

Record Date: If you were a holder of record of the common stock of Edwards Lifesciences Corporation at the close of business on March 13, 2020,9, 2022, you are entitled to notice of, and to vote at, the Annual Meeting.

Your vote is very important. Please submit your proxy or voting instructions as soon as possible to ensure that your shares will be represented at the Annual Meeting, whether or not you expect to attend the Annual Meeting.Stockholders may participate in the Annual Meeting by logging in at www.proxydocs.com/EW. Please see “Virtual Annual Meeting” below for additional information regarding participation in the virtual meeting.

List of Stockholders: A list of stockholders as of the record date for the Annual Meeting may be accessed during the virtual meeting by following the instructions you receive via email after you register in advance of the meeting. Instructions on viewing the list of stockholders will be provided to you approximately one hour prior to the start of the Annual Meeting.

 

How to Vote Your Shares
LOGO  

ViaBy Internet

Go to www.proxypush.com/EW and follow the Internet

Visit the website listed on your proxy card, notice, or voting instruction forminstructions

  LOGO  

By PhoneTelephone

Call 1-866-892-1604 and follow the phone number listed on your proxy card or voting instruction forminstructions

LOGO  

By Mail

Complete, sign, date, and return your proxy card or voting instruction form in the envelope provided

  LOGO  

In Person (Virtual)

Attend our Annual Meeting, which will be conducted virtually, via live webcast, and vote by ballot

Important Notice - Contingent Virtual Meeting

We are closely monitoring the developments regarding the coronavirus (COVID-19). Although we currently intend to hold ouronline; see “Virtual Annual Meeting in person, we are sensitive to the public health and travel concerns stockholders may have and the protocols that federal, state, and local governments may impose. In the event we determine that we need to conduct our Annual Meeting by means of remote communication, we will announce the change and provide instructions on how stockholders can participate in the Annual Meeting via the filing of additional soliciting materials with the Securities and Exchange Commission and via our website. Please check our website atwww.edwards.comunder “Investor Relations” one week prior to the Annual Meeting.

Meeting” for more information

By Order of the Board of Directors,

LOGO

Linda J. Park

Vice President, Associate General Counsel, and Corporate Secretary

March 25, 202022, 2022

 

Important notice regarding the availability of proxy materials for our

2020our 2022 Annual Meeting of Stockholders to be held on May 7, 2020:3, 2022:

Our Proxy Statement and 20192021 Annual Report to stockholders are available on the Internet at

www.proxyvote.com.www.proxydocs.com/EW.

Edwards Lifesciences Corporation     One Edwards Way, Irvine, CA 92614     www.edwards.com


VIRTUAL ANNUAL MEETING

The Annual Meeting will be held in a virtual-only meeting format, via live video webcast that will provide stockholders with the ability to participate in the Annual Meeting, vote their shares and ask questions. In consideration of the pandemic, we are implementing a virtual-only meeting format to enhance stockholder access to the Annual Meeting. We believe that the virtual-only meeting format will give stockholders the opportunity to exercise the same rights as if they had attended an in-person meeting and believe that these measures will enhance stockholder access and encourage participation and communication with our Board of Directors and management. A replay and a transcript of the entire Annual Meeting will be made available at http://ir.edwards.com.

ATTENDANCE AT THE VIRTUAL ANNUAL MEETING

Only stockholders of record and beneficial owners of shares of our common stock as of the close of business on March 9, 2022, the record date, may attend and participate in the Annual Meeting, including voting and asking questions during the virtual Annual Meeting. You will not be able to attend the Annual Meeting physically in person.

In order to attend the Annual Meeting, you must register in advance of the meeting at www.proxydocs.com/EW. Upon completing your registration, you will receive further instructions via email, including a unique link that will allow you access to the Annual Meeting and to vote and submit questions during the Annual Meeting.

As part of the registration process, you must enter the control number located on your proxy card, voting instruction form, or Notice of Internet Availability. If you are a beneficial owner of shares registered in the name of a broker, bank or other nominee, you will also need to enter your uniquely assigned control number at www.proxydocs.com/EW as part of the registration process.

If you were a stockholder as of the close of business on March 9, 2022, the record date, you may vote shares held in your name as the stockholder of record or shares for which you are the beneficial owner but not the stockholder of record electronically during the Annual Meeting through the online virtual annual meeting platform by following the instructions provided when you log onto the online virtual annual meeting platform.

On the day of the Annual Meeting, Tuesday, May 3, 2022, stockholders may begin to log onto the virtual-only Annual Meeting beginning at 9:50 a.m. local (Pacific) time, and the Annual Meeting will begin promptly at 10:00 a.m. local (Pacific) time. Please allow ample time for online login.

We will have technicians ready to assist you with any technical difficulties you may have accessing the Annual Meeting. If you encounter any difficulties accessing the virtual-only Annual Meeting platform, including any difficulties voting or submitting questions, you may call the technical support number that will be posted in your instruction email.

QUESTIONS AT THE VIRTUAL ANNUAL MEETING

Stockholders of record and beneficial owners as of the close of business on March 9, 2022, the record date, will have the ability to submit questions before and during the Annual Meeting. During a designated question and answer period at the Annual Meeting, we will respond to appropriate questions submitted by stockholders.

We will respond to as many stockholder-submitted questions as time permits, and any questions that we are unable to address during the Annual Meeting will be published and addressed on our website following the meeting, with the exception of any questions that are irrelevant to the purpose of the Annual Meeting or our business or that contain inappropriate or derogatory references which are not in good taste. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition.

YOU WILL NOT BE ABLE TO ATTEND THE ANNUAL MEETING IN PERSON.



 

TABLE OF CONTENTS

 

  Page 

PROXY SUMMARY

  i 

GENERAL MEETING AND VOTING INFORMATION

  1 

BOARD OF DIRECTORS MATTERS

  5 

PROPOSAL 1 – ELECTION OF DIRECTORS

  5 

Corporate Governance Policies and Practices

  12 

Corporate Governance Highlights

12

Active Stockholder Engagement Program

  12 

Director Independence

  13 

Corporate Governance Guidelines

  13 

Board Leadership Structure

  1413 

Lead Independent Director’s Role and Responsibilities

  1413 

Board Role In Risk Oversight

  1514 

Meetings of the Board

  15 

Board Composition

  1615 

Committees of the Board

  1615 

Succession Planning

  1817 

Communications with the Board

  1817 

Corporate Social Responsibility

  1918 

Director Compensation

  2120 

Director Compensation Table – 20192021

  2120 

Retainers and Fees

  2120 

Nonemployee Directors Stock Incentive Program

  2221 

Deferral Election Program

  2221 

Directors’ Stock Ownership Guidelines and Holding Requirement

  2221 

Expense Reimbursement Policy

  2322 

Outstanding Nonemployee Director Equity Awards

  2322 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

  24 

EXECUTIVE COMPENSATION AND OTHER INFORMATION

  25 

Executive Officers

  25 

Compensation Discussion and Analysis

  27 

Executive Summary

  27 

Compensation Philosophy and Objectives for NEOs

  3132 

Compensation Process

  3132 

Independent Compensation Consultant

  3133 

Use of Competitive Data

  3233 

Elements of Compensation

  3435 

Stock Ownership Guidelines and Holding Requirement

  4142
Page 

Compensation and Governance Committee Report

  4445 

Executive Compensation

  4546 

2019 Summary Compensation Table – Fiscal Year 2019-2021

  4546 

Grants of Plan-Based Awards in Fiscal Year 20192021

  4849 

Non-Equity Incentive Plan Awards

  4849 

Equity Incentive Plan Awards

  4950 

Outstanding Equity Awards at 20192021 FiscalYear-End

  5253 

Option Exercises and Stock Vested in Fiscal Year 20192021

  5455 

Pension Benefits

  5455 

2019 Nonqualified Deferred Compensation Plans

  5556 

Potential Payments Upon Termination or Change in Control

  5556 

CEO Pay Ratio

  5960 

PROPOSAL 2 –  ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

  6061 

EQUITY COMPENSATION PLAN INFORMATION

  6263

PROPOSAL 3 –  APPROVAL OF THE 2020 NONEMPLOYEE DIRECTORS STOCK INCENTIVE PROGRAM

63

PROPOSAL 4 –  APPROVAL OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FOR THE PURPOSE OF EFFECTING ATHREE-FOR-ONE STOCK SPLIT

68 

AUDIT MATTERS

  7164 

PROPOSAL  53 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

  7164 

Audit Committee Report

  7265 

OTHER MATTERS AND BUSINESS

  7467 

PROPOSAL 64  – STOCKHOLDER PROPOSAL REGARDING ACTION BY WRITTEN CONSENTTO REDUCE THE SHARE OWNERSHIP THRESHOLD TO CALL A SPECIAL MEETING

  7467 

Additional Information

  79

Delinquent Section 16(a) Reports

7971 

Related Persons Transactions

  7971 

Indemnification of Directors and Officers

  7971 

Deadline for Receipt of Stockholder Proposals and Director Nominations for the 20212023 Annual Meeting

  7971 

Annual Report onForm 10-K

  8072 

Delivery of the Proxy Materials

  8072 

APPENDIX A – Non-GAAP Financial Information

  A-1

APPENDIX B – 2020 Nonemployee Directors Stock Incentive Program

B-1

APPENDIX C – Amendment of the Certificate of Incorporation

C-1 
 

 

 



 

This Proxy Statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934.1934, as amended. We intend the forward-looking statements contained in this Proxy Statement to be covered by the safe harbor provisions of such Acts. AllSome statements other than statements of historical fact in this Proxy Statement or referred to or incorporated by reference into this Proxy Statement are “forward-looking statements” for purposes of these sections. These statements include, among other things, the continued impact of the pandemic on our business, any predictions, of earnings, revenues, expenses, or other financial items, plans, oropinions, expectations, with respect to development activities, clinical trials, or regulatory approvals, any statements of plans, strategies, and objectives of management for future operations, any statements concerning our future operations, financial conditions, and prospects, and any statements of assumptions underlying any of the foregoing.foregoing relating to our current and future business and operations, including, but not limited to, financial matters, development activities, clinical trials and regulatory matters, manufacturing and supply operations, and product sales and demand. These statements can sometimes be identified by the use of the forward-looking words, such as “may,” “believe,” “will,” “expect,” “project,” “estimate,” “should,” “anticipate,” “plan,” “goal,” “continue,” “seek,” “pro forma,” “forecast,” “intend,” “guidance,” “optimistic,” “aspire,” “confident,” other forms of these words, or similar words or expressions or the negative thereof. Statements of past performance, efforts or results about which inferences or assumptions may be made can also be forward-looking statements and are not indicative of future performance or results; these statements can be identified by the use of words such as “preliminary,” “initial,” “diligence,” “industry-leading,” “compliant,” “indications,” or “early feedback” or other forms of these words or similar words or expressions or the negative thereof. Investors are cautioned not to unduly rely on such forward-looking statements. These forward-looking statements are subject to substantial risks and uncertainties that could cause our results or future business, financial condition, results of operations, or performance to differ materially from our historical results or experiences or those expressed or implied in any forward-looking statements contained in this Proxy. Factors that could cause actual results or experiences to differ materially from that expressed or implied byProxy Statement. These risks and uncertainties include, but are not limited to: uncertainties regarding the forward-looking statements include uncertainties associated withseverity and duration of the pandemic and its impact on our business and the economy generally; clinical trial or commercial results or new product approvals and therapy adoption, particularly in Transcatheter Aortic Valve Replacement and Transcatheter Mitral and Tricuspid Therapies;adoption; inability or failure to comply with applicable regulations; unpredictability of product launches; competitive dynamics; changes to reimbursement for the company’sour products; the company’sour success in developing new products and avoiding manufacturing and quality issues; the impact of currency exchange rates; the timing or results of R&Dresearch and development and clinical trials; unanticipated actions by the U.S. Food and Drug Administration and other regulatory agencies; unexpected litigation impacts or expenses;expenses resulting from litigation or internal or government investigations; and other risks listed in Edwards’ Annual Report on Form10-K for the fiscal year ended December 31, 20192021 and our othersubsequent reports filed with the U.S. Securities and Exchange Commission, to which your attention is directed. These forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement. If we do update or correct one or more of these statements, investors and others should not conclude that we will make additional updates or corrections.

Edwards, Edwards Lifesciences, the stylized E logo, HemoSphere,ALLIANCE, CLASP, Edwards SAPIEN, Edwards SAPIEN 3, Edwards SAPIEN 3 Ultra, Edwards SAPIEN X4, INSPIRIS, INSPIRIS RESILIA, PARTNER, PARTNER 3, PASCAL,KONECT, KONECT RESILIA, MITRIS, MITRIS RESILIA, PROGRESS, RESILIA, SAPIEN, and SAPIEN 3, SAPIEN 3 Ultra, SAPIEN X4 and The EARLY TAVR Trial are trademarks of Edwards Lifesciences Corporation. All other trademarks are the property of their respective owners.

 

 


PROXY SUMMARY

This summary contains highlights about Edwards Lifesciences Corporation (“Edwards”) and theits upcoming 2020 annual meeting2022 Annual Meeting of stockholdersStockholders (the “Annual Meeting”). This summary does not contain all of the information that you should consider. Please read the entire Proxy Statement prior to voting.

2022 Annual Meeting of Stockholders
Date and TimeLocationRecord Date
May 3, 2022VirtualMarch 9, 2022
10:00 a.m. PT

A live webcast of the Annual Meeting will be available at www.proxydocs.com/EW.

You will not be able to attend the Annual Meeting in person. Please see “Virtual Annual Meeting” for additional information.

If you were a holder of record of the common stock of Edwards at the close of business on March 9, 2022, you are entitled to notice of, and to vote at, the Annual Meeting.

STOCKHOLDER VOTING MATTERS(Page 1)

 

Proposal

    Board’s Voting
Recommendation
Annual Meeting of
Stockholders

Proposal 1:

  

Election of Directors

 

LOGO     FOR

each nominee

Date and Time:

May 7, 2020

10:00 a.m. PT

Place:*

Edwards Lifesciences

One Edwards Way

Irvine, CA 92614

Record Date:

March 13, 2020

Proposal 2:

  

Advisory Vote to Approve Named Executive Officer Compensation

 

LOGO     FOR

Proposal 3:

Approval of the 2020 Nonemployee Directors Stock Incentive Program

LOGO     FOR

Proposal 4:

Approval of Amendment of the Certificate of Incorporation to Increase the Number of Authorized Shares of Common Stock for the Purpose of Effecting aThree-For-One Stock Split

LOGO     FOR

Proposal 5:

  

Ratification of Appointment of Independent Registered Public Accounting Firm

 

LOGO     FOR

Proposal 6:4:

  

Stockholder Proposal for an Advisory Vote onto Reduce the Share Ownership Threshold to Call a Stockholder Proposal Regarding Action By Written ConsentSpecial Meeting

 

  AGAINST

*

We are closely monitoring the developments regarding the coronavirus (COVID-19). In the event we determine that we need to conduct our Annual Meeting by means of remote communication, we will announce the change and provide instructions on how stockholders can participate in the Annual Meeting via the filing of additional soliciting materials with the Securities and Exchange Commission and via our website atwww.edwards.com.



 

 

 
  LOGO    Edwards Lifesciences Corporation   20202022 Proxy Statement  i 


BOARD OF DIRECTOR NOMINEES(Page 5)

The Board of Directors (the “Board”) has selected the following eight persons as its nominees for election for aone-year term to the Board at the Annual Meeting. The following chart provides key information on each of our director nominees as of the date of this Proxy Statement.In accordance with Each director nominee was elected as a director at our annual meeting held on May 4, 2021, to hold office until the retirement policy in our Corporate Governance Guidelines, our Board did not nominate Wesley von Schack, our current Lead Independent Director, for election at the Annual Meeting; Martha Marsh will assume the role of Lead Independent Director.Ramona Sequeira is not currently a member of our Board and is standing for election for the first time at the Annual Meeting.next annual meeting.

 

 
         

Committee Memberships

  

Name

 Age Director
Since
 Independent Audit
Committee*
 

Compensation

and Governance
Committee

 

Other Public  

Company
   Boards  

Kieran T. Gallahue

Former Chairman and CEO

CareFusion Corporation

 56 2015 Yes LOGO  3

Leslie S. Heisz

Former Managing Director

Lazard Frères & Co

 59 2016 Yes LOGO  2

William J. Link, Ph.D.

Managing Director and

Co-Founder Versant Ventures

 73 2009 Yes  LOGO 2

Steven R. Loranger

Former Chairman, President, and

CEO ITT Corporation

 68 2016 Yes  LOGO 1

Martha H. Marsh**

Retired President and CEO

Stanford Hospital & Clinics

 71 2015 Yes  LOGO 1

Michael A. Mussallem

Chief Executive Officer and Chairman

Edwards Lifesciences Corporation

 67 2000 No   0

Ramona Sequeira***

President

Takeda Pharmaceuticals USA, Inc.

 54 N/A Yes   0

Nicholas J. Valeriani

Former CEO, West Health Institute

Former EVP, Johnson & Johnson

 63 2014 Yes   LOGO 1
 
         

Committee Memberships

  

Name

 Age Director
Since
 Independent Audit
Committee*
 

Compensation

and Governance
Committee

 

Other Public

Company
Boards

Kieran T. Gallahue

Former Chairman and CEO,

CareFusion Corporation

 58 2015 Yes LOGO  

2

Leslie S. Heisz

Former Managing Director,

Lazard Frères & Co

 61 2016 Yes LOGO  2  

Paul A. LaViolette

Managing Partner and
COO, SV Health Investors LLC

 64 2020 Yes  LOGO 2  

Steven R. Loranger

Former Chairman, President and
CEO ITT Corporation

 70 2016 Yes LOGO  1  

Martha H. Marsh**

Retired President and CEO,

Stanford Hospital & Clinics

 73 2015 Yes  LOGO 1  

Michael A. Mussallem

Chief Executive Officer and Chairman,

Edwards Lifesciences Corporation

 69 2000 No   0  

Ramona Sequeira

President of the U.S. Business Unit and

Global Portfolio Commercialization,

Takeda Pharmaceuticals USA, Inc.

 56 2020 Yes LOGO  0  

Nicholas J. Valeriani

Former CEO, West Health Institute

Former EVP, Johnson & Johnson

 65 2014 Yes   LOGO 1  

 

*

Each member of the Audit Committee is an audit committee financial expert. Wesley von Schack currently serves on the Audit Committee and another Board member will be added to the Audit Committee upon his retirement from the Board.expert

 

**

Martha Marsh will assume the role of Lead Independent Director at the Annual Meeting.

***

The Board will determine the Board committee(s) to which Ms. Sequeira will be appointed at a later date if elected at the Annual Meeting.

 

C  =

Chairperson

Each director nominee, other than Ms. Sequeira, was elected as a director at the Company’s annual meeting held on May 8, 2019, to hold office until the next annual meeting.

Intersect ENT, Inc. is undergoing acquisition by Medtronic plc.



 

 

 
ii LOGO   Edwards Lifesciences Corporation   20202022 Proxy Statement 


Our Board strives to maintain a highly independent, balanced and diverse setgroup of directors that collectively possesspossesses the expertise to ensure effective oversight of management. Our director nominees are:

 

LOGOLOGOLOGOLOGO

LOGO

 

Diverse Range of Qualifications and Skills Represented by Our Directors

Medical Technology

Industry Experience

 

International Executive International

Experience

 Corporate Governance

Regulatory and

Compliance

 Senior Leadership Operations Management
Innovation/Innovation and Technology Risk Management Risk Oversight

Finance and Financial

Industry

 Human Capital Resources Financial Reporting

IT and Cybersecurity

Corporate Strategy

Corporate Responsibility



 

 

 
  LOGO    Edwards Lifesciences Corporation   20202022 Proxy Statement  iii 


CORPORATE GOVERNANCE HIGHLIGHTS(Page 12)

Our commitment to good corporate governance practices and accountability to stockholders is described below.

 

 

LOGOLOGO

WHAT WE DO

  
LOGO Annual election of directors
LOGOBoard refreshment and director skill set aligned with corporate strategy
LOGOMajority vote standard in uncontested elections, with director resignation policy
LOGOSpecial stockholdersstockholders’ meetings can be called by stockholders owning at least 15% of our outstanding shares
  
LOGOLOGO Proxy access right to permit a stockholder, or a group of up to 30 stockholders, owning at least 3% of our outstanding shares continuously for at least 3 years, to nominate up to the greater of 2 directors or 20% of our Board for inclusion in our annual meeting proxy statement
  
LOGOAnnual election of directors
LOGOOngoing Board refreshment and director skill set aligned with corporate strategy
LOGOMajority vote standard in uncontested elections, with director resignation policy
LOGO Independent Board, all but our Chief Executive Officer
  
LOGO Commitment to Board diversity
LOGOExecutive session of independent directors held at eachin-person regularly scheduled Board and committee meeting
  
LOGOLOGO Lead Independent Director provides strong independent leadership of our Board
  
LOGOLOGO Retirement policy for directors
  
LOGOLOGO Annual Board and committee self-evaluations and peer reviews
  
LOGOLOGO Encourage continuing director education with designated annual reimbursement policy
  
LOGOLOGO Formal director orientation and continuing education program
  
LOGOLOGO Nonemployee directors expected to own Edwards’ stock equal to $500,000 and also hold 50% of net shares received upon vesting or exercise of equity awarded after 2011awards until Board service ends
  
LOGOLOGO Senior management succession planning considered at each regularly scheduled Board meeting
  
LOGOLOGO Active stockholder outreach and engagement
  
LOGOLOGO Robust code of ethics in our Global Business Practice Standards
  
LOGOLOGO Active Board oversight of enterprise risks and risk management
  
LOGOLOGO Corporate sustainability reportDedicated Board oversight and receiptannual disclosure of numerous recognitions for our sustainability practices
  
LOGOLOGO “Clawback” policy for performance-based compensation

 

 

LOGOLOGO

WHAT WE DON’T DO

  
 No pledging or hedging of Edwards’ securities by members of the Board, executives, employees with a title of “vice president” equivalent or above, and any other employees designated as “Designated Insiders” under our insider trading policy
  
 No stockholder rights plan (“poison pill”)
  
 No supermajority voting provisions in the Company’sour organizational documents


 

 

 
iv LOGO   Edwards Lifesciences Corporation   20202022 Proxy Statement 


ACTIVE STOCKHOLDER ENGAGEMENT PROGRAM (Page(Page 12)

Edwards’ Board and management are committed to engaging with Edwards’ stockholders and incorporating feedback into their decision-making processes. Throughout the year, our CEO, CFO, and Vice President of Investor Relations meet, by phone andface-to-face, with current and prospective stockholders to discuss Edwards’ strategy, business, and financial results. Our CFO, Corporate Secretary and Vice President of Investor Relations, together with other members of management and, from time to time, our Lead Independent Director, engage stockholders to solicit their views and feedback on corporate governance, compensation and other related matters and to discuss the issues that matter most to our stockholders. Stockholder feedback is shared with the Board and its committees, which enhances our corporate governance practices, facilitates future dialogue between stockholders and the Board and provides additional transparency to our stockholders. Since the 2019 annual meeting of stockholders, our CFO, Corporate Secretary and Vice President of Investor Relations contacted our top stockholders representing approximately 56% of our outstanding shares and engaged with stockholders representing approximately 32% of our outstanding shares. In this engagement, we received feedback from stockholders on a range of topics including corporate governance, compensation and sustainability.

Edwards’ Board and management are committed to engaging with Edwards’ stockholders and incorporating feedback into
their decision-making processes. Throughout the year, our CEO, CFO, and Vice President of Investor Relations meet, by

phone and face-to-face, with current and prospective stockholders to discuss Edwards’ strategy, business, and financial results. Our CFO, Corporate Secretary, and Vice President of Investor Relations, and our Lead Independent Director, when appropriate, engage stockholders to solicit their views and feedback on issues that matter most to our stockholders, including, among other things, corporate governance, compensation, sustainability, corporate social responsibility, human capital management, diversity, inclusion and belonging, succession planning, and other related matters. During this past outreach season, which occurred from November to December 2021, we also discussed the effects of the pandemic on the Company and the Company’s response. Stockholder feedback is shared with the Board and its committees, which enhances our corporate governance practices, facilitates future dialogue between stockholders and the Board, and provides additional transparency to our stockholders. Since the 2021 annual meeting of stockholders, we contacted our top stockholders representing approximately 50% of our outstanding shares and engaged with stockholders representing approximately 34% of our outstanding shares.

    LOGO

Over time, we have amended our Charter and Bylaws to adopt various stockholder rights and to align our corporate governance practices with our stockholders’ interests.

 

Topic Action Taken in Response to Stockholder Feedback

Lead Independent

Director

Responsibilities

  Expanded the role of the Presiding Director position, and, in light of the additional responsibilities, designated the position, Lead Independent Director

Proxy Access

  Amended our Bylaws to provide for proxy access at 3% and3-year ownership and holding period duration thresholds

Right to Call

Special Meetings

 

  Amended our Bylaws to permit stockholders to call a special meeting

 

  In response to anon-binding stockholder proposal requesting the right to act by written consent, engaged with stockholders representing over 50% of shares then outstanding to better understand investor views and, in response to feedback received, reduced the minimum ownership threshold to call a special meeting from 25% to 15%

Proxy Access

  Amended our Bylaws to provide for proxy access at 3% and 3-year ownership and holding period duration thresholds

Disclosure of
EEO-1 Data

  Disclosed our EEO-1 data and relevant infographics on our website

Lead Independent

Director

Responsibilities

  Expanded the role of the Presiding Director position, and, in light of the additional responsibilities, designated the position, Lead Independent Director

Declassified Board 

  Amended our Charter to eliminate the classified board

No Supermajority

Voting

 

  Amended our Charter to eliminate supermajority voting

Poison Pill 

  Did not renew poison pill when it expired in March 2010

Majority Voting

in Director

Elections

 

  Amended our Bylaws to provide for majority voting in uncontested director elections



 

 

 
  LOGO    Edwards Lifesciences Corporation   20202022 Proxy Statement  v 


CORPORATE SOCIAL RESPONSIBILITY (Page 19)(Page 18)

Our Board recognizesAt Edwards, our commitment to corporate responsibility and sustainability is foundational, and expressed in the importancewords of our sustainability initiativesCredo: “Through our actions, we will become trusted partners with customers, colleagues and patients—creating a community unified in its mission to improve the need to provide effective oversightquality of those initiatives.life around the world. Our results will benefit customers, patients, employees and shareholders.” Our Compensation and Governance Committee of the Board (the “Compensation and Governance Committee”) maintains formal oversight responsibilities for our Sustainability program, with regular discussions at meetings of the full Board. Through a well-established framework and cross-functional Sustainability Council with leaders from across the organization, we continue to incorporate sustainability into our businesses’ core strategy — reflecting our belief that sustainability is essential to long-term growth. We also believe in transparency, and reportMore details on our sustainability effortsapproach and performance can be found in an annualour Sustainability Report.Report posted on our website at www.edwards.com/sustainability.

We receivedwere recognized by numerous recognitionsorganizations for our sustainability and environmental responsibilities practices in 2019,2021, some of which are highlighted below:

 

For the second consecutive year, Edwards appeared on Barron’s fourth annual list of the 100 Most Sustainable Companies in the United States. Significant performance indicators included increased efforts to mitigate our impact on the environment, as well as initiatives undertaken to bolster employee welfare, community health and customer satisfaction.

For the fifth consecutive year, Edwards was named one of America’s Most JUST Companies by Forbes and JUST Capital. This is an evaluation of the largest publicly traded U.S. companies, which are ranked on the issues Americans care about most.

Edwards was named as one of the Management Top 250 by the Wall Street Journal in partnership with the Drucker Institute for the fifth year in a row—listed #24 out of 846 companies ranked according to their overall effectiveness of “doing the right things well.” The evaluation aims to recognize firms that are particularly good at balancing a wide range of competing management priorities. Edwards achieved high marks in all five dimensions of corporate performance: Customer Satisfaction, Employee Engagement and Development, Innovation, Social Responsibility and Financial Strength.

In its inaugural ranking of the World’s Top Female-Friendly Companies, Forbes ranked Edwards #27 out of 300 companies included in the list. Forbes’ partner, Statista, surveyed 85,000 women in 40 countries. Respondents were asked to rate their employers on criteria such as pay equity and parental leave, and asked women to assess how companies use their platforms and marketing messages. They also assessed female representation at the executive and board levels.

Named oneEdwards was again a constituent of the top 15America’s Most JUST Companiesfrom Forbes and JUST Capital — United States largest publicly traded companies are ranked on the issues Americans care about most;

Named as one of theManagement Top 250 by the Wall Street Journal in partnership with the Drucker Institute — listed #25 out of 820 companies ranked. Within this list, Edwards was also cited as one of 8 “all stars” foracross-the-board rankings, achieving high marks in all five dimensions of corporate performance: Customer Satisfaction, Employee Engagement and Development, Innovation, Social Responsibility and Financial Strength;

Recognized as #1 on the Investor’s Business Daily inaugural50 Best ESG Companies in 2019 for superior Environmental, Social and Governance (ESG) ratings in addition to strong fundamental and technical performance highlighting Edwards’ “comprehensive product quality and safety controls” and its “ability to deliver exceptional shareholder value”; and

Constituent of theDJSI ESG Worldand North America Indices — Indices—the Dow Jones Sustainability World index tracks the performance of the top 10% of the 2,500 largest companies in the S&P Global Broad Market Index that lead the field in sustainability.

EXECUTIVE COMPENSATION(Page 25)

Executive Summary.    Edwards is the global leader in patient-focused medical innovations for structural heart disease as well asand critical care and surgical monitoring. Driven by a passion to help patients, we partner with the world’s leading clinicians and researchers and invest in research and development to transform care for those impacted by structural heart disease or who require hemodynamic monitoring during surgery or in intensive care. Edwards Lifesciences has been a leader in these areas for over six decades. Since our founder, Miles Lowell Edwards, first dreamed of using engineering to address diseases of the human heart, we have steadily built a company on the premise of imagining, building, and realizing a better future for patients.hospital setting.

Pay-for-Performance Philosophy.    The Compensation and Governance Committee strives to create apay-for-performance culture and strongly believes that executive compensation should be tied not only to financial and operating performance, but also directly to the long-term successful implementation of our long-term corporate strategy. As a direct result of our strategy, we have introduced therapies such as transcatheter aortic valve replacement, rapid-deploymentnovel resilient surgical heart valves and noninvasive advanced hemodynamic monitoring, all while achievingmonitoring. Successfully managing our stated financial and operating objectives. Managing our business well in a challenging, highly regulated, dynamic environment requires talented and energetic leaders who champion our strategy and deliver on our commitments.

2021 Financial and Operating Performance.Following the outbreak of COVID through the 2021 fiscal year, we continued to remain fully committed to our patient-focused innovation strategy, and our teams were relentless in doing the right thing for patients. Guided by our Credo, our priorities during the pandemic have been to protect the health and well-being of our employees, to continue to serve our patients, hospitals and clinical partners, and to support our communities.

Our financial results and operating performance in 2021 were significantly impacted by the pandemic. Procedure rates were highly variable around the globe, leading to a decline in sales compared to expectations. Treatments were delayed due to hospital prioritization of COVID patients, hospital staffing shortages and patients deferring treatment. Although we



 

 

 
vi LOGO   Edwards Lifesciences Corporation   20202022 Proxy Statement 


EDWARDS’ CORPORATE STRATEGY INFORMS PAY DESIGNsaw recovery during 2021, we faced significant headwinds in December 2021 due to a surge in COVID outbreaks, and our

financial performance was below original expectations. Despite the impact of the pandemic, 2021 was a year of significant milestones and investments for Edwards. Our total sales for fiscal year 2021 were $5.2 billion, an increase in underlying revenue growth for the year of approximately 18% over the prior year. We achieved 19% growth in adjusted earnings per share while also increasing R&D by 19%.1 The significant increase in R&D and infrastructure investments in fiscal 2021 helped strengthen our longer-term outlook. Our total stockholder return for the year was 42%.

LOGO

2019 Financial and Operating Performance.    Overall,Even with the challenges we achieved strong financial results and operating performance in 2019, exceeding our target goals for sales growth, net income growth, and free cash flow generation. We also madefaced during the global pandemic, we continued to make important progress on future advancements for patients.

Strong underlying1 sales growth of 15% was driven by:patients:

 

Groundbreaking PARTNER 3 clinical results which demonstrated superiority over surgeryInvested in increasing disease and therapy awareness, pursued further therapy expansion, and advanced new technologies in transcatheter aortic valve replacement. We completed enrollment in EARLY TAVR, a pioneering pivotal trial studying the treatment of severe aortic stenosis (AS) patients before their symptoms develop. Separately, we initiated enrollment in our PROGRESS pivotal trial for moderate AS patients and we received FDA approval for our ALLIANCE pivotal trial to study our next generation TAVR technology, SAPIEN 3 valve technologyX4;

Achieved our significant 2021 milestones in transcatheter mitral and ledtricuspid therapies, as we continued to the U.S. regulatory approvalmake meaningful progress on advancing our three key value drivers: a portfolio of our transcatheter heart valve technologypioneering therapies for patients, at low surgical risk;positive pivotal trial results to support approvals and adoption, and favorable real-world clinical outcomes;

The European launch ofExtended our leadership in surgical aortic valves through the PASCAL system, an important early addition to our portfolio of Transcatheter Mitral and Tricuspid Therapies (“TMTT”) ;

Continuedcontinued adoption of our newest premiumtechnologies, INSPIRIS RESILIA aortic surgical valve, INSPIRIS RESILIA;KONECT RESILIA aortic tissue valved conduit, and the launch of our MITRIS RESILIA valve; and

Broad useAdvanced leadership in critical care with the continued introduction of advanced monitoring technology and smart recovery algorithms for patients.

Stock Performance.    As a general indicator of our critical care technologies, includingpay-for-performance culture, the ongoing rolloutCompensation and Governance Committee considers how Edwards’ cumulative total return to stockholders (“TSR”) compares to both the S&P 500 Index and the S&P Healthcare Equipment Select Industry Index (the “SPSIHE”). The table below illustrates our 5-year cumulative TSR on common stock with the cumulative total returns of our HemoSphere smartmonitoring platform.

Profitability was also strong in 2019, even as we continued to invest aggressively to fuel important breakthrough innovations to strengthen our longer-term outlook. Utilizing significant savings in the reduction of our effective tax rate resulting fromS&P 500 Index and the Tax Cuts and Jobs Act of 2017, we hired new employees, accelerated research and development initiatives, and contributed more to employee retirement accounts. We directed a significant portion of our infrastructure investment to growing our dedicated commercial and clinical teams in Europe to support our TMTT business.SPSIHE.

COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN*

LOGO

*

$100 invested at market close on December 31, 2016 in stock or index, including reinvestment of dividends. The stock price performance included in this graph is not necessarily indicative of future stock price performance.

 

 

1 

Underlying” amount is aUnderlying growth rate” and “adjusted earnings per share” are non-GAAP item.items. Refer to the Appendix A for a reconciliation to the most directly comparable GAAP financial measure.measures.



 

 

 
  LOGO    Edwards Lifesciences Corporation   20202022 Proxy Statement  vii 


Stock Performance.    As a general indicator of ourpay-for-performance culture, the Compensation Committee considers how Edwards’ cumulative total return to stockholders (“TSR”) compares to both the S&P 500 Index and the S&P Healthcare Equipment Select Industry Index (the “SPSIHE”). The table below illustrates our5-year cumulative TSR on common stock with the cumulative total returns of the S&P 500 Index and the SPSIHE.

COMPARISON OF5-YEAR CUMULATIVE TOTAL RETURN*

LOGO

*

$100 invested on December 31, 2014 in stock or index, including reinvestment of dividends. Fiscal year ending December 31. The stock price performance included in this graph is not necessarily indicative of future stock price performance.

20192021 Annual Incentive Plan Outcomes and Long-Term Incentives.    The Company’s Annual Incentive Plan has historically consisted of three measures used to evaluateelements:

the corporate financial achievement under our annual cash incentive plan weremeasurement (based on underlying revenue growth, adjusted net income and adjusted free cash flow all computed on anon-GAAP basis. Our financial performance resulted in financial achievement at 151% of target under targets),

the cash incentive plan. In addition, our overall achievement of Key Operating Drivers (“KODs”) (quantifiable strategic milestones that include financial objectives and are tracked using a points system across our entire organization), and

individual performance.

The KODs contemplate near and long-term objectives of our multi-year strategy, and the KODs are how we translate these strategic goals into quantifiable metrics to be achieved in any given year, holding all employees, including executives, accountable for 2019the Company’s and their own performance. Approximately 25% of the KODs include a financial component.

In January 2021, due to the impacts of, and the circumstances surrounding, the pandemic and the considerations discussed in “2021 Annual Incentive Plan” on page 29 of this Proxy Statement, the Board of Directors applied discretion and approved using the KOD results as the primary mechanism to determine 2020 Annual Incentive Plan payouts across the entire organization. As a result of the expected continued impact of the pandemic in fiscal year 2021, after review and input from the Compensation Consultant and other advisors, the Board determined that it was 97%. Accordingly,also appropriate to use the results of the KOD achievement as the primary mechanism to determine 2021 annual incentive payouts.

In February 2022, the Board of Directors approved the 2021 KOD achievement at 116% of target, from which the Board applied negative discretion of 20 points for the CEO and 10 points for the other named executive officers due to issues related to the compliance program in Japan. As a result, our cash incentive plan for corporate employees funded at 146% of target. Final incentive amounts96% for the Named Executive Officers (“NEOs”)CEO and 106% for 2019the other named executive officers, and each individual’s performance was also tooktaken into account each employee’s individual performance.for the final calculation of the annual cash incentive payment for 2021. See “Elements of Compensation—Annual Cash Incentive Payment” below for additional information regarding the annual cash incentive payment. The Performance-Based Restricted Stock Units (“PBRSU”) that vested in 20192021 were granted in 2018 and measured performance based on Edwards’ TSR over a three-year period compared to that of companies in a subset of the S&P Healthcare Equipment Select Industry Index (the “SPSIHE Subset”)SPSIHE, as discussed in more detail in the Compensationunder “Compensation Discussion and Analysis section of this Proxy Statement.Analysis” below. These PBRSUs paid out at 75.77%175% of target.the targeted vesting level. Edward’s TSR over this three-year period was 154%.

For 2022, we expect to return to our historical practice of funding our cash incentive plan based on financial measures, with KODs and individual performance used to modify payouts.



 

 

 
viii LOGO   Edwards Lifesciences Corporation   20202022 Proxy Statement 


COMPENSATION PROGRAM HIGHLIGHTS(Page 30)32)

Compensation Program Highlights.    The Compensation and Governance Committee believes that its executive compensation and benefits philosophy and objectives have resulted in programs that align executives with stockholder interests.

 

 

LOGOLOGO

WHAT WE DO

  
LOGO Pay-for-Performance. Approximately 90%91% of the target total direct compensation of our CEO, and an average of 78%79% of the target total direct compensation of our other NEOs, was performance-based in 2019.2021.
  
LOGO Linkage Between Performance Measures and Strategic Imperatives. Performance measures for incentive compensation are linked to our Strategic Imperatives through achievement of KODs and are designed to create long-term stockholder value and hold executives accountable for their individual and Edwards’ performance.
  
LOGO Performance-Based Equity. Our PBRSUs vest based on our relative TSR over a three-year period.
  
LOGO Minimum Three-Year Vesting. Equity compensation is structured to vest over a minimum period of three years, subject to limited exceptions.
  
LOGO Robust Executive Stock Ownership Guidelines with Holding Period Requirements. Executives are required to hold Edwards’ stock with a value not less thansix-times salary for our CEO and three-times salary for each other NEO. Fifty percent of net shares received as equity compensation must be retained until the guideline has been met.
  
LOGO CEO Stock Ownership. Our CEO far exceeds hissix-times salary ownership guideline and has continued to increase his ownership of Edwards’ stock each year.
  
LOGO Modest Perquisites. We provide modest perquisites and have a business rationale for the perquisites that we do provide.
  
LOGO “Double Trigger” in the Event of a Change in Control.Control. Severance benefits are paid, and equity compensation awarded starting in May 2015 accelerates in connection with a severance, only upon a “double trigger” in connection with a change in control (meaning a termination of the executive’s employment is required, in addition to the occurrence of a change in control, in order for the benefits to be triggered).
  
LOGO Use of Tally Sheets.Sheets. The Compensation and Governance Committee annually reviews summaries of prior and potential future compensation levels (referred to as “tally sheets”) when making compensation decisions.
  
LOGO “Clawback” Policy.Policy. We maintain a recoupment policy for performance-based compensation.compensation.
  
LOGO Independent Compensation Consultant.Consultant. The Compensation and Governance Committee engages an independent compensation consulting firm that provides us with no other services.

 

 

LOGOLOGO

WHAT WE DON’T DO

  
 No excise taxgross-ups for executive officers.
  
 No repricing or buyout of underwater stock options.
  
 No pledging of Edwards’ securities by members of the Board, executives, employees with a title of “vice president” equivalent or above, and any other employees designated as “Designated Insiders” under our insider trading policy.
  
 No hedging of Edwards’ securities by members of the Board, executives, employees with a title of “vice president” equivalent or above, and any other employees designated as “Designated Insiders” under our insider trading policy.

 

  

We alignALIGN executive compensation

with the interests of our

stockholders.

 

ExecutiveWe DESIGN executive compensation programs

are designed to avoid excessive risk

and foster long-term value creation.

 

We adhereADHERE to strong executive

compensation and corporate governance practices.



 

 

 
  LOGO    Edwards Lifesciences Corporation   20202022 Proxy Statement  ix 



 

EDWARDS LIFESCIENCES CORPORATION

 

 

PROXY STATEMENT FOR THE

20202022 ANNUAL MEETING OF STOCKHOLDERS

GENERAL MEETING AND VOTING INFORMATION

Our Board is soliciting your proxy for use at the Annual Meeting to be held at 10:00 a.m. PT, on Thursday,Tuesday, May 7, 2020, at our corporate headquarters, located at One Edwards Way, Irvine, California 92614.3, 2022, which will be conducted virtually, via live webcast.

Unless the context otherwise requires, references in this Proxy Statement to “Edwards,” “the Company,” “we,” “our,” “us,” and similar terms refer to Edwards Lifesciences Corporation, a Delaware corporation.

Important Notice Regarding the Availability of Proxy Materials for theOur 2022 Annual Meeting of Stockholders Meeting to be Held on May 7, 20203, 2022

We are pleased to take advantage of U.S. Securities and Exchange Commission (the “SEC”) rules that allow us to furnish our proxy materials, including our 20192021 Annual Report and this Proxy Statement (the(together, the “Proxy Materials”), over the Internet. As a result, we are mailing to most of our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) instead of a paper copy of the Proxy Materials. The Notice contains instructions on how to access those documents over the Internet and how to submit your proxy via the Internet. The Notice also contains instructions on how to request a paper copy of the Proxy Materials. All stockholders who do not receive athe Notice will receive a paper copy of the Proxy Materials by mail or an electronic copy of the Proxy Materials bye-mail. This process allows us to provide our stockholders with the information they need in a more timely manner, while reducing the environmental impact and lowering the costs of printing and distributing the Proxy Materials. This Proxy Statement and our 20192021 Annual Report are available athttp:https://ir.edwards.com/annuals-proxies.cfmfinancials/annual-reports-proxies/default.aspx.

The Notice and the Proxy Materials are first being made available to stockholders on or about March 25, 2020.22, 2022.

Important Notice - Contingent Virtual Meeting

We are closely monitoring the developments regarding the coronavirus (COVID-19). Although we currently intend to hold our Annual Meeting in person, we are sensitive to the public health and travel concerns stockholders may have and the protocols that federal, state, and local governments may impose. In the event we determine that we need to conduct our Annual Meeting by means of remote communication, we will announce the change and provide instructions on how stockholders can participate in the Annual Meeting via the filing of additional soliciting materials with the Securities and Exchange Commission and via our website. Please check our website atwww.edwards.comunder “Investor Relations” one week prior to the Annual Meeting.

Voting Matters and the Recommendations of the Board

The items of business scheduled to be voted on at the Annual Meeting and our Board’s recommendation on each item are as follows:

 

Proposal

    Board VoteBoard’s Voting
Recommendation

Proposal 1.

  

Election of Directors

 

LOGO     FOR

each nominee

Proposal 2.

  

Advisory Vote to Approve Named Executive Officer Compensation

 

LOGO     FOR

Proposal 3.

  

Approval of the 2020 Nonemployee Directors Stock Incentive Program

LOGO     FOR

Proposal 4.

Approval of Amendment of the Certificate of Incorporation to Increase the Number of Authorized Shares of Common Stock for the Purpose of Effecting aThree-For-One Stock Split

LOGO     FOR

Proposal 5.

Ratification of Appointment of Independent Registered Public Accounting Firm

 

LOGO     FOR

Proposal 6.4.

  

Stockholder Proposal for an Advisory Vote onto Reduce the Share Ownership Threshold to Call a Stockholder Proposal Regarding Action By Written ConsentSpecial Meeting

 

    AGAINST

LOGOEdwards Lifesciences Corporation2020 Proxy Statement1


GENERAL MEETING AND VOTING INFORMATION

Stockholders will also be asked to consider and transact such other business as may properly come before the Annual Meeting or any postponement or adjournment thereof. Pursuant to our Bylaws, the chairman of the Annual Meeting will determine whether any business proposed to be brought before the Annual Meeting has been properly presented. If the chairman determines that the business was not properly brought before the Annual Meeting, the chairman will declare at the Annual Meeting that such business was not properly brought and such business will not be transacted.

LOGOEdwards Lifesciences Corporation2022 Proxy Statement1


GENERAL MEETING AND VOTING INFORMATION

Record Date and Stockholders List

The Board has fixed the close of business on March 13, 20209, 2022 as the record date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting. A list of stockholders of record entitled to vote at the Annual Meeting will be available for inspection by any stockholder, for any purpose germane to the meeting, during normal business hours, for a period of ten10 days prior to and including the date of the meeting,Annual Meeting, at our corporate headquarters located at One Edwards Way, Irvine, California 92614. If you register in advance to attend the Annual Meeting, a list of stockholders as of the record date for the Annual Meeting also may be accessed during the virtual meeting by following the instructions received via email after you register for the meeting. Instructions on viewing the list of stockholders will be provided approximately one hour prior to the start of the Annual Meeting.

How to Attend

The Annual Meeting will be held on Tuesday, May 3, 2022 at 10:00 a.m. PT in a virtual-only meeting format, via live video webcast. To ensure the health and well-being of our stockholders, employees and Board during the pandemic, we have determined that the Annual Meeting will be held solely in a virtual meeting format via the Internet. You will be able to attend and participate in the Annual Meeting online by visiting www.proxydocs.com/EW and registering in advance of the meeting. See “Virtual Annual Meeting” above following the Notice of 2022 Annual Meeting of Stockholders for further information.

Who Can Vote

You are entitled to vote your shares at the Annual Meeting if our records show that you held your shares as of the close of business on the record date, March 13, 2020.9, 2022. At the close of business on that date, 207,325,907621,316,637 shares of our common stock were outstanding and entitled to vote at the Annual Meeting. We have no other class of voting securities outstanding. Each stockholder is entitled to one vote per share on each proposal to be voted upon at the Annual Meeting.

How to Vote

You may hold Edwards’ shares in multiple accounts and therefore receive more than one set of the Proxy Materials. To ensure that all of your shares are voted, please submit your proxy or voting instructions for each account for which you have received a set of proxy materials.the Proxy Materials.

Shares Held of Record.    If you hold your shares in your own name as a holder of record with our transfer agent, Computershare, you may authorize that your shares be voted at the Annual Meeting in one of the following ways:

 

By Internet

 

If you received athe Notice or a printed copy of the Proxy Materials, follow the instructions in the Notice or on the proxy card.

By Telephone

 

If you received a printed copy of the Proxy Materials, follow the instructions on the proxy card.

By Mail

 

If you received a printed copy of the Proxy Materials, complete, sign, date, and mail your proxy card in the enclosed, postage-prepaid envelope.

In Person (Virtual)

 

You may also vote in person if youvirtually while attending the meeting through www.proxydocs.com/EW. To attend the Annual Meeting.Meeting and vote your shares, you must register for the Annual Meeting in advance of the meeting and provide the control number located on your Notice or proxy card. See “Virtual Annual Meeting” above following the Notice of 2022 Annual Meeting of Stockholders for further information.

Shares Held in Street Name.    If you hold your shares through a broker, bank or other nominee (that is, in street name), you will receive instructions from your broker, bank or nominee that you must follow in order to submit your voting instructions and have your shares voted at the Annual Meeting. If you want to vote in person atvirtually during the Annual Meeting, you mustmay be required to obtain a legal proxy from your broker, bank or other nominee, and bring it toyou must also register in advance of the meeting.meeting at www.proxydocs.com/EW.

Shares Held in Our 401(k) Plan.    If you participate in the Edwards Lifesciences Corporation 401(k) Savings and Investment Plan or the Edwards Lifesciences Technology Sarl Retirement Savings Plan, you will receive a request for voting instructions

2LOGOEdwards Lifesciences Corporation2022 Proxy Statement


GENERAL MEETING AND VOTING INFORMATION

with respect to the shares allocated to your plan account. You are entitled to direct the plan trustee how to vote your plan shares. If the plan trustee does not receive voting instructions for shares in your plan account, the shares attributable to your account will be voted in the same proportion as the allocated shares for which voting instructions have been received.

Even if you plan to attend the Annual Meeting, we recommend that you submit your proxy or voting instructions in advance of the Annual Meeting as described above so that your vote will be counted if you later decide not to attend or are unable to attend the Annual Meeting.

2LOGOEdwards Lifesciences Corporation2020 Proxy Statement


GENERAL MEETING AND VOTING INFORMATION

Deadline to Vote

If you are a stockholder of record, your proxy must be received by telephone or the Internet by 11:59 p.m. ET on May 6, 2020prior to the start of the meeting in order for your shares to be voted at the Annual Meeting. If you are a stockholder of record and you received a printed copy of the Proxy Materials, you may instead mark, sign, date and return the enclosed proxy card, which must be received before the polls close at the Annual Meeting.

If you hold your shares in street name through a broker, bank or other nominee, please follow the instructions provided by the broker, bank or other nominee who holds your shares. If you hold shares in one of our 401(k) plans, to allow sufficient time for voting by the plan trustees, your voting instructions must be received by telephone or the Internet by 11:59 p.m. ET on May 4, 2020.April 28, 2022.

Appointment of Proxies

The Board has appointed William J. LinkMartha H. Marsh and Michael A. Mussallem to serve as proxy holders to vote your shares according to the instructions you submit. If you properly submit a proxy, but do not indicate how you want your shares to be voted on one or more items, your shares will be voted on such items in accordance with the recommendations of our Board, as set forth above under “Voting Matters and the Recommendations of the Board.” With respect to any other matter properly presented at the Annual Meeting, your proxy, if properly submitted, gives authority to the proxy holders to vote your shares on such matter in accordance with their best judgment.

Revocation of Your Proxy

If you are a holder of record, you may revoke your proxy at any time before it is voted at the Annual Meeting by delivering written notice of revocation to the Corporate Secretary of the Company by submitting a subsequently dated proxy by mail, telephone or the Internet in the manner described above under “How to Vote,” or by attending the Annual Meeting and voting in person.during the Annual Meeting virtually. Attendance at the Annual Meeting will not itself revoke an earlier submitted proxy. If you hold your shares in street name, you must follow the instructions provided by your broker, bank or nominee to revoke your voting instructions, or, if you have obtained a legal proxy from your broker, bank or other nominee giving you the right to vote your shares at the Annual Meeting, by attendingparticipating in the Annual Meeting and voting in person.virtually.

Any change to your proxy or voting instructions that is provided by telephone or the Internet must be submitted by 11:59 p.m. ET on May 6, 2020,prior to the Annual Meeting, except that if you are voting shares held in one of our 401(k) plans, the deadline is 11:59 p.m. ET on May 4, 2020.April 28, 2022.

Broker Voting

BrokersCertain brokers holding shares of record for their customers are entitled to vote on certain routine matters, such as the approval of the amendment of our Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”) to increase the number of authorized shares of common stock for the purpose of effecting a three-for-one stock split (Proposal 4) and ratification of the appointment of PricewaterhouseCoopers LLP (“PwC”), our independent registered public accounting firm (Proposal 5)3), without instructions from their customers. However, these brokers are generally not entitled to vote on certainnon-routine matters, including the election of directors, matters relating to equity compensation plans or executive compensation, and certain corporate governance proposals, unless their customers submit voting instructions. If you hold your shares in street name through a broker and the broker does not receive your voting instructions, the broker will not be permitted to vote your shares in its discretion on any of the proposals at the Annual Meeting other than the proposal to approve the amendment of our Certificate of Incorporation (Proposal 4) and the proposal to ratify the appointment of PwC (Proposal 5)3). If you do not submit voting instructions and your broker votes your shares on Proposal 4 or Proposal 53 in its discretion, your shares will constitute “brokernon-votes” on each of the other proposals.

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GENERAL MEETING AND VOTING INFORMATION

Quorum

The presence at the Annual Meeting, in person or by proxy, of holders of at least a majority of the outstanding shares of common stock entitled to vote is necessary to constitute a quorum to transact business at the Annual Meeting. Shares represented at the Annual Meeting are counted toward a quorum even if the holder of such shares abstains from voting. Shares held through brokers are not counted toward a quorum unless the broker has authority to vote, and votes such shares, upon at least one matter at the Annual Meeting.

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GENERAL MEETING AND VOTING INFORMATION

Vote Required on Proposals

The following summary describes the vote required to approve each of the proposals at the Annual Meeting.

 

Voting Item

    Vote Standard 

Treatment of Abstentions and Broker

Broker Non-Votes

Proposal 1.

 Election of Directors 

  Majority of votes cast

 

  Abstentions and brokernon-votes will not be counted as votes cast

Proposal 4.2.

 Approval of Amendment of the Certificate of Incorporation to Increase the Number of Authorized Shares of Common Stock for the Purpose of Effecting aThree-For-One Stock Split

  Majority of outstanding shares

  Abstentions will have the effect of votes “against”; we do not expect any broker non-votes on this matter

Proposal 2.

Proposal 3.

Proposal 5.

Proposal 6.

Advisory Vote to Approve Named Executive Officer Compensation

Approval of the 2020 Nonemployee Directors Stock Incentive Program

Ratification of Appointment of Independent Registered Public Accounting Firm

Advisory Vote on a Stockholder Proposal Regarding Action By Written Consent

 

  Majority of shares represented at the Annual Meeting and entitled to vote on the proposal

 

  Abstentions will have the effect of votes “against”

  Brokernon-votes will not be counted as shares entitled to vote on the proposal

Proposal 3.

Ratification of Appointment of Independent Registered Public Accounting Firm

Proposal 4.

Stockholder Proposal for an Advisory Vote to Reduce the Share Ownership Threshold to Call a Special Meeting

Proxy Solicitation Costs

Your proxy for the Annual Meeting is being solicited on behalf of our Board, and wethe Company will paybear the cost of solicitation. At our expense, we will also request brokers and other custodians, nominees and fiduciaries to forward proxy soliciting materials to the beneficial owners of shares held of record by such persons. In addition, we have retained Georgeson Inc.LLC (“Georgeson”) to assist with the distribution and solicitation of proxies for a fee of $20,000, plus expenses for these services. We also agreed to indemnify Georgeson against liabilities and expenses arising in connection with the proxy solicitation unless caused by Georgeson’s gross negligence or intentional misconduct. Georgeson and our officers, directors and regular employees may also solicit proxies by telephone, facsimile,e-mail and personal solicitation. We will not pay additional compensation to our officers, directors and regular employees for these activities.

 

 

 
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BOARD OF DIRECTORS MATTERS

PROPOSAL 1 – ELECTION OF DIRECTORS

 

THE BOARD RECOMMENDS A VOTE“FOR” THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.

    LOGO

THE BOARD RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.

General.    Our Board currently consists of eight directors forming onea single class of directors.

The Board has nominated the eight individuals identified below for election to the Board at the Annual Meeting, to serve for aone-year term until the next annual meeting of stockholders and until their respective successors are elected and qualified, or until their earlier resignation or removal.

The Board has nominated seven of our incumbent directors for election to the Board at the Annual Meeting. In accordance with the retirement policy in our Corporate Governance Guidelines, our Board did not nominate Wesley von Schack for election at the Annual Meeting. The Board also nominated Ms. Ramona Sequeira for election at the Annual Meeting. Ms. Sequeira is not currently a member of our Board and is standing for election to the Board for the first time at the Annual Meeting.

Each of the nominees standing for election is currently a director and was previously elected to the Board by our stockholders. Each of the director nominees has consented to serve as a director if elected. However, if any nominee becomes unable or unwilling for good cause to serve before the election, the shares represented by proxy may be voted for a substitute nominee designated by the Board. No arrangement or understanding exists between any nominee and any other person or persons pursuant to which any nominee was or is to be selected as a director or nominee, and none of our directors has any family relationship with any other director or with any of our executive officers. More information regarding the Board, the committees of the Board, director independence, and related matters follows this Proposal 1.

Identification and Evaluation of Director Candidates.    Our Board carefully considers the skills, experiences, and diversity of its members as part of its robust director evaluation and Board refreshment process. Even though our Compensation and Governance Committee makes recommendations to the Board regarding candidates for election as directors of the Company, all members of the Board are very engaged in the process of, and discussions regarding, refreshment.

The Compensation and Governance Committee maintains formal criteria for selecting director nominees who will best serve the interests of the Company and its stockholders. These criteria are described in more detail below under “Board Criteria and Diversity Policy.” In addition to these requirements, the Compensation and Governance Committee also evaluates whether the candidate’s skills and experience are complementary to the existing Board members’ skills and experience, recognizing that the Board’s skills evolve in order to align with the Company’s strategy as well as emerging risks and opportunities. Some or all of the members of the Compensation and Governance Committee interview candidates that meet the criteria, and the Compensation and Governance Committee selects nominees that it believes best suit the needs of the Board. As a result of the Board’s thoughtful and deliberate process of refreshment, seven new directors have been added to the Board has appointed fivesince 2014, including two new directors since 2014. In addition, the Board has identified Ms. Sequeira, who as a Board nominee will stand for election for the first time at the Annual Meeting.in 2020. This process has involved the participation of all directors, taking advantage of their broad range of expertise and experience as part of the decision-making process.

The Board retained Spencer Stuart to commence a director search in 2018. Spencer Stuart identified potential candidatesCompensation and provided the Board with background information and its assessment of the qualifications of potential candidates, which included Ms. Sequeira. The Board then followed the evaluation and screening process discussed above, including reviewing the candidates against the formal criteria for selecting director nominees, and then discussed the potential candidates. The Board then met, discussed and selected Ms. Sequeira as a director nominee for the Annual Meeting.

The CompensationGovernance Committee will consider qualified candidates for director nominees suggested by the Company’s stockholders. Stockholders can suggest qualified candidates for director nominees by writing to the Corporate Secretary of the Company at One Edwards Way, Irvine, California 92614. Submissions should include the information about the director candidate and the stockholder making the submission that would otherwise be required by Article I, Section 2(f) of our Bylaws if the stockholder was nominating the individual for election to our Board. Submissions received that meetinclude such information, and provided that the recommended candidate meets the criteria described below, are forwarded to the Compensation and Governance Committee for further review and consideration. The Compensation and Governance Committee may also request additional information concerning the director candidate that it deems reasonably required to determine the eligibility and qualification of the director candidate to serve on our Board. Stockholders suggesting director candidates for consideration by our Board in connection with the next annual meeting of stockholders should provide their submission no earlier than January 3, 2023 and no later than February 2, 2023. The Compensation and Governance Committee does not intend to evaluate candidates proposed by stockholders any differently thanfrom other candidates.

 

 

 
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PROPOSAL 1 — ELECTION OF DIRECTORS

 

Board Criteria and Diversity Policy.    Our Board, led by the Compensation and Governance Committee, is responsible for assessing, identifying, evaluating, and, ultimately, recommending to the stockholders, individuals qualified to be directors of the Company. We believe that diverse backgrounds and experiences strengthen Board performance and promote long-term stockholder value creation.

The Compensation Committee’sand Governance Committee charter sets forth the membership criteria against which potential director candidates are evaluated. These written membership criteria state that the Company “seeks a boardBoard with diversity of background among its members includingas determined by the Board in its business judgment, which may include diversity of experience, gender, race, ethnic or national origin, and age.age or other factors as the Board determines appropriate.” In performing this responsibility, the Compensation and Governance Committee considers women and minority candidates, consistent with the membership criteria and the Company’snon-discrimination policies.

The Compensation and Governance Committee also seeks director candidates and nominees with the following qualities:qualities, among other characteristics:

 

intelligence,intelligence;

 

honesty,honesty;

 

perceptiveness,perceptiveness;

 

good judgment,judgment;

 

maturity,maturity;

 

high ethics and standards,standards;

 

integrity,integrity;

 

fairness and responsibility,fairness;

responsibility;

 

a background that demonstrates an understanding of business and financial affairs and the complexities of a large, multifaceted, global business, governmental or educational organization,organization; and

 

the ability to hold independent opinions and expressthe willingness to state them in a constructive manner.

Of significant importance, the Compensation and Governance Committee and the Board seek individuals who are compatible and able to work well with other directors and executives. The satisfaction of these criteria is implemented and assessed through ongoing consideration of directors and potential nominees by the Compensation and Governance Committee and the Board, with a discussion of Board succession planning held at regularly scheduled meetings of the Board and certain specially called meetings. These discussions have included reviews of current director skills against an established skills matrix and consideration of each director’s retirement horizon, as well as the Board’s self-evaluation and peer evaluation processes, as described below under “Board Evaluations.” Based upon these activities and its review of the current composition of the Board, the Compensation and Governance Committee and the Board believe that the nominating criteria have been satisfied. As a result, the Board believes its members represent diverse backgrounds and experience that are aligned with our Company’s strategy, including financial, industrial, entrepreneurial and international experience.

Board Evaluations.    The Board conducts an annual Board and Committee self-evaluation every July or August, soliciting each director’s views on, among other things, Board and Committee performance and effectiveness, size, composition, agenda, processes and schedule. In addition, the directors conduct annual peer evaluations focusing on each individual director’s personal interactions and skills. This is a robust process that culminates inone-on-one meetings during which peer feedback is provided to each director by the General Counsel. Our Board views the self- and peer-evaluation processes as an integral part of its commitment to cultivating excellence and best practices in its performance.

Further, before a Board Retirement Policy.    As set forth in the Corporate Governance Guidelines,member accepts a position on another public company’s board of directors, the Board has adopted a retirement policy that no director shall stand for election tomember informs the Board after reachingChairman and CEO as well as the age of 75. As a result of this retirement policy, Mr. von Schack will not stand for election to the Board at the Annual Meeting.Lead Independent Director.

 

 

 
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PROPOSAL 1 — ELECTION OF DIRECTORS

 

In addition to confirming there are no conflicts of interest with the internal legal and compliance functions, the Chairman and Lead Independent Director discuss with the other members of the Board whether there would be any reason for the Board member not to accept the position. The Board considers, among other things, the engagement of such Board member on the Board and reviews the aforementioned Board evaluations and peer reviews. In light of how critical a Board member’s focused engagement and time commitment is to the director’s ability to contribute and add value to the Company’s business and strategy, this process is intentionally comprehensive and rigorous.

Board Retirement Policy.    As set forth in the Corporate Governance Guidelines, the Board has adopted a retirement policy that no director shall stand for election to the Board after reaching the age of 75, except in special circumstances specifically approved by the Board.

In light of the robust process described above, our Board believes our nominees’ skills, expertise, and experience and their mix of qualifications and attributes strengthen our Board’s independent leadership and effective oversight of management.

 

LOGOLOGOLOGOLOGO

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Diverse Range of Qualifications and Skills Represented by Our NomineesDirectors

Medical Technology

Industry Experience

 

International Executive International

Experience

 Corporate Governance

Regulatory and

Compliance

 Senior Leadership Operations Management
Innovation/Innovation and Technology Risk Management Risk Oversight

Finance and Financial

Industry

 Human Capital Resources Financial Reporting

IT and Cybersecurity

Corporate Strategy

Corporate Responsibility

Our Board strives to maintain a highly independent, balanced, and diverse setgroup of directors that collectively possesspossesses the expertise to ensureprovide proper oversight.

 

 

 
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PROPOSAL 1 — ELECTION OF DIRECTORS

 

BOARD OF DIRECTOR NOMINEES

LOGOLOGO 

Michael A. Mussallem

 

Age:    6769

Director Since:    2000

 

Edwards Board Roles:Role:

 

  Chairman of the Board

 

 

Select Professional Experience and Highlights:

 

  Edwards Lifesciences Corporation

 

–  Chairman and CEO,Chief Executive Officer, since 2000

 

  Baxter International Inc.

 

–  Group Vice President, Cardiovascular businesses, from 1994 to 2000

 

–  Group Vice President, Biopharmaceutical business, from 1998 to 2000

 

–  Held a variety of positions with increasing responsibility in engineering and product development, from 1979 to 1994

 

  Advanced Medical Technology Association (AdvaMed)

 

–  Member of the Board, since 2001

 

–  Member of the Executive Committee, since 2006

 

–  Chairman, from 2008 to 2010

 

  University of California, Irvine Foundation

 

–  Member of the Board of Trustees, since 2008

 

  Leonard D. Schaeffer Center for Health Policy & Economics at the University of Southern California

 

–  Advisory Member of the Board, since 2014

 

  Rose-Hulman Institute of Technology

 

–  Member of the Board of Trustees, since 2017

 

 

  CEO Leadership Alliance

–  Vice Chairman, since 2017

California Healthcare Institute

 

–  Member of the Board, from 1996 to 2014

 

–  Chairman, from 2004 to 2005

 

  Forum for Corporate Directors Hall of Fame

 

  University of California Irvine Medal Award

 

  The Phoenix Conference Lifetime Achievement Award

 

  WomenHeart Excellence in Corporate Leadership Wenger Award

 

Select Skills and Qualifications:

 

Mr. Mussallem has an extensive knowledge of the medical technology industry in general, and of the people, operations, processes and products of the Company in particular, and he built an over a40-year career with the Company and its predecessor. In addition, in his roles with AdvaMed and other healthcare-related organizations, he has become a recognized leader in the medical technology industry, making important contributions to healthcare policy discussions in California, the United States and the key global markets that the Company serves. These experiences have established relationships, which are helpful in developing our Board’s strategic perspective, and enhanced his leadership of the Company and contributions to our Board.

 

LOGOLOGO 

Martha H. Marsh

 

Age:    7173

Director Since:    2015

 

Edwards Board Roles:

 

  Future  Lead Independent Director

 

  Compensation and Governance Committee Member

 

 

Other Current Public Company Directorships:

 

  AMN Healthcare Services, Inc., since 2010

 

–  Member of the Compensation and Corporate Governance Committees, since 2010

–  Chair of the Compensation Committee, since 2012

 

–  Member of the Compensation Committee, since 2010

–  Member of the Corporate Governance Committee, from 2010 to 2019

Other Public Company Directorships in Past Five Years:Previously Held:

 

  Owens & Minor, Inc., from 2012 to 2019

 

  Thoratec Corporation, from 2014 to 2015

 

Select Professional Experience and Highlights:

 

  Stanford Hospital & Clinics

 

–  President and Chief Executive Officer, from 2002 until her retirement in 2010

 

  University of California Davis Medical Center

 

–  Chief Executive Officer, from 1999 to 2002

 

  University of California Davis Health System

 

–  Chief Operating Officer, from 1999 to 2002

 

  University of Pennsylvania Health System

 

–  Senior Vice President for Professional Services and Managed Care, from 1996 to 1998

 

–  Vice President for Managed Care, from 1994 to 1996

 

Select Skills and Qualifications:

 

Ms. Marsh’s experience of more than 30 years in an increasingly complex and evolving healthcare system as a president and chief executive officer, combined with years of board experience that includes corporate governance chairmanships, provide a unique perspective as our Board considers the execution of our patient-focused innovation strategy.

 

 

 
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PROPOSAL 1 — ELECTION OF DIRECTORS

 

LOGOLOGO 

Kieran T. Gallahue

 

Age:    5658

Director Since:    2015

 

Edwards Board Roles:Role:

 

  Audit Committee Member

 

 

Other Current Public Company Directorships:

 

  Envista Holdings Corporation, since 2019

 

–  Chairman,Chair of the Nominating and Governance Committee, since 2019

 

  Arena Pharmaceuticals, Inc., since 2018

–  Member of the Audit Committee, since 2018

  intersectIntersect ENT, Inc., since 2015 (undergoing acquisition by Medtronic plc)

 

  Executive  Chairman of the Board, since 20192020

 

–  Member of the Audit Committee, since 2015

 

Other Public Company Directorships in Past Five Years:Previously Held:

  Arena Pharmaceuticals, Inc., from 2018 to 2022

 

  CareFusion Corporation, from 2011 to 2015

 

  Volcano Corporation, from 2007 to 2015

 

  ResMed, Inc., from 2008 to 2011

Select Professional Experience and Highlights:

  Signifier Medical Technology, a sleep disordered, breathing-focused medical technology company

–  Member of the Board, since 2019

 

  CareFusion Corporation, a global medical technology company (acquired by Becton, Dickinson and Company in March 2015)

 

–  Chairman and Chief Executive Officer, from 2011 until his retirement in 2015

  ResMed, Inc.

–  Member of the Board, from 2008 to 2011

 

–  Chief Executive Officer, from 2008 to 2011

 

–  President, from 2004 to 2011

 

–  President and COO,Chief Operating Officer, Americas, from 2003 to 2004

  Nanogen, Inc.

 

–  Various positions, including President and Chief Financial Officer, from 1998 to 2002

 

  Prior to 1998, various marketing, sales, and financial positions within Instrumentation Laboratory, the Procter & Gamble Company, and the General Electric Company

 

  Served on the Board and Executive Committee, and as Chairman of the International Committee and Treasurer of Advanced Medical Technology Association (AdvaMed)

 

Select Skills and Qualifications:

 

Mr. Gallahue provides valuable insights and direction to our Board gained through extensive executive management experience at medical technology companies. His leadership roles on other public company boards and committees and prior experience as a public company chief financial officer also enablesenable him to contribute valuable financial and accounting perspectives to our Board and Audit Committee.

 

LOGOLOGO 

Leslie S. Heisz

 

Age:    5961

Director Since:    2016

 

Edwards Board Roles:Role:

 

  Chair of the Audit Committee

 

 

Other Current Public Company Directorships:

 

  Capital Group Private Client Services and certain AmericanMutual Funds, since January 2019, and ETF Funds, since 2021

 

–  MemberChair of the Audit Committee, since January2021, and member, since 2019

 

–  Member of the Contracts Committee, since January 2019

 

  Public Storage, Independent Trustee, since 2017

 

–  Member of the Audit Committee, from 2017 to 2020

–  Member of the Nominating, Governance and Sustainability Committee, since 2017

 

–  Member of the Nominating/Corporate GovernanceLong-Term Planning Committee, since 2017from 2020 to 2021

 

Other Public Company Directorships in Past Five Years:Previously Held:

 

  Ingram Micro Inc., from 2007 to 2016

 

  Towers Watson & Co., from 2012 to 2016

 

  HCC Insurance Holdings, Inc., from 2010 to 2014

 

Select Professional Experience and Highlights:

 

  Kaiser Foundation Hospitals and Kaiser Foundation Health Plan, Inc., since 2015

 

–  Member of the Audit and Compliance Committee, since 2015

 

–  Member of the Finance Committee, since 2018

 

–  Member of the Governance and Community BenefitHealth Committees, from 2015 to 2017

 

  Lazard Freres & Co., from 2003 to 2010

 

–  Served as Senior Advisor thenand Managing Director for six years

  Dresdner Kleinwort Wasserstein (and its predecessor Wasserstein Perella & Co.), Mergers & Acquisitions and Corporate Finance, from 1995 to 2002

 

–  Served as Director thenand Managing Director for six years

 

  Salomon Brothers Inc., from 1987 to 1995

 

–  Served as Associate thenand Vice President, Corporate Finance for four years

 

  PricewaterhouseCoopers LLP, from 1982 to 1986

 

–  Served as Staff Consultant thenand Senior Consultant for two years

 

  National Association of Corporate Directors’ Directorship 100 Award

 

Select Skills and Qualifications:

 

Ms. Heisz’s career in the banking industry, in-depth knowledge of capital markets, and previous public company board and audit committee experience enhancesenhance our Board’s ability to effectively oversee financial reporting, enterprise and operational risk management, as well as corporate finance, tax, treasury, and governance matters.

 

 

 
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PROPOSAL 1 — ELECTION OF DIRECTORS

 

LOGOLOGO 

William J. Link, Ph.D.Paul. A. LaViolette

 

Age:73    64

Director since:2009    2020

 

Edwards Board Roles:Role:

 

  Chair of the Compensation and Governance Committee Member

 

 

Other Current Public Company Directorships:Directorships Previously Held:

 

  Second Sight Medical Products,Misonix, Inc., since 2003

–  Member of the Audit and Nominating and Corporate Governance Committees, since 2003

–  Chair of the Compensation Committee, since 2014from 2019 to 2021

 

  Glaukos Corporation, since 2001 (became a public company in July 2015)Asensus Surgical, Inc. (formerly known as TransEnterix, Inc.), from 2014 to 2021

 

–  Chairman, and Member of the Compensation, Nominating and Governance Committee, since 2001  Thoratec, from 2009 to 2015

 

Select Professional Experience and Highlights:

 

  Versant Ventures,SV Health Investors LLC, a venture capital firm investing in early-stagespecialist healthcare companiesfund management company, since 2009

 

–  Managing DirectorPartner and Co-Founder,Chief Operating Officer, since 19992014

 

  Brentwood Venture Capital, sinceAdvanced Medical Technology Association (AdvaMed), from 1998

–  General Partner to 2008

 

  Chiron Vision (acquired by Bausch & Lomb, Inc.),Boston Scientific Corporation, from 19861994 to 19972008

 

–  Founder, Chairman,Various executive positions, including serving as Chief Operating Officer, from 2004 to 2008

  C.R. Bard Inc., from 1984 to 1993

–  Various marketing and Chief Executive Officergeneral management positions

 

  Advanced Medical Optics,Kendall, Inc. (acquired by Allergan, Inc.), from 19781980 to 19861984

 

–  Founder and PresidentVarious marketing positions

 

  Before enteringMedical Device Manufacturers Association

–  Chairman of the healthcare industry, was an assistant professor inBoard, from 2016 to 2019

  Innovation Advisory Board for the DepartmentMass General Brigham Health System

–  Chairman of Surgery at the Indiana University School of MedicineBoard, since 2015

 

Select Skills and Qualifications:

 

Dr. Link’s corporate leadership and long history successfully commercializing productsMr. LaViolette brings significant executive experience in theglobal medical technology, industry provideand his experience working with large, global organizations and start-ups provides him with a unique perspective on strategy and innovation. In addition, Mr. LaViolette’s service on boards, including numerous chairmanships, has enabled him to be an immediate contributor, offering valuable insight to our Board with a valuable perspective in evaluatingand the prospects of,Compensation and risks associated with, existing business operations. In addition, his extensive experience in identifying new business opportunities and his strong technical and engineering background have proven beneficial in assessing the potential for future innovations.Governance Committee.

 

LOGOLOGO 

Steven R. Loranger

 

Age:68    70

Director Since:2016

 

Edwards Board Roles:Role:

 

  Compensation and GovernanceAudit Committee Member

 

 

Other Current Public Company Directorships:

 

  Xylem Inc., since 2011

 

–  Member of the CompensationLeadership Development and PersonnelCompensation Committee, since 2018

 

–  Chair of the Finance, Innovation and Technology Committee, since 2017

 

–  Member of the Audit and Finance Committee, from 2011 to 2018

 

–  Member of the Nominating and Governance Committee, from 2011 to 2017

 

Other Public Company Directorships in Past Five Years:Previously Held:

 

  FedEx Corporation, from 2006 untilto 2014

 

  ITT Exelis, Inc., from 2011 untilto 2013

 

Select Professional Experience and Highlights:

 

  Xylem Inc., a global water technology provider

 

–  Interim CEOChief Executive Officer and President, from 2013 until his retirement in 2014

 

  ITT Corporation

 

–  Chairman, President and CEO,Chief Executive Officer, from 2004 to 2011

  Textron, Inc.

 

–  Executive Vice President and Chief Operating Officer, from 2002 to 2004

  Honeywell International Inc. and its predecessor company, AlliedSignal, Inc.

 

–  Various executive positions, including serving as President and Chief Executive Officer of its Engines, Systems and Services businesses, from 1981 to 2002

  Senior Advisor to the CEO of FlightSafety International and serves on the Boards of the Smithsonian National Air and Space Museum and the Congressional Medal of Honor Foundation (Emeritus)

 

Select Skills and Qualifications:

 

Mr. Loranger is a seasoned executive with global manufacturing and operational experience in highly regulated, high-tech industries. His decades of experience leading large, global innovation-focused corporations with intensive data privacy components is particularly valuable to our Board.

 

 

 
10 LOGO   Edwards Lifesciences Corporation   20202022 Proxy Statement 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

LOGOLOGO 

Ramona Sequeira

 

Age:    5456

Director Since:    2020 Nominee

 

Edwards Board Roles:Role:

 

  To be determined by BoardAudit Committee Member

 

 

Other Current Public Company Directorships:

  None

Other Public Company Directorships in Past Five Years:

  None

Select Professional Experience and Highlights:

 

  Takeda Pharmaceuticals USA, Inc., a biopharmaceutical company, since 2015

 

–  Chair of the Commercialization and Launch Committee, since 2020

–  President of the U.S. Business Unit and Global Portfolio Commercialization, since 2020

–  President, from 2015 to 2020

 

–  Business Review Committee and Co-Chair of Pipeline Review Committee, since 2015

 

  MemberPharmaceutical Research and Manufacturers of the Board of PhRMA,America (PhRMA), since 2015

 

–  Director,Chair of the Board, since 2021, and member, since 2015

 

–  Vice Chair, 2020

–  Treasurer, since 2019

 

  Eli Lilly & Company

 

–  Vice President – Lilly USA, from 2013 to 2015

 

–  General Manager, UK/Northern Europe, from 2010 to 2012

 

–  Vice President, Sales – Lilly Canada, from 2005 to 2009

 

–  Associate Director, Neuroscience Marketing, from 2003 to 2005

 

  Member of the Board of Trustees for Lake Forest Academy,Harvey Mudd College, since 2017

  Member of the Board of Matter

–  Director, from 2017 to 2020

  Member of the Board of Chicago Executives Club

–  Director, from 2017 to 2019

 

Select Skills and Qualifications:

 

Ms. Sequeira has over 25 years of experience in the pharmaceutical industry through her work with Takeda and, prior to that, with Eli Lilly. She is a seasoned executive, currently leading the multi-billion dollar U.S. business for Takeda.Takeda as well as Takeda’s global brands. She has led businesses in Canada, Europe and the U.S. Her experience in leadership roles in multiple markets, across cultures and within different healthcare systems where she has successfully launched products, transformed businesses, and delivered sustainable growth is particularly valuable for our global business. Also, Ms. Sequeira’s industry role onexperience with pharmaceutical innovation and patient access aligns with the execution of our patient-focused innovation strategy.

 

LOGOLOGO 

Nicholas J. Valeriani

 

Age:    6365

Director Since:    2014

 

Edwards Board Roles:Role:

 

  Chair of Compensation and Governance Committee Member

 

 

Other Current Public Company Directorships:

 

  Surgalign Holdings, Inc. (formerly known as RTI Surgical Holdings, Inc.,)

–  Member of the Compensation Committee, since 2016

 

–  Member of the Nominating and Governance Committee, since 2019

 

–  Member of the Sciences and Technology Committee, from 2016 to 2020

Other Public Company Directorships in Past Five Years:Previously Held:

 

  Roka Bioscience, Inc., from 2015 to January 2018

 

Select Professional Experience and Highlights:

 

  Gary and Mary West Health Institute, an independent, nonprofit medical research organization that works to create new, more effective ways of delivering care at lower costs

 

–  Chief Executive Officer, from 2012 until his retirement in 2015

 

  Johnson & Johnson

 

–  Company Group Chairman, Ortho Clinical Diagnostics, from 2009 to 2012

 

–  Member of the Executive Committee

 

–  Vice President, Office of Strategy and Growth, from 2007 to 2009

 

–  Served 34 years in key positions, including Worldwide Chairman, Medical Devices and Diagnostics, and Corporate Vice President, Human Resources

 

  Member of the Boards of the Gary and Mary West Health Institute and the Gary and Mary West Health Policy Center, since 2012

 

  Member of the Board of AgNovos Healthcare, LLC, since 2016

 

  Member of the Board of SPR Therapeutics, Inc., since 2018

 

  Served on the Boards of the Robert Wood Johnson University Hospital, untilfrom 2008 to 2016, and the Center for Medical Interoperability, untilfrom 2013 to 2015

 

Select Skills and Qualifications:

 

Mr. Valeriani’s 40 years of medical technology industry experience in a large and complex global company and experience directing strategy informsinform his contribution to the development of our innovation strategy and assessment of future business opportunities. In addition, his background in human resources enables him to contribute valuable insights to the Compensation and Governance Committee.

 

THE BOARD RECOMMENDS A VOTE“FOR” THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.

    LOGO

THE BOARD RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.

 

 

 
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BOARD OF DIRECTORS MATTERS

 

CORPORATE GOVERNANCE POLICIES AND PRACTICES

Corporate Governance Highlights.The Company and the Board take seriously our commitment to good corporate governance. We believe the regular review of our corporate governance practices with current issues and trends in mind, the discussions we hold with our stockholders and advisersadvisors, and the practice enhancements we consider as a result help us to compete more effectively, sustain our successes and build long-term value for our stockholders. Our commitment to good corporate governance practices and accountability to stockholders is described in the following chart.

LOGO

WHAT WE DO

LOGOAnnual election of directors
LOGOBoard refreshment and director skill set aligned with corporate strategy
LOGOMajority vote standard in uncontested elections, with director resignation policy
LOGOSpecial stockholders meetings can be called by stockholders owning at least 15% of our outstanding shares
LOGOProxy access right to permit a stockholder, or a group of up to 30 stockholders, owning at least 3% of our outstanding shares continuously for at least 3 years, to nominate up to the greater of 2 directors or 20% of our Board for inclusion in our annual meeting proxy statement
LOGOIndependent Board, all but our Chief Executive Officer
LOGOExecutive session of independent directors held at eachin-person Board and committee meeting
LOGOLead Independent Directorprovides strong independent leadership of our Board
LOGORetirement policy for directors
LOGOAnnual Board and committee self-evaluations and peer reviews
LOGOEncourage continuing director education with designated annual reimbursement policy
LOGOFormal director orientation and continuing education program
LOGONonemployee directors expected to hold net shares upon vesting or exercise of equity awarded after 2011 until Board service ends
LOGOSenior management succession planning considered at each regularly scheduled Board meeting
LOGOActive stockholder engagement
LOGORobust code of ethics in our Global Business Practice Standards
LOGOBoard oversight of risk management
LOGOCorporate sustainability reportand receipt of numerous recognitions for our sustainability practices
LOGO“Clawback” policy for performance-based compensation

LOGO

WHAT WE DON’T DO

No pledging or hedging of Edwards’ securities by members of the Board, executives, employees with a title of “vice president” equivalent or above and employees designated as “Designated Insiders” under our insider trading policy
No stockholder rights plan (“poison pill”)
No supermajority voting provisions in the Company’s organizational documents

Active Stockholder Engagement Program.The Board and management are committed to engaging with Edwards’ stockholders and incorporating feedback into their decision-making processes. Throughout the year, our CEO, CFO and Vice President of Investor Relations meet, by phone andface-to-face, with current and prospective stockholders to discuss Edwards’ strategy, business and financial results. Our CFO, Corporate Secretary, and Vice President of Investor Relations, together with other members of management and from time to time, our Lead Independent Director, when appropriate, engage

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stockholders to solicit their views and feedback on corporate governance, compensation and other related matters and to discuss the issues that matter most to our stockholders.stockholders, including, among other things, corporate governance, compensation, sustainability, corporate social responsibility, human capital management, diversity, inclusion and belonging, succession planning, and other related matters. During this past outreach season, which occurred from November to December 2021, we also discussed the effects of the pandemic on the Company and the Company’s response. Stockholder feedback is shared with the Board and its committees, which enhances our corporate governance practices, facilitates future dialogue between stockholders and the Board and provides additional transparency to our stockholders. Since the 20192021 annual meeting of stockholders, our CFO, Corporate Secretary and Vice President of Investor Relationswe contacted our top stockholders representing approximately 56%50% of our outstanding shares and engaged with stockholders representing approximately 32%34% of our outstanding shares. In this engagement, we received feedback from stockholders on a range of topics including corporate governance, executive compensation, and sustainability.corporate social responsibility.

Over time, we have amended our Charter and Bylaws to adopt various stockholder rights and to align our corporate governance practices with our stockholders’ interests.

 

Topic Action Taken in Response to Stockholder Feedback
Lead Independent Director Responsibilities

  Expanded the role of the Presiding Director position, and, in light of the additional responsibilities, designated the position, Lead Independent Director

Proxy Access

  Amended our Bylaws to provide for proxy access at 3% and 3 year ownership and holding period duration thresholds

Right to Call

Special Meetings

 

  Amended our Bylaws to permit stockholders to call a special meeting

 

  In response to anon-binding stockholder proposal requesting the right to act by written consent, engaged with stockholders representing over 50% of shares then outstanding to better understand investor views and, in response to feedback received, reduced the minimum ownership threshold to call a special meeting from 25% to 15%

Proxy Access

  Amended our Bylaws to provide for proxy access at 3% and 3-year ownership and holding period duration thresholds

Disclosure of
EEO-1 Data

  Disclosed our EEO-1 data and relevant infographics on our website

Lead Independent

Director

Responsibilities

  Expanded the role of the Presiding Director position, and, in light of the additional responsibilities, designated the position, Lead Independent Director

Declassified Board 

  Amended our Charter to eliminate the classified board

No Supermajority

Voting

 

  Amended our Charter to eliminate supermajority voting

Poison Pill 

  Did not renew poison pill when it expired in March 2010

Majority Voting

in Director

Elections

 

  Amended our Bylaws to provide for majority voting in uncontested director elections

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BOARD OF DIRECTORS MATTERS

Director Independence.Under the corporate governance rules of the New York Stock Exchange (“NYSE”), a majority of the members of the Board must satisfy the NYSE criteria for independence. No director qualifies as independent unless the Board affirmatively determines that the director has no material relationship with the Company (either directly or as a partner, stockholder, or officer of an organization that has a relationship with the Company). TheAfter review of information supplied in the director questionnaires which are provided on an annual basis, the Board has determined that each of Mr. Gallahue, Ms. Heisz, Dr. Link,Mr. LaViolette, Mr. Loranger, Ms. Marsh, Ms. Sequeira and Mr. Valeriani, and Ms. Sequeira is independent under the NYSE rules. Mr. Von Schack, who is not standingnominees for election at the Annual Meeting, is independent under the NYSE rules. In addition, Dr. Link, who retired from the Board immediately prior to our 2021 annual meeting of stockholders, was also independent under the NYSE rules.rules during the period of his service on the Board in 2021. Mr. Mussallem is not independent as a result of his position as our Chief Executive Officer.

In assessing the directors’ independence, the Board took into account certain relationships involving Mr. LaViolette and each of Corvia Medical, Inc. and Endotronix, Inc. (entities in which the Company currently has investments). The Board considered (i) Mr. LaViolette’s position as the chairman of the board of Corvia Medical and his less than 1% interest in Corvia Medical, Inc., and (ii) Mr. LaViolette’s position as chairman of the board of Endotronix, Inc., and his position as Managing Partner and Chief Operating Officer of SV Health Investors, LLC, which has a less than 10% investment interest in Endotronix, Inc., and concluded that the foregoing did not impair Mr. LaViolette’s independence.

Corporate Governance Guidelines.    Our Board has adopted a set of Corporate Governance Guidelines (the “Governance Guidelines”) to assist the Board and its committees in performing their duties and serving the best interests of the Company and its stockholders. The Corporate Governance Guidelines cover topics including, but not limited to, director selection and qualification, director responsibilities and operation of the Board, director access to management and independent advisors, director compensation, director orientation and continuing education, succession planning, recoupment of performance-based compensation and the annual evaluations of the Board. The Corporate Governance Guidelines are available on our website atwww.edwards.com under “Investors—Corporate Governance.Governance & Sustainability—Governance—Governance Documents.

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BOARD OF DIRECTORS MATTERS

Board Leadership Structure.    The independent directors evaluate the Board’s leadership structure on a regular basis to ensure that the approach continues to provide independent oversight of theour Company and serves the best interests of stockholders.

Our Chief Executive Officer also serves as the Chairman of the Board. Our Board believes itthis leadership structure has been and continues to be effective for our Company. Under this model, theour Company has experienced strong financial and operational growth over its 2021 years as a public company, most recently providing a cumulative TSR of 266%315% to stockholders from 20142016 to 2019.2021. Our Chairman and Chief Executive Officer is seen by customers,hospitals, physicians, business partners, investors and others as providing strong leadership for theour Company in the communities we serve and in our industry. Our Board believes that our current leadership structure is effective because it fosters a constructive and cooperative relationship between the independent directors and management that allows our Board to most effectively carry out its oversight duties. Our Board also believes that, given its size and constructive working relationships, changing the existing structure would not improve the Board’s performance. The directors bring a broad range of leadership experience to the boardroom and regularly contribute to the thoughtful discussion involved in overseeing the affairs of theour Company. All of our directors are well-engaged in their responsibilities, express their views, and are open to the opinions expressed by other directors.

Our Board believes that it is important to have an active, engaged and independent Board. Our Corporate Governance Guidelines provide that a substantial majority of our Board and all members of our Audit Committee and Compensation and Governance Committee will be independent under the applicable rules of the NYSE. All members of our Board, other than the Chairman, are independent. In order to assure that the independent directors are not inappropriately influenced by management, thenon-management members of the Board independent directors meet in executive session, without management, in conjunction with each regularly scheduledin-person meeting of the Board and each committee, and otherwise as deemed necessary. These executive sessions allow independent directors to speak candidly on any matter of interest, without the CEO or other members of management present.

Lead Independent Director’s Role and Responsibilities.    Our Corporate Governance Guidelines provide that if our Chairman is not independent, our independent directors shall annually select an independent director to serve as the Lead Independent Director (formerly referred to as our presiding director).Director. Each year, the Lead Independent Director’s performance is assessed. As part of this review, the Compensation and Governance Committee evaluates the criteria for nominees for the Lead Independent Director role

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BOARD OF DIRECTORS MATTERS

and assesses any needednecessary changes. In selecting the Lead Independent Director, the Compensation and Governance Committee considers relevant leadership, operational and corporate governance experience, relationships with other Board members and external commitments. In addition, the Lead Independent Director is expected to have a thorough understanding of the Company’s business operations and history.

Mr. von SchackMs. Marsh is currently designated as the Lead Independent Director until his retirement at the Annual Meeting, at which time Ms. Marsh will assume this role. The Lead Independent Directorand, as such, she presides at the executive sessions of the Board.

In addition, in discharging responsibilities under our Corporate Governance Guidelines, the Lead Independent Director:

 

reviews and approves Board meeting agendas and relevant information provided to the Board;

 

reviews and approves Board meeting schedules to assureensure there is sufficient time for discussion of allagendaall agenda items;

 

serves as a liaison between the independent members of the Boarddirectors and the Chairman and other members of management;

 

provides feedback to management from the Board’s executive sessions;

 

coordinates the activities of the independent directors, including calling meetings of the independent directors as necessary and appropriate to address their responsibilities;

 

provides advice and counsel to the Chairman; and

 

consults and directly communicates with major stockholders, as appropriate, including participation in the Company’s stockholder outreach efforts.

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BOARD OF DIRECTORS MATTERS

Board Role in Risk Oversight.    Effective risk oversight is an important priority of the Board. Its role includes understanding the critical risks in the business, allocating the responsibilities for risk oversight among the full Board and its committees, evaluating the Company’s risk management processes and facilitating open communication between management and the directors.

While the Board oversees risk management, the Company’s management is charged with managing risk and bringing to the Board’s attention emerging risks as well as the most material risks. We have internal processes designed to facilitate the identification and management of risks and assure regular communication with the Board and the Audit Committee. At least once per quarter, the Company’s management provides the full Board with an analysis of the Company’s most significant risks. The Board implements its risk oversight function both as a whole and through delegation to its committees. Both committees play significant roles in carrying out the risk oversight function.

The Audit Committee oversees risks related to the financial statements and the financial reporting process, including internal control over financial reporting and accounting matters. It also regularly reviews Edwards’ risk management processes and enterprise-wide risk management, focusing on manufacturing processes and supplier quality, product development processes and systems, continuity of our operations and regulatory compliance. The Audit Committee also regularly reviews treasury risks (insurance, credit, debt, currency risk and hedging programs), legal and compliance risks, and other risk management functions; senior leaders of the Company present at least twice a year, and sometimes more frequently as applicable, on information technology infrastructure and cyber-security risk,cybersecurity and other risk management functions.information security risks. In addition, the Audit Committee considers risks to the Company’s reputation and has established procedures related to the reporting of ethical and compliance issues, including maintenance of a confidential, anonymous reporting hotline for ethical and compliance issues.hotline. The Audit Committee periodically receives reports on, and discusses, the risk management and escalation process, and reviews significant risks and exposures with the subject matter experts inidentified by management, the internal auditors, or the independent public accountants, who identityincluding the steps management has taken to monitor and control such risks and report them to the Audit Committee.exposures.

The Compensation and Governance Committee considers risks related to succession planning, human capital management, including diversity, inclusion and belonging, the attraction and retention of talent, and risks relating to the design of compensation programs and arrangements. As part of its normal review of these risks, the Compensation and Governance Committee considers the Company’s compensation policies and practices to determine if their structure or implementation provides incentives to employees to take unnecessary or inappropriate risks that could have a material adverse effect on the Company. The Compensation and Governance Committee also reviews compensation and benefits plans affecting employees, in addition to those applicable to executive officers. The Compensation and Governance

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BOARD OF DIRECTORS MATTERS

Committee has determined that the implementation and structure of the compensation policies and practices do not encourage unnecessary and inappropriate risks that could have a material adverse effect on the Company. The Compensation and Governance Committee further determined that the Company’s compensation programs and practices appropriately encourage employees to maintain a strong balance sheet, improve operating performance and create value for stockholders, without encouraging unreasonable or unrestricted risks. In making these determinations, the Compensation and Governance Committee considered the views of the Company’s compensation staff, legal counsel and internal audit team, as well as its Compensation Consultant (as defined below). In addition, the Compensation and Governance Committee oversees risks associated with the Company’s political activities and expenditures, as well as risks related to sustainabilitycorporate social responsibility principles, programs and practices, including environmental and social affairs. Moreover, the Compensation and Governance Committee oversees the Company’s program for engaging with stockholders on corporate governance and other matters relating to meetings of the Company’s stockholders.

The full Board considers strategic risks and opportunities, and regularly receives reports from the committees regarding risk oversight in their areas of responsibility. Our Board believes that the processes it has established for overseeing risk would be effective under a variety of leadership frameworks and, therefore, do not materially affect its choice of leadership structure as described under “Board Leadership Structure” above.

Meetings of the Board.During the year ended December 31, 2019,2021, the Board held seven13 meetings. Each director attended at least 75% of the total of all meetings of the Board and any applicable committee held during the period of his or her tenure in 2019.2021, with an average attendance rate of 99.31%.

TheOur Company encourages, but does not require, itsour directors to attend our annual meetings of stockholders. All of our then-current directors attended the 2019our 2021 annual meeting.

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BOARD OF DIRECTORS MATTERS

meeting of stockholders.

Board Composition.OurThe current Board hassize is fixed the number of directors at eight.eight directors.

The Board regularly assesses its composition, including in connection with the Board evaluation process, as further described above in “Identification and Evaluation of Director Candidates.” The ages of our director nominees range from 5456 to 73, with an average age of approximately 64.65. We believe in a balanced approach to director tenure that allows the Board to benefit from a mix of newer directors who bring fresh perspectives and seasoned directors who bring continuity and a deep understanding of our business. For our nominees, lengths of service on our Board range from 0 years1 year to approximately 1121 years, with an average tenure of approximately 7 years. In addition, 37.5% of our nominees are female.female, and 25% of our nominees are ethnically diverse. None of the nominees currently serve on the boards of directors of more than three other public companies.

Committees of the Board.To facilitate independent director review, and to make the most effective use of the directors’ time and capabilities, we have established the Audit Committee and the Compensation and Governance Committee. The Board is permitted to establish other committees from time to time as it deems appropriate.

Audit Committee

 

Audit Committee Membership
Leslie S. Heisz, Chair
Kieran T. Gallahue
Wesley von Schack*
Steven R. Loranger

*  Not standing for election at the Annual Meeting. Another Board member will be added to the Audit Committee upon Mr. von Schack’s retirement from the Board.

Ramona Sequeira

Key Highlights:Highlights.

 

Each member is “independent,” “financially literate,” and an “audit committee financial expert” under applicable rules of the NYSE and the SEC.

 

The Audit Committee held nineten meetings in 2019.2021.

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BOARD OF DIRECTORS MATTERS

Purpose.    The Audit Committee assists the Board in fulfilling its oversight responsibilities relating to, among other things:

 

the integrity of the Company’s financial statements;

 

compliance with legal and regulatory requirements;

 

monitoring the independent registered public accounting firm’s qualifications, performance and independence;

 

the performance of the Company’s internal audit function;

 

the Company’s investment and hedging activities; and

 

enterprise-wide riskrisks and management practices.practices related to those risks, including, but not limited to, manufacturing processes and supplier quality, product development processes and systems, continuity of our operations and information technology infrastructure and cybersecurity and information security risks.

The Company has a full-time internal audit function that reports to the Audit Committee and to the CFO, and is responsible for, among other things, objectively reviewing and evaluating the adequacy, effectiveness and quality of the Company’s system of internal controls. The Company also has a Chief Responsibility Officer who manages the Company’s ethics and compliance programs reportingand reports to the Audit Committee and the CEO.

The Audit Committee appoints, retains, terminates, determines compensation for, and oversees the independent registered public accounting firm, reviews the scope of the audit by the independent registered public accounting firm and inquiries into the effectiveness of the Company’s accounting and internal control functions. The Audit Committee also assists the Board in establishing and monitoring ethics and compliance with the Global Business Practice Standards of the Company. The Company’s Global Business Practice Standards are posted on our website atwww.edwards.com under “About Us—Corporate Responsibility.” The Audit Committee also reviews, with the Company’s management and the

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BOARD OF DIRECTORS MATTERS

independent registered public accounting firm, the Company’s policies and procedures with respect to risk assessment and risk management and reviews and approves or ratifies any related party transactions, as described under “Other Matters and Business—Related Party Transactions” below.

The full responsibilities of the Audit Committee are included in its written charter, which is posted on our website atwww.edwards.com under “Investors—Corporate Governance.Governance & Sustainability—Governance—Governance Documents.

Compensation and Governance Committee

 

Compensation and Governance
Committee Membership
WilliamNicholas J. Link, Ph.D.,Valeriani, Chair
Steven R. LorangerPaul A. LaViolette
Martha H. Marsh
Nicholas J. Valeriani

Key Highlights:Highlights.

 

Each member is “independent” under the rules of the NYSE and a “nonemployee director” underRule 16b-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

The Compensation and Governance Committee held five meetings in 2019.2021.

Purpose.    The Compensation and Governance Committee’s responsibilities include, among other things:

 

determining the compensation of executive officers and recommending to the Board the compensation of outsidenonemployee directors;

 

overseeing management of succession planning, attraction and retention of talent, and risks related to the design of executive compensation programs and arrangements;

 

developing and recommending to the Board corporate governance guidelines for the Company;

 

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identifying, evaluating and recommending individuals qualified to be directors to the Board; and

 

overseeing the evaluation of the Board and management.management;

overseeing the Company’s principles, programs and practices on sustainability topics, including environmental and social affairs; and

overseeing the Company’s program for engaging with stockholders on corporate governance and other matters relating to meetings of the Company’s stockholders.

In making its decisions regarding compensation of the NEOs (other than the CEO), the Compensation and Governance Committee considers recommendations provided by our CEO and Corporate Vice President of Human Resources, regarding compensation of the NEOs (other than the CEO), as further described under “Compensation Discussion and Analysis—Compensation Process” below. The Compensation and Governance Committee has also delegated to (i) the CEO the authority to grant stock options or other equity awards to eligible employees who are not executive officers, and (ii) the Administrative and Investment Committee the administrative and fiduciary functions related to the Company’s employee benefit plans, including the review of funding and investment of plan funds, and the authority to approve amendmentamendments to the plans, appoint trustees and enter into trust agreements.

In 2019,2021, the Compensation and Governance Committee retained the services of Semler Brossy Consulting Group as its independent compensation consultant (“Compensation Consultant”). See “Compensation Discussion and Analysis—Independent Compensation Consultant” for additional information regarding the Compensation and Governance Committee’s engagement of its Compensation Consultant.

The Compensation and Governance Committee also advises the Board on Board committee structure and membership and corporate governance matters. It evaluates the governance environment, receives feedback from management interactions with stockholders, and reviews and recommends to the Board corporate governance enhancements that are in the best interest of the Company and its stockholders.

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BOARD OF DIRECTORS MATTERS

The Compensation and Governance Committee also oversees Edwards’ political activities, including the periodic review of its policy on political expenditures and its payments that may be used for political purposes, and confirms that political expenditures from corporate funds are consistentreceives reports regarding compliance with the policy. In addition, the Compensation and Governance Committee reviews and oversees Edwards’ principles, programs and practices on sustainability topics, including environmental and social affairs.affairs, as well as the Company’s public reporting on these topics. Reports concerning political activities and sustainability efforts and metrics are presented periodically to the Compensation and Governance Committee.

The full responsibilities of the Compensation and Governance Committee are included in its written charter, which is posted on our website atwww.edwards.com under “Investors—Corporate Governance.Governance & Sustainability—Governance—Governance Documents.

Succession Planning.    Our Board is actively engaged and involved in talent management to identify and cultivate our future leaders. At every regularly scheduled Board meeting, directors discuss the Company’s leadership and talent development. Our directors also have an opportunity to meet with Company leaders, including executive officers, business group leaders and functional leaders through regular reports to the Board from senior management, technology showcases and mealsother gatherings with management. In addition, Board members have freedom of access to all employees, and have made site visits to meet local management.

We maintain a robustmid-year and annual performance review process for our employees, as well as amany programs focused on leadership development programand growth that cultivatesare designed to cultivate leadership principles in our future leaders. Management develops leadership at lower levels of the organization by identifying both high potentials and key talent and exposing them to the skills and capabilities that will allow these individuals to become future leaders.

Communications with the Board.    Stockholders and other interested parties who desire to contact any member of the Board, including the Lead Independent Director or thenon-management members of the Board as a group, may write to any member or members of the Board at: Board of Directors, c/o Corporate Secretary, Edwards Lifesciences Corporation, One Edwards Way, Irvine, California 92614. Communications will be received by the Corporate Secretary of the Company and, after initial review and determination of the nature and appropriateness of such communications, will be distributed to the appropriate members of the Board depending on the facts and circumstances described in the communication.

 

 

 
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BOARD OF DIRECTORS MATTERS

 

CORPORATE SOCIAL RESPONSIBILITY

Our Board recognizesAt Edwards, our commitment to corporate responsibility and sustainability is foundational, and expressed in the importancewords of our sustainability initiativesCredo: “Through our actions, we will become trusted partners with customers, colleagues and patients – creating a community unified in its mission to improve the need to provide effective oversightquality of those initiatives.life around the world. Our results will benefit customers, patients, employees, and shareholders.” Our Compensation and Governance Committee maintains formal oversight responsibilities for our Sustainability program, with regular discussions at meetings of the full Board. Through a well-established framework and cross-functional Sustainability Council with leaders from across the organization, we continue to incorporate sustainability into our businesses’ core strategy—reflecting our belief that sustainability is essential to long-term growth. We also believe in transparency, and report on our sustainability efforts in an annual Sustainability Report.

 

Board Oversight Over Environmental, Sustainability, and Corporate Social Responsibility

 

Our Board has designed robust internal processes to oversee our

Company’s sustainability principles, strategies, and initiativesinitiatives.

 

LOGO

Edwards’ Sustainability Report discusses our programs and practices designed to promote ethical business practices, good corporate governance, and the well-being and health of the environment, our environment, employees, and the communities in which we live and work. We continue to align our sustainability efforts with our aspirations and patient-focused innovation strategy. In 2019,2021, we integrated sustainability factors into our strategic planning process to ensureso that future sustainability goals continue tomay be closely aligned with our business strategy.strategy and aspirations. We conducted a comprehensive materiality assessment refresh through engagement with internal and external stakeholders, that identifiedwhich helped to identify the sustainability topics that matter most for the Company. Sustainability targets were set that align with our Company’s aspirations. Our team continues to assess and report progress on our targetsgoals annually.

We also expandedwere recognized by numerous organizations for our sustainability practices in 2021, some of which are highlighted below:

For the second consecutive year, Edwards appeared on Barron’s fourth annual list of the 100 Most Sustainable Companies in the United States. Significant performance indicators included increased efforts to mitigate our impact on the environment, as well as initiatives undertaken to bolster employee welfare, community health and customer satisfaction.

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BOARD OF DIRECTORS MATTERS

For the fifth consecutive year, Edwards was named one of America’s Most JUST Companies by Forbes and JUST Capital. This is an evaluation of the largest publicly traded U.S. companies, which are ranked on the issues Americans care about most.

Edwards was named as one of the Management Top 250 by the Wall Street Journal in partnership with the Drucker Institute for the fifth year in a row—listed #24 out of 846 companies ranked according to their overall effectiveness of “doing the right things well.” The evaluation aims to recognize firms that are particularly good at balancing a wide range of competing management priorities. Edwards achieved high marks in all five dimensions of corporate performance: Customer Satisfaction, Employee Engagement and Development, Innovation, Social Responsibility and Financial Strength.

In its inaugural ranking of the World’s Top Female-Friendly Companies, Forbes ranked Edwards #27 out of 300 companies included in the list. Forbes’ partner, Statista, surveyed 85,000 women in 40 countries. Respondents were asked to rate their employers on criteria such as pay equity and parental leave, and asked women to assess how companies use their platforms and marketing messages. They also assessed female representation at the executive and board levels.

Edwards was again a constituent of the DJSI ESG World and North America Indices—the Dow Jones Sustainability World index tracks the performance of the top 10% of the 2,500 largest companies in the S&P Global Broad Market Index that lead the field in sustainability.

More details on our sustainability approach and performance can be found in our Sustainability Metricsat-a-Glance, a snapshotReport posted on our website at www.edwards.com/sustainability. A complete list of recognitions can be found on our ESG data, to provide additional data, and we expanded our Governance Maps that show the process used to establish accountability in one overarching, interactive graphic to illustrate Edwards’ internal responsibility structures for managing our material topics. Each section describes who is involved when we set, execute, and communicate our strategy.website at www.edwards.com under “About Us—Awards & Recognitions.”

 

 

 
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BOARD OF DIRECTORS MATTERS

We received numerous recognitions for our sustainability and environmental responsibilities practices in 2019, some of which are highlighted below:

Named one of the top 15Americas Most JUST Companiesfrom Forbes and JUST Capital—United States largest publicly traded companies are ranked on the issues Americans care about most;

Named as one of theManagement Top 250 by the Wall Street Journal in partnership with the Drucker Institute—listed #25 out of 820 companies ranked. Within this list, Edwards was also cited as one of 8 “all stars” foracross-the-board rankings, achieving high marks in all five dimensions of corporate performance: Customer Satisfaction, Employee Engagement and Development, Innovation, Social Responsibility and Financial Strength;

Recognized as #1 on the Investor’s Business Daily inaugural50 Best ESG Companies in 2019 for superior Environmental, Social and Governance (ESG) ratings in addition to strong fundamental and technical performance highlighting Edwards’ “comprehensive product quality and safety controls” and its “ability to deliver exceptional shareholder value”; and

Constituent of theDJSI ESG Worldand North America Indices—the Dow Jones Sustainability World index tracks the performance of the top 10% of the 2,500 largest companies in the S&P Global Broad Market Index that lead the field in sustainability.

More details on our ESG efforts can be found in our Sustainability Report posted on our website atwww.edwards.comunder “About Us—Corporate Responsibility.” A complete list of recognitions can be found under “About Us—Awards & Recognitions.”

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BOARD OF DIRECTORS MATTERS

 

DIRECTOR COMPENSATION

Director Compensation Table – 20192021

The following table presents the 20192021 compensation paid or awarded to each individual who served as a nonemployee director at any time during 2019.2021. The compensation paid to Mr. Mussallem is presented in the “Executive Compensation” disclosures beginning on page 45.46. Mr. Mussallem does not receive additional compensation for his service as a director.

 

Name

  Fees Earned or
Paid in Cash
($)(1)
  Stock
Awards
($)(2)
  Option
Awards
($)(2)
  

Total

($)

  Fees Earned or
Paid in Cash
($)(1)
  Stock
Awards
($)(2)
  Option
Awards
($)(2)
  

Total

($)

Mr. Gallahue

   $80,075   $239,913       $319,988       $80,068   $239,979       $320,047

Ms. Heisz

    100,147    239,913        340,060    100,000    239,979        339,979

Dr. Link

    93,075    239,913        332,988

Mr. LaViolette

    75,000    239,979        314,979

Dr. Link*

                

Mr. Loranger

    75,075    239,913        314,988    73,856    239,979        313,835

Ms. Marsh

    75,000    239,913        314,913    110,000    239,979        349,979

Mr. von Schack

    115,075    239,913        354,988

Ms. Sequeira

    80,000    239,979        319,979

Mr. Valeriani

    75,000    239,913        314,913    93,000    239,979        332,979

*

Dr. Link retired from the Board in connection with our 2021 annual meeting of stockholders which was held on May 4, 2021.

 

(1)

Consists of annual retainer fees and meeting fees for service as a director and a member of Board committees. Please see the section “Retainers and Fees” section below. Director fees that would have been paid in cash, but, at the election of the director, converted to restricted stock or option awards are included in this “Fees Earned or Paid in Cash” column.

 

(2)

Amounts disclosed in these columns reflect the aggregate grant-date fair value of the restricted stock award or option award, as applicable, granted to our nonemployee directors during 20192021 (excluding restricted stock and option awards granted in lieu of cash and as to which the corresponding retainer fees have been included in the “Fees Earned or Paid in Cash” column), as determined under the principles used to calculate the grant-date fair value of equity awards for purposes of our financial statements in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. For a discussion of the assumptions and methodologies used to value the awards reported in these columns, please see the discussion of restricted stock awards and option awards contained in Note 14 of the “Notes to Consolidated Financial Statements” in the 20192021 Annual Report.

 

  

Please see the information under “Nonemployee Directors Stock Incentive Program” and “Outstanding Nonemployee Director Equity Awards” below for the grant-date fair value of each restricted stock and option award granted to our nonemployee directors in 20192021 as well as the restricted stock and option awards held by each nonemployee director at the end of 2019.2021.

Retainers and Fees.Nonemployee directors received the following retainers and fees in 2019:2021:

 

Nonemployee Director Retainers and Fees

      

Annual Retainers

      

Nonemployee Director

   $75,000       $75,000

Lead Independent Director

   $35,000   $35,000

Audit Committee Chair

   $25,000   $25,000

Audit Committee Member

   $5,000   $5,000

Additional Meeting Fees if meetings exceed the following:

   $1,500*   $1,500*

– 10 meetings for the Board

      

– 10 meetings for the Audit Committee

      

– 7 meetings for the Compensation and Governance Committee

      

Compensation Committee Chair

   $18,000

Compensation and Governance Committee Chair

   $18,000

 

*

Per meeting; meeting fees cannot be deferred.

A director may elect to receive stock options or restricted shares in lieu of the annual cash retainers as described in “Deferral Election Program” below. Meeting fees, however, cannot be deferred. Retainers are paid in advance. Directors beginning service during the year receive a prorated amount of the retainer.

 

 

 
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BOARD OF DIRECTORS MATTERS

 

Nonemployee Directors Stock Incentive Program.In order to align the nonemployee directors’ interests more closely with the interests of our stockholders, we have implementedmaintain our Nonemployee Directors Stock Incentive Program (the “Nonemployee“2020 Nonemployee Directors Stock Incentive Program”), pursuant to which each nonemployee director receives an annual grant of options for up to 40,000120,000 shares of our common stock, or Restricted Stock Units (“RSU”) for up to 16,00048,000 shares of our common stock, or a combination of options and RSUs with a maximum grant-date value as of 2019 of approximately $240,000. The Compensation and Governance Committee recommends to the Board for its approval the actual amount and type of award for each year.

The annual equity award is granted on the day after our annual meeting. The option exercise price is the closing price of our common stock on the grant date. Options are valued as of the grant date using the Black-Scholes valuation model, and the RSUs are valued at the fair market value of the common stock on the grant date. The Board has discretion to determine whether an award will be granted to a director who joins the Board mid-year and to determine the terms and conditions of any such award.

On May 9, 2019,5, 2021, each nonemployee director who was serving on that date received 1,3232,615 RSUs as an annual grant (the grant-date fair value of such award was $239,913,$239,979, determined as noted in footnote 2 to the Director Compensation Table above).

These RSUs vest 100% upon the earlier of the completionone-year anniversary of one year of service on the Board measured from the grant date orand the date of the next regular annual meeting of stockholders at which members of the Board are to be elected, subject to earlier vesting in the event of the nonemployee director’s death or disability.disability or in connection with a change of control of Edwards. Once the RSUs vest, the shares must be held untilsubject to the nonemployee director no longer serves on the Board.requirements described in “Directors’ Stock Ownership Guidelines and Holding Requirement” below.

Prior to 2017, upon a nonemployee director’s initial election to the Board, the new nonemployee director received a grant of the numbers of RSUs or stock options determined by dividing $200,000 by the fair value of a share on the grant date for RSUs, or the fair value of an option on the grant date, estimated using the Black-Scholes valuation model, and in either case rounding up to the nearest whole share, provided that in no event shall such number exceed twentysixty thousand (20,000)(60,000) shares. Initial stock option awards vestone-third each year over three years from the grant date, subject to the nonemployee director’s continued service on the Board, and subject to earlier vesting in the event of the nonemployee director’s death or disability. The exercise price of an option is the closing price of our common stock on the date of the award. With respect to initial stock option awards granted after May 14, 2013, the shares of our common stock issued upon exercise of the options must be held untilsubject to the nonemployee director no longer serves on the Board.requirements described in “Directors’ Stock Ownership Guidelines and Holding Requirement” below.

Deferral Election Program.In lieu of all or part of a nonemployee director’s annual cash retainer, the director may elect to receive either stock options or restricted stock awards under the 2020 Nonemployee Directors Stock Incentive Program. If a director makes a timely election to receive stock options, such options are granted on the date the cash retainer would otherwise have been paid, and the number of shares subject to the option is equal to four times the number of shares that could have been purchased on the grant date with the amount of the director’s cash retainer that was foregone to receive the award. The options are exercisable and vested in full on the grant date, and the exercise price per share is the fair market value of the common stock on the grant date. If a director makes a timely election to receive a restricted share award, the shares are granted on the date the cash retainer would otherwise have been paid, and the number of shares granted is equal to the portion of the cash retainer to be paid in the form of restricted shares divided by the fair market value per share of the common stock on the grant date. The restrictions on the restricted shares lapse upon the earlier of (1) theone-year anniversary of the grant date or (2)and the date of the next regular annual meeting of stockholders at which members of the Board are to be elected.elected, subject to earlier vesting in the event of the nonemployee director’s death or disability or in connection with a change in control of Edwards.

On May 9, 2019, Ms. Heisz5, 2021, Mr. Loranger received 311 restricted3,270 stock option shares in lieu of herhis annual cash retainer (the grant-date fair value of each such award was $56,397,$68,856, determined as noted in footnote 2 to the Director Compensation Table above). On the same date, Messrs.Mr. Gallahue Loranger and von Schack, and Dr. Link each received a grant of 414818 restricted shares in lieu of his annual cash retainer (the grant-date fair value of each such award was $75,075,$75,068, determined as noted in footnote 2 to the Director Compensation Table above).

Directors’ Stock Ownership Guidelines and Holding Requirement.Under the stock ownership guidelines, each nonemployee director is expected to own shares of our common stock equal towith a value of at least $500,000. This amount equals almost six times the annual cash retainer received byfor each nonemployee director. StockShares that is countedcount toward meeting the

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BOARD OF DIRECTORS MATTERS

guideline includes any sharesinclude common stock owned outright, restricted stock, RSUs and 25%RSUs. Once the stock ownership guideline of the value of vested,in-the-money stock options. Upon vesting or exercise of equity awarded after 2011,$500,000 is met, each nonemployee director is required to hold 50% of the underlyingnet remaining shares of the common stock, (netwhether owned outright and/or acquired in connection with the vesting of any shares soldrestricted stock and/or restricted stock units, after satisfaction of applicable taxes (and in the case of stock options granted prior to coverJuly 2021, after satisfaction of applicable taxes and payment of the exercise price and applicable taxes)price) until the director’s Board service ends. The holding requirement does not apply to equity awards directors elect to receive in lieu of their cash retainers.

Expense Reimbursement Policy.    Directors are reimbursed for travel expenses related to their attendance at Board and committee meetings as well as for the costs of attending director continuing education programs. The Board may change reimbursement arrangements for nonemployee directors from time to time.

Outstanding Nonemployee Director Equity Awards

The following table sets forth, as of December 31, 2021, the stock options and unvested stock awards (RSUs and restricted shares) held by each nonemployee director who served on the Board in 2021.

      Option Awards  Stock Awards  

Name

  Grant Date  Exercise
Price
($)
  Unvested
Option
Awards
(#)
  Option Awards
Vested and
Outstanding
(#)
  Stock Awards
Not Vested
(#)
  

Mr. Gallahue

    02/19/2015    22.2867        32,256      
    05/12/2017    36.8633        7,056      
    05/05/2021                2,615(1)   
    05/05/2021                 818(2)   
         

 

 

    

 

 

    

 

 

   

Total

                  —    39,312    3,433  
         

 

 

    

 

 

    

 

 

   

Ms. Heisz

    07/14/2016    35.6767        9,671      
    05/12/2017     36.8633        7,056      
    05/18/2018     45.3167        5,739      
    05/08/2020     72.6133        3,099      
    05/05/2021                 2,615(1)   
         

 

 

    

 

 

    

 

 

   

Total

              25,565    2,615  
         

 

 

    

 

 

    

 

 

   

Mr. LaViolette

    05/05/2021                2,615(1)   
         

 

 

    

 

 

    

 

 

   

Total

                  2,615  
         

 

 

    

 

 

    

 

 

   

Mr. Loranger

    05/18/2018    45.3167        5,739      
    05/08/2020     72.6133        4,134      
    05/05/2021     91.7700        3,270(3)       
    05/05/2021                 2,615(1)   
         

 

 

    

 

 

    

 

 

   

Total

              13,143    2,615  
         

 

 

    

 

 

    

 

 

   

Ms. Marsh

    11/19/2015    25.9883        28,722      
    05/05/2021                2,615(1)   
         

 

 

    

 

 

    

 

 

   

Total

              28,722    2,615  
         

 

 

    

 

 

    

 

 

   

Ms. Sequeira

    05/05/2021                2,615(1)   
         

 

 

    

 

 

    

 

 

   

Total

                  2,615  
         

 

 

    

 

 

    

 

 

   

Mr. Valeriani

    05/05/2021                2,615(1)   
         

 

 

    

 

 

    

 

 

   

Total

                  2,615  
         

 

 

    

 

 

    

 

 

   
                                    

 

 

 
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BOARD OF DIRECTORS MATTERS

 

Expense Reimbursement Policy.    Directors are reimbursed for travel expenses related to their attendance at Board and committee meetings as well as for the costs of attending director continuing education programs.

The Board may change compensation arrangements for nonemployee directors from time to time.

Outstanding Nonemployee Director Equity Awards

The following table sets forth, as of December 31, 2019, the stock options and unvested stock awards (RSUs and restricted shares) held by each nonemployee director who served on the Board in 2019.

      Option Awards  Stock Awards  

Name

  Grant Date  Exercise
Price
($)
  Unvested
Option
Awards
(#)
  Option Awards
Vested and
Outstanding
(#)
  Stock Awards
Not Vested
(#)
  

Mr. Gallahue

    02/19/2015    66.860        10,752      
    05/12/2017    110.590        2,352      
    05/09/2019                1,323(1)   
    05/09/2019                414(2)   
         

 

 

    

 

 

    

 

 

   

Total

                  —    13,104    1,737  
         

 

 

    

 

 

    

 

 

   

Ms. Heisz

    07/14/2016    107.030        6,557      
    05/12/2017    110.590        2,352      
    05/18/2018    135.950        1,913      
    05/09/2019                1,323(1)   
    05/09/2019                311(2)   
         

 

 

    

 

 

    

 

 

   

Total

              10,822    1,634  
         

 

 

    

 

 

    

 

 

   

Dr. Link

    05/09/2019                1,323(1)   
    05/09/2019                414(2)   
         

 

 

    

 

 

    

 

 

   

Total

                  1,737  
         

 

 

    

 

 

    

 

 

   

Mr. Loranger

    05/12/2016    105.590        6,599      
    05/18/2018    135.950        1,913      
    05/09/2019                1,323(1)   
    05/09/2019                414(2)   
         

 

 

    

 

 

    

 

 

   

Total

              8,512    1,737  
         

 

 

    

 

 

    

 

 

   

Ms. Marsh

    11/19/2015    77.965        9,574      
    05/09/2019                1,323(1)   
         

 

 

    

 

 

    

 

 

   

Total

              9,574    1,323  
         

 

 

    

 

 

    

 

 

   

Mr. von Schack

    05/09/2019                1,323(1)   
    05/09/2019                414(2)   
         

 

 

    

 

 

    

 

 

   

Total

                  1,737  
         

 

 

    

 

 

    

 

 

   

Mr. Valeriani

    11/13/2014    62.275        7,536      
    05/09/2019                1,323(1)   
         

 

 

    

 

 

    

 

 

   

Total

              7,536    1,323  
         

 

 

    

 

 

    

 

 

   
                                    

(1)

Annual awards vest on the earlier of (i) theone-year anniversary of the grant date or (ii)and the date of the next regular annual meeting of stockholders at which members of the Board are to be elected.elected, subject to earlier vesting in the event of the nonemployee director’s death or disability or in connection with a change in control of Edwards.

 

(2)

Annual retainer fees deferred into restricted shares under the Deferral Election Program vest on March 15, 2020.the earlier of the one-year anniversary of the grant date and the date of the next regular annual meeting of stockholders at which members of the Board are to be elected, subject to earlier vesting in the event of the nonemployee director’s death or disability or in connection with a change in control of Edwards.

(3)

Annual retainer fees deferred into stock options under the Deferral Election Program are vested upon grant.

 

 

 
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding beneficial ownership of the Company’s common stock as of January 31, 2020 by each stockholder known by the Company to own beneficially more than 5% of the Company’s common stock. Percent of beneficial ownership is based upon 209,122,578 shares of the Company’s common stock outstanding as of January 31, 2020.2022.

 

Principal Stockholder Name and Address

Total Shares

Beneficially

Owned

    Percentage    

of Class

  

Total Shares

Beneficially

Owned

  

Percentage

of Class

The Vanguard Group(1)

100 Vanguard Blvd.

Malvern, PA 19355

 16,261,702 7.78%        49,076,649    7.86%

BlackRock, Inc.(2)

55 East 52nd Street

New York, NY 10055

 18,200,799 8.70%    57,040,983    9.10%

 

(1)

Based solely on information contained in the Schedule 13G/A filed with the SEC by The Vanguard Group, on its own behalf, on February 12, 2020.9, 2022. The Schedule 13G/A indicates The Vanguard Group has sole voting power for 321,883 shares, shared voting power for 56,7231,057,122 shares, sole dispositive power for 15,901,05146,489,114 shares and shared dispositive power for 360,651 shares. The number2,587,535 shares as of shares reported as beneficially owned by The Vanguard Group in its Schedule 13G/A includes 248,789 shares beneficially owned by Vanguard Fiduciary Trust Company (“VFTC”), and 181,462 shares beneficially owned by Vanguard Investments Australia, Ltd. (“VIA”). VFTC and VIA are wholly owned subsidiaries of The Vanguard Group. VFTC serves as investment manager of collective trust accounts and VIA serves as investment manager of Australian investment offerings.December 31, 2021.

 

(2)

Based solely on information contained in the Schedule 13G/A filed with the SEC by BlackRock, Inc. on its own behalf, on February 5, 2020.3, 2022. The Schedule 13G/A indicates BlackRock, Inc. has sole voting power for 15,871,54550,795,386 shares and sole dispositive power for 18,200,799 shares.57,040,983 shares as of December 31, 2021.

The following table sets forth certain information regarding beneficial ownership of the Company’s common stock as of January 31, 20202022 by (i) each of the NEOs (as named below); (ii) each of our current directors and director nominees; and (iii) all of our current directors and executive officers as a group. Percent of beneficial ownership is based upon 209,122,578623,207,437 shares of the Company’s common stock outstanding as of January 31, 2020.2022.

Under the column “RSUs and Shares Underlying Options,” we include the number of shares that could be acquired within 60 days of January 31, 20202022 pursuant to the exercise of stock options or the vesting of stock unit awards. These shares are not deemed outstanding for purposes of computing the beneficial ownership of any other person. Unless otherwise indicated, we believe that the stockholders listed have sole voting and investment power with respect to all shares, subject to applicable community property laws.

 

Named Executive Officers, Executive Officers and Directors:

Outstanding
Shares
Beneficially
Owned(1)
RSUs and
Shares
Underlying
Options
Total
Shares
Beneficially
Owned

    Percentage    

of Class

Named Executive Officers, Executive Officers and Directors

  Outstanding
Shares
Beneficially
Owned(1)
  RSUs and
Shares
Underlying
Options
  Total
Shares
Beneficially
Owned
  

    Percentage    

of Class

Mr. Mussallem

 975,116 988,838 1,963,954 *    3,728,236    1,628,269    5,356,505    *

Mr. Bobo

    194,891    375,215    570,106    *

Mr. Ullem

 71,588 118,900 190,488 *    244,197    255,861    500,058    *

Mr. Bobo

 66,052 179,309 245,361 *

Mr. Wood

    179,421    177,116    356,537    *

Mr. Lemercier

 36,843 69,883 106,726 *    140,325    210,767    351,092    *

Mr. Wood

 108,744 73,443 182,187 *

Mr. Gallahue

    57,569    39,312    96,881    *

Mr. Gallahue

 16,148 13,518 29,666 *

Mr. Loranger

    61,965    13,143    75,108    *

Mr. Valeriani

    61,196        61,196    *

Ms. Marsh

    24,162    28,722    52,884    *

Ms. Heisz

 4,000 11,133 15,133 *    22,565    25,565    48,130    *

Dr. Link

 19,352 414 19,766 *

Mr. Loranger

 11,632 8,926 20,558 *

Ms. Marsh

 5,630 9,574 15,204 *

Ms. Sequeira

        3,303        3,303    *

Mr. Valeriani

 12,672 7,536 20,208 *

Mr. von Schack

 38,157 414 38,571 *

Mr. LaViolette

                *

All current directors and executive officers as a group (15 persons)

 1,402,158 1,698,658 3,100,816 1.48%    4,819,514    3,290,916    8,110,430    1.29%

 

*

Less than 1%

 

(1)

Includes shares held by family trust, members of his or his/her household, in the 401(k) Plans, or jointly, as follows: Mr. Mussallem, 851,194;3,728,235; Mr. Bobo, 155,023; Mr. Ullem, 71,588;229,251; Mr. Bobo, 41,408;Wood, 496; Mr. Lemercier, 15,000;45,000; Mr. Gallahue, 15,734;56,751; Mr. Loranger, 5,000; Dr. Link, 10,772;15,000; and Mr. von Schack, 37,743.Ms. Sequeira, 3,303.

 

 

 
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EXECUTIVE COMPENSATION AND OTHER INFORMATION

EXECUTIVE OFFICERS

Set forth below is the biographical information regarding our current executive officers, other than Mr. Mussallem, whose biographical information is set forth under “Proposal 1—Election of Directors—Director Nominees” above. None of the executive officers has any family relationship with any other executive officer or any of our directors.

LOGOLOGO  

Donald E. Bobo, Jr., age 58.60. Mr. Bobo has been Corporate Vice President since 2007 and is currently responsible for Edwards’ corporate strategy and corporate development functions. In addition, Mr. Bobo has executive responsibility for the Company’s disease awareness and heart failure initiatives, as well as the U.S. healthcare solutions and commercial services team. Mr. Bobo has more than 3035 years of experience in the medical productstechnology and healthcare industry and has served in various operating roles at Edwards.Edwards, including, most recently, the development of the Company’s Transcatheter Mitral and Tricuspid Therapies strategy, Vice President and General Manager of the Surgical Structural Heart business and global valve manufacturing operations. Prior to joining Edwards in 1995, Mr. Bobo held a variety of roles with increasing levels of responsibility with American Hospital Supply and Baxter Healthcare Corporation, including research and development, business development, operations and general management. He has served on the Boardboard and Executive Committeeexecutive committee of the California Life Sciences Association since 2015 and served as its Chairmanchairman of the Boardboard from May 2017 to May 2018.

LOGOLOGO  

Daveen Chopra,age 41.43. Mr. Chopra has been Corporate Vice President, Surgical Structural Heart since JuneMay 2018. Prior to joining Edwards, Mr. Chopra held various roles with increasing levels of responsibility at Medtronic plc, a medical technology, services and solutions company, from 2005 to 2018. He was the2018, culminating in a global leader, servingleadership role as vice presidentVice President and general manager,General Manager of Medtronic’s aortic franchise.Aortic Franchise. Mr. Chopra previously served as vice presidentChopra’s previous roles at Medtronic include Vice President of global marketingGlobal Marketing, leading Medtronic’s endovascular therapies business.Endovascular Therapies Business. While in Medtronic’s endovascular therapies business,Endovascular Therapies Business, he served as vice president,Vice President, U.S. commercial operations, directorCommercial Operations, Director of program management office, senior business managerProgram Management Office, Senior Business Manager for the endovascularEndovascular and peripheral businessPeripheral Business in Asia-Pacific, global group product managerGlobal Group Product Manager for thoracic stent grafts,Thoracic Stent Grafts, and international aortic product manager.International Aortic Product Manager. Prior to Medtronic, Mr. Chopra served as an international strategy consultant at The Parthenon Group supporting clients in various industries ranging from education to industrial manufacturing. In 2020, he joined the board of the Edwards Lifesciences Foundation, and, in 2021, he joined the board of Octane.

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Jean-Luc Lemercier, age 62.64. Mr. Lemercier has been Corporate Vice President, EMEA (Europe, Middle East and Africa), Canada and Latin America since July 2017. Prior to assuming his current role, Mr. Lemercier served as Vice President of Transcatheter Heart Valves EMEA from 2008 to 2017. Under his leadership, Edwards has successfully built its leadership position in Europe. BeforePrior to joining Edwards, Mr. Lemercier served in various leadership roles with Johnson & Johnson Cordis from 1996 to 2008, including leader of the structural heart disease group in the United States;States, Vice President of New Business Development in Europe;Europe, Vice President of the Cordis Cardiology Division in Belgium;Belgium, and General Manager of Cordis France. Mr. Lemercier has more than 30 years of medical technology experience, beginning with Baxter in France, and held several sales and marketing management positions within Baxter in both Europe and the United States. Mr. Lemercier has served on the Boardboard of CARMAT since January 2017.

 

 

 
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EXECUTIVE COMPENSATION AND OTHER INFORMATION

 

LOGOLOGO  

Catherine M. Szyman, age 53.55. Ms. Szyman has been Corporate Vice President, Critical Care since 2015. Under her leadership, Edwards has experienced successful sales growth in the Critical Care business unit. Prior to 2015, she was employed for more than 20 years at Medtronic LLC,plc, where she served as its Senior Vice President and President of Medtronic’s global diabetesGlobal Diabetes business from 2009 to 2014, overseeing research, development, operations, sales and marketing for Medtronic’s insulin infusion pumps and continuous glucose monitoring systems. Prior to that, she held a variety of leadership roles at Medtronic, including Senior Vice President of Corporate Strategy and Business Development, General Manager of Endovascular Innovations and Vice President of Finance for the Cardiovascular Business. Ms. Szyman currently serves on the boards of Endotronix, Octane OC andOutset Medical Inc., Inari Medical Inc., and the American Heart Association of Orange County, and joined the board of the Edwards Lifesciences Foundation in 2015. Ms. Szyman previously served on the boards of Octane, Tornier, Inspire Medical Systems, and the California Healthcare Institute.

LOGOLOGO  

Scott B. Ullem, age 53.55. Mr. Ullem becamehas been Corporate Vice President, Chief Financial Officer insince January 2014. In addition, Mr. Ullem has executive responsibility for the Company’s information technology, information security, risk management, indirect sourcing, and corporate services teams. Prior to joining Edwards, he served from May 2010 to December 2013 as Chief Financial Officer of Bemis Company Inc., a Fortune 500 publicly traded global supplier of packaging and pressure sensitive materials used in leading food, consumer, and healthcare products.products, from May 2010 to December 2013. Mr. Ullem also had leadership responsibility for one of Bemis’ three business segments and the company’s information technology function. Before joiningPrior to Bemis, Mr. Ullem spent 17 years in investment banking, serving as Managing Director at Goldman Sachs and later at Bank of America. He has served on the Boardboard and Compensation Committeecompensation committee of Berry Global Inc. since 2016, and is a Henry Crown Fellow at the Aspen Institute.

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Huimin Wang, M.D., age 63.65. Dr. Wang has been Corporate Vice President, Japan, Asia and Pacific since 2010. From 2004 to 2010, he served as Corporate Vice President, Japan and Intercontinental Regions and, wasfrom 2000 to 2004, served as Corporate Vice President, Japan from 2000Japan. Prior to 2004. Previously,joining Edwards, he served in a number of roles with Baxter Healthcare Corporation, including Senior Manager of Strategy Development, Director of Product/Therapy for the Renal Division in Japan, and President of Medical Systems and Devices in Japan, and was a representative director of Baxter Limited, a Japan corporation, through Septemberfrom 2000 to 2002. Before joiningPrior to Baxter, Dr. Wang was a senior associate with Booz, Allen & Hamilton in Chicago, Vice President of Integrated Strategies, a consulting and venture management firm which heco-founded, and an associate with McKinsey & Company. Prior to that, Dr. Wang was a resident and staff physician in anesthesiology at Keio University Hospital in Tokyo. Dr. Wang serves on the board of The Ascend Foundation.

LOGOLOGO  

Larry L. Wood, age 54.56. Mr. Wood has been Corporate Vice President, Transcatheter Aortic Valve Replacement (“TAVR”)(TAVR) since 2007. Under his leadership, Edwards has experienced extraordinary growth in the global TAVR business, and the Edwards SAPIEN heart valve has won numerous awards, including the Prix Galien “Best Medical Technology Product” award. Most recently priorbusiness. Prior to assuming his current role, from March 2004 to February 2007, he served as Vice President and General Manager, Percutaneous Valve Interventions.Interventions, from 2004 to 2007. Mr. Wood has more than 3035 years of experience in the medical technology industry at both Edwards and Baxter Healthcare Corporation in positions including manufacturing management, regulatory affairs and strategic and clinical marketing, primarily for the surgical heart valve therapy business. Mr. Wood is a frequently invited faculty member at key interventional cardiology and cardiothoracic surgery scientific congresses. He previously held key positions in manufacturing management, regulatory affairs, and strategic and clinical marketing, primarily in the Company’s leading surgical heart valve franchise. Mr. Wood is also a passionate supporter of the United Way Orange County’s Destination Graduation Program which encouragesat-risk high school students to graduate and pursue higher education.

 

 

 
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EXECUTIVE COMPENSATION AND OTHER INFORMATION

 

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis describes and provides disclosure about the objectives and policies underlying our executive compensation programs.

Executive Summary

Edwards is the global leader in patient-focused medical innovations for structural heart disease, as well as critical care and surgical monitoring. Driven by a passion to help patients, we partner with the world’s leading clinicians and researchers and invest in research and development to transform care for those impacted by structural heart disease or who require hemodynamic monitoring during surgery or in intensive care.

Pay-for-Performance Philosophy.    The Compensation Committee strives to create apay-for-performance culture and strongly believes that executive compensation should be tied not only to performance but also directly to the successful implementation of our corporate strategy.

We embrace a corporate strategy that puts patients first and creates value with therapies that transform care. We execute our strategy by focusing on the right thing for patients, identifying unmet clinical needs and developing breakthrough therapies, doing so in a way that establishes trusted relationships with our stakeholders. As a direct result of our strategy, we have introduced new therapies such as transcatheter aortic valve replacement, rapid-deployment surgical heart valves and noninvasive advanced hemodynamic monitoring, all while achieving our stated financial and operating objectives, and strengthening our leadership positions. Managing our business well in a challenging, highly regulated, dynamic environment requires talented and energetic leaders who champion our strategy and deliver on our commitments.

Our executive compensation programs are designed to emphasize performance-based compensation, reward financial performance and the implementation of our corporate strategy, and align the financial interests of our executives with those of our stockholders.

EDWARDS’ CORPORATE STRATEGY INFORMS PAY DESIGN

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

Long-term incentive awards are designed to align the financial interests of our executives with those of our stockholders. Awards granted to our NEOs in 2019 included stock options, PBRSUs and time-based RSUs. We believe our equity compensation mix provides a balance of incentives that serve to retain executive talent while reinforcing our long-term growth strategy, as a company focused on exceptional revenue growth, strong profitability, and long-term stockholder returns.

Edwards’ 20192021 NEOs are as follows:

 

NEO NAMES AND POSITIONSNames and Positions

Michael A. Mussallem

Chairman and Chief Executive Officer

Scott B. Ullem

Corporate Vice President, Chief Financial Officer

Donald E. Bobo

Corporate Vice President, Strategy and Corporate Development

Jean-Luc Lemercier

Corporate Vice President, EMEA (Europe, Middle East and Africa), Canada and Latin America

Larry L. Wood

Corporate Vice President, Transcatheter Aortic Valve Replacement

2019 FinancialExecutive Summary

Edwards is the global leader in patient-focused medical innovations for structural heart disease and Operating Performance.critical care monitoring. Driven by a passion to help patients, we partner with the world’s leading clinicians and researchers and invest in research and development to transform care for those impacted by structural heart disease or who require hemodynamic monitoring in the hospital setting.

Pay-for-Performance Philosophy.    Overall, we achieved strong financial resultsThe Compensation and operatingGovernance Committee strives to create a pay-for-performance culture and strongly believes that executive compensation should be tied not only to annual performance in 2019, exceeding our target goals for sales growth, net income growth, and free cash flow generation. Webut also made important progress on future advancements for patients.

Strong underlying1 sales growth of 15% was driven by:

Groundbreaking PARTNER 3 clinical results which demonstrated superiority over surgerydirectly to the successful implementation of our SAPIEN 3 valve technologylong-term corporate strategy.

We are driven by our culture that puts patients first and ledour long-term corporate strategy that creates value with therapies that transform care and focuses on large, under-treated diseases. Our annual plan is essential to executing our strategy and seeks to do the U.S. regulatory approvalright thing for patients, identifying unmet clinical needs and developing breakthrough therapies, while maintaining trusted relationships with our stakeholders. As a direct result of our strategy, we have introduced therapies, such as transcatheter aortic valve replacement, novel resilient surgical heart valve technology for patients at low surgical risk;valves and noninvasive advanced hemodynamic monitoring, and we have strengthened our leadership positions. Successfully managing our business in a challenging, highly regulated, dynamic environment requires talented and energetic leaders who champion our strategy and deliver on our commitments.

The European launch ofOur executive compensation programs are designed to emphasize performance-based compensation, reward financial performance and the PASCAL system, an important early addition to our TMTT portfolio;

Continued adoptionimplementation of our newest premium aortic surgical valve, INSPIRIS RESILIA;corporate strategy and

Broad use align the financial interests of our critical care technologies, including the ongoing rolloutexecutives with those of our HemoSphere smartmonitoring platform.long-term stockholders.

Profitability was also strong in 2019, even asContinued Response to COVID.Following the outbreak of COVID, we continued to invest aggressivelyremain fully committed to fuel important breakthrough innovationsour patient-focused innovation strategy, and our teams were relentless in doing the right thing for patients. Guided by our Credo, our priorities during the pandemic have been to strengthen our longer-term outlook. Utilizing significant savings inprotect the reductionhealth and well-being of our effective tax rate resulting from the Tax Cuts and Jobs Act of 2017, we hired new employees, accelerated research and development initiatives, and contributed more to employee retirement accounts. We directed a significant portion ofcontinue to serve our infrastructure investment to growing our dedicated commercialpatients, hospitals and clinical teams in Europepartners, and to support our TMTT business.communities.

1

“Underlying” amount is anon-GAAP item. Refer to the Appendix A for a reconciliation to the most directly comparable GAAP financial measure.

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

Stock Performance.    One indicatorWith respect to our employees, our Company is part of the essential healthcare infrastructure, and many of our employees are “essential” workers who cannot work remotely. We created safe pay-for-performanceon-site culture isworking conditions; these included implementing extensive COVID safety practices and procedures to ensure the relationshipdelivery of our NEOs’ total direct compensation to total stockholder return. Over the past five years, on average, 89% of the CEO’s total direct compensation has been performance-based, and 74% is tied to the performance of Edwards’ stock. As a general indicator, the Compensation Committee considers how Edwards’ cumulative total return to stockholders compares to both the S&P 500 Index and the SPSIHE. The table below illustrates our Company’s5-year cumulative total stockholder return on common stock with the cumulative total returns of the S&P 500 Index and the SPSIHE. The cumulative total return listed below assumes an initial investment of $100 at the market close on December 31, 2014 and reinvestment of dividends. Stockholder returnslife-saving technologies in over the indicated period should not be considered indicative of future stockholder returns.

COMPARISON OF5-YEAR CUMULATIVE TOTAL RETURN*

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* $100 invested on 12/31/14 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.

     The stock price performance included in this graph is not necessarily indicative of future stock price performance.

2019 Annual Incentive Plan Outcomes and Long-Term Incentives.    The three measures used to evaluate financial achievement under our annual cash incentive plan were revenue growth, net income and free cash flow, all computed on anon-GAAP basis. Our financial results resulted in financial achievement at 151% of target under the cash incentive plan. In addition, our overall achievement of KODs100 countries. We also utilized remote work options for 2019 was 97%. Accordingly, our cash incentive plan for corporatethose employees funded at 146% of target. Final incentive amounts for the NEOs for 2019 also took into account each employee’s individual performance, as more fully described below under “Elements of Compensation—Annual Cash Incentive Payment.”

The PBRSUs awarded to NEOs in 2016 that vested in 2019 were based on Edwards’ TSR over a three-year performance period relative to the TSR of the SPSIHE subset for that same period. These PBRSUs paid out at 75.77% of target, as more fully described under “Elements of Compensation—Determination as to 2016 PBRSU Awards.”who could work remotely.

 

 

 
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EXECUTIVE COMPENSATION AND OTHER INFORMATION

For our patients, we worked to ensure that our life-saving technologies continued to be accessible during the pandemic with customer support provided by our committed field team that participated in procedures in hospitals all over the world. We worked with investigators, clinicians, hospitals and trial sites to continue and reengage patient treatments.

To support our communities, we partnered with a local Southern California healthcare organization to open a mass vaccination clinic at our headquarters campus in Irvine. We contributed significant resources to support the effort and took the clinic mobile when vaccination efforts turned to reaching underserved communities. In addition, we supported more than 250 global charities last year and continued our work with Every Heartbeat Matters, our primary philanthropic initiative through the Edwards Lifesciences Foundation, to improve the lives of 2.5 million additional underserved structural heart and critical care patients by the end of 2025. We are also proud to say that in 2021, more than 80% of our employees participated in at least one charitable activity.

2021 Financial and Operating Performance.    Our financial results and operating performance in 2021 were significantly impacted by the pandemic. Procedure rates were highly variable around the globe, leading to a decline in sales compared to expectations. Treatments were delayed due to hospital prioritization of COVID patients, hospital staffing shortages and patients deferring treatment. Although we saw recovery during 2021, we faced significant headwinds in December 2021 due to a surge in COVID outbreaks, and our financial performance was below original expectations. Despite the impact of the pandemic, 2021 was a year of significant milestones and investments for Edwards. Our total sales for fiscal year 2021 were $5.2 billion, an increase in underlying revenue growth for the year of approximately 18% over the prior year. We achieved 19% growth in adjusted earnings per share while also increasing R&D by 19%.2 The significant increase in R&D and infrastructure investments in fiscal 2021 helped strengthen our longer-term outlook. Our total stockholder return for the year was 42%.

Even with the challenges we faced during the global pandemic, we continued to make important progress on future advancements for patients:

Invested in increasing disease and therapy awareness, pursued further therapy expansion, and advanced new technologies in transcatheter aortic valve replacement. We completed enrollment in EARLY TAVR, a pioneering pivotal trial studying the treatment of severe aortic stenosis (AS) patients before their symptoms develop. Separately, we initiated enrollment in our PROGRESS pivotal trial for moderate AS patients and we received FDA approval for our ALLIANCE pivotal trial to study our next generation TAVR technology, SAPIEN X4;

Achieved our significant 2021 milestones in transcatheter mitral and tricuspid therapies, as we continued to make meaningful progress on advancing our three key value drivers: a portfolio of pioneering therapies for patients, positive pivotal trial results to support approvals and adoption, and favorable real-world clinical outcomes;

Extended our leadership in surgical aortic valves through the continued adoption of our newest technologies, INSPIRIS RESILIA aortic valve, KONECT RESILIA aortic tissue valved conduit, and the launch of our MITRIS RESILIA valve; and

Advanced leadership in critical care with the continued introduction of advanced monitoring technology and smart recovery algorithms for patients.

Stock Performance.    One indicator of our pay-for-performance culture is the relationship of our NEOs’ target total direct compensation to total stockholder return. Over the past five years, on average, 90% of the CEO’s target total direct compensation has been performance-based, and 75% has been tied to the performance of Edwards’ stock. As a general indicator, the Compensation and Governance Committee considers how Edwards’ cumulative total return to stockholders compares to both the S&P 500 Index and the SPSIHE. The table below illustrates our Company’s 5-year cumulative total stockholder return on common stock with the cumulative total returns of the S&P 500 Index and the SPSIHE. The cumulative total return listed below assumes an initial investment of $100 at the market close on December 31, 2016 and reinvestment of dividends. Stockholder returns over the indicated period should not be considered indicative of future stockholder returns.

2

“Underlying growth rate” and “adjusted earnings per share” are non-GAAP items. Refer to Appendix A for reconciliation to the most directly comparable GAAP financial measures.

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN*

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* $100 invested at market close on December 31, 2016 in stock or index, including reinvestment of dividends.

   The stock price performance included in this graph is not necessarily indicative of future stock price performance.

2021 Annual Incentive Plan.    The Company’s Annual Incentive Plan has historically consisted of three elements:

the corporate financial measurement (based on underlying revenue growth, adjusted net income and adjusted free cash flow targets);

the Key Operating Drivers (“KODs”) (quantifiable strategic milestones that include financial objectives and are tracked using a points system across our entire organization); and

individual performance.

In light of the pandemic, to determine the right approach for the Annual Incentive Plan during the 2020 and 2021 plan years for the Company, the Compensation and Governance Committee and the Board considered, among other things, the following:

Ensuring that management is not disincentivized for creating long-term value (e.g., protecting employees, not taking actions that would disrupt development programs that would advance our long-term strategy and providing care/relief for patients);

Rewarding the prompt and proactive actions taken by the management team to protect employee health while maintaining our commitment to patients, as well as the other actions taken by management during the pandemic as described above under “Continued Response to COVID”;

Rewarding the Company’s operational execution;

Paying for performance and execution by using the KODs approved by the Board;

Being consistent with the Compensation and Governance Committee’s intention to continue a pay-for-performance culture that compensates executives and employees for the successful implementation of our corporate strategy;

The fact that the headwinds the Company faced were largely outside the control of the employees; and

Engagement and retention considerations for our dedicated employees.

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

 

Taking into account these considerations, in January 2021, the Board of Directors determined that implementing the annual cash incentive payment, as structured, was not consistent with its intention to create a Compensation Program Highlights.pay-for-performance culture that compensates executives and employees for the successful implementation of our corporate strategy. The Compensation Committee believes thatBoard, therefore, used its executive compensation and benefits philosophy and objectivesdiscretion to approve using the KOD results as the primary mechanism to determine 2020 Annual Incentive Plan payouts across the entire organization. This resulted in eliminating the corporate financial measurement element of the Annual Incentive Plan for 2020, which, if used, would have resulted in programsa funding at 0% in 2020. In addition, because the Board expected that alignthe pandemic would continue to impact the Company in fiscal year 2021, the Board decided to (1) use this same approach for the 2021 Annual Incentive Plan and (2) include an Edwards-wide revenue component to the KODs for 2021.

The KODs are a rigorous set of milestones and metrics that are used throughout the Company to manage annual objectives at a more granular level. Annually, the Board approves the Company’s Strategic Imperatives, and it is from these Strategic Imperatives that the KODs are derived. The KODs contemplate near and long-term objectives of our multi-year strategy, and the KODs are how we translate these strategic goals into quantifiable metrics to be achieved in any given year, holding all employees, including executives, with stockholder interests.accountable for the Company’s and their own performance.

For 2021, there were four Strategic Imperatives approved by the Board of Directors from which the KODs were derived:

 

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WHAT WE DO

LOGOPay-for-Performance. Approximately 90% of the total direct compensation of our CEO, and an average of 78% of the total direct compensation of our other NEOs, was performance-based in 2019.
LOGOLinkage Between Performance Measures and Strategic Imperatives. Performance measures for incentive compensation are linked to our Strategic Imperatives through achievement of KODs and are designed to create long-term stockholder value and hold executives accountable for their individual and Edwards’ performance.
LOGOPerformance-Based Equity. Our PBRSUs vest based on our relative TSR over a three-year period.
LOGOMinimum Three-Year Vesting. Equity compensation is structured to vest over a minimum period of three years, subject to limited exceptions.
LOGORobust Executive Stock Ownership Guidelines with Holding Period Requirements. Executives are required to hold Edwards’ stock with a value not less thansix-times salary for our CEO and three-times salary for each other NEO. Fifty percent of net shares received as equity compensation must be retained until the guideline has been met.
LOGOCEO Stock Ownership. Our CEO far exceeds hissix-times salary ownership guideline and has continued to increase his ownership of Edwards’ stock each year.
LOGOModest Perquisites. We provide modest perquisites and have a business rationale for the perquisites that we do provide.
LOGO“Double Trigger” in the Event of a Change in Control. Severance benefits are paid, and equity compensation awarded starting in May 2015 accelerates in connection with a severance, only upon a “double trigger” in connection with a change in control (meaning a termination of the executive’s employment is required, in addition to the occurrence of a change in control, in order for the benefits to be triggered).
LOGOUse of Tally Sheets. The Compensation Committee annually reviews summaries of prior and potential future compensation levels (referred to as “tally sheets”) when making compensation decisions.
LOGO“Clawback” Policy. We maintain a recoupment policy for performance-based compensation.
LOGOIndependent Compensation Consultant. The Compensation Committee engages an independent compensation consulting firm that provides us with no other services.

Lead the global expansion of Transcatheter Aortic Valve Replacement (“TAVR”) and accelerate the treatment of aortic stenosis

 

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WHAT WE DON’T DO

No excise taxgross-ups for executive officers.
No repricing or buyout of underwater stock options.
No pledging of Edwards’ securities by members of the Board, all employees with a title of “vice president” equivalent or above, and employees designated as “Designated Insiders” under our insider trading policy.
No hedging of Edwards’ securities by members of the Board, executives, employees with a title of “vice president” equivalent or above, and employees designated as “Designated Insiders” under our insider trading policy.

Consideration ofSay-on-Pay Vote Results.    At our 2019 annual meeting, our stockholders cast an advisory vote onTransform the compensationtreatment of our NEOs (a“say-on-pay” vote). Approximately 95%mitral and tricuspid valve disease

Extend global presence in surgical heart valves and critical care

Strengthen capabilities and talent to execute key initiatives and fortify culture

Underlying these Strategic Imperatives are approximately 80 specific KOD metrics and milestones relating to, among other things, research and development, commercial and financial milestones in each of the votes cast on this proposal voted in favorfour business units, key initiatives to increase patient access to our therapies and specific milestones for global supply chain as it relates to launches of our NEO compensation. We believe this vote reflects stockholders’ continued strong supportproducts, supply, capacity, quality, productivity, service and capabilities. Approximately 25% of compensation programs for our NEOs.the KODs include a financial component. The Compensation Committee will continue to consider the results ofsay-on-pay votes along with the feedback received from stockholders received through the stockholder outreach program when making future compensation decisions for the NEOs.KOD achievement percentage cannot exceed 150%.

 

 

 
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EXECUTIVE COMPENSATION AND OTHER INFORMATION

 

We do not disclose our KODs in detail because we believe doing so would cause a meaningful competitive disadvantage. However, we are providing additional transparency on the structure and outcomes of the 2021 Annual Incentive Plan KODs with specific illustrative examples of milestones in the table below to provide the nature and types of milestones included in our KODs.

Strategic Imperatives

Points
Achieved
Illustrative Examples of KODs Underlying the Strategic Imperatives

Lead the global expansion of TAVR and accelerate the treatment of aortic stenosis

36

  Achieved milestones on two TAVR clinical trials which will lead to expanded indications over time, the EARLY TAVR and PROGRESS trials

  Achieved milestones on the advancement of next-gen product portfolio

  Strong OUS TAVR growth

Transform the treatment of mitral and tricuspid valve disease

27

  Completed enrollment of CLASP IID pivotal trial

  Achieved clinical enrollment milestones for tricuspid therapies

  Achieved technical milestones advancing next-gen mitral and tricuspid therapies

Extend global presence in surgical heart valves and critical care

24

  Extended leadership position in Surgical Structural Heart through the adoption of premium technologies

  Strong global growth in Critical Care and Surgical Structural Heart despite the impact of COVID on hospital staffing

  Achieved milestones around the advancement of Critical Care technologies including hardware, algorithm development, and smart recovery technologies

Strengthen capabilities and talent to execute key initiatives and fortify culture

26

  Substantial progress achieved on new manufacturing facilities preparing for future growth

  Achieved global supply chain milestones through innovative efforts that enabled continuous production of life-saving heart valve therapies and critical care technologies

Edwards-Wide Revenue Growth

3

  For the full year 2021, sales increased 18% on an underlying basis to $5.2 billion and adjusted earnings per share grew 19% to $2.22

Total

116

  Despite COVID uncertainties, achieved long-term strategic initiatives and milestones

2021 Executive and Corporate Annual Incentive Plan Outcomes.As discussed above, the Compensation and Governance Committee determined an approach for the Annual Incentive Plan outcomes that would be applied for 2021.

In February 2022, the Board of Directors approved the 2021 KOD achievement at 116% of target, from which the Board applied negative discretion of 20 points for the CEO and 10 points for the other named executive officers due to issues related to the compliance program in Japan. As a result, our cash incentive plan funded at 96% for the CEO and 106% for the other named executive officers, and each individual’s performance was also taken into account for the final calculation of the annual cash incentive payment for 2021. See “Elements of Compensation—Annual Cash Incentive Payment” below for additional information regarding the annual cash incentive payment.

2022 Edwards Incentive Plan.In addition, because we plan for conditions resulting from the pandemic to gradually improve through 2022, the Compensation and Governance Committee determined that the Company would reinstate a financial performance measure for the 2022 Edwards Incentive Plan.

Consideration of Say-on-Pay Vote Results.    At our 2021 annual meeting, our stockholders cast an advisory vote on the compensation of our NEOs (a “say-on-pay” vote). Approximately 93% of the votes cast on this proposal voted in favor of our NEO compensation. We believe this vote reflects stockholders’ continued strong support of compensation programs

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

for our NEOs. The Compensation and Governance Committee will continue to consider the results of say-on-pay votes along with the feedback received from stockholders received through the stockholder outreach program when making future compensation decisions for the NEOs.

Compensation Philosophy and Objectives for NEOs.    Our compensation programs are designed to attract, retain, motivate and engage executives with superior leadership and management capabilities to enhance stockholder value. Within this overall philosophy, our objectives are to:

 

offer programs that place a higher emphasis on performance-based compensation than fixed compensation;

 

align the financial interests of executives with those of our long-term stockholders; and

 

provide compensation that is competitive.

We strongly believe that a significant amount of compensation for the NEOs should be composed of short-term and long-term incentives, orat-risk pay, to focus the executives on near-term goals and strategic initiatives. The amount of such short-term and long-term incentive compensation is dependent on achievement of our annual goals, individual performance, and long-term increases in the value of our stock. The targetIn this Proxy Statement, “target total direct compensationcompensation” for each NEO consists of (i) base salary, (ii) Incentive Pay Objective (as defined under “Elements of Compensation—Annual Cash Incentive Payment” below), and (iii) long-term incentive awards (presented in the charts below using their target equity mix values).

The charts below illustrate the percentage weighting of each compensation vehicle that comprise the 20192021 target total direct compensation for the CEO and the average for the other NEOs.

 

LOGOLOGO  LOGOLOGO

Compensation Process.    The Compensation and Governance Committee is responsible for discussing, evaluating and approving the compensation of the CEO and the other NEOs, including the specific objectives and target performance levels to be included in our executive compensation plans. The CEO and other members of the executive leadership team develop our Strategic Imperatives as well as the KODs that measure our achievement of these imperatives. The Board reviews and approves the Strategic Imperatives and KODs at the start of every year. The CEO provides input to the Compensation and Governance Committee afteryear-end regarding achievement of our Strategic Imperatives and KODs. In addition, the CEO and the Corporate Vice President of Human Resources provide recommendations to the Compensation and Governance Committee regarding compensation of the NEOs (other than the CEO). The Compensation and Governance Committee then determines the compensation of the CEO and reviews and approves the compensation of the other NEOs.

The CEO and the Corporate Vice President of Human Resources are invited to, and regularly attend, Compensation and Governance Committee meetings asnon-voting guests. The Compensation and Governance Committee regularly meets in executive session without participation by the CEO or other management representatives. In addition, our CEO and Corporate Vice President of Human Resources meet with the Compensation Consultant as well as the Chair of the

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Compensation and Governance Committee in preparation for Compensation and Governance Committee meetings, and the Compensation Consultant also regularly attends Compensation and Governance Committee meetings and participates in executive sessions with the Compensation and Governance Committee.

Independent Compensation Consultant.    The Compensation Consultant, Semler Brossy Consulting Group, has been retained by and reports to the Compensation and Governance Committee and provides executive and director compensation consulting services to the Compensation and Governance Committee.

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Semler Brossy’s responsibilities for fiscal 20192021 generally included:

 

Annual and periodic reviews of executive total compensation relative to peers;

 

Annual and periodic reviews of Directordirector total compensation;

 

Annual and periodic reviews of the Company’s comparator group;

 

Report on proxy advisory firms aroundsay-on-pay and other compensation matters;

 

Presentations on specialized topics, as requested or applicable;

 

Reports to the Compensation and Governance Committee on market trends and best practices in compensation; and

 

Attendance and participation in all Compensation and Governance Committee meetings and stockholder consultations, as requested.

The Compensation Consultant does not provide any other services to the Board or the Company. The Compensation and Governance Committee has assessed the independence of the Compensation Consultant pursuant to the NYSE rules and determined that the Compensation Consultant is independent, and free of conflicts of interest with us or any of our directors or executive officers.

Use of Competitive Data.    We do not target any one specific percentile but instead consider the market data along with factors like the individual’s performance and context from the talent market more broadly to determine our target total direct compensation and the elements of compensation for our NEOs. In determining the appropriate positioning level of each NEO’s target total direct compensation and each component of compensation for an NEO, the Compensation and Governance Committee also takes into account its assessment of the Company’s or business unit’s general performance, as applicable for each executive, and the executive’s tenure, experience, level of individual performance and potential to contribute to our future growth. Accordingly, an NEO’s actual compensation may be higher or lower than the median for the position based on the Compensation and Governance Committee’s assessment of these other factors. If the Compensation and Governance Committee determines that changes are appropriate, it has the flexibility to make adjustments for one or more executives.

Consistent with our philosophy of emphasizing pay for performance, annual cash incentive payments are designed to be above Incentive Pay Objectives when we exceed our goals and below the Incentive Pay Objectives when we do not achieve our goals. In the event threshold levels of performance are not attained, no annual incentive payment is generally earned.

For purposes of establishing the value of equity awards, stock options are valued as of the grant date using the Black-Scholes valuation model. RSUs and PBRSUs are valued at the fair market value of the underlying shares on the grant date. Except as otherwise noted above or described below, the Compensation and Governance Committee’s executive compensation determinations are subjective and the result of the Compensation and Governance Committee’s business judgment, which is informed by the experiences of the members of the Compensation and Governance Committee as well as the input from the Compensation Consultant and peer group data provided by the Compensation Consultant. In order to establish competitive compensation market data for the NEOs, the Compensation Consultant uses public proxy information from companies primarily in the medical technology industry. These peer companies are chosen based on the Compensation and Governance Committee’s assessment of their market capitalization, revenue, business focus, complexity, geographic location and the extent to which the Compensation and Governance Committee believes they compete with us for executive talent (the “Comparator Group”). The composition of the Comparator Group is reviewed periodicallyannually to monitor the appropriateness of the profiles of the companies included so that the group continues to reflect our competitive market and provides statistical reliability.

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The review of the Comparator Group for pay decisions in 20192021 was conducted in July 2018.2020. After evaluating a series of qualitative and quantitative factors among other publicly traded U.S. companies in our industry, including scale, talent,

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business, and operational characteristics and overlap among peers, the Compensation and Governance Committee updatedselected the below companies as the Comparator Group used to make 2019 executive compensation decisions by adding Baxter International Inc., Align Technology, Inc. and ABIOMED, Inc. and removing PerkinElmer, Inc. and Integra Lifesciences Holdings Corporation. C.R. Bard Inc.for 2021. The group was acquired by Becton, Dickinson and Company and, therefore, it was also removed from the Comparator Group. For 2019,same as the Comparator Group consisted of the following companies:for 2020, except that Waters Corporation and DENTSPLY SIRONA, Inc. were removed due to them being smaller, low-growth companies, and DexCom, Inc. was added due to its stronger fit from a size and business standpoint.

 

Edwards’ 20192021 Comparator Group

Abbott Laboratories

 

IDEXX Laboratories,Hologic, Inc.

ABIOMED, Inc.

 

Illumina,IDEXX Laboratories, Inc.

Agilent Technologies, Inc.

 

Intuitive Surgical,Illumina, Inc.

Alexion Pharmaceuticals, Inc.

 

Medtronic plcIntuitive Surgical, Inc.

Align Technology, Inc.

 

ResMed Inc.Medtronic plc

Baxter International Inc.

 

Stryker CorporationResMed Inc.

Becton, Dickinson and Company

 

Teleflex, Inc.Stryker Corporation

Boston Scientific Corporation

 

Varian Medical Systems,Teleflex, Inc.

The Cooper Companies, Inc.

 

Waters CorporationVarian Medical Systems, Inc.

DENTSPLY SIRONA,DexCom, Inc.

 

Zimmer Biomet Holdings, Inc.

Hologic, Inc.

As of June 30, 2018,2020, Edwards ranked at the 6158stth percentile of this group in terms of market capitalization. Compensation data are generally regressed for market capitalization to ensure that the data are not distorted by larger companies. Regression analysis is a commonly used technique tosize-adjust data, which allows for more statistically valid comparisons. The key measure used in our regression model is market capitalization. Based on this measure, the regression formula correlates and adjusts the raw data for base salary, total cash compensation and total direct compensation to predict those items based on the market capitalization for each of the Comparator Group companies.

Although data from the Comparator Group are the primary data input for compensation decisions for the NEOs, consideration is given to compensation data for companies in healthcare-related industries as reported in nationally recognized Radford Global Technology and Global Lifesciences Compensation Surveys. The Compensation and Governance Committee considers both survey data that is healthcare-specific and also general industry data for companies within a similar size scope to Edwards. The Compensation and Governance Committee believes it is appropriate to refer to these additional data because we compete with these types of companies for executive talent.

We do not target any one specific percentile but instead consider the market data along with factors like the individual’s performance and context from the talent market more broadly to determine our target total direct compensation and the elements of compensation for our NEOs.

 

 

 
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Elements of Compensation.    The compensation package for each NEO consists primarily of (a)(i) base salary; (b)salary, (ii) an annual cash incentive payment based on attainment ofpre-established financial measures, operating goals, and individual performance;performance, and (c)(iii) long-term stock-based incentive awards. Each of these three components of compensation is intended to promote one or more of our objectives of designing executive compensation that is performance-based, is competitive, and aligns the interests of the executives with our stockholders, as further described in the Elements of Compensation Summary chart below.

Elements of Compensation Summary

 

Element of Compensation

 Why We Pay this Element       Compensation and Governance
Committee’s Evaluation Criteria
  

Base Salary

 

  Provides fixed compensation component payable in cash

 

  Provides a certain level of security and continuity from year to year

 

  Helps attract and retain qualified executives

    

  In addition to competitive data, the executive’s responsibilities, tenure, prior experience and expertise, individual performance, future potential, and internal equity are considered

 

Annual Cash Incentive PaymentPayment*

(see*See sections “Executive Summary” above and “Annual Cash Incentive Payment” section below)below for specific considerations and changes to the Incentive Plan for fiscal year 2021.

 

  Provides variable compensation component payable in cash to motivate and reward executives for annual performance against established corporate financial measures, operating and strategic goals, and individual objectives

 

  Recognizes executives based on their individual contributions

 

  Is performance-based and not guaranteed

    

  IncentiveHistorically, incentive plan funding iswas determined by multiplying:

 
    

Financial Measurement Achievement

(based on underlying revenue growth, adjusted net income,
and adjusted free cash flow targets
set at the

beginning of the year)

  
    X 
    

KOD Achievement

(based on strategic, corporate, and
business unit objectives determined at
the beginning of the year) year)

The aggregate KOD multiplier
may not exceed 150%

  
    X 
    

Individual Performance Objective Achievement

(determined at the beginning of the year) year)

Up to a maximum of 200% of
pre-established Incentive Pay Objective

  

 

 

 
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Element of Compensation

 Why We Pay this Element Compensation and Governance
Committee’s Evaluation Criteria

Long-Term Incentive Awards

 

  55% Stock Options

 

  20% RSUs

 

  25% PBRSUs

 

  Aligning executives’ interests directly with those of stockholders; provides executives with an incentive to manage the Company from the perspective of an owner

 

  Stock options tie executive pay directly to stockholder value creation over the long term, promote executive retention, and are consistent with our focus ontop-line growth, innovation and our longer-term investment horizon and product pipeline

 

  RSUs promote stability and retention of our executives over the long term

 

  PBRSUs are measured against relative TSR, which links compensation to our performance over a three-year period against the performance of other companies

 

  Since RSUs and PBRSUs are paid in shares of Edwards stock, these awards also further link executives’ interests with those of our long-term stockholders

 

  Retains qualified employees

 

  Is performance- or stock price-based and value is not guaranteed

 

  The size and composition of long-term incentive awards are determined annually by the Compensation and Governance Committee, taking into account competitive total direct compensation pay positioning guidelines using market reference data from the Comparator Group, along with the individual executive’s level of responsibilities, ability to contribute to and influence our long-term results, and individual performance

Benefits

 

  Provides a safety net to protect against financial catastrophes that can result from illness, disability or death

 

  A benefit program that is competitive with companies with which we compete for executive talent supports recruitment and retention of executives

 

  Executives are eligible to participate in benefit programs on terms as are generally offered to other Company employees

PerquisitesPerquisites*

 

  Assists in attracting and retaining executives by enhancing the competitiveness of the executive’s compensation in a relatively inexpensive way

 

  Enables executives to perform their responsibilities efficiently, maximize their working time, and minimize distractions

 

  Modest perquisites, consistent with market practices

* Effective January 1, 2022, certain benefits were removed from our perquisite program and offset by certain compensation changes, as further described under “Benefits and Perquisites—Perquisite and Offsetting Changes” below.

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Base Salary.    The Compensation and Governance Committee generally reviews each NEO’s base salary in February and any approved changes are effective with the first pay period in April. The base salary for the CEO is established in a similar manner and is described more fully under “Employment and Post-Termination Agreements” below. Base salaries paid to the NEOs increased between 2.0% and 5.5% in 20192021 over the level in effect in 20182020 to help maintain market competitiveness and based on the Compensation and Governance Committee’s assessment of internal rolesandroles and contributions.

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Annual Cash Incentive Payment.    All of the NEOs and many other management andnon-management-level employees (approximately 12,13314,607 employees) participated in the 20192021 Edwards Incentive Plan (the “Incentive Plan”).

The Compensation and Governance Committee establishes for each NEO the amount of incentive payment that will be earned for targeted performance, referred to as the “Incentive Pay Objective.” The Compensation and Governance Committee utilizes the Incentive Pay Objective so that the total cash compensation (base salary plus incentive payment for expected performance) for the NEOs will be at approximately the median of executives at comparable positions in the Comparator Group. The Compensation and Governance Committee then considers performance results to determine the actual cash incentive payments.

In February 2022, the Board of Directors approved the 2021 KOD achievement at 116% of target, from which the Board applied negative discretion of 20 points for the CEO and 10 points for the other named executive officers due to issues related to the compliance program in Japan. As described below, in applying its discretion, the Compensation Committee may reduce, but may not increase, thea result, our cash incentive payment.plan funded at 96% for the CEO and 106% for the other named executive officers, and each individual’s performance was also taken into account for the final calculation of the annual cash incentive payment for 2021.

The accompanying “Grants of Plan-Based Awards in Fiscal Year 2019”2021” table below reports the maximum amounts payable and the Incentive Pay Objective (called the “Target” in the table) established for each NEO.

The Incentive PlanNEO for NEOs in 2019 provided that achievement at the threshold of any one of three Company financial measures (revenue growth, net income and free cash flow) would result in initial funding for the Incentive Plan. Then, the Compensation Committee applied its discretion in atwo-step process to determine the final annual cash incentive payments for the NEOs. Each of these two steps is discussed below:

(1)

Incentive Plan Funding

The Compensation Committee, after consultation with management, sets annual incentive performance goals each year for achievement of financial measures and KODs. Financial measures arenon-GAAP calculations generally on the same basis as contained in our financial guidance, subject to further adjustment to account for material developments during the year. In February 2019, the Compensation Committee initially established the financial measures at the minimum, target, and maximum levels set forth in the chart below.

Incentive Plan funding is determined after results of achievement of the predetermined financial measures and KODs are known.

The following illustration shows how the Incentive Plan is funded.

Financial

Measure

Achievement (%)

X

Key Operating

Driver

Achievement (%)

=

Actual

Incentive Plan

Funding (%)

Initially, the Board assesses the percentage of achievement ofpre-established Company financial measures. No funding is earned if actual performance associated with at least one of the financial goals does not exceed thepre-established minimum threshold. All three thresholds were exceeded in 2019. Achievement of the maximum level specified for each financial goal would result in funding for this measure at 175%.

For 2019, our financial goals, and the corresponding weightings, were as follows: revenue growth (50% weighting); net income (30% weighting); and free cash flow (20% weighting). The following table sets forth the target level for each goal2021 as well as the level of achievement required to reachmaximum amount that could have been earned by each NEO under the various levels of financial measure achievement. Interpolation is appliedAnnual Incentive Plan for results between2021 had the levels shown in the chart.

Based on themaximum performance levels in the chart below, our financial measures funded at 151%.

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2019 Company Financial Performance Measures*

   Percentage of Financial Measure Achievement  
   Minimum
(25%)
  Target
(100%)
  Maximum
(175%)
  Actual
(%)
  

Underlying Revenue Growth – 50% Weight

    8.0%    10.5%    15.5%    15.3%  

Adjusted Net Income ($M) – 30% Weight

   $  995   $  1,048   $  1,100   $  1,048  

Adjusted Free Cash Flow ($M) – 20% Weight

   $752   $827   $902   $991     

*

“Underlying Revenue Growth” is a non-GAAP item. Refer to Appendix A for a reconciliation to the most directly comparable GAAP financial measure. Adjusted Net Income used in setting and determining compensation is not calculated in accordance with GAAP and excludes intellectual property litigation expenses, amortization of intangible assets, fair value adjustments to contingent consideration liabilities, the purchase of intellectual property, impairment of long-lived assets, and the tax benefit from stock based compensation. Adjusted Free Cash Flow is also a non-GAAP financial measure that is defined as cash flows from operating activities less capital expenditures and excluding the tax benefit from stock based compensation and payments related to a litigation settlement, net of the associated tax benefit. As to each measure, the percentage of achievement is determined on a straight-line basis for actual performance between the minimum and target, or between the target and maximum, levels.

The financial measure achievement is multiplied by the level of achievement ofpre-established KODs. Management proposes and the Board reviews and approves the KODs each year to address specific business initiatives derived from our Strategic Imperatives and operating plans. The KODs address specific tangible and measurable progress toward our Strategic Imperatives, and focus the executive team on the areas and strategic initiatives most important to our future success. We have established a range of performancebeen attained (which for each KOD withNEO is 200% of the expectation that the target range should be achievable with the expected level of performance. Performance within the expected range results in a multiplier of 100%. Performance below the range is consideredsub-optimal and will result in a discount to the financial measure. Performance above the range is considered extraordinary and results in a multiplier above 100%. The aggregate KOD multiplier may not exceed 150%NEO’s Incentive Pay Objective).

In 2019, there were four KODs:

Lead the expansion of Transcatheter Aortic Valve Replacement and accelerate the treatment of aortic stenosis

Transform the treatment of mitral and tricuspid valve disease

Strengthen global leadership in surgical heart valve, critical care and adjacent opportunities

Strengthen capabilities and talent to execute key initiatives

After evaluating actual achievement of 80 different metrics and milestones underlying these KODs, the Board determined in its judgment that overall KOD performance for 2019 was 97%.

Based on the formula above, combining financial performance of 151% with KOD performance of 97%, the Compensation Committee arrived at a corporate Incentive Plan funding of 146%.

(2)

Individual Performance

Individual Performance.Individual performance objectives for the CEO are established collaborativelyapproved by the CEOCompensation and the CompensationGovernance Committee, and the individual performance objectives for the other NEOs are established collaboratively by the CEO and each such executive. The Compensation and Governance Committee believes each executive has an appropriate number of meaningful individual performance objectives. The individual performance objectives are chosen to create goals, the attainment of which is designed to implement our strategic and operating plans, with a focus on the achievement of the financial measures and operational goals within each executive’s individual area of responsibility.

These objectives are considered in the aggregate to determine an overall performance assessment for each NEO for the purposes of determining compensation. Although some of the individual performance objectives are expressed in qualitative terms that require subjective evaluation, objectives also include several quantitative measures. However, the assessment of the overall performance for each NEO involves a subjective process. The CEO reviews the performance of each NEO (other than the CEO) with the Compensation and Governance Committee and recommends a performance assessment for each executive. The Compensation and Governance Committee assesses the CEO’s performance. The Compensation and Governance Committee then exercises subjective judgment, reviewing the individual performance objectives, the overall performance of the individual executive

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against all of his or her individual objectives, taken together, and the executive’s performance relative to the environment and to other executives. There is no formal weighting of the individual performance objectives. Individual performance may impact an executive’s cash incentive payment, subject to an overall cap on incentive payments of 200% of the Incentive Pay Objective.

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The individual performance objectives for the CEO and the other NEOs and the factors considered by the Compensation and Governance Committee for 20192021 are described below.

 

NEO

  

20192021 Performance Objectives and Factors Considered

by the Compensation and Governance Committee

Mr. Mussallem

  

  Develop and deploy strategy; drive our strategic imperatives through KOD achievement; achieve Company financial goals; increase long-term shareholder value; attract and retain a diverse, talented team; promote a strong culture consistent with our Credo and Aspirations; and provide leadership as Board Chairman.

  

  The Compensation and Governance Committee found that Mr. Mussallem broadly achieved allled a remarkable patient-focused team who, as a member of his objectives, noting that Edwards’the critical healthcare infrastructure, never stopped working to deliver its planned financial results demonstrated impressive growth,with an unwavering commitment to our patients and that he had overseeninnovation strategy. Continued focus on important therapy innovations and infrastructure-related strategic initiatives intended to drive longer term growth and success. Thesuccess were executed as the Company was recognized for our sustainability program and significant community engagement. The Company fortified our strong patient-focused culture sustainability program and community engagement. Overall, Mr. Mussallem delivered above-expectation financial results highlighted by strong profitability despite product launch delays.expanded our diversity and inclusion initiatives to strengthen our innovation strategy. The Company continued to deliver superiorfocus on delivering long-term shareholder returns compared to benchmarks while investing aggressively in our technology pipeline and infrastructure necessary to support future initiatives.growth.

Mr. Ullem

  

  Ensure the Company’sintegrity of Edwards’ financial reporting maintains the highest integrity;reporting; drive to achieve 20192021 strategic imperatives, KODs and financial goals; maintain a high standard of investor relations; optimize capital deployment and; enhance stockholder returns; execute company-widedeployment; expand Information TechnologyTechnology’s capabilities to support growth; actively manage enterprise risks; attract and retain a diverse, talented team; and promote a strong culture consistent with our Credo and Aspirations.

  The Compensation and Governance Committee noted that even under continued difficult circumstances of the pandemic, Mr. Ullem demonstrated strong overall performance in the role of Chief Financial Officer. Specifically, he participated in key strategic initiatives to drive long-term shareholder valuation creation, led effective financial planning and the issuance of timely and accurate financial reports, improved risk mitigation through enterprise risk management, deployed key global information technology enhancements to strengthen Edwards’ management of data, and expanded diversity and inclusion programs.

Mr. Bobo

  Develop and implement Edwards’ corporate strategy, establish and execute business development goals that advance our strategy and strengthen our portfolio; provide leadership to our U.S. Healthcare solution team; advance our emerging heart failure initiatives; attract and retain a diverse, talented team; and promote a strong culture consistent with our Credo and Aspirations.

  

  The Compensation Committee noted that Mr. Ullem demonstrated strong overall performance in the role of Chief Financial Officer. Specifically, he led the continued development of solid financial planning and issuance of timely and accurate financial reports, continued to build investor confidence, implemented strategic changes to facilitate favorable impact from the “Tax Cuts and Jobs Act” and optimized the Company’s capital structure to enhance shareholder returns, improved risk mitigation through enterprise risk management, deployed several global information technology enhancements to strengthen Edwards’ infrastructure, and focused on global talent development.

Mr. Bobo

  Develop and implement Edwards’ corporate strategy, establish and execute business development goals that advance our strategy, provide leadership to our Healthcare solution team, develop and advance our emerging heart failure and disease awareness initiatives; attract and retain a diverse, talented team; and promote a strong culture consistent with our Credo and Aspirations.

  The CompensationGovernance Committee noted Mr. Bobo’s leadership in the strengtheningto strengthen and execution ofexecute our innovation-driven strategy including advancing our global disease awareness initiatives; the successful execution ofcompanies’ portfolio and representing EW with key external partners, executed business development transactions that advancedstrengthened our pipeline, strengthenedpipelines, advanced key initiatives and complemented our internal investments;investments, and provided leadership offor our heart-failurenew strategic initiatives including investment analysis, strategic fit analysis, and CardioCare initiatives.alliance management.

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NEO

2021 Performance Objectives and Factors Considered

by the Compensation and Governance Committee (Continued)

Mr. Lemercier

  

  Develop, evolve and execute the regional business strategy for Europe, Canada, and Latin America; drive new product introductions, consistently deliver sales growth and achieve financial goals for Europe, Eastern Europe, Middle East, Africa, Canada, and Latin America; drive innovation and enhance leadership in key franchises; ensure the proper funding from the different healthcare systems supporting our innovative technologies across the Region; attract and retain a diverse, talented team; and promote a strong culture consistent with our Credo and Aspirations.

  

  The Compensation and Governance Committee noted that despite recurring circumstances of the pandemic, Mr. Lemercier’s leadership abilities to continually achieve strongachieved solid regional results aligned with the plan, specifically driven by multiplenew product indications, product launches, geography expansion, a focus on regulatory and government affairs and regulatory, and patient engagement. In particular, there was expanded adoption and new indication achieved forNotably, the Transcatheter Aortic Valve Replacement as well asadoption has significantly progressed while EW market leadership improved, continued introduction of newtransformative Transcatheter Mitral and Tricuspid Therapies.therapies, pursuing leadership in this emerging field, as well as driving strong surgical structural heart and critical care initiatives. His team also enhanced customer operations, prepared for EU MDR readinessEdwards’ participation within the MedTech European trade association with a focus on cardiovascular disease awareness in Europe and had continued focus on talent development and community philanthropy across all geographies.

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NEO

2019 Performance Objectives and Factors Considered by the Compensation Committee (Continued)

Mr. Wood

  

  Develop, evolve and execute the strategy for the Transcatheter Aortic Valve Replacement business to strengthen our leadership position; consistently deliver sales growth and achieve the financial goals for the Transcatheter Aortic Valve Replacement business; drive innovation and 20192020 product development KODs; attract and retain a diverse, talented team; and promote a strong culture consistent with our Credo and Aspirations.

  

  The Compensation and Governance Committee noted that under Mr. Wood’s leadership, Transcatheter Aortic Valve Replacement financial results were strong globally and significantly exceeded the original 2019 expectations. In addition, Edwardsachieving planned revenue targets was the first company to receive both FDA approval and CE Mark for TAVR in the treatment of patients at low risk for surgerychallenging as a result of the randomized PARTNER 3 Trial results publishedpandemic, but Edwards continued its strong patient focus with on-site case support globally and was present in The New England Journalthe great majority of Medicine.the cases. His team also advanced thecontinued to expand our SAPIEN 3 Ultra valve, introducing it to cliniciansplatform globally and strengthened our leadership position by achieving US approval on our pulmonic program, receiving regulatory approval and reimbursement in Japan for low-risk patients, completing enrollment in the U.S.asymptomatic trial, and Europe. In summary, 2019 was marked by meaningful indication expansionsgaining approval to start a trial on our next generation TAVR technology. The continued body of evidence on our TAVR technology established the groundwork for a new clinical trial to study patients increased awareness among clinicians and patients about TAVR, and continued technology leadershipwith moderate aortic stenosis, which is a population that is demonstrating improved patient outcomes.could benefit from earlier intervention.

    

Committee Review Process.    The Compensation and Governance Committee generally meets each February to review and approve annual incentive payments for the prior year and to set incentive performance targets for the current year. The Compensation and Governance Committee may adjust the incentive payment levels based on financial measure achievement, KOD achievement, individual performance, and TSR. In February 2020, after reviewing2022, the Company’s 2019 performance versus financialCompensation and operational goals, TSR performance, and business unit performance, the CompensationGovernance Committee awarded incentive payments to the NEOs that ranged from 139%96.0% to 158%116.6% of the Incentive Pay Objectives for the NEOs. The amount awarded to each NEO for 20192021 is reported in the accompanying “Summary Compensation” table.Compensation Table.” The incentive payments were paid in March 2020.2022.

(3)Long-Term Incentive Awards.

Long-Term Incentive Awards.

The mix of long-term incentive awards granted to our NEOs in 20192021 included stock options, PBRSUs and RSUs. The Compensation and Governance Committee views stock options as performance-based equity compensation, tying our executives’ pay directly to stockholder value creation over the long term because the value of our common stock must increase after the date of grant of the options in order for the options to have any value. Having a seven-year time horizon, stock options also promote the retention of our executives and are consistent with our focus ontop-line growth, innovation and our longer-term investment horizon and product pipeline. PBRSU awards measure relative TSR, which the Compensation and Governance Committee believes is a straightforward and objective metric for

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our stockholders to evaluate our performance against the performance of other companies and to align with stockholder interests. As the RSU awards have value regardless of stock price performance, they help promote the stability and retention of a strong executive team over the longer term (vesting schedules generally require continuous service over multiple years, as described below).

Of the total 20192021 long-term incentive awards granted to each of our NEOs, the grant values ofapproved by the Compensation and Governance Committee were weighted 55% stock options, were weighted 55%,25% PBRSUs, were weighted 25%, and 20% time-based RSUs were weighted 20%.RSUs. We believe measuringrewarding a combination of absolute TSR (through stock options) and relative TSR (through PBRSUs), and providing stock-denominated time-based vesting RSUs, results in a balance between these incentives that appropriately aligns our executives’ pay with stockholder value while promoting the stability and retention of the executive team. Given the different risk and reward characteristics of these three types of awards and our executive compensation philosophy, the Compensation and Governance Committee believes that the equity awards granted to executives should compriseinclude a greater proportion of stock options and PBRSUs relative to RSUs.

Stock Options.    Stock options granted in 2019 to Mr. UllemMessrs. Mussallem, Bobo, Lemercier and Mr. Wood vest annually over four years and have a seven-year term. Stock options granted to Mr. Mussallem, Mr. Lemercierterm and Mr. Bobo vest monthly over 36 months, consistent with the vesting standards established by the Company for its stock option grants to executives who are retirement-eligible, andretirement-eligible. Stock options granted in 2021 to Mr. Ullem have a seven-year term.term and vest annually over four years as he was not retirement-eligible at the time of grant. Stock options granted during 20192021 have an exercise price equal to the closing price on the day of the regular Board meeting held on the next day following Compensation and Governance Committee approval.approval as that was the effective date of grant for these options.

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PBRSUs.    PBRSUs awarded in 20192021 are based on relative TSR performance as measured for the performance period beginning April 30, 20192021 and ending April 30, 2022.2024. The percentage of the target PBRSU awards that will vest at the end of the three-year performance period depends on the percentage by which our annualized TSR exceeds or falls short of the median annualized TSR (calculated assuming dividend reinvestment) of the SPSIHE Subset (as defined below). The chart below illustrates the maximum, target and threshold performance levels and the PBRSU payout at each level.level (with the payout level determined on a pro-rata basis for actual performance between the levels shows in the chart).

 

20192021 PBRSU

Performance

Levels

 Annualized TSR vs Median of SPSIHE Subset 

Payout as a

Percentage of

Target Award

Maximum

 

    +7.5% or more points from median

   175%

Target

 

    Median

   100%

Threshold

 

    -7.5% points from median

   25%

No Payout

 

    More than-7.5% points from median

   0%

The maximum and threshold performance levels applicable to the awards were set at levels that the Compensation and Governance Committee believed were consistent with the historical 75th and 25th percentile levels, respectively, for the TSRs of the SPSIHE Subset. The “SPSIHE Subset” is a subset of 2528 companies in the S&P Healthcare Equipment Select Industry Index that are also onin the S&P 500 Index or S&P 400 Midcap Index. We believe this group is a strong comparator for performance purposes as it includes companies of comparable size with similar business models.

RSUs.    RSUs awarded in 20192021 to the NEOs vest 25% annually over four years on each anniversary of the award date, subject to continued employment of the award recipient through the applicable vesting date. RSUs awarded prior to February 2020 vest 50% on the third and fourth anniversaries of the award date, subject to continued employment of the award recipient through the applicable vesting date.

At the Compensation and Governance Committee meeting immediately preceding the stockholder meeting in May of each year, the Compensation and Governance Committee generally determines the size of the long-term incentive award for each NEO. In keeping with our commitment to provide a total compensation package that emphasizesat-risk components of pay, long-term incentives for 20192021 comprised, on average, 68%71% of the value of the NEO’s target total direct compensation package.

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

For 2019,2021, the CEO evaluated each NEO’s performance (other than his own), as discussed previously (see “Compensation Process” above), and establishedmade specific recommendations as to their equity award levels for the Compensation and Governance Committee’s consideration. Accordingly, theThe Compensation and Governance Committee establishedapproved awards for the NEOs (other than the CEO) based on, taking into account these recommendations and the Compensation and Governance Committee’s assessment of the factors noted above for each executive. The Compensation and Governance Committee, with input from the full Board, evaluated the CEO’s performance using the same criteria as discussed above in “Compensation Process” to establish the appropriate award for the CEO. Equity awards are granted under the Company’s Long-Term Stock Incentive Compensation Program (the “Long-Term Stock Program”), which was lasthas been approved by the stockholders in May 2017. The equity awards granted to the NEOs for 2019 are set forth in the accompanying “Grants of Plan — Based Awards in Fiscal Year 2019” table below.stockholders.

Value of Equity Awarded in 2019.2021.    In granting equity awards, the Compensation Committee values stockStock options are valued as of the grant date using the Black-Scholes valuation model,model. The Black-Scholes valuation is used by the Compensation and Governance Committee in granting the equity awards, and is used by the Company in measuring and recognizing compensation expense. RSUs and PBRSUs are valued at the fair market value of the underlying shares on the grant date, with the value of PBRSUs based on the “target” level of performance. Under applicable accounting rules, however, the grant-date fair value of the PBRSUs awarded to our NEOs is calculated for purposes of our financial reporting using a Monte Carlo simulation pricing model. The PBRSUs are included as compensation for our NEOs in the “Summary Compensation Table” based on this valuation methodology. For information on the assumptions used in this fair value computation, refer to Note 14 of the “Notes to Consolidated Financial Statements” in the 2019our 2021 Annual Report. The Compensation and Governance Committee does not apply the Monte Carlo simulation when it determines the number of PBRSUs to be awarded to an executive (instead basing the value of a PBRSU on the fair market value of the underlying “target” number of shares on the grant date) to simplify the award process and provide more consistent award sizing (based on the number of shares subject to the awards) from year to year.

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

The following chart shows the values of the PBRSU awards approved by the Compensation and Governance Committee in 20192021 that were used to determine the number of shares subject to the awards (based on the $177.77 closing price per share of our common stock on May 4, 2021, the grant date for the PBRSUs, and calculated at the “target” level of performance and without taking the Monte Carlo simulation pricing model into account), as well as the accounting grant-date fair value of the PBRSUs we are required to use under applicable SEC rules to report in the “Summary Compensation Table” (calculated as noted in the footnotes to the “Summary Compensation Table,” and including the impact of the Monte Carlo simulation pricing model).

 

  2019 PBRSU Awards    2021 PBRSU Awards   

Name

  Value
Based on
May 8, 2019
Stock Price
  

Value Required

to be Included

in Summary

    Compensation    

Table

    Value
Based on
May 4, 2021
Stock Price
   

Value Required

to be Included

in Summary

Compensation

Table

   

Mr. Mussallem

   $1,924,360   $2,099,509    $2,500,708    $3,231,008  

Mr. Ullem

    502,200    547,909    594,851    768,570  

Mr. Bobo

    426,648    465,480    466,550    602,800  

Mr. Lemercier

    288,876    315,169    331,251    427,988  

Mr. Wood

    448,869    489,724     531,867    687,192   

The equity awards granted to the NEOs in 2021, and the grant-date fair value of all the long-term incentivethese awards, granted by the Company to the NEOs in 2019 is includedset forth in the “Grants of Plan-Based Awards in Fiscal Year 2019”2021” table below.

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

Determination as to 20162018 PBRSU Awards.    In May 2016,2018, the Compensation and Governance Committee granted awards of PBRSUs to certain of our executives. For these awards to vest, Edwards’ TSR had to reachbe at or above -7.5% points from the 25th percentile relative to thatmedian TSR of the other companies that were listed in the SPSIHE Subset on the grant date and were still publicly traded on April 30, 2019,2021, the last day of the three-year performance period. Edwards’ percentile rankingTSR compared to the threshold, target, and maximum percentile ranksperformance levels of the SPSIHE Subset as of April 30, 2019,2021, as well as the3-year TSRs relative to each level, are as follows:

 

2016 PBRSU

Performance

Levels

  Rank of SPSIHE
Subset
  

TSR Over

Three-Year

Period

  

Payout as a

    Percentage of    

Target Award

2018 PBRSU

Performance

Levels

  Company’s TSR vs
Median of SPSIHE Subset
  

TSR Over

Three-Year

Period

  

Payout as a     

Percentage of     
Target Award     

Maximum

  75th Percentile    30.17%    175%  +7.5% points from Median    25.36%    175%

Target

  50th Percentile    22.59%    100%  Median    17.86%    100%

Threshold

  25th Percentile    15.15%    25%  -7.5% points from Median    10.36%    25%

Edwards

  38th Percentile    20.25%    75.77%  +7.80% points from Median    25.66%    175%

The Compensation and Governance Committee determined that as of April 30, 20192021 our relative TSR was at +7.80% points above the 38th percentilemedian and, accordingly, 75.77%175% of the target award for each executive vested. Amounts realized by our NEOs attributable to these awards can be found in the “Option Exercises and Stock Vested in Fiscal Year 2019”2021” table below.

Stock Ownership Guidelines and Holding Requirement.    Under our guidelines, executives are expected to own shares of Edwards’ stock as follows:

 

CEO

 

Other NEOs

6 times base salary 3 times base salary

All of theour NEOs are in compliance with the


ownership guidelines.

Stock ownership guidelines were established to create additional owner commitment and to emphasize stockholder value creation. Expected ownership levels are adjusted as the executives’ annual base salaries change. Executives who have not met the guidelines must hold 50% of the net shares of our common stock acquired in connection with the exercise of stock options and the vesting of restricted stock, RSU awards, and RSUPBRSU awards (after satisfaction of applicable taxes and, in the case of

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

options, payment of the exercise price) until the guidelines are met. In the event an executive achieved the guideline but was unable to maintain the ownership level due to a decline in the price of our common stock, the 50% holding requirement is reinstated.

Prohibition on Pledging and Hedging.    We have adopted a policy prohibiting all members of the Board, all employees with a title of “vice president” equivalent or above, and any other employee designated as a “Designated Insider” from time to time under our insider trading policy, from pledging or hedging the Company’s securities. Pledging includes holding the Company’s securities in a margin account or otherwise pledging the Company’s securities as collateral for a loan. Hedging includes entering into short sales, options, puts, calls and sales against the box, as well as hedging of the Company’s securities or derivative transactions including equity swaps, forwards, futures, collars and exchange funds. To our knowledge, none of our NEOs have engaged in hedgingpledging or pledginghedging with respect to our common stock.

Market Timing of Equity Awards.    We do not have any program, plan or practice to time equity grants in coordination with the release of material information. Annual equity awards for the NEOs are generally approved at the Compensation and Governance Committee meeting in May of each year and awarded on the date of the Board meeting immediately following that Committee Meeting.meeting. Any other equity awards to the NEOs, including grants to new hires, are generally made on the date of the next regularly scheduled Board meeting.

Benefits and Perquisites.    The NEOs are eligible to participate in employee benefit programs generally offered to other of our employees employed in the same jurisdiction as the NEO including, for all NEOs employed in the United States, the

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

Edwards Lifesciences Corporation 401(k) Savings and Investment Plan (“401(k)”), which provides for a Company matching contribution. Beginning in 2018, theThe Company matches employee 401(k) contributions dollar for dollar up to the first 4% of a participant’s cash compensation, and 50% onof the next 2%. of cash compensation. In addition, we provide certain other perquisites to our NEOs described below that are not generally available to our employees.

The Compensation and Governance Committee conducts an annual review of the competitiveness of our perquisite program, including its individual components and levels, against the perquisite programs of companies in the Comparator Group. As a result of these reviews, the Compensation and Governance Committee may make adjustments from time to time in the benefits and perquisites provided as it determines to be appropriate.

We believe that providing perquisites enhances the competitiveness of the executive’s compensation in a relatively inexpensive way. These perquisites are described below and reported in the “Summary Compensation Table.”

Our perquisite program for the NEOs includes the following:

Car Allowance.    An annual car allowance isCar allowances were paid in fiscal year 2021 as follows: $13,200 for the CEO, and $10,800 for the other U.S.-based NEOs. An executiveNEOs residing outside of the U.S. iswere entitled to an amount in local currency that providesprovided the executiveNEO with similar car benefits as those received by an executiveNEO in the U.S. The car allowance iswas intended to cover expenses related to the lease, purchase, insurance, and maintenance of a vehicle, and mileage for business use. It iswas provided in recognition of the need to have executives visit customers,hospitals, physicians, business partners, and other stakeholders in order to fulfill their job responsibilities. Effective January 1, 2022, this car allowance was removed from our perquisite program, as further described below.

Perquisite Allowance.    For fiscal year 2021, the NEOs received fixed allowances for certain expenses. The CEO received $40,000 (including one club membership that is being used for corporate business purposes, at a cost of $7,103 in 2021), and the other NEOs each received $20,000. The allowance was also permitted to be used to cover certain personal financial, estate and tax planning costs, as we believe that it was appropriate for the NEOs to have professional assistance in managing their compensation. Mr. Lemercier also received a monthly housing allowance. Effective January 1, 2022, these perquisite allowances were removed from our perquisite program, as further described below.

Executive Physical Examination.    The Company paid up to $2,149$3,649 for each annual executive physical examination received by a NEO. This benefit encourages the proactive management of the executive’s health, helping best position the executive team to be able to address the ongoing andday-to-day issues we face.

Perquisite Allowance.Pension. NEOs receive a fixed annual allowance for certain expenses. The CEO receives $40,000 (including one club membership that is being used for corporate business purposes, at a cost of $6,190 in 2019), and the other NEOs each receive $20,000. This benefit recognizes the diverse nature of expenses that have a business nexus that may be incurred by our executives. The allowance may also be used to cover certain personal financial, estate and tax planning costs, as we believe that it is appropriate for the executives to have professional assistance in managing their total compensation, permitting them to focus their full attention on growing and managing our business.

Pension.    Mr. Lemercier participates in our pension plan applicable to our salaried employees at our Nyon, Switzerland facility (see the section “Pension Benefits” below). WeOther than our 401(k) plan described above, we do not have any pension plans in which any of the other NEOs participate.

42Perquisite and Offsetting Changes. Effective January 1, 2022, the car and perquisite allowances were removed from our perquisite program. The removal of these allowances was offset for the NEOs, as follows: (i) for the CEO, an increase in salary by $22,000; (ii) for the other U.S.-based NEOs, an increase in salary by $16,000 and an increase in target bonus by $15,000; and (iii) for Mr. Lemercier, an increase of $10,000 in both salary and target bonus, since he did not receive a car allowance.LOGOEdwards Lifesciences Corporation2020 Proxy Statement


EXECUTIVE COMPENSATION AND OTHER INFORMATION

Deferred Compensation.    We have adopted a deferred compensation plan for the NEOs and certain other management employees to enable them to save for retirement by deferring their income and the associated tax to a future date or termination of employment. Under the Executive Deferred Compensation Plan (the “EDCP”), return on compensation deferred by participants is based on investment alternatives selected by the participant. We believe that the EDCP is comparable to similar plans offered by companies in the Comparator Group.

The amounts deferred and accrued under the EDCP for the NEOs are reported below in the “Summary Compensation Table” and the “Nonqualified Deferred Compensation Plans” table.

Employment and Post-Termination Agreements.    We have entered into an employment agreement with the CEO, as well aschange-in-control severance agreements (the“change-in-control severance agreements”) with the CEO and our

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

other NEOs as discussed below. Mr.Messrs. Bobo, Mr. Lemercier, Mr. Ullem, and Mr. Wood are eligible to participate in a general severance plan for eligible U.S. employees to receive severance benefits, and Mr. Lemercier is eligible to receive severance benefits, in each case upon an involuntarya qualifying termination of employment due to the elimination of their position or a reduction in workforce.employment.

Chief Executive Officer Employment Agreement.    We entered into an amended and restated employment agreement with Mr. Mussallem on March 9, 2009, which was approved by the Compensation and Governance Committee and provides for, among other things, his appointment as Chief Executive Officer, an annual base salary, bonus and long-term incentive awards as determined by the Board, and, in certain circumstances, severance payments upon termination of employment. The agreement renews automatically for successiveone-year terms.

Mr. Mussallem’s base salary is reviewed and may be adjusted annually based on the Compensation and Governance Committee’s review of the Comparator Group data in consultation with the Compensation Consultant, and Mr. Mussallem’s performance. The Compensation and Governance Committee followed the same philosophy and programs described above for executives in determining 20192021 compensation for Mr. Mussallem. In addition, the Compensation and Governance Committee reviewed a tally sheet, which affixed a dollar amount to all components of Mr. Mussallem’s compensation, including current compensation, equity awards and benefits.

The Compensation and Governance Committee believes, after reviewing Mr. Mussallem’s target total direct compensation, individual performance, and contribution to our financial results during 2019,2021, that Mr. Mussallem’s total compensation and each component thereof were in line with our compensation philosophy and objectives.

If Mr. Mussallem’s employment is involuntarily terminated by us without “cause,” as defined in the employment agreement, we are required to pay certain severance benefits, provided he is not receiving the severance benefits under hischange-in-control severance agreement. The material terms of the severance arrangement are described in the section “Potential Payments upon Termination or Change in Control” below.

Change-in-Control Severance Agreements.    We have entered into agreements with the NEOs pursuant to which such individuals will be provided certain payments and benefits in the event of termination of employment following a change in control of the Company. We believe that these agreements enhance the likelihood of retaining the services of the executives in the event we were to become an acquisition target and allow the NEOs to continue to focus their attention on our business operations, stockholder value and the attainment of long-term and short-term objectives without undue concern over their employment or financial situations. The material terms of the agreements are described in the section “Potential Payments upon Termination or Change in Control,”Control” below.

We believe that the level of severance payments is fair and reasonable based on the value we would derive from the services provided by the executives withchange-in-control severance agreements prior to, and following, a change in control.

Tax Implications – Policy Regarding Section 162(m).    Federal income tax law generally prohibits a publicly-held company from deducting compensation paid to a current or former NEO that exceeds $1 million during the tax year. Certain awards granted by the Company before November 2, 2017 that were based upon attainingpre-established performance measures set by the Compensation and Governance Committee, as well as amounts payable to former executives pursuant to a written binding contract that was in effect on November 2, 2017, may qualify for an exception to the $1 million deductibility limit. There can be no assurance that any compensation the Compensation and Governance Committee intended to be deductible will in fact be deductible.

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

Although the potential deductibility of compensation is one of the factors the Compensation and Governance Committee notes when designing the Company’s executive compensation program, the Compensation and Governance Committee has the flexibility to take any compensation-related actions it determines are in the best interests of the Company and its stockholders, including awarding compensation that will not be deductible for tax purposes.

The Compensation and Governance Committee recognizes the importance of preserving our ability to design compensation programs to attract and retain skilled and qualified individuals in a highly competitive market. The Compensation and Governance Committee will continue to design salary, annual incentive bonuses and long-term incentive compensation in a manner that the Compensation and Governance Committee believes prudent or necessary to hire and retain our NEOs, and may approvenon-deductible compensation arrangements for our executive officers from time to time when it believes that these other considerations outweigh the benefit of the tax deductibility of the compensation.

2020 Compensation Decisions.    At its February 2020 meeting, the Compensation Committee approved average base salary increases of approximately 3.6% for the NEOs to maintain market competitiveness. The Compensation Committee also approved other base salary increases to recognize performance for other executives. In addition, the Compensation Committee established the Incentive Pay Objectives and the maximum bonus for each NEO, and established the Company’s 2020 financial measures and operational goals under the Incentive Plan.

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

COMPENSATION AND GOVERNANCE COMMITTEE REPORT

The Compensation and Governance Committee has reviewed and discussed the “Compensation Discussion and Analysis” disclosurecontained in this Proxy Statement with management. Based on thisits review and discussion,discussions, the Compensation and Governance Committee recommended to the Board that the “Compensation Discussion and Analysis” be included in thethis Proxy Statement distributed in connection withand incorporated by reference into the Company’s 2021 Annual Meeting.Report on Form 10-K.

The Compensation and Governance Committee:

WilliamNicholas J. Link, Ph.D.Valeriani (Chair)

Steven R. Loranger

Martha H. Marsh

Nicholas J. ValerianiPaul A. LaViolette

This report shall not be deemed soliciting material or to be filed with the SEC, or incorporated by reference in any document so filed, whether made before or after the date hereof, except to the extent we specifically request that it be treated as soliciting material or it is specifically incorporated by reference therein.

 

 

 
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EXECUTIVE COMPENSATION AND OTHER INFORMATION

 

EXECUTIVE COMPENSATION

The “Summary Compensation Table” quantifies the value of the different forms of compensation earned by or awarded to our NEOs for 2019.2021. The primary elements of each NEO’s total compensation reported in the table are base salary, annual bonus and long-term equity incentives, consisting of stock options, PBRSUs and RSUs. NEOs also received the other benefits listed in the “All Other Compensation” column of the “Summary Compensation Table,” as further described in the footnotes to the table.

The “Summary Compensation Table” should be read in conjunction with the tables and narrative descriptions that follow. A description of the material terms of each NEO’s base salary and annual bonus is provided immediately following the “Summary Compensation Table.” The “Grants of Plan-Based Awards in Fiscal Year 2019”2021” table, and the accompanying description of the material terms of the stock options, PBRSUs, and RSUs granted in 2019,2021, provides information regarding the long-term equity incentives awarded to NEOs in 2019.2021. The “Outstanding Equity Awards at 20192021 FiscalYear-End” and “Option Exercises and Stock Vested in Fiscal Year 2019”2021” tables provide further information on the NEOs’ potential realizable value and actual value realized with respect to their equity awards.

2019 Summary Compensation Table – Fiscal 2019-2021

The following table sets forth a summary, for the years indicated, of the compensation of the principal executive officer, the principal financial officer and our three other most highly compensated executive officers whose total compensation for 2019 was in excess of $100,000 and who were serving as executive officers at the end of 2019.2021. No other executive officers that would have otherwise been includable in the table on the basis of total compensation for 20192021 have been excluded by reason of their termination of employment or change in executive status during that year.

 

Name and

Principal Position

 Year Salary $(1) 

Bonus

$(2)

 Stock
Awards
$(3)
 Option
Awards
$(3)
 Non-Equity
Incentive Plan
Compensation
$(4)
 Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
$(5)
 All Other
Compensation
$(6)
         Total $         Year Salary $(1) 

Bonus

$(2)

 Stock
Awards
$(3)
 Option
Awards
$(3)
 Non-Equity
Incentive Plan
Compensation
$(4)
 Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
$(5)
 All Other
Compensation
$(6)
 Total $ 

Mr. Mussallem

  2019  1,072,240    3,641,664  4,235,402  2,381,117    190,550  11,520,973 2021  1,153,040       5,230,175   5,501,118   1,581,770          147,202         13,613,305   

Chairman of the Board and Chief Executive Officer

  2018  1,034,769    3,391,586  3,631,053  2,597,000    183,294  10,798,318 2020  1,121,299       3,731,409   4,232,880   734,993          230,352         10,050,933 
  2017  995,385    2,943,863  3,409,180  2,228,226    176,099  9,734,099 2019  1,072,240       3,641,664   4,235,402   2,381,117          190,550         11,520,973 

Mr. Ullem

  2019  619,760    1,047,907  1,098,595  756,864    47,945  3,571,071 2021  664,688       1,244,451   1,306,053   573,036          81,175         3,869,403 

Corporate Vice President,

Chief Financial Officer

  2018  593,628    843,514  975,537  559,944    49,207  3,021,830 2020  647,079    49,583   1,091,084   1,236,859   262,500          98,860         3,385,965 
  2017  569,826    855,664  914,598  800,400    44,082  3,184,570 2019  619,760       1,047,907   1,098,595   756,864          47,945         3,571,071 

Mr. Bobo

  2019  615,455  2,000  807,687  935,153  671,600    73,546  3,105,441 2021  658,091       976,040   1,026,875   540,176          64,329         3,265,511 

Corporate Vice President

  2018  592,999  4,000  772,062  891,964  563,790    78,584  2,903,399 2020  640,931       856,555   975,897   252,000          77,881         2,803,264 
  2017  573,506  2,000  821,135  881,474  802,473    68,501  3,149,089
 2019  615,455    2,000   807,687   935,153   671,600          73,546         3,105,441 

Mr. Lemercier

  2019  576,854    546,270  633,331  555,287  804,765  197,453  3,313,960 2021  654,236       693,922   728,243   532,209       433,522   239,517         3,281,649 

Corporate Vice President

          2020  625,360       604,174   688,517   254,746       1,925,308   246,810         4,344,915 
 2019  576,854       546,270   633,331   555,287       804,765   197,453         3,313,960 

Mr. Wood

  2019  605,791  4,000  849,708  988,184  756,864    88,736  3,293,283 2021  658,063    2,000   1,114,085   1,170,952   567,418          77,726         3,590,244 

Corporate Vice President

  2018  574,430  4,000  804,231  936,516  507,683      2,918,403 2020  639,273       968,369   1,097,961   273,000          101,114         3,079,717 
  2017  550,506  2,000  821,135  880,215  780,318    87,602  3,121,776
 2019  605,791    4,000   849,708   988,184   756,864          88,736         3,293,283 

 

(1)

AmountsThe amounts shown for 20192021 include amounts that were deferred into the EDCP as follows: Mr. Mussallem – $122,611;$111,133; Mr. Ullem – $0;$37,476; Mr. Bobo – $27,789;$360,196; Mr. Lemercier – $0, and Mr. Wood – $41,440$37,716. The EDCP is more fully described in the section following the “Nonqualified Deferred Compensation Plans” table below.

Mr. Lemercier’s salary is paid in Swiss Francs. Mr. Lemercier’s salary isFrancs and reported in this table by converting Swiss Francs to United States dollars using an exchange ratio of 1.0917, 1.0657 and 1.006404 (which(each of which is theour average monthly intercompany Swiss Franc to United States dollar exchange rate for the year)., for years 2021, 2020 and 2019, respectively.

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(2)

AmountsThe amount shown for Mr. Ullem includes an award received through our Discretionary Cash Award Program which recognizes extraordinary contributions to our Company. The amounts shown for Messrs. Bobo and Wood include awards received through our Innovation Rewards Program which compensates active employee inventors for their patent contributions to our Company.

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

 

(3)

The amounts reported in these columns reflect the aggregate grant-date fair value of the stock awards and option awards during the applicable year. These values have been determined under the principles used to calculate the grant-date fair value of equity awards for purposes of our financial statements in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. PBRSUs have been valued for this purpose based on a Monte Carlo simulation pricing model. For a discussion of the assumptions and methodologies used to value the awards reported in these columns, please see the discussion of stock awards and option awards contained in Note 14 of the “Notes to Consolidated Financial Statements” in the 2019our 2021 Annual Report.

 

 

TheUnder the terms of our PBRSU awards at grant, between 0% and 175% of the target number of shares subject to the awards can vest based on performance and the other vesting conditions applicable to the awards. For the PBRSUs awarded to our NEOs in 2021, 2020 and 2019, the table below sets forth (i) the grant-date fair value of the awards determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, forwith these values determined based on a Monte Carlo simulation pricing model (included in the PBRSUs awarded in fiscal 2019, 2018,“Probable Outcome” column below), and 2017 based upon the probable outcome of the performance-related vesting conditions as of the grant date (we judged the “target” level of performance to be the probable outcome as of the grant date of the awards), and(ii) the grant-date fair value of these awards determined on that basis but assuming that the maximum level of performance was achieved.

 

Name

  Year  

Probable Outcome of

Performance Conditions

Grant-Date Fair Value

($)

  

Maximum Outcome of

    Performance Conditions    

Grant-Date Fair Value

($)

  Year  

Probable Outcome of

Performance Conditions

Grant-Date Fair Value

($)

  

Maximum Outcome of

Performance Conditions

Grant-Date Fair Value

($)

Mr. Mussallem

    2019     2,099,509    3,674,140    2021    3,231,008    5,654,264
    2018     1,970,143    3,447,749    2020    2,188,776    3,830,357
    2017     2,071,342    3,624,849    2019    2,099,509    3,674,140

Mr. Ullem

    2019     547,909    958,840    2021    768,570    1,344,998
    2018     486,960    852,180    2020    638,651    1,117,640
    2017     522,158    913,777    2019    547,909    958,840

Mr. Bobo

    2019     465,480    814,590    2021    602,800    1,054,900
    2018     446,070    780,623    2020    502,240    878,921
    2017     501,410    877,468    2019    465,480    814,590

Mr. Lemercier

    2019     315,169    551,545    2021    427,988    748,979
    2020    353,428    618,500
    2019    315,169    551,545

Mr. Wood

    2019     489,724    857,017    2021    687,192    1,202,586
    2018     464,656    813,148    2020    570,446    998,280
    2017     501,410    877,468    2019    489,724    857,017

 

(4)

Amounts shown in this column for 20192021 were earned under the Incentive Plan based on achievement of performance criteria for 2019,2021, as described in the “Compensation Discussion and Analysis” above. Amounts shown for Mr. Bobo include $221,628$178,258 deferred into the EDCP. Amounts earned but not deferred were paid to the executives for 2019 performance.

 

(5)

Mr. Lemercier participates in our pension plan for salaried employees at our Nyon, Switzerland facility (see the section “Pension Benefits” below). The amounts shown include employer contributions and investment earnings, and do not include regular employee contributions of approximately $113,248$121,294 in 2019.2021. The amount of Mr. Lemercier’s regular employee contributions to the Nyon pension plan isare reflected in the total amount included in the “Base Salary”“Salary” column of the “Summary Compensation Table”.Table.”

 

 

 
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EXECUTIVE COMPENSATION AND OTHER INFORMATION

 

(6)

The “All Other Compensation” column includes the following amounts paid to the NEOs for the year ended December 31, 2019.2021. The amounts disclosed are the actual costs to us of providing these benefits.

 

Type of

Compensation

 

 

    Mr. Mussallem    

 

 

 

    Mr. Ullem    

 

 

 

    Mr. Bobo    

 

 

 

    Mr. Lemercier    

 

 

 

    Mr. Wood    

 

 

 

    Mr. Mussallem    

 

 

 

    Mr. Ullem    

 

 

 

    Mr. Bobo    

 

 

 

    Mr. Lemercier    

 

 

 

    Mr. Wood    

 

401(k) Company Match

 $14,000 $14,000 $14,000 $ $14,000 $14,500 $14,500 $14,500   $14,500

EDCP Company Contribution

  122,611    27,789    41,440  78,809  31,230  18,153    31,430

Company Contribution – Zurich vita Pension Plan (saving)

        153,232         $156,568  

Car Allowance or Company Car Lease Payments

  13,200  10,800  10,800  24,094  10,800  13,200  10,800  10,800  28,363  10,800

Officer Perquisites (Flexible Allowance, including, among other things, financial planning expenses, airline club dues, club membership dues, home office supplies, personal travel expenses; Annual Physical Examination Expenses and Life Insurance Premiums)

  40,739  23,145  20,957  20,127*  22,496  40,693  24,645  20,876  21,834  20,996

Housing Allowance

        32,752  

Totals

 $190,550 $47,945 $73,546 $197,453 $88,736 $147,202 $81,175 $64,329 $239,517* $77,726

 

 *

Converted from 19,999 Swiss Francs to United States dollars. The conversion rate was determined by averaging thedollars, using an exchange ratio of 1.0917 (which is our average monthly intercompany Swiss Franc to United States dollar exchange rate for the year.year).

 

Employment Agreements.    We entered into an amended and restated employment agreement with Mr. Mussallem on March 9, 2009, as described in the “Compensation Discussion and Analysis” section above. We do not have employment agreements with the other NEOs. Post-termination benefits for the NEOs are discussed in the section “Potential Payments Upon Termination or Change in Control” section below.

 

 

 
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EXECUTIVE COMPENSATION AND OTHER INFORMATION

 

Grants of Plan-Based Awards in Fiscal Year 20192021

The following table provides certain summary information concerning each grant of an incentive award made to NEOs in 20192021 under a compensation plan.

 

     

 

Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards(2)

 

 

Estimated Future Payouts
Under Equity Incentive
Plan Awards(4)

 

All Other
Stock
Awards:
Number of
Shares of
Stock/

Units (#)

 All Other
Option
Awards;
Number of
Securities
Underlying
Options
(#)
 Exercise
or Base
Price of
Option
Awards
($/Share)
 Closing
Price on
Grant
Date
($)
 

Grant-Date  

Fair Value
of Stock
and
Option
Awards
($)(8)

     

 

Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards(2)

 Estimated Future Payouts
Under Equity Incentive
Plan Awards(4)
 

All Other
Stock
Awards:
Number of
Shares of
Stock/

Units (#)

 All Other
Option
Awards;
Number of
Securities
Underlying
Options
(#)
 Exercise
or Base
Price of
Option
Awards
($/Share)
 Closing
Price on
Grant
Date
($)
 

Grant-Date

Fair Value
of Stock
and
Option
Awards
($)(8)

Name

 Grant
Date(1)
 Approval
Date
 Threshold
($)
 Target
($)
 Maximum
($)
 Threshold
(#)
 Target
(#)
 Maximum
(#)
 Grant
Date(1)
 Approval
Date
 Threshold
($)
 Target
($)
 Maximum
($)
 Threshold
(#)
 Target
(#)
 Maximum
(#)

Mr. Mussallem

   02/20/2019   1,553,240(3)  3,106,480                   02/18/2021   1,647,677(3)  3,295,354                
 05/08/2019 05/07/2019               85,600(6)  177.77 177.77 4,235,402 05/04/2021 05/03/2021               210,000(6)  93.31 93.31 5,501,118  
 05/08/2019 05/07/2019             8,675(5)        1,542,155 05/04/2021 05/03/2021             21,425(5)        1,999,167
  05/08/2019  05/07/2019          10,825  18,943          2,099,509  05/04/2021  05/03/2021          26,800  46,900          3,231,008

Mr. Ullem

   02/20/2019   480,000(3)  960,000                   02/18/2021   510,000(3)  1,020,000                
 02/21/2019 02/20/2019             575(5)        100,016
 05/08/2019 05/07/2019               19,900(7)  177.77 177.77 1,098,595 05/04/2021 05/03/2021               44,400(7)  93.31 93.31 1,306,053
 05/08/2019 05/07/2019             2,250(5)        399,983 05/04/2021 05/03/2021             5,100(5)        475,881
  05/08/2019  05/07/2019          2,825  4,943          547,909  05/04/2021  05/03/2021          6,375  11,156          768,570

Mr. Bobo

   02/20/2019   460,000(3)  920,000                   02/18/2021   490,000(3)  980,000                
 05/08/2019 05/07/2019               18,900(6)  177.77 177.77 935,153 05/04/2021 05/03/2021               39,200(6)  93.31 93.31 1,026,875
 05/08/2019 05/07/2019             1,925(5)        342,207 05/04/2021 05/03/2021             4,000(5)        373,240
  05/08/2019  05/07/2019          2,400  4,200          465,480  05/04/2021  05/03/2021          5,000  8,750          602,800

Mr. Lemercier

   02/20/2019   391,507(3)  783,014                   02/18/2021   473,396(3)  946,792                
 05/08/2019 05/07/2019               12,800(6)  177.77 177.77 633,331 05/04/2021 05/03/2021               27,800(6)  93.31 93.31 728,243
 05/08/2019 05/07/2019             1,300(5)        231,101 05/04/2021 05/03/2021             2,850(5)        265,934
  05/08/2019  05/07/2019          1,625  2,843          315,169  05/04/2021  05/03/2021          3,550  6,212          427,988

Mr. Wood

   02/20/2019   480,000(3)  960,000                   02/18/2021   530,000(3)  1,060,000                
 05/08/2019 05/07/2019               17,900(7)  177.77 177.77 988,184 05/04/2021 05/03/2021               44,700(6)  93.31 93.31 1,170,952
 05/08/2019 05/07/2019             2,025(5)        359,984 05/04/2021 05/03/2021             4,575(5)        426,893
  05/08/2019  05/07/2019          2,525  4,418          489,724  05/04/2021  05/03/2021          5,700  9,975          687,192

 

(1)

Our practice is to grant equity-based awards on the date of the Board meeting following the Compensation and Governance Committee’s approval of the grants.

 

(2)

These are awards payable under the Incentive Plan for 2019.2021. See the discussion on “Annual Cash Incentive Payment” beginning at page 3637 for additional information. Amounts for Mr. Lemercier were converted from Swiss Francs to United States dollars using an exchange rate of 1.0045761.127133 CHF/USD (reflects the exchange rate as of January 2019)2021).

 

(3)

See the discussions beginning at page 3629 on “2021 Annual Incentive Plan” and page 37 on “Annual Cash Incentive Payment” and on “Incentive Pay Objective” for additional information. The amounts set forth above represent the Incentive Pay Objective anticipatedthat were set in the beginning of 2020 prior to bethe pandemic that would have been paid for performance meeting thepre-established objectives at the “target” and “maximum” performance levels.

 

(4)

These are PBRSUs granted under the Long-Term Stock Program that vest based on a combination of certain length of service and market conditions. The material terms of the PBRSUs are described in the section “Equity Incentive Plan Awards—Performance-Based Restricted Stock Units” below.

 

(5)

RSUs with respect to shares of common stock are granted under the Long-Term Stock Program. RSUs granted in 2021 become vested as to 50%in four equal annual installments beginning on the first anniversary of the total number of units subject to the award on each of the third and fourth anniversaries of the awardgrant date and are subject to the executive’s continued employment with the Company. The material terms of the RSUs are described in the section “Equity Incentive Plan Awards—Restricted Stock Units” below.

 

(6)

Options to acquire common stock are granted under the Long-Term Stock Program. Consistent with vesting standards established by the Company for its stock option grants to executives who are retirement-eligible, these options vest and become exercisable in 36 equal monthly installments beginning one month after the award date, and are subject to the executive’s continued employment with the Company. The material terms of the options are described in the section “Equity Incentive Plan Awards—Stock Options” below.

 

(7)

Options to acquire common stock are granted under the Long-Term Stock Program. The options vestConsistent with vesting standards established by the Company for its stock option grants to executives who are not retirement-eligible, this option vests and becomebecomes exercisable in four equal annual installments beginning on the first anniversary of the grant date. The material terms of the options are described in the section “Equity Incentive Plan Awards—Stock Options” below.

 

(8)

The amounts reported in this column reflect the grant-date fair value of the stock award or option award determined under the principles used to calculate the grant-date fair value of equity awards for purposes of our financial statements. For the assumptions and methodologies used to value the awards, see footnote 3 to the “Summary Compensation Table” above.

Non-Equity Incentive Plan Awards.    The material terms of thenon-equity incentive plan awards reported in the table above are described in the “Compensation Discussion and Analysis” section under the heading, “2021 Annual Incentive Plan” and “Elements of Compensation—Annual Cash Incentive Payment.”

 

 

 
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EXECUTIVE COMPENSATION AND OTHER INFORMATION

 

Equity Incentive Plan Awards.    Each of the equity incentive awards reported in the table above was granted under, and is subject to, the terms of the Long-Term Stock Program. The Compensation and Governance Committee administers the Long-Term Stock Program and has authority to interpret the plan provisions and make all required determinations thereunder. Additional terms of the equity incentive awards reported in the table above are described in the “Compensation Discussion and Analysis” section under the heading, “Elements of Compensation—Long-Term Incentive Awards” and in the footnotes accompanying the table above. The terms of the accelerated vesting provisions for equity incentive awards are described in this section and in the section titled “Potential Payments Upon a Termination or Change in Control.”

The table above reports awards of stock options granted to our NEOs in 2019.2021. Each option represents a contractual right to receive one share of Companyour common stock if the option becomes vested and is exercised, subject to payment of the exercise price of the option by the award holder. The terms of each option are summarized in the chart below.

 

STOCK OPTIONS

Maximum Term (Expiration Date)(expiration date)

 

Seven years from grant date

Exercise Price Per Share

 

Fair market value of a share of common stock on the grant date

Vesting Schedule—Regular (all option grants in the chart above awarded to Mr. Ullem and Mr. Wood)Ullem)

 

25% annually over four years following the grant date

Vesting Schedule—Retirement-Eligible (awards granted since May 2015 to all retirement-eligible executives, including Mr.(Messrs. Mussallem, Mr. Bobo, Lemercier and Mr. Lemercier)Wood)

 

Monthly over 36 months following the grant date

Vesting Schedule—Retirement-Eligible (awards granted before May 2015 to certain retirement-eligible executives, including Mr. Mussallem and Mr. Lemercier)

Monthly over 24 months following the grant date

Effect of Change in Control (awards granted before May 2015)

Accelerated vesting upon a change in control of
the Company

Effect of Change in Control (awards granted since May 2015)

 

��  No automatic acceleration upon a change in control of the Company

 

  Accelerated vesting upon a change in control with either (1) a specified termination of employment (a “double-trigger”) under the NEO’schange-in-control severance agreement, or (2) termination of the awards in connection with the change in control

Effect of Termination of Employment of Retirement-Eligible NEOs (Mr.(Messrs. Mussallem, Mr. Bobo, Lemercier and Mr. Lemercier)Wood)

 

  Unvested options held by the NEO will immediately terminate and be forfeited

 

  Vested options held by the NEO will remain exercisable and will terminate on the earlier of five years from termination date or the normal expiration date

Effect of Termination of Employment ofNon-Retirement-Eligible NEOs (Mr. Ullem and Mr. Wood)Ullem)

 

  Unvested options held by the NEO will immediately terminate and be forfeited

 

  Vested options held by the NEO will remain exercisable and will terminate on the earlier of 90 days from termination date or the normal expiration date

Effect of Termination of Employment due to Death or Disability

  Unvested options held by the NEO will immediately vest

Dividend Rights

 

No dividend rights

 

 

 
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EXECUTIVE COMPENSATION AND OTHER INFORMATION

 

The “Grant of Plan-Based Awards in Fiscal Year 2019”2021” table above reports awards of RSUs granted to our NEOs in 2019.2021. Each RSU represents a contractual right to receive one share of our common stock if the time-based vesting requirements applicable to the award are satisfied, as summarized in the chart below.

 

RESTRICTED STOCK UNITS

Vesting Schedule

  

50%  25% of the total number of units subject to the award on the first, second, third and fourth anniversaries of the award date

Effect of Change in Control (awards granted before May 2015)

  

Accelerated vesting upon a change in control of the Company

Effect of Change in Control (awards granted since May 2015)

No automatic acceleration upon a change in control of the Company; accelerated vesting upon a change in control with either (1) a specified termination of employment (a “double-trigger”) under the NEO’schange-in-control severance agreement, or (2) termination of the awards in connection with the change in control

Effect of Termination of Employment of Retirement- Eligible NEOs (including Mr.Messrs. Mussallem, Mr. Bobo,Lemercier and Mr. Lemercier)Wood)

  

  If the grant would otherwise vest less frequently than annually, RSUs held by the NEO will vest 25% for each full year of employment from the grant date

 

  Any remaining unvested RSUs held by the NEO and not earned as mentioned above will terminate and be forfeited

Effect of Termination of Employment ofNon-Retirement-Eligible NEOs (including Mr. Ullem and Mr. Wood)(Mr. Ullem)

  

Unvested RSUs held by the NEO will immediately terminate and be forfeited

Effect of Termination of Employment due to Death or Disability

  Unvested RSUs held by the NEO will immediately vest

Dividend Rights

  

Dividend equivalent units may be paid or credited, either in cash or in actual or phantom shares of common stock, on outstanding RSUs; however, to date we have never paid a dividend on our common stock

The “Grant of Plan-Based Awards in Fiscal Year 2019”2021” table above reports awards of PBRSUs granted to our NEOs in 2019.2021. Each PBRSU represents a contractual right to receive one share of our common stock if the performance-based and time-based vesting requirements applicable to the award are satisfied, as summarized in the chart below.

 

PERFORMANCE-BASED RESTRICTED STOCK UNITS

Right and Vesting Schedule

  

Receive 0% to 175% of the target number of shares subject to the award based on TSR measured over a3-year performance period compared to comparator companies, generally subject to continued employment through the applicable vesting date

TSR Definition

  

The average of the closing price of a share for each trading day during the one month ending on the first day of the performance period compared to the average of the closing price of a share for each trading day during the one month ending on the last day of the performance period

Effect of Change in Control (awards granted before May 2015)

  

Upon a change in control:

  during the performance period, the PBRSUs will accelerate and immediately vest at 100% of the target level, or

  after the last day of the performance period and prior to the applicable scheduled time-based vesting date, subject to the executive’s continued employment, will vest as to the number of units that otherwise would have become vested on the vesting date based on actual performance

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

PERFORMANCE-BASED RESTRICTED STOCK UNITS (Continued)

Effect of Change in Control
(awards granted since May
2015)

No automatic acceleration upon a change in control of the Company; accelerated vesting upon a change in control with either (1) a specified termination of employment (a “double-trigger”) under the NEO’schange-in-control severance agreement, or (2) termination of the awards in connection with the change in control

Effect of Termination due to
Death, Disability,
Retirement or Termination
Without “Cause” or for
“Good “Good Reason”

  

Any unvested PBRSUs will remain eligible to vest at the end of the performance period based on actual attainment of the performance goals, and, for termination due to retirement, the NEO will receive apro-rata portion of the shares subject to the award (after giving effect to the performance conditions) based on the NEO’s whole months of service during the performance period

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

PERFORMANCE-BASED RESTRICTED STOCK UNITS (Continued)

Effect of any Other
Termination of
Employment

 

Any unvested PBRSUs held by the NEO will terminate and be forfeited

Compensation and Governance Committee
Determination, Vesting
Date

 

At the meeting of the Compensation and Governance Committee in May after the end of the performance period, the Compensation and Governance Committee will determine the exact number of shares issuable; payout will be interpolated on a linear basis between the points indicated in the table under “Performance Criteria” below

Dividend Rights

 

Dividend equivalent units may be paid or credited, either in cash or in actual or phantom shares of common stock, on outstanding RSUs; however, to date we have never paid a dividend on our common stock

Performance Period

 

Begins April 30 of the grant year and ends on April 30 in the third year following the grant year

Comparator Companies

 

Companies that were listed in the SPSIHE Subset on the grant date that are still publicly traded companies on the last day of the performance period

Performance Criteria

 Performance Levels 

Company’s TSR vs Median

of SPSIHE CompaniesSubset

 

Payout as a Percentage of Target Award

 Maximum 

+7.5% points from medianMedian

 

175%

 Target 

Median

 

100%

 Threshold 

-7.5% points from medianMedian

 

25%

  No Payout 

More than-7.5% points
from medianMedian

 

0%

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

Outstanding Equity Awards at 2021 Fiscal Year-End

The following table provides certain summary information concerning outstanding equity awards held by our NEOs as of December 31, 2021, including the vesting schedules for the portions of these awards that had not vested as of that date.

    Option Awards Stock Awards  

Name

 Award
Date
 Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
 Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
 

Option
Exercise
Price

($)

 Option
Expiration
Date
 Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
 

Market Value
of Shares
or Units of
Stock That
Have Not
Vested

($)(1)

 Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (#)
 

Equity
Incentive
Plan Awards:
Market or
Payout
Value
of Unearned
Shares, Units

or Other
Rights That
Have Not
Vested

($)(1)

  

Mr. Mussallem

   05/14/2015   225,250      21.7600   05/13/2022              
   05/12/2016   352,500      35.1967   05/11/2023              
   05/11/2017   352,200      36.7500   05/10/2024              
   05/17/2018   312,900      45.2767   05/16/2025              
   05/08/2019   221,127   35,673(2)    59.2567   05/07/2026              
   05/07/2020   111,936   100,164(2)    72.6800   05/06/2027              
   05/04/2021   40,832   169,168(2)    93.3100   05/03/2028              
   05/17/2018               15,900(3)    2,059,845        
   05/08/2019               26,025(3)    3,371,539        
   05/08/2019                     32,475(5)    4,207,136  
   05/07/2020               15,921(4)    2,062,566        
   05/07/2020                     26,475(5)    3,429,836  
   05/04/2021               21,425(4)    2,775,609        
    05/04/2021                     26,800(5)    3,471,940     

Total

        1,616,745   305,005             79,271   10,269,559   85,750   11,108,912     

Mr. Ullem

   05/12/2016   80,700      35.1967   05/11/2023              
   05/11/2017   79,800      36.7500   05/10/2024              
   05/17/2018   50,625   16,875(6)    45.2767   05/16/2025              
   05/08/2019   29,850   29,850(6)    59.2567   05/07/2026              
   05/07/2020   14,025   42,075(6)    72.6800   05/06/2027              
   05/04/2021      44,400(6)    93.3100   05/03/2028              
   05/17/2018               3,939(3)    510,297        
   02/21/2019               1,725(3)    223,474        
   05/08/2019               6,750(3)    874,463        
   05/08/2019                     8,475(5)    1,097,936  
   05/07/2020               4,671(4)    605,128        
   05/07/2020                     7,725(5)    1,000,774  
   05/04/2021               5,100(4)    660,705        
    05/04/2021                     6,375(5)    825,881     

Total

        255,000   133,200             22,185   2,874,067   22,575   2,924,591     

Mr. Bobo

   05/14/2015   44,200��     21.7600   05/13/2022              
   05/12/2016   80,700      35.1967   05/11/2023              
   05/11/2017   85,500      36.7500   05/10/2024              
   05/17/2018   70,500      45.2767   05/16/2025              
   05/08/2019   48,822   7,878(2)    59.2567   05/07/2026              
   05/07/2020   25,806   23,094(2)    72.6800   05/06/2027              
   05/04/2021   7,622   31,578(2)    93.3100   05/03/2028              
   05/17/2018               3,600(3)    466,380        
   05/08/2019               5,775(3)    748,151        
   05/08/2019                     7,200(5)    932,760  
   05/07/2020               3,657(4)    473,764        
   05/07/2020                     6,075(5)    787,016  
   05/04/2021               4,000(4)    518,200        
    05/04/2021                     5,000(5)    647,750     

Total

        363,150   62,550             17,032   2,206,495   18,275   2,367,526     

 

 

 
  LOGO    Edwards Lifesciences Corporation   20202022 Proxy Statement  5153 


EXECUTIVE COMPENSATION AND OTHER INFORMATION

 

Outstanding Equity Awards at 2019 FiscalYear-End

The following table provides certain summary information concerning outstanding equity awards held by our NEOs as of December 31, 2019, including the vesting schedules for the portions of these awards that had not vested as of that date.

    

 

Option Awards

 

 

Stock Awards

  

Name

 Award
Date
 Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
 Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
 

Option
Exercise
Price

($)

 Option
Expiration
Date
 Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
 

Market Value
of Shares
or Units of
Stock That
Have Not
Vested

($)(1)

 Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (#)
 

Equity
Incentive
Plan Awards:
Market or
Payout
Value
of Unearned
  Shares, Units  

or Other
Rights That
Have Not
Vested

($)(1)

  

Mr. Mussallem

   05/14/2013   164,250      35.785   05/13/2020              
   05/08/2014   383,200      41.940   05/07/2021              
   05/14/2015   191,200      65.280   05/13/2022              
   05/12/2016   117,500      105.590   05/11/2023              
   05/11/2017   101,091   16,309(2)    110.250   05/10/2024              
   05/17/2018   55,045   49,255(2)    135.830   05/16/2025              
   05/08/2019   16,643   68,957(2)    177.770   05/07/2026              
   05/12/2016               5,875   1,370,579(3)         
   05/11/2017               11,975   2,793,648(3)         
   05/11/2017                     14,975(4)    3,493,518  
   05/17/2018               10,600   2,472,874(3)         
   05/17/2018                     13,250(4)    3,091,093  
   05/08/2019               8,675   2,023,791(3)         
    05/08/2019                     10,825(4)    2,525,364     

Total

        1,028,929   134,521             37,125   8,660,891   39,050   9,109,975     

Mr. Ullem

   05/08/2014   43,100      41.940   05/07/2021              
   05/14/2015   44,200      65.280   05/13/2022              
   05/12/2016   20,175   6,725(5)    105.590   05/11/2023              
   05/11/2017   13,300   13,300(5)    110.250   05/10/2024              
   05/17/2018   5,625   16,875(5)    135.830   05/16/2025              
   05/08/2019      19,900(5)    177.770   05/07/2026              
   05/12/2016               1,463   341,303(3)         
   05/11/2017               3,025   705,702(3)         
   05/11/2017                     3,775(4)    880,670  
   05/17/2018               2,625   612,386(3)         
   05/17/2018                     3,275(4)    764,025  
   02/21/2019               575   134,142(3)         
   05/08/2019               2,250   524,903(3)         
    05/08/2019                     2,825(4)    659,044     

Total

        126,400   56,800             9,938   2,318,436   9,875   2,303,739     

Mr. Bobo

   05/14/2013   26,848      35.785   05/13/2020              
   05/08/2014   52,300      41.940   05/07/2021              
   05/14/2015   44,200      65.280   05/13/2022              
   05/12/2016   20,175   6,725(5)    105.590   05/11/2023              
   05/11/2017   24,540   3,960(2)    110.250   05/10/2024              
   05/17/2018   12,402   11,098(2)    135.830   05/16/2025              
   05/08/2019   3,674   15,226(2)    177.770   05/07/2026              
   05/12/2016               1,463   341,303(3)         
   05/11/2017               2,900   676,541(3)         
   05/11/2017                     3,625(4)    845,676  
   05/17/2018               2,400   559,896(3)         
   05/17/2018                     3,000(4)    699,870  
   05/08/2019               1,925   449,083(3)         
    05/08/2019                     2,400(4)    559,896     

Total

        184,139   37,009             8,688   2,026,824   9,025   2,105,442��    

52LOGOEdwards Lifesciences Corporation2020 Proxy Statement


EXECUTIVE COMPENSATION AND OTHER INFORMATION

   

 

Option Awards

 

 

Stock Awards

     Option Awards Stock Awards  

Name

 Award
Date
 Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
 Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
 

Option
Exercise
Price

($)

 Option
Expiration
Date
 Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
 

Market Value
of Shares
or Units of
Stock That
Have Not
Vested

($)(1)

 Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (#)
 

Equity
Incentive
Plan Awards:
Market or
Payout
Value
of Unearned
    Shares, Units    

or Other
Rights That
Have Not
Vested

($)(1)

   Award
Date
 Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
 Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
 

Option
Exercise
Price

($)

 Option
Expiration
Date
 Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
 

Market Value
of Shares
or Units of
Stock That
Have Not
Vested

($)(1)

 Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (#)
 

Equity
Incentive
Plan Awards:
Market or
Payout
Value
of Unearned
Shares, Units

or Other
Rights That
Have Not
Vested

($)(1)

  

Mr. Lemercier

 05/14/2013 13,880   35.785 05/13/2020          05/14/2015 34,880   21.7600 05/13/2022         
 02/20/2014 5,002   34.050 02/19/2021         
 05/08/2014 17,360   41.940 05/07/2021          05/12/2016 19,920   35.1967 05/11/2023         
 05/14/2015 11,660   65.280 05/13/2022          05/11/2017 43,200   36.7500 05/10/2024         
 05/12/2016 4,980 1,660(5)  105.590 05/11/2023          05/17/2018 47,700   45.2767 05/16/2025         
 05/11/2017 7,200 7,200(5)  110.250 05/10/2024          05/08/2019 33,063 5,337(2)  59.2567 05/07/2026         
 05/17/2018 8,391 7,509(2)  135.830 05/16/2025          05/07/2020 18,207 16,293(2)  72.6800 05/06/2027         
 05/08/2019 2,488 10,312(2)  177.770 05/07/2026          05/04/2021 5,405 22,395(2)  93.3100 05/03/2028         
 05/12/2016         425 99,148(3)       05/17/2018         2,439(3)  315,972     
 05/11/2017         1,625 379,096(3)       05/08/2019         3,900(3)  505,245     
 05/11/2017             2,050(4)  478,245  05/08/2019             4,875(5)  631,556 
 05/17/2018         1,625 379,096(3)       05/07/2020         2,589(4)  335,405     
 05/17/2018             2,025(4)  472,412  05/07/2020             4,275(5)  553,826 
 05/08/2019         1,300 303,277(3)       05/04/2021         2,850(4)  369,218     
  05/08/2019              1,625(4)   379,096    05/04/2021              3,550(5)   459,903  

Total

    70,961  26,681      4,975  1,160,618  5,700  1,329,753      202,375  44,025      11,778  1,525,840  12,700  1,645,285  

Mr. Wood

 02/20/2014 5,002   34.050 02/19/2021          05/11/2017 76,800   36.7500 05/10/2024         
 05/14/2015 42,800   65.280 05/13/2022          05/17/2018 48,600 16,200(6)  45.2767 05/16/2025         
 05/12/2016 19,575 6,525(5)  105.59 05/11/2023          05/08/2019 26,850 26,850(6)  59.2567 05/07/2026         
 05/11/2017 12,800 12,800(5)  110.250 05/10/2024          05/07/2020 12,450 37,350(6)  72.6800 05/06/2027         
 05/17/2018 5,400 16,200(5)  135.830 05/16/2025          05/04/2021 8,691 36,009(2)  93.3100 05/03/2028         
 05/08/2019   17,900(5)  177.770 05/07/2026          05/17/2018         3,750(3)  485,813     
 05/12/2016         1,425 332,438(3)       05/08/2019         6,075(3)  787,016     
 05/11/2017         2,900 676,541(3)       05/08/2019             7,575(5)  981,341 
 05/11/2017             3,625(4)  845,676  05/07/2020         4,107(4)  532,062     
 05/17/2018         2,500 583,225(3)       05/07/2020             6,900(5)  893,895 
 05/17/2018             3,125(4)  729,031  05/04/2021         4,575(4)  592,691     
 05/08/2019         2,025 472,412(3)        05/04/2021              5,700(5)   738,435  
  05/08/2019              2,525(4)   589,057  

Total

    85,577  53,425      8,850  2,064,617  9,275  2,163,765      173,391  116,409      18,507  2,397,582  20,175  2,613,671  

 

(1)

The dollar amounts shown in this column are determined by multiplying the number of shares or units reported in the “Number of Shares or Units of Stock That Have Not Vested” column by $233.29,$129.55, the closing price of our common stock on the last trading day of 2019.2021.

 

(2)

Options to acquire common stock granted under the Long-Term Stock Program. Consistent with vesting standards established for executives who are retirement eligible, including Mr.Messrs. Mussallem, Mr. Bobo, Lemercier and Mr. Lemercier,Wood, options granted since May 2015 vest and become exercisable in 36 equal monthly installments beginning one month after the award date, and are subject to the executive’s continued employment.

 

(3)

RSUs under the Long-Term Stock Program. RSUs become vested as to 50% of the total number of units subject to the award on each of the third and fourth anniversaries of the award date, and are subject to the executive’s continued employment.

 

(4)

RSUs under the Long-Term Stock Program. RSUs granted since February 2020 become vested as to 25% of the total number of units subject to the award on each anniversary of the award date, and are subject to the executive’s continued employment.

(5)

Target number of PBRSUs under the Long-Term Stock Program. PBRSUs vest on the third anniversary of the award date and are subject to the executive’s continued employment. The number of shares issuable upon vesting of these PBRSUs will range from 0% to 175% of the target number of shares subject to the award and depend on satisfaction of applicable performance requirements over a three-year performance period.

 

(5)(6)

Options to acquire common stock granted under the Long-Term Stock Program. The options vest and become exercisable in four equal annual installments beginning on the first anniversary of the award date, and are subject to the executive’s continued employment.

 

 

 
54 LOGO   Edwards Lifesciences Corporation   20202022 Proxy Statement 53


EXECUTIVE COMPENSATION AND OTHER INFORMATION

 

Option Exercises and Stock Vested in Fiscal Year 20192021

The following table sets forth for each of the NEOs the number of shares of our common stock acquired under the NEO’s RSU and PBRSU awards that vested during the year ended December 31, 20192021, and the value realized on each exercise of stock options by the NEO during the year ended December 31, 2019.2021. No stock appreciation rights have been granted to the NEOs.

 

 Option Awards Stock Awards   Option Awards  Stock Awards  

Name

 

Number of
Shares
    Acquired on    

Exercise(#)

 

    Value Realized    

on Exercise
($)(1)

 

    Number of Shares    

Acquired on
Vesting(#)

 

    Value Realized    

on Vesting
($)(2)

   

Number of
Shares
    Acquired on    

Exercise(#)

 

    Value Realized

on Exercise
($)(1)

  

    Number of Shares    

Acquired on
Vesting(#)

 

Value Realized

on Vesting
($)(2)

  

Mr. Mussallem

  393,950(3)   62,849,542  25,794  4,645,509   808,100(3)   64,104,980    108,730  9,758,581 

Mr. Ullem

  37,500(4)   6,997,050  6,472  1,165,557         27,222  2,443,739 

Mr. Bobo

  91,552(5)   15,285,462  6,472  1,165,557   140,708(4)   11,628,841    24,918  2,236,623 

Mr. Lemercier

  12,560(6)   1,778,584  1,115  199,905   67,186(5)   4,889,073    16,367  1,468,848 

Mr. Wood

  80,600(7)   12,358,576  6,264  1,128,111    78,300(6)   5,508,214    25,874  2,322,514  

 

(1)

The dollar amounts shown in the “Value Realized on Exercise” column are determined by multiplying (i) the number of shares of our common stock to which the exercise of the option related, by (ii) the difference between theper-share closingsale price of our common stock on the date of exercise and the exercise price of the options.

 

(2)

The dollar amounts shown in the “Value Realized on Vesting” column are determined by multiplying (i) the number of shares or units, as applicable, that vested, by (ii) theper-share closing market price of our common stock on the day prior to vesting.

 

(3)

All 393,950808,100 options exercised by Mr. Mussallem were exercised pursuant to apre-arranged stock trading plan established under Rule10b5-1 of the Exchange Act (a “Rule10b5-1 Plan”).

 

(4)

All 37,500140,708 options exercised by Mr. UllemBobo were exercised pursuant to a Rule10b5-1 Plan.

 

(5)

All 60,05267,186 options exercised by Mr. BoboLemercier were exercised pursuant to a Rule10b5-1 Plan.

 

(6)

All 12,560 options exercised by Mr. Lemercier were exercised pursuant to a Rule10b5-1 Plan.

(7)

All 80,60078,300 options exercised by Mr. Wood were exercised pursuant to a Rule10b5-1 Plan.

Pension Benefits

Mr. Lemercier participates in our pension plan applicable to salaried employees at our Nyon, Switzerland facility. None of our other NEOs participates in any Company pension plan. The following table sets forth the actuarial present value of Mr. Lemercier’s accumulated benefit under the Nyon pension plan (the “Nyon Pension Plan”).

 

Name

 Plan Name Number of Years
of
Credited Service
(#)
 Present Value of
Accumulated
Benefit
($)(1)
 

    Payments During    

Last Fiscal Year
($)

 Plan Name Number of Years
of
Credited Service
(#)
 Present Value of
Accumulated
Benefit
($)(1)
 

Payments During

Last Fiscal Year
($)

  

Mr. Mussallem

               

Mr. Ullem

               

Mr. Bobo

               

Mr. Lemercier

  Nyon Plan  $10,700,576(2)    Nyon Pension Plan   $13,304,169(2)   

Mr. Wood

                

 

(1)

See Note 13 of the “Notes to Consolidated Financial Statements” in our 20192021 Annual Report for a discussion of the assumptions and methodologies used to determine the present value of accumulated benefits under the Nyon Pension Plan.

 

(2)

The conversion ratereflects the average monthly intercompanyReported in this table by converting Swiss Francs to United States dollars using an exchange rate forratio of 1.081512 as of December 2019 (1.019371 CHF/USD).31, 2021.

The Nyon Pension Plan is a cash balance plan under which each participant has an account balance consisting of savings and interest credits earned each year. Interest credits are determined annually. Savings credits are equal to a percentage of “insured salary” based upon the age of the participant (ranging from 15% at age 18 to 28% at age 55 or older for managers opting for an additional optional contribution of 4%). Insured salary includes salary, temporary income and bonus reduced by social security offsets. The plan is funded by both employee and employer contributions, which are fully vested at all times.

 

 

 
54 LOGO   Edwards Lifesciences Corporation   20202022 Proxy Statement 55


EXECUTIVE COMPENSATION AND OTHER INFORMATION

 

Mr. Lemercier made a regular employee contribution of approximately $113,248$121,294 in 2019.2021. Normal retirement age is 65. At normal retirement, a participant may choose to receive the accumulated account balance as either a lump sum or in the form of a pension annuity.

2019 Nonqualified Deferred Compensation Plans

Executive Deferred Compensation Plan.    The following table sets forth information relating to our nonqualified deferred compensation plan (“EDCP”) for 20192021 for theour NEOs.

 

Name

 Executive
Contributions in Last
Fiscal Year
($)(1)
 Registrant
Contributions in Last
Fiscal Year
($)(2)
 Aggregate Earnings
in Last Fiscal Year
($)(3)
 Aggregate
Withdrawals/
Distributions
($)
 

  Aggregate Balance  

at Last FYE
($)(4)

 Executive
Contributions in Last
Fiscal Year
($)(1)
 Registrant
Contributions in Last
Fiscal Year
($)(2)
 Aggregate Earnings
in Last Fiscal Year
($)(3)
 Aggregate
Withdrawals/
Distributions
($)
 

Aggregate Balance

at Last Fiscal Year  End
($)(4)

Mr. Mussallem

  172,256  122,611  1,485,908    6,460,729  111,133  78,809  1,372,589    10,414,198

Mr. Ullem

            37,476  31,229  43,095    302,092

Mr. Bobo

  421,589  27,789  1,275,857  -4,405  7,338,345  360,196  18,153  1,178,295  (212,617)  10,598,451

Mr. Lemercier

                    

Mr. Wood

  49,728  41,440  229,620    1,019,932  37,715  31,430  224,669    1,673,118

 

(1)

Executive contributions for 20192021 are included in the “Salary” column of the “Summary Compensation Table” above.

 

(2)

Company contributions for 20192021 are included in the “All Other Compensation” column of the “Summary Compensation Table” above.

 

(3)

“Earnings” is defined to reflect the difference in the account balance between the beginning and end of the year, less any executive or Company contributions and any amounts withdrawn or distributed. Earnings include realized and unrealized gains and losses, capital gains and losses, and dividends paid.

 

(4)

The vested balance at the end of 20192021 reflects the following aggregate amounts that were previously reported as compensation in the appropriate columns of the “Summary Compensation Table” for years through and including 20172021 to the extent the executive was an NEO for the applicable year: $4,679,953$8,851,667 for Mr. Mussallem, $0$190,292 for Mr. Ullem, $5,431,464$9,171,264 for Mr. Bobo, $0 for Mr. Lemercier, and $699,145$1,379,304 for Mr. Wood. In addition, Mr. Bobo deferred $186,051$83,160 from his 20182020 Non-Equity Incentive payout into the EDCP.

The EDCP provides the NEOs and certain other employees with the opportunity to defer specified percentages (up to 25%) of their cash compensation and receive matching employer contributions that could not be deferred or contributed to the 401(k) because of the limitations under such plan imposed by the Internal Revenue Code (the “Code”). The EDCP also permits the participants to defer up to 100% of their annual cash incentive bonus and an additional 55% of their base pay, but we do not match the employee contribution above 25%. Participants may elect deferred amounts to be paid either in the form of a lump sum or in up to 15 annual installments upon either separation from service, a specified date, or death. Deferrals are credited with gains or losses based on the performance of one or more investment alternatives selected by the participant from among investment funds chosen by the Compensation and Governance Committee or its delegate. Investment elections made for each plan year may not be revoked, changed or modified except as permitted under the EDCP, and subject to applicable law. No actual investments will be held in the participants’ accounts and participants will at all times remain general unsecured creditors of the Company with respect to their account balances.

Potential Payments Upon Termination or Change in Control

Included below is a summary of the material terms and conditions of the only agreements we have entered into with our NEOs that provide for certain payments and benefits in connection with a termination of their employment, other than benefits that are part of employee benefit plans that apply on the same terms to all salaried employees. Also described below are the terms of the Long-Term Stock Program with respect to outstanding equity awards in the event of a change in control of the Company.

Change-in-Control Severance Agreements.    We have entered intochange-in-control severance agreements with each of the NEOs and certain other executives. Thechange-in-control severance agreements entered into with Messrs. Mussallem, Bobo and Wood were subject to an initial term ending December 31, 2013, and thechange-in-control severance agreements entered into with Mr. Ullem and Mr. Lemercier were subject to initial terms ending December 31, 2014 and December 31, 2017, respectively. Thechange-in-control severance agreements are subject to automaticone-year extensions each year unless we provide notice that the agreement will not be extended. Under the terms of the

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

change-in-control severance agreement, each executive is entitled to receive certain severance payments if, at any time during the period commencing six months prior to and ending on the date that is 24 months following a change in control, the executive incurs a “qualifying termination” of employment. For these purposes, a “qualifying termination” means (i) the executive is involuntarily terminated by us without cause or (ii) the executive voluntarily terminates employment for good reason.

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

For purposes of thechange-in-control severance agreements, “cause” generally includes (1) certain willful and deliberate material breaches by the executive of the executive’s duties and responsibilities that are not timely remedied; (2) the executive engaging in conduct that is willfully, demonstrably and materially injurious to the Company that is not timely remedied; or (3) the executive being convicted of, or pleading guilty ornolo contendere to, a felony that adversely affects the reputation of the executive or the Company.

For the NEOs other than Mr. Mussallem, “good reason” generally includes (1) a material change of the executive’s responsibilities or status or the assignment of the executive to duties materially inconsistent with such responsibilities or status; (2) a relocation in excess of 50 miles of the executive’s principal job location; (3) a reduction of the executive’s base salary, incentive plans or benefits; (4) our failure to require any successor company to assume the obligations under the agreement; or (5) a material breach by the Company of the material terms of the agreement. For Mr. Mussallem, “good reason” generally has the same meaning described above, except that the definition also includes that following a change in control (1)(i) Mr. Mussallem is no longer a member of the Board or fails to be nominated for reelection to the Board; or (2)(ii) Mr. Mussallem and the Company (or any successor company) have not mutually agreed (within five business days following a change in control) on the terms and conditions of his continued employment.

In the event of a qualifying termination, the executive would be entitled to receive a lump sum payment equal to the sum of (1) two times (three times in the case of Mr. Mussallem) the annual base salary as of the time of termination (or during the 12 months preceding the change in control, if higher); (2) two times (three times in the case of Mr. Mussallem) the Incentive Pay Objective for the year of termination (or the dollar amount of the actual bonus paid in the preceding year, if higher); (3) apro-rated bonus for the year of termination; (4) all then-outstanding and unvested long-term incentive awards would generally be subject to accelerated vesting; and (5) continued participation in our medical and dental plans for three years following termination of employment. In addition, the executive would be entitled to reasonable outplacement services. If any such payments or benefits would constitute a parachute payment under Section 280G of the Code, then such payments and benefits would be reduced to the extent necessary to assure that the executive receives only the greater of (1)(i) the amount of the payments which would not constitute a parachute payment, or (2)and (ii) the amount which yields the greatestafter-tax benefit after taking into account any excise taxes imposed under Section 4999 of the Code. Thechange-in-control severance agreements do not provide for taxgross-up payments. Receipt of these severance benefits is conditioned upon the executive executing and not revoking a general release of any claims in favor of the Company.

Thechange-in-control severance agreements for the NEOs other than Mr. Mussallem provide that, in the event the executive is entitled to benefits under our Severance Pay Plan (the “Severance Plan”), which is described below, and the executive also has a qualifying termination under thechange-in-control severance agreement, the executive will be entitled to the benefits under thechange-in-control severance agreement only, and installment payments under the Severance Plan will immediately terminate without offset or reduction for any benefits already received under the Severance Plan. In the event Mr. Mussallem becomes entitled to the benefits under hischange-in-control severance agreement following the time at which he became entitled to certain severance benefits under the terms of his employment agreement (which is described below), any then-remaining severance benefits under his employment agreement will immediately terminate and he will only be entitled to benefits under hischange-in-control severance agreement, and the amount of certain severance benefits payable under hischange-in-control severance agreement will be reduced by the amount of the severance benefits previously paid under his employment agreement.

Employment Agreement with CEO.    On March 9, 2009, the Company entered into an amended and restated employment agreement with Mr. Mussallem pursuant to which he is eligible to receive benefits in connection with certain termination circumstances. If Mr. Mussallem’s employment is terminated without cause, we will pay him the sum of (1) two times his highest base salary in the preceding 12 months; (2) the higher of one times his maximum target bonus for the year of termination, or two times the actual bonus paid in the preceding year; (3) apro-rated bonus for the year of termination; and (4) an amount equal to the cost of continued medical and dental coverage for up to 24 months. Mr. Mussallem will

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

not be entitled to receive any such payments if he receives payments under hischange-in-control severance agreement and, as described above, any severance benefits Mr. Mussallem may receive under hischange-in-control severance agreement will be offset by any benefits he received under his employment agreement. For purposes of Mr. Mussallem’s employment agreement, “cause” generally includes (1)(i) the executive willfully engaging in conduct that is demonstrably and materially injurious to the Company; or (2)(ii) the executive’s conviction of a felony.

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

If Mr. Mussallem’s employment is terminated due to retirement, disability or death, he will receive hispro-rated bonus for the year of termination and additional benefits as determined in accordance with our benefit plans.

For a period of 24 months following his termination of employment, Mr. Mussallem may not employ or solicit for employment any of our employees or consultants.

Severance Pay Plan.    We maintain the Severance Plan, under which the NEOs (other than Mr.Messrs. Mussallem and Mr. Lemercier) and certain other U.S. employees are eligible to receive severance benefits in connection with a termination of the individual’s employment due to elimination of his or her position or a reduction in the size of our workforce. Benefits paid toIf an NEO (other than Mr.Messrs. Mussallem and Mr. Lemercier) becomes entitled to benefits under the Severance Plan, the NEO’s benefits will consist of cash severance equal to one andone-half times the executive’s “monthly compensation” (as defined in the Severance Plan), plus 4% of the executive’s monthly compensation multiplied by the number of whole months of service completed as of the date of termination. In no event will this cash severance exceed two times the executive’s annual compensation received in the preceding 12 months. See“Change-in-Control Severance Agreements” section above for a description of the treatment of Severance Plan benefits if an NEO is also entitled to severance benefits under thechange-in-control severance agreement.

Severance Benefits for Mr. Lemercier.    Mr. Lemercier is eligible to receive severance benefits if his employment is terminated by the Company for any reason other than for cause. These benefits will consist of cash severance equal to one month of his monthly base salary for every year of service, capped at two years of his annual base salary. In addition, he will be entitled to six months advance notice of a termination of employment or pay in lieu of notice of an amount equal to six months of his monthly base salary. Mr. Lemercier will not be entitled to receive any such payments if he receives payments under his change-in-control severance agreement.

Acceleration of Equity Awards.    None of our outstanding unvested equity awards will vest automatically upon a change in control (i.e., we have no “single trigger” vesting arrangements). Pursuant to the terms of the Long-Term Stock Program, applicable toall unvested equity awards granted prior to May 2015, in the event of a change in control of the Company, all outstanding stock options, restricted stock, RSUs and PBRSUs held by all employees (including the NEOs)NEOs will vest in full. This provision was amended as to awards granted since May 2015 such thatfull if there is both a change in control and a specified termination of employment (a “double-trigger”) are required,, or if the awards must beare terminated in thechange-in-control transaction, in order for vesting of the awards to accelerate in connection with thechange-in-control transaction.

Estimated Payments.    The following tables set forth the estimated payments and benefits that would have been payable to the NEOs under the terms of their agreements as described above had their employment been terminated on December 31, 20192021 under the termination circumstances indicated below. Unless otherwise noted, all cash payments would be made in a lump sum and would be paid by us or our successor. The amounts set forth in these tables represent estimates and forward-looking information that is subject to substantial variation based on the timing of the applicable triggering event. We caution the reader to consider these limitations in reviewing the following tables.

For purposes of estimating the amount of payments and benefits payable as a result of a termination of the executive’s employment following a change in control, we have made the following assumptions where applicable:

 

the change in control occurred on December 31, 2019;2021;

 

the stock price was $233.29$129.55 per share, which was the closing price of our common stock on December 31, 2019;2021;

 

all NEOs were terminated on the date of the change in control; and

 

the NEOs received continued participation in our medical and dental plans for three years following termination of employment.

We have also assumed that outstanding and unvested stock options, RSUs and PBRSUs held by the executive accelerated and became vested (to the extent required in the circumstances) on the applicable event. If the awards were accelerated in connection with a change in control pursuant to which the awards were to be terminated, the value of the acceleration would be the same as the applicable value indicated below for “Qualifying Termination in Connection with a Change in Control” assuming that the change in control occurred on December 31, 2019.2021. In these circumstances, there would be no additional value for the accelerated vesting of the awards in connection with a termination of employment if the awards had previously accelerated because of the change in control.

 

 

 
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EXECUTIVE COMPENSATION AND OTHER INFORMATION

 

Executive Benefits and Payments upon Termination: Mr. Mussallem

 

 

Qualifying
Termination
in
Connection
with a
Change in
Control(1)

(a)

 

 

Termination
Due to
Retirement(2)

(b)

 

 

Termination
Due to
Disability or
Death(2)

(c)

 

 

Involuntary
    Termination    

by the

Company
Without

Cause(2)

(d)

 

  

 

Qualifying
Termination
in
Connection
with a
Change in
Control(1)

 

  

 

Termination
Due to
Retirement(2)

 

  

 

Termination
Due to
Disability or
Death(2)

 

  

 

Involuntary
    Termination    
by the

Company
Without
Cause(2)

 

Salary Severance

$3,213,600  $2,142,400   $3,408,987           $2,272,658  

Bonus Severance

 5,004,681   3,336,454    4,943,031            1,647,677

Pro Rata Bonus – 2019

 1,553,240$1,553,240$1,553,240 1,553,240

Pro Rata Bonus – 2021

    1,647,677   $1,647,677   $1,647,677    1,647,677

Stock Option Acceleration

 10,634,824  10,634,824     14,333,732        14,333,732    

Restricted Stock Unit Acceleration

 5,960,560 2,700,332 5,960,560     10,269,267    2,715,692    10,269,267    2,715,692

Performance-Based Stock Unit Acceleration

 9,109,975 5,297,951 5,297,951 5,297,951    11,108,912    6,416,683    11,108,912    6,416,683

Medical and Dental Coverage Continuation(2)

 34,812   23,208    38,758            25,839

Outplacement

 50,000       50,000            

Total

$35,561,692$9,551,523$23,446,575$12,353,253   $45,800,364   $10,780,052   $37,359,588   $14,726,226

 

(1)

PursuantRepresents benefits that would be provided pursuant to the terms of Mr. Mussallem’schange-in-control severance agreement. Mr. Mussallem’s payments and benefits will be reduced to the extent necessary to ensure that he receives only the greater of (1) the amount of the payments which would not constitute a parachute payment, orand (2) the amount which yields the executive the greatestafter-tax amount of benefits after taking into account any excise taxes imposed on the executive under Section 4999 of the Code. The value of Mr. Mussallem’s severance benefits presented in the table assumes that no such reduction in his benefits would be required.

 

(2)

PursuantRepresents benefits that would be provided pursuant to the terms of Mr. Mussallem’s amended and restated employment agreement.

(3)

Represents benefits that would be provided pursuant to the terms of Mr. Mussallem’s amended and restated employment agreement and assumingtaking into account that the termination of employmentMr. Mussallem is not in connection with a change in control.retirement-eligible.

Executive Benefits and Payments upon Termination: Qualifying Termination in

Connection with a Change in Control(1)

 

Mr. Ullem

Mr. Bobo

Mr. Lemercier

      Mr. Wood      

  

Mr. Ullem

  

Mr. Bobo

  

Mr. Lemercier

  

    Mr. Wood      

Salary Severance

$1,240,988$1,231,048$1,159,433$1,216,862   $1,310,110   $1,297,106   $1,317,590   $1,297,052  

Bonus Severance

 1,119,888 1,127,580 784,468 1,015,366    1,020,000    980,000    918,921    1,060,000

Pro Rata Bonus – 2019

 480,000 460,000 392,950 480,000

Pro Rata Bonus – 2021

    510,000    490,000    392,234    530,000

Stock Option Acceleration

 5,244,700 3,272,643 2,402,105 4,980,815    7,522,228    3,011,161    2,112,979    6,681,639

Restricted Stock Unit Acceleration

 2,318,319 1,548,462 1,065,844 2,064,617    2,873,581    2,206,398    1,525,451    2,397,485

Performance-Based Stock Unit Acceleration

 2,303,739 2,105,442 1,329,753 2,163,764    2,924,591    2,367,526    1,645,285    2,613,671

Medical and Dental Coverage Continuation

 123,338 48,154 912,445 96,028    132,894    38,758    1,909,522    103,506

Outplacement

 50,000 50,000 50,000 50,000    50,000    50,000    50,000    50,000

Total

$12,880,972$9,843,329$8,096,998$12,067,452   $16,343,404   $10,440,949   $9,871,982   $14,733,353

 

(1)

Represents benefits that would be provided pursuant to the terms of the NEO’s change-in-control severance agreement. Under thechange-in-control severance agreements, payments and benefits will be reduced to the extent necessary to ensure that the executive receives only the greater of (1) the amount of the payments which would not constitute a parachute payment orand (2) the amount which yields the executive the greatestafter-tax amount of benefits after taking into account any excise taxes imposed on the executive under Section 4999 of the Code. The value of each executive’s severance benefits presented on the table assumes that no such reduction in benefits would be required.

Executive Benefits and Payments upon Termination:

Not in Connection with a Change in Control

 

 

Mr. Ullem

Mr. Bobo

Mr. Lemercier

  Mr. Wood  

Cash Severance

$224,412$671,947$857,467$913,661
   

Mr. Ullem

  

Mr. Bobo

  

Mr. Lemercier

  

Mr. Wood

Cash Severance

   $289,316   $759,888   $1,098,897(1)    $1,025,752  

(1)

Mr. Lemercier’s cash severance is reported in this table by converting Swiss Francs to United States dollars using an exchange ratio of 1.0917 (which is our average monthly intercompany Swiss Franc to United States dollar exchange rate for the year), and assumes that he was entitled to pay in lieu of six months advance notice of termination.

 

 

 
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EXECUTIVE COMPENSATION AND OTHER INFORMATION

 

Death and Disability Benefits for Mr. Lemercier.    As a member of our European Management Team, Mr. Lemercier is entitled to receive death and disability benefits as part of his pension plan rules. In the event of the termination of his employment due to disability, Mr. Lemercier would be entitled to a benefit under the Nyon pension plan equal to 60% of his qualifying risk salary payable at 65. Assuming termination of his employment as of December 31, 20192021 because of disability, Mr. Lemercier would have been entitled to receive $506,616$542,035 per year until age 65. In the event of his death while employed by us, Mr. Lemercier would be entitled to a lump sum payment equal to 200% of his insured salary as well as a spouse pension. Assuming his death as of December 31, 2019,2021, Mr. Lemercier’s death benefit would have been a lump sum of $1,688,721$1,806,785 and a spouse’s pension of $337,744$361,357 per year payable for life. An exchange rate of 1.019371 CHF/USD has been used to convert paymentsMr. Lemercier’s benefits are reported in this paragraph by converting Swiss Francs intoto United States Dollars.dollars using an exchange ratio of 1.081512.

CEO Pay Ratio

Pursuant to the Securities Exchange Act of 1934, as amended, we are required to disclose in this proxy statementProxy Statement the ratio of the total annual compensation of our CEO to the median of the total annual compensation of all of our employees (excluding our CEO). Based on SEC rules for this disclosure and applying the methodology described below, we have determined that our CEO’s total compensation for 20192021 was $11,520,973,$13,613,305, and the median of the total 20192021 compensation of all of our employees (excluding our CEO) was $64,517.$73,036. Accordingly, we estimate the ratio of our CEO’s total compensation for 20192021 to the median of the total 20192021 compensation of all of our employees (excluding our CEO) to be 179186 to 1.

TheWe identified the median employee that was used for purposes of calculating the ratio above was the same employee (the “2018“2020 median employee”) that was identified as the median employee for purposes of the CEO pay ratio disclosure included in the Proxy Statement for our 20182021 Annual Meeting of Stockholders. ThereStockholders (the “2020 Pay Ratio Disclosure”), and there has been no change in our employee population or employee compensation arrangements since the 20182020 median employee was identified that we believe would significantly impact our pay ratio disclosure. However, because the 2020 median employee was on a leave of absence for a portion of 2021, we believe the impact of that leave on the 2020 median employee’s total compensation for 2021 would result in a significant change to the pay ratio disclosure. Accordingly, as permitted by the SEC rules, we substituted another employee (the “substituted median employee”) as the median employee for purposes of this disclosure; the substituted median employee’s total compensation in 2020 was substantially similar to the 2020 median employee’s total compensation for 2020 based on the compensation measure used to select the median employee for purposes the 2020 Pay Ratio Disclosure.

The total 2021 annual compensation for 2019 for thatthe substituted median employee and the total compensation for 2019 for our CEO, as included in the first paragraph of this pay ratio disclosure werewas determined using the same rules that apply to reporting the compensation of our Named Executive OfficersNEOs (including our CEO) in the “Total” column of the Summary Compensation Table. The total compensation amounts included in the first paragraph of this pay-ratio disclosure were determined based on that methodology. The SEC’s pay ratio disclosure rules permit the use of estimates, assumptions, and adjustments, and the SEC has acknowledged that pay ratio disclosures may involve a degree of imprecision. We believe that the foregoing pay ratio is a reasonable estimate calculated in a manner consistent with the SEC’s pay ratio disclosure rules.

The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s total annual compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

 

 

 
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PROPOSAL 2 – ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

 

THE BOARD RECOMMENDS A VOTE“FOR” THE APPROVAL OF THE COMPENSATION OF OUR NEOS.

    LOGO

THE BOARD RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NEOS.

In accordance with Section 14A of the Exchange Act and the related rules of the SEC, we are providing our stockholders with the opportunity to vote, on an advisory,non-binding basis, on the executive compensation of our NEOs as disclosed in this Proxy Statement (including in the compensation tables and narratives accompanying those tables as well as in the “Compensation Discussion and Analysis”).

As described more fully in the “Compensation Discussion and Analysis,” our executive compensation programs are designed to attract, retain, motivate, and engage executives with superior leadership and management capabilities. High-caliber talent is critical to our success and we strive to provide compensation that is competitive. Our strongpay-for-performance culture is reflected below:

 

A significant portion of executive compensation is performance based;

 

Our performance goals consist of a mix of company-wideCompany-wide financial, operating, and strategic measures as well as personal objectives designed to further the Company’s annual and long-term business performance; and

 

We strive to align the interests of our executives with the interests of our stockholders, with a significant portion of executive compensation being in the form of equity awards with a value dependent upon our stock price.

We urge stockholders to read the “Compensation Discussion and Analysis” beginning on page 27, which describes in more detail how our executive compensation policies and procedures are designed and operate to achieve our compensation and strategic objectives, as well as the “Summary Compensation Table” and other related compensation tables and narrative appearing on pages 4546 through 59.60. The Compensation and Governance Committee and the Board believe that the policies, procedures, and compensation programs described in these sections have contributed to the Company’s long-term performance.

In the advisory vote at our 20192021 annual meeting, approximately 95%93% of the votes cast by our stockholders supported our executive compensation policies and procedures.

Even though we have regularly received strong support for our executive pay practices, the Compensation and Governance Committee continues to engage in periodic reviews of our executive compensation and benefits programs and makes changes as appropriate to reflect our compensation philosophy and objectives, and to take into account stockholder feedback.

In 2019, we achieved significant growthJanuary 2021, due to the impacts of, and exceededthe circumstances surrounding, the pandemic and the considerations discussed in “2021 Annual Incentive Plan” on page 29 of this Proxy Statement, the Board of Directors applied discretion and approved using the KOD results as the primary mechanism to determine 2020 Annual Incentive Plan payouts across the entire organization. As a result of the expected continued impact of the pandemic in fiscal year 2021, after review and input from the Compensation Consultant and other advisors, the Board determined that it was also appropriate to use the results of the KOD achievement as the primary mechanism to determine 2021 annual incentive payouts.

In February 2022, the Board of Directors approved the 2021 KOD achievement at 116% of target, from which the Board applied negative discretion of 20 points for the CEO and 10 points for the other named executive officers due to issues related to the compliance program in Japan. As a result, our financial goals, includingnon-GAAP revenue, net incomecash incentive plan funded at 96% for the CEO and free cash flow,106% for the three measuresother named executive officers, and each individual’s performance was also taken into account for the final calculation of achievement under ourthe annual cash incentive plan. In February 2020, after reviewingpayment for 2021. See “Elements of Compensation—Annual Cash Incentive Payment” above for additional information regarding the Company’s 2019 performance versus financial and operational goals, TSR performance, and business unit performance, the Compensation Committee awardedannual cash incentive payments to the NEOs that ranged from 139% to 158% of the Incentive Pay Objectives for the NEOs.payment.

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PROPOSAL 2 – ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

Another indicator of ourpay-for-performance culture is the relationship of the NEOs’ target total direct compensation to TSR. Over the past five years, on average, 89%90% of the CEO’s target total direct compensation is performance-based, and 74%75% is tied to the performance of Edwards’ stock. Our stock price has increased 266%315% over the past five years, 149%154% over the past three years, and 52%42% over the past year.

We are asking our stockholders to indicate their support for our NEO compensation programs as described in thethis Proxy Statement. This proposal, commonly known as a“say-on-pay” proposal, gives our stockholders the opportunity to express their views on our NEOs’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in thethis Proxy Statement.

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PROPOSAL 2 – ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

Accordingly, we ask our stockholders to vote “FOR”FOR the following resolution at the Annual Meeting:

“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the NEOs, as disclosed in the Company’s Proxy Statement for the 20202022 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the U.S. Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosure included in the Proxy Statement.”

Thesay-on-pay vote is advisory, and therefore not binding on the Company, the Compensation and Governance Committee or the Board, and it will not be construed as overriding a decision by the Company, the Compensation and Governance Committee or the Board, or creating or implying any additional fiduciary duty. However, the Board and ourthe Compensation and Governance Committee value the opinions of our stockholders and will consider the voting results when making future decisions regarding executive compensation. Our current policy is to provide our stockholders with an opportunity to approve the compensation of the NEOs each year at the annual meeting. It is expected that the next such vote will occur at the 20212023 annual meeting.

 

THE BOARD RECOMMENDS A VOTE“FOR” THE APPROVAL OF THE COMPENSATION OF OUR NEOS.

    LOGO

THEBOARD RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NEOS.

 

 

 
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EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth, for each of our fourfive equity compensation plans, which include the Long-Term Incentive Compensation Stock Program, the Nonemployee Directors Program, the 2020 Nonemployee Directors Stock Incentive Program, the 2001 Employee Stock Purchase Plan for United States Employees (the “U.S. ESPP”) and the 2001 Employee Stock Purchase Plan for International Employees (the “International ESPP”), the number of shares of our common stock subject to outstanding awards, the weighted-average exercise price of outstanding options, and the number of shares remaining available for future award grants as of December 31, 2019.2021. These plans have each been approved by our stockholders.

 

Plan Category

  

Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights(#)

(a)

  

Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights($)(1)

(b)

  

Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans(#)  
(excluding securities
reflected in column

(a)(c)

  Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights(#)
  Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights($)(1)
  Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans(#)(2)

Equity Compensation Plans Approved by Stockholders

    6,625,353(2)    $96.53    9,228,578(3)     14,584,392(3)    $52.79    30,397,375(4) 
  

Equity Compensation Plans Not Approved by Stockholders

                        

Total

    14,584,392        30,397,375

 

(1)

The weighted-average exercise price is calculated without taking into account 919,9502,251,364 shares of common stock subject to outstanding RSUs and PBRSUs (with PBRSUs taken into account at the targeted level of performance) that will become issuable as those units vest, without any cash consideration or other payment required for such shares.

 

(2)

Excludes securities reflected in column 1 of the table (Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights).

(3)

This amount includes (a) 5,705,40312,333,028 shares of common stock subject to outstanding stock options, (b) 799,8091,981,439 shares of common stock subject to RSU awards, that will entitle the holder to one share of our common stock for each such unit that vests over the holder’s period of continued service, 120,141and (c) 269,925 shares subject to PBRSUs granted to executives (atPBRSU awards (determined at the targeted level of performance; actual payout could range from 0% to 175% of the targeted level based on relative total stockholder return)return over the performance period). This amount does not include 1,967818 restricted shares granted to nonemployee directors that were outstanding and unvested as of December 31, 2019.2021.

 

(3)(4)

As of December 31, 2019,2021, the following number of shares of common stock remain available for future issuance under equity compensation programs approved by our stockholders: (a) Long-Term Stock Program — 8,461,928;20,986,527; (b) 2020 Nonemployee Directors Stock Incentive Program – 766,650 and (the current Nonemployee Directors Program will terminate in accordance with its terms on April 1, 2020 and no2,245,133 (no new awards may be granted under the predecessor plan, after that date; an equal 766,650 shares that will be available under the 2020 Nonemployee Directors Stock Incentive Program if our stockholders approve Proposal 3;Program); (c) U.S. ESPP – 1,243,2735,447,410; and (d) the International ESPP 363,366.– 1,718,305. The shares available under the Long-Term Stock Program may be used for any type of award authorized under the Long-Term Stock Program, including stock options, restricted stock, RSUs and PBRSUs. The shares available under the 2020 Nonemployee Directors Stock Incentive Program may be used for any type of award authorized under the 2020 Nonemployee Directors Stock Incentive Program, including stock options, stock issuances, restricted stock, RSUs and stock appreciateappreciation rights.

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PROPOSAL 3 – APPROVAL OF THE 2020 NONEMPLOYEE DIRECTORS STOCK INCENTIVE PROGRAM

THE BOARD RECOMMENDS A VOTE“FOR” THE APPROVAL OF THE 2020 NONEMPLOYEE DIRECTORS PROGRAM.

The Company is requesting that stockholders approve the 2020 Nonemployee Directors Stock Incentive Program (the “2020 Nonemployee Directors Program”), which was adopted, subject to stockholder approval, by the Board on February 20, 2020. The 2020 Nonemployee Directors Program will allow us to continue to grant equity awards to our nonemployee directors in order to align the nonemployee directors’ interests more closely with the interests of our stockholders.

The 2020 Nonemployee Directors Program will replace the current Nonemployee Directors Program that will expire according to its terms on April 1, 2020. As of January 31, 2020, there were 766,650 shares of our common stock available for new awards under the current Nonemployee Directors Program. The Company will not grant any new awards under the current Nonemployee Directors Program after April 1, 2020. Under the 2020 Nonemployee Directors Program, 766,650 shares of common stock would be available for award grants, which reflects the number of shares available for new award grants under the current Nonemployee Directors Program (which will expire) with no proposed increase in the share limit.

If stockholder approval for this proposal is not obtained, the Company will not be able to grant equity awards to nonemployee directors after the expiration of the current Nonemployee Directors Program, and we would be unable to continue thelong-term equity component of our nonemployee director compensation program. Our nonemployee directors are not eligible to receive award grants under the Long-Term Stock Incentive Program. Without the ability to use stock, we would be required to replace the long-term equity component of our nonemployee director compensation program with additional cash compensation for our nonemployee directors in order to maintain a competitive nonemployee director compensation program. We believe that additional cash compensation would offer less of an opportunity to further the link between nonemployee director interests and stockholder interests.

The Company encourages stockholders to consider the following factors that support this request:

The Company grantslong-term incentive awards (stock options and RSUs) to its nonemployee directors to further align their interests with those of our stockholders. The size of these incentive award grants has been limited under the Nonemployee Directors Program, and will continue to be limited under the 2020 Nonemployee Directors Program. As a result, the Company has achieved a low burn rate for the Nonemployee Directors Program while providing what we believe to be adequate compensation for our nonemployee directors.

   2016  2017  2018  2019

Annual Burn Rate(1)

    0.01%    0.01%    0.01%    0.01

(1) BurnRate =

(a) shares subject to awards granted under the Nonemployee Directors Program less shares subject to Nonemployee Directors Program awards cancelled, divided by (b) shares of Company common stock outstanding as of year end

The 766,650 shares that would be available for award grants under the 2020 Nonemployee Directors Program if stockholders approve this proposal represent 0.37% of our outstanding shares at December 31, 2019.

The total number of shares of our common stock subject to awards granted under the Nonemployee Directors Program over the last three years, and through January 31, 2020, are as follows:

   2017  2018  2019  2020 Through  
January 31

Stock Options

    4,704    3,826        

RSAs

    1,764    1,437    1,967    

RSUs

    14,238    11,585    9,261    

Total

    20,706    16,848    11,228    

 

 

 
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PROPOSAL 3 – APPROVAL OF THE 2020 NONEMPLOYEE DIRECTORS STOCK INCENTIVE PROGRAM

As additional context, the total number of shares of our common stock subject to awards granted under the Long-Term Stock Program over the last three years, and through January 31, 2020, are as follows (in each case with PBRSUs taken into account at the targeted level of performance): 1,385,735 in 2017, 1,222,603 in 2018, 1,032,244 in 2019, and 0 in 2020 through January 31, 2020.

Each year since 2008, we have actively repurchased shares of our common stock through various stock repurchase programs. The Board has approved stock repurchase programs authorizing us to purchase our common stock on the open market, including pursuant to aRule 10b5-1 plan and in privately negotiated transactions. As of December 31, 2019, we had remaining authority to purchase $1.2 billion of common stock.

To help assess the potential dilutive impact of the 2020 Nonemployee Directors Program proposal, the number of shares of our common stock issued and outstanding in each of the last four fiscal years is as follows:

 2016201720182019  

Shares Outstanding at Fiscal Year End (in millions)

 211.6 209.8 207.7 209.0 

On January 31, 2020, the Company had outstanding 209,122,578 shares of common stock.

As of January 31, 2020, a total of 60,776 shares were subject to outstanding options and stock awards under the Nonemployee Directors Program (referred to as “overhang”). These included 49,548 shares subject to outstanding options and 1,967 shares subject to outstanding RSAs and 9,261 shares subject to outstanding RSUs. As of that date, a total of 766,650 shares were available for new award grants under the Nonemployee Directors Program. In addition, as of that date, 5,533,228 shares were subject to outstanding options under the Long-Term Stock Program, 781,179 shares were subject to RSUs outstanding under the Long-Term Stock Program, 120,141 shares were subject to PBRSUs outstanding under the Long-Term Stock Program (at the targeted level of performance; actual payout could range from 0% to 175% of the targeted level), and 8,507,117 shares were then available for new award grants under the Long-Term Stock Program.

We are committed to maintaining strong corporate governance practices and note the following important factors that pertain to our 2020 Nonemployee Directors Program and ourlong-term equity compensation practices:

The Company has adopted stock ownership guidelines and a holding requirement for its nonemployee directors to create additional owner commitment and to emphasize stockholder value creation. (See “Director Compensation—Directors’ Stock Ownership Guidelines and Holding Requirement.”) All current nonemployee directors have met their ownership targets;

The maximum term of options is seven years;

We do not have any program, plan or practice to time equity awards in coordination with the release of material information;

Our practice is to grant equity awards to the nonemployee directors each year on the day following our annual meeting of stockholders; and

We have never engaged in a repricing of stock options, and our 2020 Nonemployee Directors Program would require stockholder approval for any repricing actions.

The principal terms of the 2020 Nonemployee Directors Program are summarized below. The following summary is qualified in its entirety by the full text of the 2020 Nonemployee Directors Program, which has been filed as Appendix B to this Proxy Statement.

Administration.    The 2020 Nonemployee Directors Program will be administered by the Compensation Committee, or by another committee appointed by the Board (which shall consist of entirely of directors) or by the Board itself. The administrator of the 2020 Nonemployee Directors Program may also delegate administrative duties under the plan to officers, employees and directors of the Company, except that it may not delegate its authority with respect to granting awards under the plan. The administrator of the 2020 Nonemployee Directors Program (the Board or a committee of directors) will have broad authority under the 2020 Nonemployee Directors Program including the authority to select participants and determine awards; establish terms and conditions of awards, make certain adjustments to awards and construe and interpret the program.

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PROPOSAL 3 – APPROVAL OF THE 2020 NONEMPLOYEE DIRECTORS STOCK INCENTIVE PROGRAM

Eligibility.    Only nonemployee directors of the Company will be eligible to participate in the 2020 Nonemployee Directors Program. As of January 31, 2020, the Company had seven nonemployee directors. The Company’s employees and independent contractors are not eligible to participate in the 2020 Nonemployee Directors Program.

Share Reserve.    Subject to adjustment for certain changes in the Company’s capitalization or other events referred to under “Adjustments in Authorized Shares” below, and subject to approval of Proposal 3 by stockholders, a total of 766,650 shares of our common stock will be authorized for issuance under the 2020 Nonemployee Directors Program, which represents the number of shares that were available for new award grants under the current Nonemployee Directors Program as of January 31, 2020. In general, shares subject to outstanding options or other awards under the 2020 Nonemployee Directors Program that expire or otherwise terminate prior to the issuance of the shares subject to those options or awards will be available for subsequent issuance under the 2020 Nonemployee Directors Program. Unvested shares issued under the 2020 Nonemployee Directors Program and subsequently forfeited to or reacquired by the Company will be added back to the number of shares reserved for issuance under the 2020 Nonemployee Directors Program and will accordingly be available for subsequent issuance. In addition, upon exercise of a stock appreciation right, the number of shares reserved for issuance under the 2020 Nonemployee Directors Program shall be reduced by the gross number of shares as to which such stock appreciation right is exercised.

As of January 31, 2020, 49,548 options, 1,967 RSAs, and 9,261 RSUs were outstanding under the current Nonemployee Directors Program. As of the same date, 956,088 shares had been issued pursuant to the exercise of outstanding options and 1,016,486 shares had been issued upon vesting of RSUs and the grant of restricted stock awards, and 766,650 shares remained available for future awards under the current Nonemployee Directors Program. As noted above, the current Nonemployee Directors Program will expire according to its terms on April 1, 2020 and we will not grant any new awards under the current Nonemployee Directors Program after April 1, 2020.

Types of Awards.    The following types of awards may be granted to eligible participants under the 2020 Nonemployee Directors Program: stock options, stock issuances, restricted stock awards, RSUs and stock appreciation rights.

Stock Options and Stock Appreciation Rights.    Nonqualified stock options and stock appreciation rights (“SARs”) may be granted under the 2020 Nonemployee Directors Program. A nonqualified stock option is an option that is not intended to be a qualified stock option within the meaning of Section 422 of the Internal Revenue Code and is the right to purchase shares of the Company’s common stock at a future date at a specified price per share (the “exercise price”). A SAR is the right to receive payment of an amount equal to the excess of the fair market value of share of the Company’s common stock on the date of exercise of the SAR over the base price of the SAR. The Compensation Committee has the discretion to select eligible participants to receive options or SARs, and determine the number of shares, exercise price, and other terms of options or SARs granted under the 2020 Nonemployee Directors Program. The maximum term of an option granted under the 2020 Nonemployee Directors Program is seven years.No option or SAR may be granted with an exercise or base price less than the closing price of our common stock on the grant date. The closing price of our common stock as of January 31, 2020 was $219.86 per share.

Share Issuances, Restricted Stock and Restricted Stock Units.    Shares of our common stock may be issued under the 2020 Nonemployee Directors Program to eligible participants, and such shares may or may not have restrictive conditions. The Compensation Committee has the discretion to select eligible participants to receive common stock, and determine the number of shares, purchase price (if any), any conditions of restriction (if any), and other terms of stock issued under the 2020 Nonemployee Directors Program. A plan participant who receives an award of common stock will have stockholder rights, including voting and dividend rights, for those shares unless the Compensation Committee determines otherwise.

The Compensation Committee may issue RSUs under the 2020 Nonemployee Directors Program, which entitle the participant to receive shares of our common stock underlying the units upon attainment of designated performance goals, the satisfaction of specified service requirements or upon the expiration of a designated time period following the vesting of the units. The Compensation Committee has the discretion to select eligible participants to receive RSUs, and to determine the number of shares, any vesting and other terms and conditions of the RSUs. The holders of RSUs will not have any stockholder rights until the underlying shares are actually issued to the holder. However, dividend equivalent units may be paid or credited, either in cash or in actual or phantom shares of our common stock, on outstanding restricted units, subject to such terms and conditions as the Compensation Committee deems appropriate.

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PROPOSAL 3 – APPROVAL OF THE 2020 NONEMPLOYEE DIRECTORS STOCK INCENTIVE PROGRAM

Annual Awards.    The 2020 Nonemployee Directors Program provides that each nonemployee director will receive an annual grant of options for up to 40,000 shares of our common stock, or a RSU award for up to 16,000 units with respect to shares of our common stock, or a combination of options and RSUs with a maximum grant date value of approximately $240,000. The Board or Compensation Committee may, from time to time and without stockholder approval, change the grant date value (currently, $240,000) for awards that are to be granted in a combination of options and RSUs, so long as the total number of options granted to a nonemployee director in any one year under the 2020 Nonemployee Directors Program does not exceed 40,000 shares and so long as the total number of RSUs granted to a nonemployee director in any one year under the 2020 Nonemployee Directors Program does not exceed 16,000. As described in “Director Compensation” above, for 2019 each nonemployee director who was serving on the day after our 2019 annual meeting was granted an annual award of 1,323 RSUs. The Compensation Committee recommends to the Board for its approval the actual amount and type of award for each year. The annual equity award is granted on the day after our annual meeting. The option exercise price is the closing price of our common stock on the grant date. The annual awards vest upon the first to occur of (i) the first anniversary of the award date or (ii) the next annual meeting of the Company that occurs in the calendar year after the award date. The annual awards also fully vest upon the director’s death or disability.

Equity Awards in Lieu of Cash.    Directors may also elect to receive all or a portion of their annual cash retainer in the form of options or restricted stock granted under the 2020 Nonemployee Directors Program (for more information, see “Director Compensation — Deferral Election Program” above).

Amendment of the 2020 Nonemployee Directors Program; No Limit on Other Authority.    The Board may alter, amend, suspend or terminate the 2020 Nonemployee Directors Program at any time, and the Compensation Committee may amend awards previously granted. Stockholder approval will be required for any amendment of the 2020 Nonemployee Directors Program only to the extent required by applicable law. In addition, and except for adjustments made in connection with changes in the Company’s capitalization or other events referred to under “Adjustments in Authorized Shares” below or any repricing that may be approved by our stockholders, the Compensation Committee may not (1) amend an outstanding option for the sole purpose of lowering the exercise price of the option, (2) cancel, exchange or surrender an outstanding option in exchange for cash or other awards for the purpose of repricing the award, or (3) cancel, exchange or surrender an outstanding option for the purposes of reissuing such option at a lower exercise price, without stockholder approval. Further, no termination, amendment or modification of the 2020 Nonemployee Directors Program or amendment of previously granted awards may adversely affect in any material way a previously granted award, without the consent of the participant holding the award. The 2020 Nonemployee Directors Program does not limit the authority of the Company, the Board, or the Compensation Committee to grant awards or authorize any other compensation, with or without reference to the Company’s common stock, under any other plan or authority.

Acceleration upon Change in Control.    Awards granted under the 2020 Nonemployee Directors Program will generally become 100% vested and exercisable upon a change in control of the Company.

Adjustments in Authorized Shares.    In the event of any change in corporate capitalization, such as a stock split, or a corporate transaction, such as any merger, consolidation, separation, including aspin-off, or other distribution of stock or property of the Company, any reorganization or any partial or complete liquidation of the Company, adjustments will be made to: (i) the maximum number and class of shares issuable under the 2020 Nonemployee Directors Program, (ii) the number and class of shares subject to the annual awards to directors under the 2020 Nonemployee Directors Program, and (iii) the number and class of and price of shares subject to outstanding awards granted under the 2020 Nonemployee Directors Program. Such adjustments will be made as deemed to be appropriate and equitable by the Compensation Committee, in its sole discretion, to prevent dilution or enlargement of rights.

New Plan Benefits.    No options have been granted, and no direct stock issuances or RSUs have been awarded, on the basis of the approval of this Proposal 3. If the 2020 Nonemployee Directors Program had been in effect in 2019, we expect that our award grants for 2019 would not have been different from those actually made in that year under the current Nonemployee Directors Program.

As described under “Director Compensation — Nonemployee Directors Stock Incentive Program” above, our current compensation practice is to grant each nonemployee director who is serving on the day after our annual meeting an annual equity award of RSUs, with the number of shares subject to each award to be determined by dividing $240,000 by the closing price of our common stock on the grant date (or the immediately preceding trading day if the grant date is not a trading day). Assuming, for illustrative purposes only, that the price of the common stock used for the conversion of the

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PROPOSAL 3 – APPROVAL OF THE 2020 NONEMPLOYEE DIRECTORS STOCK INCENTIVE PROGRAM

dollar amount set forth above into shares is $220, each nonemployee director would receive an annual RSU award with respect to 1,091 shares (after rounding down to the nearest whole share) and 7,637 shares per year would be allocated to the Company’s seven nonemployee directors as a group for the annual grants. This calculation assumes that there are no new eligible directors, no changes in the value of a share, there continues to be seven eligible directors seated and there are no changes to the awards granted under the director equity grant program. This calculation also does not take into account any shares that may be issued under the 2020 Nonemployee Directors Program if directors elect to receive all or a portion of their cash retainer fees in the form of awards under the plan, since it cannot be predicted whether and the extent to which any directors would make this election in the future.

Summary of Federal Income Tax Consequences.    The following summary describes the United States federal income taxation treatment applicable to the Company and the participants who receive awards under the 2020 Nonemployee Directors Program. The following summary is not intended to be exhaustive and, among other considerations, does not describe the deferred compensation provisions of Section 409A of the Internal Revenue Code to the extent an award is subject to and does not satisfy those rules, nor does it describe state, local, or international tax consequences.

Option and SAR Grants.    Options granted under the 2020 Nonemployee Directors Program may only benon-statutory options which are not intended to be incentive stock options within the meaning of Section 422 of the Internal Revenue Code. No taxable income is recognized by a recipient upon the grant of anon-statutory option or SAR. The recipient will generally recognize ordinary income in the year in which the option or SAR is exercised equal to the excess of the fair market value of the exercised shares on the exercise date over the exercise or base price of the shares, and the recipient will be required to satisfy the tax withholding requirements applicable to such income, if any. The Company will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the recipient with respect to the exercised stock option or SAR. The deduction will generally be allowed for the Company’s taxable year in which such ordinary income is recognized by the recipient.

Share Issuances.    A recipient of fully vested common stock will generally recognize ordinary income based on the then- fair market value of the shares at the time of grant. The recipient will be required to satisfy the tax withholding requirements applicable to such income, if any. The Company will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the recipient.

Restricted Stock.    A recipient of restricted stock will generally recognize ordinary income when his or her shares vest, based on thethen- fair market value of the shares. The recipient may, however, elect under Section 83(b) of the Internal Revenue Code to include as ordinary income in the year of issuance of the shares the fair market value of the shares at that time. The recipient will be required to satisfy the tax withholding requirements applicable to such income, if any. The Company will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the recipient. The deduction will be allowed for the taxable year in which such ordinary income is recognized by the recipient.

Restricted Stock Units.    No taxable income is recognized upon receipt of a RSU. The holder will recognize ordinary income in the year in which the shares subject to that unit are actually issued. The amount of that income will be equal to the fair market value of the shares on the date of issuance. The holder will be required to satisfy the tax withholding requirements applicable to such income, if any. The Company will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the holder. The deduction will, in general, be allowed for the taxable year in which such ordinary income is recognized by the holder.

Other Tax Considerations.    If an award is accelerated for a “change in control” under the Internal Revenue Code, the Company may not be permitted to deduct the portion of the compensation attributable to the acceleration if it exceeds certain threshold limits under the Internal Revenue Code (and certain related excise taxes may be triggered).

Board Recommendation.    The Board believes that it is in our best interests to continue to align the nonemployee directors’ interests more closely with the interests of our stockholders through annual equity awards under the 2020 Nonemployee Directors Program.

All of our nonemployee directors are eligible for awards under the 2020 Nonemployee Directors Program and thus have a personal interest in the approval of this Proposal 3.

THE BOARD RECOMMENDS A VOTE“FOR” THE APPROVAL OF THE 2020 NONEMPLOYEE DIRECTORS PROGRAM.

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PROPOSAL 4 – APPROVAL OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FOR THE PURPOSE OF EFFECTING ATHREE-FOR-ONE STOCK SPLIT

THE BOARD RECOMMENDS A VOTE“FOR” THE ADOPTION AND APPROVAL OF THE AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FOR THE PURPOSE OF EFFECTING A THREE-FOR-ONE STOCK SPLIT.

Description of the Proposed Amendment

Our Certificate of Incorporation currently authorizes the issuance of up to 350 million shares of common stock, par value $1.00 per share, and 50 million shares of preferred stock, par value $0.01 per share.

On February 20, 2020, our Board adopted resolutions approving an amendment (the “Amendment”) to the Certificate of Incorporation to increase the number of authorized shares of common stock from 350 million shares to 1.05 billion shares for the purpose of effecting athree-for-one forward split (the “Stock Split”) of our issued and outstanding common stock following the effectiveness of such Amendment and providing for a proportional increase in our authorized but unissued shares of common stock. The Board determined that the Amendment is advisable and in the best interests of the Company and directed that the proposed Amendment be submitted for adoption and approval by stockholders at the Annual Meeting.

The full text of the Amendment to the Certificate of Incorporation is set forth in Appendix C to this Proxy Statement. The Amendment would not affect the number of authorized shares of preferred stock. Currently, there are no shares of preferred stock issued and outstanding.

Purposes and Effects of the Proposed Amendment

As of March 13, 2020, we have 207,325,907 shares of common stock outstanding and the number of authorized shares of our common stock is 350 million. Based on the number of shares of common stock outstanding as of March 13, 2020, following filing of the Amendment and after giving effect to the Stock Split and a proportional increase in our authorized but unissued shares of common stock, we will have approximately 621,977,721 shares of common stock outstanding and the number of authorized shares of our common stock will be increased to 1.05 billion. Our Board is recommending the proposed increase in the number of authorized shares of common stock to provide adequate shares of common stock for the Stock Split, including to provide for a proportional increase in our authorized but unissued shares of common stock.

Our Board intends to approve, subject to and contingent upon stockholder adoption and approval and the effectiveness of the Amendment, the Stock Split, which would be effected pursuant to a stock dividend (the “Stock Dividend”) of two shares of our common stock to the holders of record of each share of our common stock. The Board anticipates approving a record date as of the close of business on May 18, 2020 (the “Record Date”) for determining the stockholders of record entitled to receive the Stock Dividend and a payment date for the Stock Dividend of May 29, 2020 (the “Payment Date”). If our stockholders adopt and approve the Amendment, the Amendment will become effective on the date that it is filed with the Secretary of State of the State of Delaware. Upon declaration of the Stock Dividend by the Board and approval of the Record Date and Payment Date therefor, each stockholder of record at the close of business on the Record Date will become the record owner of, and be entitled to receive, two additional shares of common stock for each share of common stock then owned of record by such stockholder. If the Amendment is adopted and approved by the stockholders, the Company currently anticipates filing the Amendment with the Secretary of State of the State of Delaware on May 8, 2020. If the Amendment is not adopted and approved by the stockholders or is subsequently abandoned by the Board, the Stock Split will not be effected and the Stock Dividend will not be made to the stockholders. Further, if the Board subsequently determines not to proceed with the currently anticipated Stock Split, the Amendment, even if it is approved by stockholders, will not be filed with the Secretary of State of the State of Delaware.

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PROPOSAL 4 – APPROVAL OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION

The Stock Split and its Effects.    The trading price of our common stock has risen significantly over the past several years. Our Board has evaluated the data demonstrating that our employees have a high level of interest and ownership in Edwards’ common stock as well as the feedback from those employees that a higher stock price can limit those who desire to invest in Edwards’ stock, especially those who are earlier in their careers. The Board also reviewed the effect of the trading price of our common stock, reviewing our history of stock splits and other relevant factors. The closing market price of our common stock on March 13, 2020, was $185.50 as reported on the NYSE. The Board believes in the Company’s long-term strategy and the continued growth of the Company and, in consideration of the factors above, the Board believes that effecting the Stock Split would be in the best interests of the Company and its stockholders.

Following the Payment Date of the Stock Dividend, each stockholder will own three times the number of shares of our common stock such stockholder held prior to the Stock Split. The Stock Split will affect all of our stockholders uniformly and will not affect any stockholder’s percentage ownership of our common stock. Proportionate voting rights and other rights and preferences of the holders of our common stock will not be affected by the Stock Split. The number of stockholders of record will also not be affected by the Stock Split.

The Stock Split will also result in a proportionate increase in the number of shares of common stock available for issuance under our equity compensation plans due to the adjustment provisions set forth in such plans. With respect to outstanding stock options to purchase shares of our common stock, the Stock Split would result in an increase in the number of shares subject to such outstanding stock options proportional to thethree-for-one ratio of the Stock Split and would also result in a proportionate decrease in the exercise price of such outstanding stock options (rounded up to the nearest whole cent) due to the adjustment provisions set forth in such options. With respect to other outstanding awards to acquire shares of our common stock, the Stock Split would result in an increase in the number of shares subject to such outstanding awards proportional to thethree-for-one ratio of the Stock Split due to the adjustment provisions set forth in such awards.

Accounting Consequences of Stock Split.    The par value per share of our common stock will remain unchanged at $1.00 per share after the Stock Split. As a result, on the Payment Date of the Stock Dividend, the stated capital on our consolidated balance sheet attributable to common stock will be increased proportionately and the additionalpaid-in-capital account will be decreased by the amount by which the stated capital is increased. Per share net income or loss will be decreased for current and prior periods because there will be additional shares of our common stock outstanding. We do not anticipate that any other accounting consequences, including changes to the amount of stock-based compensation expense to be recognized in any period, will arise as a result of the Stock Split.

Other Purposes and Effects of the Amendment.    As a general matter, the additional proportional increase in our authorized but unissued shares of common stock as a result of the Amendment would enable the Board to issue additional shares of common stock in its discretion from time to time without further action or approval of our stockholders, subject to and as limited by any rules or listing requirements of the NYSE or of any other applicable rules or regulations. However, the proportion of such additional shares of authorized common stock in relation to our issued and outstanding common stock will be the same both before and after the Stock Split. The corporate purposes for which our Board may issue additional shares of common stock include future acquisitions, capital-raising or financing transactions involving common stock, convertible securities or other equity securities, stock splits, stock dividends and current or future equity compensation plans. Our Board believes the proportionate increase in our authorized but unissued common stock is appropriate to maintain the flexibility currently available to the Company to issue shares in the future without the potential expense or delay incident to obtaining stockholder approval for any particular issuance. Except for shares of common stock reserved for grant(s) pursuant to our equity compensation plans and shares of common stock expected to be distributed to stockholders to effect the planned Stock Split, the Company does not currently have any other plans, agreements, commitments or understandings with respect to the issuance of the additional shares (or the currently authorized but unissued shares) of common stock, nor does the Company currently have any plans, arrangements, commitments or understandings with respect to the issuance of any shares of preferred stock.

The Stock Split will affect all of our stockholders uniformly and will not affect any stockholder’s percentage ownership of our common stock. However, other future issuances of shares of common stock or securities convertible into shares of common stock could, under certain circumstances, be construed as having an anti-takeover effect (for example, by diluting the stock ownership of a person seeking to effect a change in the composition of the Board or contemplating a tender offer or other transaction for the combination of our Company with another company). While we do not intend

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PROPOSAL 4 – APPROVAL OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION

the Amendment to deter or to prevent a change in control, we could use the additional shares of common stock (as we could use the currently authorized but unissued shares of our common stock) to hinder persons seeking to acquire or take control of our Company or to dilute voting power of the outstanding shares. We are not aware of any efforts to obtain control of our Company and we have not made this Proposal 4 in response to any such efforts.

Rights of Additional Authorized Shares of Common Stock

Any additional authorized shares of common stock, if and when issued, would be part of our existing class of common stock, and would have the same rights and privileges as the currently outstanding shares of common stock. The holders of common stock are not entitled to preemptive rights or cumulative voting.

Procedure for Implementing Stock Split

Subject to and contingent upon stockholder adoption and approval and the effectiveness of the Amendment, our Board intends to approve the Stock Split, and establish the Record Date and Payment Date for the Stock Dividend. Accordingly, the Board anticipates that the Stock Dividend will be payable on May 29, 2020 to the record holders of each share of our common stock as of the close of business on May 18, 2020. All shares issued as a result of the proposed Stock Split will be uncertificated, issued in book-entry form, either through the Direct Registration System or as a credit to an existing account of a stockholder of record. Consequently, certificates representing shares of common stock currently issued will remain valid for the number of shares shown and should be retained by each stockholder and should not be returned to the Company or to its transfer agent, as it will not be necessary to submit outstanding certificates for exchange. You will receive information about the additional shares to which you are entitled on or around the payment date. PLEASE DO NOT DESTROY OR RETURN YOUR EXISTING STOCK CERTIFICATES. CERTIFICATES REPRESENTING SHARES OF COMMON STOCK ISSUED PRIOR TO THE STOCK SPLIT WILL CONTINUE TO REPRESENT THE SAME NUMBER OF SHARES OF COMMON STOCK AFTER THE EFFECTIVE DATE OF THE STOCK SPLIT.

Effective Date of Proposed Amendment

If the Amendment is adopted by the required vote of stockholders, such Amendment will become effective on the date the Amendment is filed with the Secretary of State of the State of Delaware. If the Amendment is adopted and approved and becomes effective, we anticipate the Stock Dividend will be paid on May 29, 2020 to the record holders of each share of our common stock as of the close of business on the Record Date.

Reservation of Right to Abandon Amendment and Stock Split.

Our Board reserves the right to not proceed with the Amendment and to abandon the Amendment without further action by our stockholders at any time before the effectiveness of the filing of the Amendment with the Secretary of State of the State of Delaware, even if the Amendment is adopted and approved by our stockholders at the Annual Meeting. By voting in favor of the Amendment, you are expressly also authorizing our Board to delay, not proceed with, and abandon, the proposed Amendment if it should so decide, in its sole discretion, that such action is in the best interests of our Company and its stockholders. If the Board elects to abandon the Amendment, the number of authorized shares of common stock will remain 350 million and the Stock Dividend will not be paid and the Stock Split will not be effected.

THE BOARD RECOMMENDS A VOTE“FOR” THE ADOPTION AND APPROVAL OF THE AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FOR THE PURPOSE OF EFFECTING A THREE-FOR-ONE STOCK SPLIT.

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AUDIT MATTERS

PROPOSAL 53 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

THE BOARD RECOMMENDS A VOTE“FOR” THE RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

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THE BOARD RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

The Audit Committee has appointed PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm for the fiscal year ending December 31, 2020.2022. Representatives of PwC are expected to attend the Annual Meeting and will be available to respond to appropriate questions and to make a statement if they so desire. In addition to the annual audit services, PwC performs certainnon-audit services for us. Although we are not required to seek stockholder approval of the appointment of PwC, the Board believes that it is consistent with good corporate governance practices to ask stockholders to ratify the appointment. If the appointment is not ratified, the Audit Committee will explore the reasons for stockholder rejection and will reconsider the appointment. In addition, even if stockholders ratify the Audit Committee’s appointment of PwC, the Audit Committee, in its discretion, may still appoint a different independent registered public accounting firm if it believes that such a change would be in the best interests of the Company and our stockholders.

PwC has been our independent registered public accounting firm since 1999, serving in that capacity and reporting on our consolidated financial statements and the effectiveness of our internal controls over financial reporting continuously throughsince that time, including for the 20192021 fiscal year.

In considering whether to reappoint PwC, the Audit Committee evaluated PwC’s performance and considered factors, including, but not limited to, the following factors:following:

 

PwC’s qualifications and global capabilities;capabilities, including its experience in the medical technology industry;

 

the results of the Company’s annual assessment of PwC’s performance;

 

PwC’s and the audit engagement team’s independence, including whether the provision of non-audit services provided by PwC, individually and in aggregate, to the Company during 2021 was compatible with their independence;

 

the quality, timeliness, and candor of PwC’s communications with the Audit Committee and management;

 

the appropriateness of PwC’s fees;

 

PwC’s tenure as our independent registered public accounting firm;

 

the controls and processes in place that help ensure PwC’s continued independence;

 

any Public Company Accounting Oversight Board’s firm inspection reports; and

 

whether the provisionpotential impact ofnon-audit services provided by PwC to the Company during 2019 was compatible with their independence. appointing a new independent registered public accounting firm.

The Audit Committee maintains oversight over PwC by holding regular private sessions with PwC, performing annual evaluations, and being directly involved in the selection of new lead audit partners pursuant to SEC rules requiring that a new lead audit partner be designated in the normal course every five years to bring a fresh perspective to the audit engagement. A new partner was so designated in advance of the 2020 audit.

 

THE BOARD RECOMMENDS A VOTE“FOR” THE RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

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THE BOARD RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

 

 

 
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Fees Paid to Principal Accountants.    During 20192021 and 2018,2020, PwC was retained to provide services in the following categories and amounts (in millions):

 

  2019  2018  2021  2020

Audit Fees

   $3.5   $3.4   $3.8   $3.4

Audit-Related Fees

    0.3    0.3    0.1    0.2

Tax Fees

    1.5    1.3    1.8    1.8

All Other Fees

    (1)    (1)    (1)    (1)

 

(1)

In 2019both 2021 and 2018,2020, there were $15,000 and $46,000, respectively, in “All Other Fees”.

Audit Fees.    Amounts paid under “Audit Fees” include aggregate fees for the audit of our consolidated financial statements and the effectiveness of internal controls over financial reporting, the three quarterly reviews of the Company’s reports onForm 10-Q and other SEC filings, and services in connection with statutory and regulatory filings.

Audit-Related Fees.    Amounts paid under “Audit-Related Fees” were for miscellaneous audit and consulting services.

Tax Fees.    Amounts paid under “Tax Fees” in 2019both 2021 and 2020 were for tax compliance ($0.9 million) and other tax services ($0.6 million), and in 2018 were for tax compliance ($0.71.2 million) and other tax services ($0.6 million).

All Other Fees.    There were $15,000 and $46,000 in “All Other Fees” in 2019both 2021 and 2018, respectively.2020.

Pre-Approval of Services.    The Audit Committee is required topre-approve the audit andnon-audit services performed by our independent registered public accounting firm in order to assure that the provision of such services does not impair the auditor’s independence. Any proposed services exceedingpre-approved cost levels require specificpre-approval by the Audit Committee.

The Audit Committee at least annually reviews and provides generalpre-approval for the services that may be provided by the independent registered public accounting firm; the term of the generalpre-approval is 12 months from the date of approval, unless the Audit Committee specifically provides for a different period. If the Audit Committee has not provided generalpre-approval, then the type of service requires specificpre-approval by the Audit Committee.

The Audit Committee does not delegate to management its responsibilities topre-approve services performed by the independent registered public accounting firm, but may delegatepre-approval authority to one or more of its members. The member or members to whom such authority is delegated must report anypre-approval decisions to the Audit Committee at its next scheduled meeting. The annual audit services, engagement terms, and fees are subject to the specificpre-approval of the Audit Committee. One hundred percent (100%) of audit andnon-audit services performed by PwC in 20192021 and 20182020 were approved by the Audit Committee.

AUDIT COMMITTEE REPORT

The Audit Committee comprises the threefour directors named below, each of whom meets the enhanced independence standards for Audit Committee members as set forth in applicable rules of the NYSE and the SEC. The Board has designated each member of the Audit Committee as an “audit committee financial expert” under applicable rules of SEC. Additional information regarding the Audit Committee, its responsibilities and meetings are described above in the section entitled “Board of Directors Matters – Matters—Corporate Governance Policies and Practices – Practices—Committees of the Board.”

Management is responsible for our internal controls, financial reporting process and compliance with laws, regulations and ethical business practices. Our independent registered public accounting firm, PwC, is responsible for performing an independent audit of our annual consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States of America, as well as expressing an opinion on the effectiveness of our internal control over financial reporting. The Audit Committee’s responsibility is to monitor and oversee these processes.

 

 

 
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In fulfilling its oversight responsibilities, the Audit Committee has reviewed and discussed with management the Company’s consolidated financial statements as of and for the fiscal year ended December 31, 2019.2021. The Audit Committee has discussed with the Company’s independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board.Board and the SEC. The Audit Committee has received and reviewed the written disclosures and the letter from the independent registered public accounting firm under applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm its independence.

Based on the reviews and discussions referred to above, and relying thereon, the Audit Committee recommended to the Board that the financial statements referred to above be included in the Company’s 2021 Annual Report onForm 10-K for filing with the SEC.

The Audit Committee:

Leslie S. Heisz (Chair)

Kieran T. Gallahue

Wesley W. von SchackSteven R. Loranger

Ramona Sequeira

This report shall not be deemed soliciting material or to be filed with the SEC, or incorporated by reference in any document so filed, whether made before or after the date hereof, except to the extent we specifically request that it be treated as soliciting material or it is specifically incorporated by reference therein.

 

 

 
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OTHER MATTERS AND BUSINESS

PROPOSAL 64 – STOCKHOLDER PROPOSAL REGARDING ACTION BY WRITTEN CONSENTTO REDUCE THE SHARE OWNERSHIP THRESHOLD TO CALL A SPECIAL MEETING

 

THE BOARD RECOMMENDS A VOTE“AGAINST” THIS PROPOSAL REGARDING ACTION BY WRITTEN CONSENT.

THE BOARD RECOMMENDS A VOTE “AGAINST” THIS PROPOSAL TO REDUCE THE SHARE OWNERSHIP THRESHOLD TO CALL A SPECIAL MEETING.

 

A stockholder has submitted the proposal and supporting statement set forth below in accordance with the rules of the SEC.below.

The Board and the Company disclaim any responsibility for its content. We will furnish, orally or in writing, as requested, the name, address and claimed share ownership of the stockholder that submitted this proposal promptly upon oral or written request to the Company’s Corporate Secretary.

Proposal 64Adopt a NewSpecial Shareholder Right – Written ConsentMeeting Improvement

Shareholders request thatask our board of directorsto take the steps necessary to permit written consent by shareholders entitledamend the appropriate company governing documents to castgive the minimum numberowners of votes that would be necessarya combined 10% of our outstanding common stock the power to authorizecall a special shareholder meeting.

One of the action at a meeting at which all shareholders entitled to vote thereon were present and voting. This written consentmain purposes of this proposal is to give shareholders the right to formally participate in calling for a special shareholder meeting regardless of their length of stock ownership to the fullest powerextent possible.

To make up for our complete lack of a right to act by written consent consistent with applicable law. This includeswe need the right of 10% of shares to call for a special shareholder ability to initiate any appropriate topic for written consent.

meeting. Hundreds of major companies enable shareholder actionprovide shareholders with the right to act by written consent. This proposal topic won majority shareholder support at 13 large

Certain companies, in a single year. This included 67%-support at both Allstate and Sprint. This proposal topic also won 63%-support at Cigna Corp. (CI) in 2019. This proposal topic would have received higher votes that 63% to 67% at these companies if more shareholders had access to independent proxy voting advice.

Edwards Lifesciences shareholders already gave 51%-support to the written consent topic in 2015. This 51% vote can means close to 60% support from shareholders who had access to independent proxy voting advice.

This 51%-vote apparently triggered a sort of engagement redirection lead by Wesley von Schack, presiding director. After Mr. von Schack did his sort of engagement redirection it was somehow determined that the 51% of Edwards Lifesciences shareholders who voteddo not provide for written consent purportedly really wanted to tinker with the special meeting provisions.

Mr. von Schack is apparently a lesson in how management “engagement” can be used to negatively redirect the purported meaning of a shareholder vote.

The right for shareholders to act by written consent, is gaining acceptance ashave a more reasonable stock ownership threshold to call for a special shareholder meeting. Southwest Airlines is an example of a company that does not provide for shareholder written consent and yet provides for 10% of shares to call for a special shareholder meeting.

Special meetings allow shareholders to vote on important right thanmatters, such as electing new directors with special expertise or independence that may be lacking in our current or future directors as was the case with the 3 new Exxon directors supported by the Engine No. 1 hedge fund at the 2021 Exxon annual meeting.

Our management is best served by providing the means for 10% of shareholders, who have special expertise, to bring emerging opportunities or solutions to problems to the attention of management and all shareholders.

It is important to remember that management can abruptly discontinue any shareholder engagement program if it fails to give mostly cheerleading support to management. There is no rule that prevents dishonest practices in shareholder engagement like asking shareholder input on a topic after introducing the topic with overwhelming negative comments.

Management claims it has good shareholder engagement. Then management contradicts this by spending extra company money to drill shareholders on how to vote according to the management party line when there is even the slightest chance shareholders will vote against a management recommendation.

Our bylaws give absolutely no assurance that any engagement with shareholders will be undertaken. A more reasonable shareholder right to call for a special meeting. This seems to be the conclusion of the Intel Corporation (INTC) shareholder vote at the 2019 Intel annual meeting.

The directors at Intel apparently thought they could divert shareholder attention away from written consent by making it less difficult formeeting will help ensure that management engages with shareholders to callin good faith because shareholders will have a special meeting. However Intel shareholders responded with greater support for written consent in 2019 compared to 2018.

Written consent support at Flowserve Corporation increased from 43% to 51% inone-year. Written consent also received 45%-support at The Bank of New York Mellon Corporation (BK) in 2018 and BK said it adopted written consent in 2019. And a proxy advisor has set certain minimum requirements for a company adopting written consent in case management is tempted to adopt a “fig leaf” version of written consent.viable Plan B as an alternative.

Please vote yes:

Adopt a NewSpecial Shareholder RightMeeting ImprovementWritten Consent — Proposal 64

 

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The Board has carefully considered the above stockholder proposal and believes that it is unnecessary and not in the best interests of stockholders. The Board recommends that stockholders vote “AGAINST” this proposal for the following reasons which are further discussed below:

The same stockholder proposal was submitted by the same stockholder in 2018, and that proposal received support from only 23.7% of the votes cast, confirming what we heard in the course of our active stockholder engagement efforts—most stockholders support the Board’s position on this proposal.

The stockholder proposal would deprive all stockholders of the right to be consulted on key matters impacting their investment.

The Board expanded the right of stockholders to call special meetings in direct response to feedback received through extensive stockholder outreach led by our Lead Independent Director in 2015-2016 on this exact topic. In those conversations, stockholders overwhelmingly indicated that expansion of our existing special meeting right was superior to implementing a right for stockholders to act by written consent.

The existing right to call a special meeting is preferable and is set at an appropriate threshold.

We have a strong corporate governance structure and record of accountability.

The same stockholder proposal was submitted by the same stockholder in 2018, and that proposal received support from only 23.7% of the votes cast, confirming what we heard in the course of our active stockholder engagement efforts—most stockholders support the Board’s position on this proposal.

Ongoing active stockholder engagement efforts, and a vote on the same proposal in 2018, further affirm that most stockholders are comfortable with our existing practices. The Company Board and management have remained committed to engaging with stockholders. Among other engagement efforts, our Corporate Secretary and Investor Relations teams, together with other members of management and, from time to time, our Lead Independent Director, engage stockholders to solicit their views and feedback on corporate governance and other related matters and to discuss the issues that matter most to our stockholders. For the past several years, we have reached out to over 50% of our outstanding stock annually to discuss areas of interest. Stockholder feedback is shared with the Board and its committees to directly inform decisions.

In these engagement discussions, we received feedback from stockholders on a range of topics including corporate governance.Although stockholders possess a variety of views, the feedback we have received affirms that most of our stockholders are supportive of the Company’s existing stockholder rights, including our special meeting threshold of 15%, and recognize that a written consent right would deprive stockholders of the right to be consulted on key matters impacting their investment.

The stockholder proposal would deprive all stockholders of the right to be consulted on key matters impacting their investment.

Our governing documents require that actions on which stockholders will be asked to vote be considered at a meeting of stockholders. This requirement assures that all stockholders receive advance notice of the proposed action, have an opportunity to discuss it, and consider all points of view. In contrast, the proposal would allow critical actions to be approved without notice to other stockholders and without an opportunity for discussion at a stockholder meeting. This proposal, if adopted, could disenfranchise stockholders and may deprive them of these rights, while enabling other short-term or special interest investors with no fiduciary duties to stockholders or to the Company to approve proposals that are not in the best interest of the Company and all stockholders. Accordingly, the Board believes that the written consent process is not appropriate for a widely held public company. This belief has been affirmed by stockholders through our robust stockholder outreach efforts over the past few years, including extensive outreach conducted during 2015-2016 on this topic, which we discuss in more detail below.

The Board expanded the right of stockholders to call special meetings in direct response to feedback received through extensive stockholder outreach led by our Lead Independent Director in 2015-2016 on this exact topic. In those conversations, stockholders overwhelmingly indicated that expansion of our existing special meeting right was superior to implementing a right for stockholders to act by written consent.

The above stockholder proposal was submitted by the same stockholder in 2014 and then again in 2015. Following the vote on this proposal in 2015 (the “2015 proposal”), which was approved by 50.8% of the votes cast (39% of the shares

 

 

 
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then outstanding), we, including Mr. von Schack,The Board has carefully considered the Board’s Lead Independent Director (then-Presiding Director), engagedabove stockholder proposal and believes it is not in substantial stockholder outreach in order to be able to inform the Boardbest interests of our stockholders’ current views onstockholders and our Company and is unnecessary. The Board recommends that stockholders vote “AGAINST” this matter. The feedback provided by stockholders during these meetings was provided toproposal for the full Board for consideration.

2015 Outreach.    During 2015, our management contacted 26 of our largest stockholders representing approximately 54% of our outstanding shares to, among other things, seek their feedback on the 2015 proposal that was narrowly approved at the 2015 Annual Meeting. This outreach resulted in conversations with 13 stockholders representing approximately 43% of our outstanding shares. The engagement included extensive discussions of the positive and negative aspects of the special meeting versus the written consent rights, both generally and specifically as it relates to the Company.

Overall, stockholders were pleased to be consulted and, among other things, voiced two consistent themes:following reasons, which are further discussed below:

 

Our stockholders strongly favoredIn response to stockholder feedback, the Board already has made special meeting rights more accessible by reducing the ownership threshold to call a special meeting from 25% to 15%.

We believe a 10% special meeting threshold is extremely low in light of our historical and current ownership concentration, and the existing right to call a special meeting overmore appropriately protects stockholder interests and the rightlong-term value of the Company.

We have a strong corporate governance structure and record of accountability.

In response to actstockholder feedback, the Board already has made special meeting rights more accessible by written consent. Many of these stockholders said they preferredreducing the rightownership threshold to call a special meeting over the right to act by written consent because while both provide stockholders an avenue to be heard outside the annual meeting cycle, special meetings provide additional protections for all stockholders and avoid the logistical issues that some stockholders have experienced when presented with a consent solicitation.

Regardless of their views on the right to act by written consent, stockholders believed it was important that the Board be responsive to the vote on the 2015 proposal.

Based on this feedback, the Board evaluated various alternatives. After careful deliberation and consideration of the Company’s specific circumstances, including its history of having a concentrated stockholder base, the Board determined that lowering the threshold for the special meeting right from 25% to 15% likely was.

The Board believes that it is important for stockholders to have the most responsive and appropriate course of action. Before doing so, however, the Board wantedability to understand how our stockholders would view that action and whether they would consider it superior to the adoption of a right to act by written consent.

2016 Outreach.    To obtain feedback specific to this proposed action, in early 2016, we contacted 20call special shareholder meetings. We engaged extensively with stockholders representing approximately 51%over 50% of our outstanding shares and spoke with 18 stockholders representing just over 50% of our shares, including many stockholders who had provided their views during our initial outreach. Mr. von Schack led conversations with five of our top six stockholders. The remaining calls were conducted by the management team that participated on the calls with Mr. von Schack, which included the CFO, the Corporate Secretary and the Vice President of Investor Relations.

The results of these conversations were as follows:

All of these stockholders approved of the Board’s engagement process and efforts to incorporate stockholders’ perspectives into its decision-making process.

All but one of these stockholders said they considered the Board lowering the special meeting thresholdcommon stock in lieu of adopting a written consent right to be responsive to the vote on the 2015 proposal.

During our 2016 outreach, the one stockholder who said that it had voted for the 2015 proposal and would still prefer to have bothdiscuss special meeting and written consent rights indicated that it appreciated the Board’s thoughtful process to address the feedback received during the 2015 outreach conversations. This stockholder believed the Board was responsive to the vote on the 2015 proposal.

In lightrights. As a result of the feedback we received, during the outreach, indicating that loweringBoard reduced the threshold required to call a special meeting is superior to the adoption of a right to act by written consent and also having considered the factors listed below, in February 2016, the Board amended our Bylaws to lower the threshold for the special meeting right from 25% to 15% of our outstanding shares of common stock, which remains theour current threshold. In our ongoing, active engagement with stockholders since that time, the majority of stockholders have indicated support for the Company’s current special meeting threshold of 15% because this ownership percentage would give stockholders the right to call a special meeting but does not increase the risk that a special meeting can be called by a few stockholders focused on narrow or short-term interests or agendas that are not in the best interests of the Company and its stockholders.

TheWe believe a 10% special meeting threshold is extremely low in light of our historical and current ownership concentration, and the existing right to call a special meeting is preferablemore appropriately protects stockholder interests and is set at an appropriate threshold.the long-term value of the Company.

Our existingThe Company has a history of significant ownership concentration among our top stockholders. Over the past decade, the Company has always had at least one stockholder with ownership at or above approximately 8%, and approximately two-thirds of the time, the Company has had at least one stockholder with ownership at or above 10%. Four different institutions have owned at least 10% of the Company’s stock at some point during that same period. Therefore, we believe that reducing the current ownership threshold of 15% to 10% would be an extreme measure that could have the unintended consequence of wasting corporate resources to address narrowly supported interests.

The Board believes that having a special meeting right at 15% protects shareholder interests as well as the long-term value of the Company. It strikes the right balance for the Company, as it is a low enough threshold to provide a meaningful right for stockholders to call special meetings, allowsyet high enough to prevent a single stockholder (or small group of stockholders) from furthering a narrow agenda. Because stockholders do not have a fiduciary duty to the Company or to the Company’s other stockholders, lowering the special meeting threshold could give a single stockholder (or small group of stockholders) the ability to distract management and waste resources to advance an agenda that is not in the best interests of the Company and the majority of stockholders.

In addition, our current 15% ownership threshold to call a special meeting provides an important safeguard for the Company given that holding special meetings is very costly and time-consuming due to legal costs associated with preparing required proxy materials, the substantial printing and mailing costs, the diversion of the Board and senior management’s time and attention and the expenditure of other Company resources required to prepare for and conduct the special meeting. Because special meetings require a considerable investment in Company resources, they should be limited to circumstances where a reasonable number of stockholders believe a matter is sufficiently urgent or extraordinary that it must be addressed between annual meetings. We believe our current ownership threshold of 15% enhances our stockholders’ ability to act on important matters while also protecting the Company and other stockholders by allowing only a meaningful group of stockholders to propose actions without waiting for the Company’s next Annual Meeting. A special meeting set at an appropriate threshold is preferable to action by written consent because a meeting allows all stockholders to participate in, and discuss the merits of, a proposed action, andexercise this right.

 

 

 
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allowsFurthermore, the Board to make a thoughtful recommendation about the action. As a result, a strong stockholder special meeting right is better suited to a culture of transparency and good corporate governance.

The Board continues to believe that having a special meeting right atCompany’s 15% strikes the right balance for the Company, as it is a low enough threshold to provideprovides a meaningful and more advantageous shareholder right for stockholders to act between annual meetings yet high enough to prevent a single stockholder (or small group of stockholders) from acting without broad stockholder support. The Company has a history of having significant concentration amongst its top stockholders. Over the past decade, the Company has always had at least one stockholder with ownership at or above approximately 8%, and approximatelytwo-thirds of the time, the Company has had at least one stockholder with ownership above 10%. Four different institutions have owned at least 10% of the Company’s stock at some point during that same period.

In addition, atthan most large publicly traded companies. At the present time, only 18%12% of S&P 500 companies maintain a special meeting right with a threshold at or below 15%, providing additional confidence to the Board that a special meeting right with a. The most common threshold of 15%for S&P 500 companies is in line with the Company’s strong corporate governance structures.25% percent.

We have a strong corporate governance structure and record of accountability.

The Board believes this proposal should be assessed in the context of the Company’s overall corporate governance, including other stockholder rights available under our Bylaws. Our current corporate governance structure reflects a significant and ongoing commitment to strong and effective governance practices and a willingness to be responsive and accountable to our stockholders. We regularly assess and refine our corporate governance policies and procedures to take into account evolving best practices and to address feedback provided by our stockholders during our regular engagement with them. The Board firmly believes that the company’sCompany’s strong corporate governance practices are a key enabler of the exceptional and sustainable value that the Company has created for stockholders.

Our current special meeting right, which we adopted in 2014 and expanded in 2016, does not limit agenda items and contains typical notice and record date requirements. In addition to adopting aour special meeting right, in 2014, and expanding that right in 2016, we have implemented numerous other corporate governance measures to (1) ensure that the Board remains accountable to stockholders, (2) provide our stockholders with a meaningful voice in the nomination and election of directors, (3) ensure the ability to communicate with directors, and (4) promote the consideration of stockholder views. For example:

Stockholder Engagement – Stockholders can communicate directly with the Board and/or individual directors, and we regularly engage with our stockholders to solicit views and gather valuable feedback on important issues, such as our long-term strategy, governance practices, executive compensation program, corporate responsibility, sustainability, our stockholders’ rights and other topics suggested by our stockholders. For the past several years, we have reached out to stockholders owning over 50% of our outstanding shares of common stock at least twice a year to discuss areas of interest, with feedback reported back to the Board to directly inform Board decisions. Importantly, stockholders have not raised in these conversations concerns over our current ownership threshold to call a special meeting.

 

Annual Election of Directors and Majority Voting in Director Elections – All of our directors stand forre-election at each annual meeting.meeting of stockholders. Directors must be elected by a majority vote in an uncontested election, and a director who fails to receive the required number of votes forre-election must tender his or her written resignation for consideration by the Board.

 

Substantial Majority of the Board is Independent – The Board is composed entirely of independent directors, other than the Chief Executive Officer.

 

Lead Independent Director – We have a Lead Independent Director with defined and significant responsibilities. Based on feedback from stockholders, in 2019, the responsibilities of the Presiding Director position were further expanded and the position was renamed Lead Independent Director. Our Lead Independent Director provides strong independent leadership of ourthe Board by, among other things, presiding at executive sessions in connection with every Board meeting and approving Board meeting agendas and meeting schedules.

 

Board Refreshment – The Board has added fiveseven new directors over the past sixeight years. These additions are the result of a thoughtful process that has involved the participation of all directors and occasionally an executive search firm to assist in evaluating candidates. This process is designed to ensure that ourthe Board benefits from fresh perspectives, diversity of thought and a collective skill set that is aligned with the needs of our business.

 

Proxy Access – In 2016, the Board amended our Bylaws to implement proxy access. Under our Bylaws, a stockholder or a group of up to 30 stockholders owning at least 3% of our outstanding shares of common stock continuously for at least three years may nominate and include in our proxy materials up to the greater of two director candidates or 20% of the Board. This right provides an avenue for stockholder action that is incremental to our special meeting right and further reduces the need for stockholders to act by written consent.

 

Eliminating Supermajority Voting – In 2013, in response to anon-binding stockholder proposal at the 2012 Annual Meeting of Stockholders, the Board recommended, and stockholders approved, amendments to our Certificate of Incorporation to eliminate the supermajority voting provision. The Board subsequently eliminated the supermajority voting provision from our Bylaws as well.

No Stockholder Rights Plan – We do not have a stockholder rights plan, or so-called “poison pill.”

 

 

 
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No Stockholder Rights Plan – We do not have a stockholder rights plan, orso-called “poison pill.”

Stockholder Engagement – Stockholders can communicate directly with the Board and/or individual directors, and we regularly engage with our investors to solicit views on important issues such as our governance practices, executive compensation program, and our stockholders’ rights. For the past several years, we have reached out to over 50% of our outstanding stock annually to discuss areas of interest, with feedback reported back to the Board to directly inform Board decisions.

Consistent with its current practice, the Board will continue to engage with itsour stockholders on corporate governance measures and evaluate appropriate changes to our governance structure, policies, and practices that will serve the best interests of the Company and our stockholders.

In summary, in light of the existing and carefully considered ownership threshold to call a special meeting, right, as well as the Board’s continuing commitment to ensuring effective corporate governance, including through a robust stockholder engagement program, the Board believes that this proposal is unnecessary and not in the best interests of our Company and our stockholders.

 

THE BOARD RECOMMENDS A VOTE“AGAINST” THIS PROPOSAL REGARDING ACTION BY WRITTEN CONSENT.

THE BOARD RECOMMENDS A VOTE “AGAINST” THIS PROPOSAL TO REDUCE THE SHARE OWNERSHIP THRESHOLD TO CALL A SPECIAL MEETING.

 

 

 
7870 LOGO   Edwards Lifesciences Corporation   20202022 Proxy Statement 


OTHER MATTERS AND BUSINESS

 

Additional Information.    Our Bylaws, Corporate Governance Guidelines and charters of each of the Audit Committee and Compensation and Governance Committee are posted on our website atwww.edwards.com under “Investors—Corporate Governance.Governance & Sustainability—Governance—Governance Documents.” Our Global Business Practice Standards (applicable to all of the Company’s employees, executive officers and directors) are posted atwww.edwards.comunder “About Us—Corporate Responsibility.” In addition, our Sustainability Report is posted on our website atwww.edwards.com under “About Us—Corporate Responsibility.” References to our website throughout this Proxy Statement are provided for convenience only and the content on our website does not constitute a part of this Proxy Statement.

Delinquent Section 16(a) Reports.    To our knowledge, all reports that were required to be filed during 2019 by our executive officers, directors and beneficial owners of more than 10% of our common stock under Section 16 of the Exchange Act were filed on a timely basis, except for a Form 4 for Mr. Ullem relating to a special grant of RSUs that occurred on February 21, 2019.

Related Persons Transactions.    Under the Audit Committee charter, the Audit Committee is responsible for reviewing and approving or ratifying all transactions with related persons that are required to be disclosed pursuant to Item 404(a) ofRegulation S-K adopted by the SEC. Related persons include our executive officers and directors, nominees for directors, 5% or more beneficial owners of our common stock, and immediate family members of these persons. Transactions involving amounts paid by the Company or its subsidiaries in excess of $120,000 and in which the related person has a direct or indirect material interest are referred to as “related person transactions.” The Audit Committee will generally consider all relevant factors when determining whether to approve or ratify a related person transaction. The Audit Committee reviewed and approved the following related person transaction: Mr. Bobo’s son has been working for the Company, for a number of years, in a business unit not under Mr. Bobo’s direction. In 2019, his total compensation surpassed the $120,000 reporting threshold.

Indemnification of Directors and Officers.    Pursuant to our Certificate of Incorporation, we indemnify our directors and officers to the fullest extent permitted by law. We have also entered into indemnification agreements with each of our directors and executive officers that contractually commit us to provide this indemnification to him or her.

Deadline for Receipt of Stockholder Proposals and Director Nominations for the 20212023 Annual Meeting

Proposals for Inclusion in the Proxy Materials.    In order for a stockholder proposal to be eligible for inclusion in our proxy statement for the 20212023 annual meeting, the written proposal must be received by the Corporate Secretary of the Company at its principal executive offices at the address below no later than November 25, 202022, 2022 and must comply with the requirements of theRule 14a-8 under the Exchange Act.

Director Nominations for Inclusion in the Proxy Materials.    Under the Company’s proxy access right, a stockholder, or a group of up to 30 stockholders, owning at least 3% of our outstanding shares continuously for at least three years, is permitted to nominate up to the greater of two directors or 20% of our Board for inclusion in our proxy statement, provided that the stockholder(s) and the nominee(s) satisfy the requirements in our Bylaws. In order for a stockholder to nominate a director for election to our Board for inclusion in our proxy statement for the 20212023 annual meeting, written notice must be received by the Corporate Secretary of the Company at its principal executive offices at the address below no earlier than October 26, 202023, 2022 and no later than November 25, 2020.22, 2022. Other specifics regarding the content of the notice and certain other eligibility and procedural requirements, can be found in Section 10 of Article I of our Bylaws.

Proposals and Director Nominations Not Intended for Inclusion in the Proxy Materials.    In order for a stockholder to present a proposal or nominate a director for election to our Board at our 20212023 annual meeting, but not have such proposal or nomination included in the proxy statement for our 20212023 annual meeting, written notice of the proposal or director nomination(s) must be received by the Corporate Secretary of the Company at its principal executive offices at the address below no earlier than January 7, 20213, 2023 and no later than February 6, 2021.2, 2023. However, if the date of the 20212023 annual meeting is a date that is not within 25 days before or after May 7, 20213, 2023 (the anniversary date of the Annual Meeting), written notice must be received no later than the close of business on the 10th calendar day after the first to occur of the day on which notice of the 20212023 annual meeting is mailed or public disclosure of the date of the 20212023 annual meeting is made. Other specifics regarding the notice procedures, including the required content of the notice, can be found in Section 9 of Article I (with respect to stockholder proposals) and Section 2 of Article I (with respect to director nominations) of our Bylaws.

Our Bylaws require that a stockholder must provide certain information concerning the proposing person, the nominee and the proposal, as applicable. Nominations and proposals not meeting the requirements set forth in our Bylaws will not be entertained at the 2023 annual meeting. Stockholders should contact the Corporate Secretary of the Company in writing at One Edwards Way, Irvine, California 92614 to obtain additional information as to the proper form and content of stockholder nominations or proposals.

In addition, a stockholder who intends to solicit proxies in support of director nominees other than our Board’s nominees at the 2023 annual meeting must deliver written notice to the Company setting forth the information required by Rule

 

 

 
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OTHER MATTERS AND BUSINESS

 

Our Bylaws require that14a-19 under the Exchange Act no later than March 4, 2023. However, if the date of the 2022 annual meeting is a stockholderdate before April 3, 2023 or after June 2, 2023, written notice must provide certain information concerningbe received by the proposing person,later of 60 days prior to the nominee anddate of the proposal, as applicable. Nominations and proposals not2023 annual meeting or the 10th calendar day following the day on which public announcement of the date of the 2023 annual meeting of stockholders is first made. The notice requirement under Rule 14a-19 is in addition to the applicable notice requirements set forth inunder our Bylaws will not be entertained at the 2021 annual meeting. Stockholders should contact the Corporate Secretary of the Company in writing at One Edwards Way, Irvine, California 92614 to obtain additional information as to the proper form and content of stockholder nominations or proposals.described above.

Annual Report onForm 10-K.    The Company will furnish without charge to each person whose proxy is solicited, upon the written request of such person, a copy of the 2019our 2021 Annual Report as filed with the SEC, including the financial statements and financial statement schedules (upon request, exhibits thereto will be furnished subject to payment of a specified fee). Requests for copies of such report should be directed to: Edwards Lifesciences Corporation, Attention: Corporate Secretary, One Edwards Way, Irvine, California 92614.

Delivery of the Proxy Materials.    We have adopted a procedure called “householding,” which the SEC has approved. Under this procedure, stockholders of record who have the same address and last name and did not receive athe Notice or otherwise receive their Proxy Materials electronically will receive only one copy of the Proxy Materials unless we receive contrary instructions from one or more of such stockholders. Upon oral or written request, we will deliver promptly a separate copy of the Proxy Materials to a stockholder at a shared address to which a single copy of the Proxy Materials was delivered. If you are a stockholder of record at a shared address to which we delivered a single copy of the Proxy Materials and you desire to receive a separate copy of the Proxy Materials for the Annual Meeting or for our future meetings, or if you are a stockholder at a shared address to which we delivered multiple copies of the Proxy Materials and you desire to receive one copy in the future, please submit your request to Computershare at P.O. Box 30170, College Station, Texas 77842-3170,505000, Louisville, Kentucky 40233-5000, (800) 446-2617. If you are a beneficial stockholder, please contact your bank, broker or other nominee directly if you have questions, require additional copies of the Proxy Materials, wish to receive multiple reports by revoking your consent to householding or wish to request single copies of the Proxy Materials in the future.

By Order of the Board of Directors,

 

LOGO

Linda J. Park

Vice President, Associate General Counsel,

and Corporate Secretary

ALL STOCKHOLDERS ARE URGED TO SUBMIT THEIR PROXIES PROMPTLY.

 

 

 
8072 LOGO   Edwards Lifesciences Corporation   20202022 Proxy Statement 



 

APPENDIX A

EDWARDS LIFESCIENCES CORPORATION

Non-GAAP Financial Information

We report ourTo supplement the consolidated financial results prepared in accordance with Generally Accepted Accounting Principles (“GAAP”). We also, we usenon-GAAP historical financial measures. The Company usesManagement makes adjustments to the GAAP measures for items (both charges and gains) that (a) do not reflect our core operational activities, (b) are commonly adjusted within our industry to enhance comparability of our financial results with those of our peer group, or (c) are inconsistent in amount or frequency between periods (albeit such items are monitored and controlled with equal diligence relative to core operations). We use the term “adjusted sales” or “underlying growth rate”“underlying” when referring tonon-GAAP sales and sales growth information, which excludes foreigncurrency exchange fluctuations,rate fluctuations. We use the conversionterm “adjusted” to a consignment inventory system for surgical structural heart (“Surgical”), the positive impactalso exclude intellectual property litigation expenses, amortization of TAVR stocking sales in Germanyintangible assets, and the negative impact ofde-stocking, and includes the prior year sales results of a business acquired in the current year.fair value adjustments to contingent consideration liabilities arising from acquisitions.

Management usesnon-GAAP financial measures internally for strategic decision making, forecasting future results, and evaluating current performance. Thesenon-GAAP financial measures are used in addition to, and in conjunction with, results presented in accordance with GAAP and reflect an additional way of viewing aspects of the Company’sour operations by investors that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting the Company’sour business and facilitate comparability tohistoricalto historical periods.

Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other companies and should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. A reconciliation of thenon-GAAP historical financial measure used herein to the most comparable GAAP measure is provided in the table below.

Fluctuations in exchange rates impact the comparative results and sales growth rates of the Company’sour underlying business. Management believes that excluding the impact of foreign exchange rate fluctuations from its sales growth provides investors a more useful comparison to historical financial results. The impact of foreign exchange rate fluctuations has been detailed in the “Reconciliation of Sales” table below.

The items described below are adjustments to the GAAP financial results in the reconciliationreconciliations that follows:follow:

Surgical Consignment Conversion.    Intellectual Property Litigation Expenses, net—The Company incurred net intellectual property litigation expenses of $20.6 million and $37.5 million in 2021 and 2020, respectively.

Change in Fair Value of Contingent Consideration Liabilities—The Company recorded income of $124.1 million and expense of $13.6 million in 2021 and 2020, respectively, related to changes in the fair value of its contingent consideration liabilities arising from acquisitions.

Amortization of Intangible Assets—The Company recorded amortization expense related to developed technology and patents in the amount of $7.7 million and $5.4 million in 2021 and 2020, respectively.

Litigation SettlementIn 2018,2020, the Company recorded a sales return reserve of $82.5$367.9 million charge to settle certain patent litigation related to its conversion to a consignment inventory system for surgical heart valves.transcatheter mitral and tricuspid repair products.

TAVR Germany Stocking Sales.    In 2017, the Company recorded $61.8 million in net stocking sales to customers in Germany, as these customers elected to purchase additional inventory in anticipation of a potential supply interruption resulting from intellectual property litigation. In 2018, these customers consumed on a net basis $8.0 million of their stocking inventory.

RECONCILIATION OF SALES

(in millions, except percentage data)

          2018 Adjusted  

Sales (YTD)

 YTD
4Q 2019
 YTD
4Q 2018
 Change 

GAAP

Growth
Rate*

 

CASMED

Acquisition

 Surgical
Consignment
Conversion
 Germany
Stocking
 

FX

Impact

 YTD 4Q
2018
Adjusted
Sales
 

Underlying 

Growth

Rate*

Total

  $4,348.0  $3,722.8  $625.2   16.8%  $15.3  $82.5  $8.0  $(56.4)  $3,772.2   15.3%

*

Numbers may not calculate due to rounding.

 

 

 
  LOGO    Edwards Lifesciences Corporation   20202022 Proxy Statement  A-1 



APPENDIX A

 

Unaudited Reconciliation of GAAP to APPENDIX BNon-GAAP Financial Information

EDWARDS LIFESCIENCES CORPORATION(in millions, except per share and percentage data)

2020 Nonemployee Directors Stock Incentive Program

   2021  2020

 

GAAP

 

   

 

$

 

 

2.38

 

 

 

   

 

$

 

 

1.30

 

 

 

 

Non-GAAP adjustments:

 

      

 

Intellectual property litigation expenses, net

 

   

 

 

 

 

0.02

 

 

 

   

 

 

 

 

0.05

 

 

 

 

Change in fair value of contingent consideration liabilities

 

   

 

 

 

 

(0.19

 

 

)

 

   

 

 

 

 

0.02

 

 

 

 

Amortization of intangible assets

 

   

 

 

 

 

0.01

 

 

 

   

 

 

 

 

0.01

 

 

 

 

Litigation settlement

 

   

 

 

 

 

 

 

 

   

 

 

 

 

0.48

 

 

 

   

 

 

    

 

 

 

Adjusted

   $2.22   $1.86
   

 

 

    

 

 

 

 

Adjusted growth rate

 

   

 

 

 

 

19.4

 

 

%

 

   
             

Reconciliation of Sales

(in millions, except percentage data)

          2020 Adjusted             

Sales (YTD)

 Full Year
2021
 Full Year
2020
 Change 

GAAP

Growth
Rate*

 

FX

Impact

 Full Year
2020
Adjusted
Sales
 

  Underlying  

Growth

Rate*

Total

  $5,232.5  $4,386.3  $846.2   19.3%  $57.3  $4,443.6   17.8%

 

Article 1.*

Establishment, Objectives, and DurationNumbers may not calculate due to rounding.

 

1.1.

Establishment of the Program. Edwards Lifesciences Corporation, a Delaware corporation (hereinafter referred to as the “Company”), hereby adopts the 2020 Nonemployee Directors Stock Incentive Program (hereinafter referred to as the “Program”), as set forth in this document, effective as of February 20, 2020 (the “Effective Date”). The Program permits the grant of Nonqualified Stock Options, Stock Issuances, Restricted Stock, Restricted Stock Units and Stock Appreciation Rights.

1.2.

Objectives of the Program. The objectives of the Program are to optimize the profitability and growth of the Company through long-term incentives which are consistent with the Company’s goals and which link the personal interests of Participants to those of the Company’s stockholders. The Program is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of Participants who make significant contributions to the Company’s success and to allow Participants to share in the success of the Company.

1.3.

Duration of the Program. The Program shall commence on the Effective Date, as described in Section 1.1 hereof, and shall remain in effect, subject to the right of the Board to amend or terminate the Program at any time pursuant to Article 16 hereof, until all Shares subject to it shall have been purchased or acquired according to the Program’s provisions.

Article 2.

Definitions

Whenever used in the Program, the following terms shall have the meanings set forth below, and when the meaning is intended, the initial letter of the word shall be capitalized:

2.1.

Annual Retainer means the fixed annual fee of a Nonemployee Director in effect on the first day of the year in which such Annual Retainer is payable for services to be rendered as a Nonemployee Director of the Company. The Annual Retainer does not include meeting or chairmanship fees.

2.2.

Award means, individually or collectively, a grant under this Program of Nonqualified Stock Options, Stock Issuances, Restricted Stock, Restricted Stock Units, or Stock Appreciation Rights.

2.3.

Award Agreement means an agreement entered into by the Company and each Participant setting forth the terms and provisions applicable to Awards granted under this Program.

2.4.

Board orBoard of Directors means the Board of Directors of the Company.

2.5.

Change in Control of the Company shall mean the occurrence of any one of the following events:

(a)

Any “Person”, as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, and any trustee or other fiduciary holding securities under an employee benefit plan of the Company or such proportionately owned corporation), is or becomes the “beneficial owner” (as defined in Rule13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company’s then outstanding securities; or

(b)

During any period of not more than twenty-four (24) months, individuals who at the beginning of such period constitute the Board of Directors of the Company, and any new director (other than a director designated by a Personwho has entered into an agreement with the Company to effect a transaction described in Sections 2.5(a), 2.5(c), or 2.5(d) of this Section 2.5) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at leasttwo-thirds (2/3) of the directors then still in office who either were directors at the beginning of

LOGOEdwards Lifesciences Corporation2020 Proxy StatementB-1


APPENDIX B

the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; or

(c)

The consummation of a merger or consolidation of the Company with any other entity, other than: (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than sixty percent (60%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person acquires more than thirty percent (30%) of the combined voting power of the Company’s then outstanding securities; or

(d)

The Company’s stockholders approve a plan of complete liquidation or dissolution of the Company, or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction having a similar effect.

2.6.

Code means the Internal Revenue Code of 1986, as amended from time to time.

2.7.

Committee means the Compensation and Governance Committee and any successor thereto or any other committee appointed by the Board to administer Awards to Participants, as specified in Article 3 herein. To the extent the Board determines it will administer this Program, references to the Committee shall mean the Board.

2.8.

Company means Edwards Lifesciences Corporation, a Delaware corporation, and any successor thereto as provided in Article 19 herein.

2.9.

“Disability” means the inability of the Participant to attend any meetings of the Board or a Committee thereof for a period oftwenty-six (26) weeks by reason of a medically determinable physical or mental impairment or the resignation or replacement of the Participant as a member of the Board by reason of such impairment.

2.10.

Effective Date shall have the meaning ascribed to such term in Section 1.1 hereof.

2.11.

Employee means an employee of the Company or of a Subsidiary of the Company.

2.12.

Exchange Act means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.

2.13.

Fair Market Value means the closing price of a Share on the New York Stock Exchange (or the principal exchange on which the Shares are then traded, if not the New York Stock Exchange) on the date as of which such value is being determined or, if there shall be no reported transactions in the Shares on such exchange for such date, on the next preceding date for which such transactions were reported on such exchange.

2.14.

Nonemployee Director means a member of the Company’s Board who is not an Employee of the Company.

2.15.

Nonqualified Stock Option orOption means an option to purchase Shares granted under Article 6 or Article 11 herein and which is not intended to meet the requirements of Code Section 422.

2.16.

Option Price means the price at which a Share may be purchased by a Participant pursuant to an Option.

2.17.

Participant means a Nonemployee Director who has been selected to receive an Award or who has outstanding an Award granted under the Program.

2.18.

Period of Restriction means the period during which the transfer of Shares of Restricted Stock is limited in some way (based on the passage of time, the achievement of performance goals, or upon the occurrence of other events as determined by the Committee, in its discretion), and the Shares are subject to a substantial risk of forfeiture, as provided in Article 8 herein.

2.19.

Restricted Stock means an Award granted to a Participant pursuant to Article 8 herein.

 

 

 
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APPENDIX B

2.20.

Restricted Stock Unit” means an Award granted to a Participant pursuant to Article 9 herein.

2.21.

Shares means the shares of common stock of the Company.

2.22.

Stock Appreciation Right means an Award granted to a Participant pursuant to Article 10 herein.

2.23.

Stock Issuance means an Award granted to a Participant pursuant to Article 7 herein.

2.24.

Subsidiary means any business, whether or not incorporated, in which the Company beneficially owns, directly or indirectly through another entity or entities, securities or interests representing more than fifty percent (50%) of the combined voting power of the voting securities or voting interests of such business.

Article 3.

Administration

3.1.

General. The Program shall be administered by the Compensation and Governance Committee of the Board, or by any other Committee appointed by the Board for such purpose (or the Board itself if the Board elects to administer this Program). Any Committee administering the Program shall be comprised entirely of directors. The members of the Committee shall be appointed in accordance with the bylaws of the Company and the charter of such Committee. Members of the Committee may participate in the Program. The Committee shall have the authority to delegate administrative duties to officers, Employees, or directors of the Company; provided that the Committee shall not be able to delegate its authority with respect to granting Awards.

3.2.

Authority of the Committee. Except as limited by law or by the Certificate of Incorporation or Bylaws of the Company, and subject to the provisions of the Program, the Committee shall have the authority to: (a) interpret the provisions of the Program, and prescribe, amend, and rescind rules and procedures relating to the Program; (b) grant Awards under the Program, in such forms and amounts and subject to such terms and conditions as it deems appropriate, including, without limitation, Awards which are made in combination with or in tandem with other Awards (whether or not contemporaneously granted) or compensation or in lieu of current or deferred compensation; (c) subject to Article 16, modify the terms of, cancel and reissue, or repurchase outstanding Awards; (d) prescribe the form of agreement, certificate or other instrument evidencing any Award under the Program; (e) correct any defect or omission and reconcile any inconsistency in the Program or in any Award hereunder; (f) design Awards to satisfy requirements to make such Awardstax-advantaged to Participants in any jurisdiction or for any other reason that the Company desires; and (g) make all other determinations and take all other actions as it deems necessary or desirable for the administration of the Program; provided, however, that no outstanding Option will be (i) amended to lower the exercise price, (ii) canceled, exchanged or surrendered in exchange for cash or other awards for the purpose of repricing the Option, or (iii) canceled, exchanged or surrendered for the purpose of reissuing such Option to a Participant at a lower exercise price (other than, in each case, pursuant to Section 5.4) without the approval of the Company’s stockholders. The determination of the Committee on matters within its authority shall be conclusive and binding on the Company and all other persons. The Committee shall comply with all applicable laws in administering the Program. If and to the extent permitted by law (and subject to Section 3.1 herein), the Committee may delegate its authority as identified herein.

3.3.

Decisions Binding. All determinations and decisions made by the Committee pursuant to the provisions of the Program and all related orders and resolutions of the Board shall be final, conclusive and binding on all persons, including the Company, its stockholders, directors, Participants, and their estates and beneficiaries.

Article 4.

Eligibility and Participation

4.1.

Eligibility. Persons eligible to participate in this Program shall be all Nonemployee Directors.

4.2.

Actual Participation. Subject to the provisions of the Program, the Committee may, from time to time, select from all eligible Nonemployee Directors those to whom Awards shall be granted and shall determine the nature and amount of each Award.

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P.O. BOX 8016, CARY, NC 27512-9903

  

YOUR VOTE IS IMPORTANT!

PLEASE VOTE BY:

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Go To: www.proxypush.com/EW

•  Cast your vote online

•  Have your Proxy Card/Voting Instruction Form ready

•  Follow the simple instructions to record your vote

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APPENDIX B

 

MAIL

•  Mark, sign and date your Proxy Card/Voting Instruction Form

•  Fold and return your Proxy Card/Voting Instruction Form in the postage-paid envelope provided.

Article 5.

Shares Subject to the Program

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5.1.

Number of Shares Available for Grants. Subject to adjustment as provided in Section 5.4 herein, the number of Shares hereby reserved for delivery to Participants under the Program shall be Seven Hundred Sixty Six Thousand Six Hundred Fifty (766,650) Shares. Subject to the restrictions for Nonemployee Directors set forth in Article 11, the Committee shall determine the appropriate methodology for calculating the number of Shares issued pursuant to the Program.

5.2.

Type of Shares. Shares issued under the Program in connection with Awards may be authorized and unissued Shares or issued Shares held as treasury Shares.

5.3.

Reuse of Shares.

(a)

General. In the event of the expirationor termination (by reason of forfeiture, expiration, cancellation, surrender, failure to vest or otherwise) of any Award under the Program, that number of Shares that was subject to the Award but not delivered shall again be available for subsequent Awards under the Program.

(b)

Restricted Stock. In the event that Shares are delivered under the Program as Restricted Stock and are thereafter forfeited or reacquired by the Company pursuant to rights reserved upon the grant thereof, such forfeited or reacquired Shares shall again be available as Awards under the Program.

(c)

Stock Appreciation Rights.Upon exercise of any Stock Appreciation Right, the Share reserve under Section 5.1 shall be reduced by the gross number of Shares as to which such Stock Appreciation Right is exercised.

5.4.

Adjustments in Authorized Shares. In the event of any change in corporate capitalization, such as a stock split, or a corporate transaction, such as any merger, consolidation, separation, including aspin-off, or other distribution of stock or property of the Company, any reorganization (whether or not such reorganization comes within the definition of such term in Code Section 368) or any partial or complete liquidation of the Company, such adjustment shall be made in the number and class of Shares which may be delivered under Section 5.1, in the number and class of and/or price of Shares subject to outstanding Awards granted under the Program and in the number and/or class of Shares subject to Awards to be granted to Nonemployee Directors under Article 11 (including the applicable limits set forth in Article 11), as shall be determined to be appropriate and equitable by the Committee, in its sole discretion, to prevent dilution or enlargement of rights; provided, however, that the number of Shares subject to any Award shall always be a whole number. In astock-for-stock acquisition of the Company, the Committee may, in its sole discretion, substitute securities of another issuer for any Shares subject to outstanding Awards.

Article 6.

Stock Options

6.1.

Grant of Options.

(a)

Subject to the terms and provisions of the Program, Options may be granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee.

(b)

All Options under the Program shall be granted in the form of nonqualified stock options as no Option under the Program may be granted in the form of an incentive stock option as defined under the provisions of Code Section 422.

6.2.

Award Agreement. Each Option grant shall be evidenced by an Award Agreement that shall specify the Option Price, the duration of the Option, the number of Shares to which the Option pertains, and such other provisions as the Committee shall determine.

6.3.

Option Price. The Option Price for each grant of an Option under this Program shall be at least equal to one hundred percent (100%) of the Fair Market Value of a Share on the date the Option is granted.

6.4.

Duration of Options.Unless the Committee determines otherwise, the term of each Option shall expire on the seventh (7th) anniversary date of its grant, subject to such provisions for earlier expiration as the Committee may specify in accordance with Section 6.8 (relating to termination of directorship) or otherwise.

 

Edwards Lifesciences Corporation

Annual Meeting of Stockholders

For Stockholders of record as of March 9, 2022

    Control Number
 
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APPENDIX B

6.5.

Exercise of Options. Options granted under this Article 6 shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve, which need not be the same for each grant or for each Participant.

6.6.

Payment. Options granted under this Article 6 shall be exercised by the delivery of a written notice of exercise (or such other form of notice as the Company may specify) to the Company, setting forth the number of Shares with respect to which the Option is to be exercised, or compliance with such procedures as the Company may establish for notifying the Company, either directly or through anon-line internet transaction with a brokerage firm authorized by the Company to effect such option exercise, of the exercise of the Option for one or more Shares. Exercise of an Option must be accompanied by full payment for the Shares for which the Option is exercised (or a satisfactory “cashless exercise” notice).

The Option Price upon exercise of any Option shall be payable to the Company in full either: (a) in cash or its equivalent; (b) by tendering previously acquired Shares (by either actual delivery or attestation) having an aggregate Fair Market Value at the time of exercise equal to the total Option Price; (c) by a cashless exercise as permitted under Federal Reserve Board’s Regulation T, subject to applicable securities law restrictions and such procedures and limitations as the Company may specify from time to time; (d) by any other means which the Committee determines to be consistent with the Program’s purpose and applicable law; or (e) by a combination of two or more of (a) through (d).

Subject to any governing rules or regulations, including cashless exercise procedures, as soon as practicable after receipt of a notification of exercise and full payment (or a satisfactory “cashless exercise” notice), the Company shall cause to be issued and delivered to the Participant, in certificate form or otherwise, evidence of the Shares purchased under the Option(s).

6.7.

Restrictions on Share Transferability. The Committee may impose such restrictions on any Shares acquired pursuant to the exercise of an Option granted under this Article 6 as it may deem advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such Shares.

6.8.

Termination of Directorship. Each Participant’s Option Award Agreement shall set forth the extent to which the Participant shall have the right to exercise the Option following termination of the Participant’s service to the Company as a Nonemployee Director. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement entered into with each Participant, need not be uniform among all Options issued pursuant to this Article 6, and may reflect distinctions based on the reasons for termination.

6.9.

Nontransferability of Options. Except as otherwise provided in a Participant’s Award Agreement, no Option granted under this Article 6 may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Further, except as otherwise provided in a Participant’s Award Agreement, all Options granted to a Participant under this Article 6 shall be exercisable during his or her lifetime only by such Participant.

6.10.

Substitution of Cash. Unless otherwise provided in a Participant’s Award Agreement, and notwithstanding any provision in the Program to the contrary (including but not limited to Section 16.2), in the event of a Change in Control in which the Company’s stockholders holding Shares receive consideration other than shares of common stock that are registered under Section 12 of the Exchange Act, the Committee shall have the authority to require that any outstanding Option be surrendered to the Company by a Participant for cancellation by the Company, with the Participant receiving in exchange a cash payment from the Company within ten (10) days of the Change in Control. Such cash payment shall be equal to the number of Shares under Option, multiplied by the excess, if any, of the fair market value of a Share on the date the Change in Control occurs, over the Option Price.

Article 7.

Stock Issuances

7.1.

Stock Issuance Awards. Subject to the terms and provisions of the Program, the Committee may issue Shares as fully vested shares (“Stock Issuances”) in such number and upon such terms as shall be determined by the Committee.

 

TIME:

PLACE:

  
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APPENDIX B

7.2.

Consideration. A Stock Issuance may be awarded in consideration for cash, past services rendered to the Company or an affiliate or for such other consideration as determined by the Committee.

Article 8.

Restricted Stock

8.1.

Grant of Restricted Stock. Subject to the terms and provisions of the Program, the Committee, at any time and from time to time, may grant Shares of Restricted Stock to Participants in such amounts as the Committee shall determine.

8.2.

Restricted Stock Agreement. Each Restricted Stock grant shall be evidenced by a Restricted Stock Award Agreement that shall specify the Period(s) of Restriction, the number of Shares of Restricted Stock granted, and such other provisions as the Committee shall determine.

8.3.

Restriction on Transferability. Except as provided in this Article 8, the Shares of Restricted Stock granted herein may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction established by the Committee and specified in the Restricted Stock Award Agreement, or upon earlier satisfaction of any other conditions, as specified by the Committee in its sole discretion and set forth in the Restricted Stock Award Agreement. All rights with respect to the Restricted Stock granted to a Participant under the Program shall be available during his or her lifetime only to such Participant.

8.4.

Other Restrictions. The Committee shall impose such other conditions and/or restrictions on any Shares of Restricted Stock granted pursuant to the Program as it may deem advisable including, without limitation, any or all of the following:

(a)

A required period of service with the Company, as determined by the Committee, prior to the vesting of Shares of Restricted Stock.

(b)

A requirement that Participants forfeit (or in the case of Shares sold to a Participant, resell to the Company at his or her cost) all or a part of Shares of Restricted Stock in the event of termination of his or her service as a Nonemployee Director during the Period of Restriction.

(c)

A prohibition against such Participants’ dissemination of any secret or confidential information belonging to the Company, or the solicitation by Participants of the Company’s Employees for employment by another entity.

Shares of Restricted Stock awarded pursuant to the Program shall be registered in the name of the Participant and if such Shares are certificated, in the sole discretion of the Committee, such certificate may be deposited in a bank designated by the Committee or with the Company. The Committee may require a stock power endorsed in blank with respect to Shares of Restricted Stock whether or not certificated.

Except asotherwise provided in this Article 8, Shares of Restricted Stock covered by each Restricted Stock grant made under the Program shall become freely transferable (subject to any restrictions under any applicable securities law) by the Participant after the last day of the applicable Period of Restriction.Tuesday, May 3, 2022, 10:00 AM, Pacific Time

 

8.5.

Voting Rights. UnlessAnnual Meeting to be held live via the Committee determines otherwise, Participants holding Shares of Restricted Stock issued hereunder shall be entitled to exercise full voting rights with respect to those Shares during the Period of Restriction.

8.6.

Dividends and Other Distributions. Unless the Committee determines otherwise, during the Period of Restriction, Participants holding Shares of Restricted Stock issued hereunder shall be entitled to regular cash dividends paid with respect to such Shares. The Committee may apply any restrictions to the dividends that the Committee deems appropriate.

8.7.

Termination of Directorship. Each Restricted Stock Award Agreement shall set forth the extent to which the Participant shall have the right to vest in previously unvested Shares of Restricted Stock following termination of the Participant’s service to the Company as a Nonemployee Director. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement entered into with each Participant, need not be uniform among all Shares of Restricted Stock issued pursuant to the Program, and may reflect distinctions based on the reasons for termination.

Internet - please visit

 

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www.proxydocs.com/EW for more details and to view the proxy materials.

 


APPENDIX B

Article 9.

Restricted Stock Units

9.1.

Restricted Stock Units Awards. Subject to the terms and conditions of the Program, the Committee may, at any time and from time to time, issue Restricted Stock Units which entitle the Participant to receive the Shares underlying those units following the lapse of specified restrictions (whether based on the achievement of designated performance goals or the satisfaction of specified services or upon the expiration of a designated time period following the vesting of the units).

9.2.

Restricted Stock Units Award Agreement. Each Restricted Stock Units award shall be evidenced by a Restricted Stock Units Award Agreement that shall specify the vesting restrictions, the number of Shares subject to the Restricted Stock Units award, and such other provisions as the Committee shall determine.

9.3.

Restrictions. The Committee shall impose such other conditions and/or restrictions on the issuance of any Shares under the Restricted Stock Units granted pursuant to the Program as it may deem advisable including, without limitation, any or all of the following:

(a)

A required period of service with the Company, as determined by the Committee, prior to the issuance of Shares under the Restricted Stock Units award.

(b)

A requirement that the Restricted Stock Units award be forfeited in whole or in part in the event of termination of the Participant’s services as a Nonemployee Director during the vesting period.

(c)

A prohibition against such Participants’ dissemination of any secret or confidential information belonging to the Company, or the solicitation by Participants of the Company’s Employees for employment by another entity.

Except asotherwise provided in this Article 9, Shares subject to Restricted Stock Units under the Program shall be freely transferable (subject to any restrictions under applicable securities law) by the Participant after receipt of such shares.

9.4.

Stockholder Rights. Participants holding Restricted Stock Units issued hereunder shall not have any rights with respect to Shares subject to the award until the award vests and the Shares are issued hereunder. However, dividend-equivalent units may be paid or credited, either in cash or in actual or phantom Shares, on outstanding Restricted Stock Units awards, subject to such terms and conditions as the Committee may deem appropriate.

9.5.

Termination of Directorship. Each Restricted Stock Units Award Agreement shall set forth the extent to which the Participant shall have the right to vest in previously unvested Shares subject to the Restricted Stock Units award following termination of the Participant’s service to the Company as a Nonemployee Director. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement entered into with each Participant, need not be uniform among all Restricted Stock Unit awards issued pursuant to the Program, and may reflect distinctions based on the reasons for termination.

Article 10.

Stock Appreciation Rights

10.1.

Stock Appreciation Rights Awards. Subject to the terms and conditions of the Program, the Committee may issue a Stock Appreciation Rights award which shall entitle the Participant to receive upon exercise a payment in cash or Shares underlying the exercised award equal to the excess (if any) of (a) the Fair Market Value of the Shares on the date of exercise over (b) the aggregate base price in effect for such Shares. A Stock Appreciation Right shall become exercisable during such times and subject to such conditions as shall be determined by the Committee, in its sole discretion.

10.2.

Stock Appreciation Rights Agreement. Each Stock Appreciation Rights award shall be evidenced by a Stock Appreciation Rights Award Agreement that shall specify the vesting restriction, the number of Shares subject to the award and such additional terms and conditions as the Committee shall determine.

10.3.

Base Price. The base price for each grant of a Stock Appreciation Right under this Program shall be at least equal to one hundred percent (100%) of the Fair Market Value of a Share on the date the award is granted.

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APPENDIX B

10.4.

Nontransferability of Stock Appreciation Rights. Except as otherwise provided in a Participant’s Award Agreement, no Stock Appreciation Right granted under this Article 10 may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Further, except as otherwise provided in a Participant’s Award Agreement, all Stock Appreciation Rights granted to a Participant under this Article 10 shall be exercisable during his or her lifetime only by such Participant.

Article 11.

Automatic Awards to Nonemployee Directors

11.1.

[Intentionally Omitted.]

11.2.

Annual Awards.

(a)

Unless otherwise determined by the Committee, each Nonemployee Director shall receive annually, effective as of the day following each annual meeting of the Company’s stockholders an award as follows (the “Annual Award”):

(i)

An Option for up to forty thousand (40,000) Shares, or

(ii)

A Restricted Stock Units award for up to sixteen thousand (16,000) Shares, or

(iii)

A combination of an Option and Restricted Stock Units award, provided that in no event may the total value of the Option and Restricted Stock Units award subject to such combined award exceed two hundred forty thousand dollars ($240,000). The Committee shall have the sole discretion to determine the amount and type of award for each year and to change the maximum grant date value set forth in the preceding sentence from year to year if it determines that a change is advisable; provided, however, that in the event of a combined Annual Award to a Nonemployee Director for a particular year in no event shall the total number of shares subject to the Option component of such award for the Nonemployee Director for that year exceed the limit in clause (i) above and in no event shall the total number of shares subject to the Restricted Stock Units component of such award for the Nonemployee Director for that year exceed the limit in clause (ii) above. For such purposes, the value of the Annual Award shall be calculated as follows: (A) the value of an Option shall be equal to the fair value of an option share as estimated on the date of grant under a valuation model approved by Financial Accounting Standards Board (“FASB”) for purposes of the Company’s financial statements under Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor provision); and (B) the value of a Restricted Stock Unit shall be equal to the Fair Market Value of the Share on the award date.

(b)

Each Annual Award shall vest upon the first to occur of (i) the Participant’s completion of one (1) year of Board service measured from the award date or (ii) the next annual meeting of the Company’s stockholders that occurs after the calendar year in which the Annual Award is granted (or such longer period as determined by the Committee). Each Annual Award shall become fully vested in the event of the Participant’s death or Disability.

(c)

Notwithstanding any other provision of the Program to the contrary, the Shares acquired under an Annual Award (net of any Shares sold to cover the exercise price and applicable taxes due in connection with the exercise or settlement of the award) may not be sold, transferred or otherwise disposed of prior to the Participant’s cessation of Board service.

(d)

All additional terms of an Annual Award will be as set forth in Articles 6 and 9, as applicable, or as set forth in the specific Award Agreement governing such award.

11.3.

Annual Retainer Election.

(a)

Subject to the terms and provisions of the Program and any other restrictions set out by the Committee in its sole discretion, the Committee may permit each Nonemployee Director to elect to receive all or a portion of his or her Annual Retainer in the form of Options or Restricted Stock to be issued as of the first day on which such Annual Retainer is otherwise due and payable (the “Conversion Date”) and using the Fair Market Value of a Share as of the Conversion Date as the Option Price of the Options.

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APPENDIX B

(b)

If conversion elections are permitted by the Committee, each irrevocable election shall be made in accordance with such rules as the Committee may determine in its sole discretion which shall be consistent with the requirements of Code Section 409A and the Treasury Regulations and rulings promulgated thereunder. Except as may otherwise be determined by the Committee, in the event of a Participant’s election to receive an Option in lieu of his Annual Retainer, the number of shares subject to the Option shall be determined by dividing that portion of the Annual Retainer to be paid in the form of the Option by the Fair Market Value of a Share on the Conversion Date and multiplying the quotient by four (4). In the event of a Participant’s election to receive Restricted Stock in lieu of an Annual Retainer, the number of Shares of such Restricted Stock shall be determined by dividing that portion of the Annual Retainer to be paid in the form of Shares of Restricted Stock by the Fair Market Value of a Share on the Conversion Date. In the event the preceding formula would result in a fractional Share being issued or subject to an Option, the number of Shares subject to the issuance or Option shall be rounded up to the nearest whole Share.

(c)

Restricted Stock granted pursuant to this Section 11.3 shall vest upon the first to occur of (i) the Participant’s completion of one (1) year of Board service measured from the grant date or (ii) the next annual meeting of the Company’s stockholders at which Board members are to be elected. Each Annual Award shall become fully vested in the event of the Participant’s death or Disability.

(d)

Any portion of a Nonemployee Director’s Annual Retainer for which an election has not been made pursuant to this Section 11.3, shall be paid in cash to such Nonemployee Director at such time or times as payments thereof are customarily made by the Company.

(e)

All additional terms of an Award received as a result of the election described herein will be asset-forth in Sections 6 and 7, as applicable, or as set forth in the specific Award Agreement governing such Award.

Article 12.

Beneficiary Designation

Each Participant under the Program may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the ProgramThis proxy is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate.

Article 13.

Deferrals

The Committee may permit or require a Participant to defer such Participant’s receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant by virtue of the exercise of an Option, or Stock Appreciation Right or the lapse or waiver of restrictions with respect to Restricted Stock or Restricted Stock Units. If any such deferral election is required or permitted, the Committee shall, in its sole discretion, establish rules and procedures for such payment deferrals which shall be consistent with the requirements of Code Section 409A and the Treasury Regulations and rulings promulgated thereunder.

Article 14.

Rights of Participants

14.1.

Directorship. Nothing in the Program or any Award Agreement shall interfere with or limit in any way the right of the Company to terminate at any time any Participant’s service to the Company as a Nonemployee Director, nor confer upon any Participant any right to continue in the service of the Company.

14.2.

Participation. No Nonemployee Director shall have the right to be selected to receive an Award under this Program, or, having been so selected, to be selected to receive a future Award.

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APPENDIX B

Article 15.

Change in Control

Upon the occurrence of a Change in Control and notwithstanding the terms of any Award Agreement, unless otherwise specifically prohibited under applicable laws, or by the rules and regulations of any governing governmental agencies or national securities exchanges:

(a)

Any and all Options granted hereunder shall become immediately exercisable, and shall terminate upon the earlier of (i) the third anniversary of the Participant’s date of termination of service or (ii) expiration of the Option term.

(b)

Any restriction periods and restrictions imposed on Awards shall lapse.

Article 16.

Amendment, Modification, and Termination

16.1.

Amendment, Modification, and Termination. Subject to the terms of the Program including Section 16.2, the Board may at any time and from time to time, alter, amend, suspend or terminate the Program in whole or in part. However, stockholder approval shall be required for any amendment of the Program only to the extent required by applicable law.

16.2.

Awards Previously Granted. Notwithstanding any provision of the Program or of any Award Agreement to the contrary (but subject to Section 6.10 hereof), no termination, amendment, or modification of the Program or amendment of an Award previously granted under the Program shall adversely affect in any material way any Award previously granted under the Program, without the express consent of the Participant holding such Award.

Article 17.

Compliance with Applicable Law and Withholding

17.1.

General. The granting of Awards and the issuance of Shares under the Program shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. Notwithstanding anything to the contrary in the Program or any Award Agreement, the following shall apply:

(a)

The Company shall have no obligation to issue any Shares under the Program if such issuance would violate any applicable law or any applicable regulation or requirement of any securities exchange or similar entity.

(b)

Prior to the issuance of any Shares under the Program, the Company may require a written statement that the recipient is acquiring the Shares for investment and not for the purpose or with the intention of distributing the Shares and that the recipient will not dispose of them in violation of the registration requirements of the Securities Act of 1933.

(c)

With respect to any Participant who is subject to Section 16(a) of the Exchange Act, the Committee may, at any time, add such conditions and limitations to Award or payment under the Program or implement procedures for the administration of the Program which it deems necessary or desirable to comply with the requirements of Rule16b-3 of the Exchange Act.

(d)

If, at any time, the Company, determines that the listing, registration, or qualification (or any updating of any such document) of any Award, or the Shares issuable pursuant thereto, is necessary on any securities exchange or under any federal or state securities or blue sky law, or that the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, any Award, the issuance of Shares pursuant to any Award, or the removal of any restrictions imposed on Shares subject to an Award, such Award shall not be granted and the Shares shall not be issued or such restrictions shall not be removed, as the case may be, in whole or in part, unless such listing, registration, qualification, consent, or approval shall have been effected or obtained free of any conditions not acceptable to the Company or the Committee otherwise provides.

17.2.

Securities Law Compliance. Transactions under this Program are intended to comply with all applicable conditions of Rule16b-3 or its successors under the 1934 Act.

17.3.

Tax Withholding. The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes,

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APPENDIX B

domestic or foreign, required or permitted by law or regulation to be withheld with respect to any taxable event arising as a result of this Program.

17.4.

Share Withholding. Awards payable in Shares may provide that with respect to withholding required upon any taxable event arising thereunder, Participants may elect to satisfy the withholding requirement (or the Committee may require that the tax withholding requirement be satisfied), in whole or in part, by having the Company withhold Shares to satisfy their withholding tax obligations. Unless otherwise provided by the Committee, all elections shall be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations, including prior Committee approval, that the Committee, in its sole discretion, deems appropriate.

Article 18.

Indemnification

Each person who is or shall have been a member of the Committee, orbeing solicited on behalf of the Board shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Program and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

Article 19.

Successors

All obligations of the Company under the Program with respect to Awards granted hereunder shall, to the extent legally permissible, be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

Article 20.

Legal Construction

20.1.

Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.

20.2.

Severability. In the event any provision of the Program shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Program, and the Program shall be construed and enforced as if the illegal or invalid provision had not been included.

20.3.

Governing Law. To the extent not preempted by federal law, the Program, and all Award or other agreements hereunder, shall be construed in accordance with and governed by the laws of the state of Delaware without giving effect to principles of conflicts of laws.

20.4.

Non-Exclusivity of the Program; No Corporate Action Restriction. Nothing in this Program shall limit or be deemed to limit the authority of the Board or the Committee to grant awards or authorize any other compensation, with or without reference to the Shares, under any other plan or authority. The existence of this Program, the award agreements and the awards granted hereunder shall not limit, affect, or restrict in any way the right or power of the Company or any of its subsidiaries (or any of their respective shareholders, boards of directors or committees thereof (or any subcommittees), as the case may be) to make or authorize: (a) any adjustment, recapitalization, reorganization or other change in the capital structure or business of the Company or any subsidiary, (b) any merger, amalgamation, consolidation or change in the ownership of the Company or any subsidiary, (c) any issue of bonds, debentures, capital, preferred or prior preference stock ahead of or affecting the capital stock (or the rights thereof) of the Company or any subsidiary, (d) any dissolution or liquidation of the Company or any subsidiary, (e) any sale or transfer of all or any part of the assets or business of the Company or any subsidiary, (f) any other

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APPENDIX B

award, grant, or payment of incentives or other compensation under any other plan or authority (or any other action with respect to any benefit, incentive or compensation), or (g) any other corporate act or proceeding by the Company or any subsidiary. No participant, beneficiary or any other person shall have any claim under any award or award agreement against any member of the Board or the Committee, or the Company or any employees, officers or agents of the Company or any subsidiary, as a result of any such action. Awards need not be structured so as to be deductible for tax purposes.

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APPENDIX C

EDWARDS LIFESCIENCES CORPORATION

AMENDMENT OF THE CERTIFICATE OF INCORPORATION

CERTIFICATE OF AMENDMENT OF

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

EDWARDS LIFESCIENCES CORPORATION

Edwards Lifesciences Corporation (the “Corporation”), a corporation organized and existing under the laws of the state of Delaware (the “DGCL”), does hereby certify that:

1.

The name under which the Corporation was originally incorporated was CVG Controlled Inc. and the original certificate of incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on September 10, 1999.

2.

This Certificate of Amendment amends the provisions of the Corporation’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) filed with the Secretary of State of the State of Delaware on May 16, 2013.

3.

The Certificate of Amendment was duly adopted by the Board of Directors of the Corporation and by the stockholders of the Corporation in accordance with Section 242 of the General Corporation Law of the State of Delaware.

4.

The first sentence of Article FOURTH of the Certificate of Incorporation be and hereby is amended and restated in its entirety to read as follows:

“The total number of shares of stock which the Corporation shall have authority to issue is One Billion One Hundred Million (1,100,000,000) shares, of which Fifty Million (50,000,000) shares, par value $.01 per share, shall be preferred stock (“Preferred Stock”) and of which One Billion Fifty Million (1,050,000,000) shares, par value $1.00 per share, shall be common stock (the “Common Stock”).”

5.

This Certificate of Amendment shall become effective immediately upon filing with the Secretary of State of the State of Delaware.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be executed on its behalf on this               ��day of May 2020.

EDWARDS LIFESCIENCES CORPORATION

By:

Name:

Title:

LOGOEdwards Lifesciences Corporation2020 Proxy StatementC-1


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EDWARDS LIFESCIENCES CORPORATION ONE EDWARDS WAY IRVINE, CA 92614 ATTN: LINDA J. PARK VOTE BY INTERNET: www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m., ET the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site, and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by Edwards in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To enroll in electronic delivery of proxy materials, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE: 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m., ET the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign, and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. You may hold Edwards shares in multiple accounts and therefore receive more than one proxy card or voting instruction form and related materials. Please vote EACH proxy card and voting instruction form that you receive. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E95773-P34055-Z76409 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY EDWARDS LIFESCIENCES CORPORATION The Board of Directors recommends you vote FOR the following nominees: 1. ELECTION OF DIRECTORS For Against Abstain 1a. Michael A. Mussallem 1b. Kieran T. Gallahue 1c. Leslie S. Heisz 1d. William J. Link, Ph.D. 1e. Steven R. Loranger 1f. Martha H. Marsh 1g. Ramona Sequeira 1h. Nicholas J. Valeriani Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date The Board of Directors recommends you vote FOR Proposals 2, 3, 4, and 5. 2. ADVISORY VOTE TO APPROVE COMPENSATION OF NAMED EXECUTIVE OFFICERS 3. APPROVAL OF THE 2020 NONEMPLOYEE DIRECTORS STOCK INCENTIVE PROGRAM 4. APPROVAL OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FOR THE PURPOSE OF EFFECTING A THREE-FOR-ONE STOCK SPLIT 5. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors recommends you vote AGAINST Proposal 6. 6. ADVISORY VOTE ON A STOCKHOLDER PROPOSAL REGARDING ACTION BY WRITTEN CONSENT NOTE: In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournments or postponements thereof. Signature (Joint Owners) Date For Against Abstain For Against Abstain


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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. E95774-P34055-Z76409 EDWARDS LIFESCIENCES CORPORATION Annual Meeting of Stockholders May 7, 2020 10:00 a.m., PT This proxy is solicited by the Board of Directors The undersigned hereby appoints William J. LinkMartha H. Marsh and Michael A. Mussallem (together, the “Named Proxies”), and each or either of them, as proxies, each with the power to appoint his substitutetrue and with authority in each to act in the absencelawful attorneys of the others, to representundersigned, with full power of substitution and revocation, and authorizes them, and each of them, to vote all the shares of common stock of Edwards Lifesciences Corporation which the undersigned is entitled to vote at the Annual Meeting of Stockholders of Edwards Lifesciences Corporation to be held at the corporate headquarters of Edwards Lifesciences Corporation, One Edwards Way, Irvine, California 92614, on Thursday, May 7, 2020, at 10:00 a.m., PT, and any adjournments thereof, on the proposals described in the Proxy Statement in accordance with the instructions on the reverse side, and all other matters properly coming before the meeting. This proxy revokes all proxies previously given by the undersigned to vote at suchsaid meeting and any adjournmentsadjournment thereof upon the matters specified and upon such other matters as may be properly brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys to vote in their discretion on such other matters as may properly come before the meeting and revoking any proxy heretofore given.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED IDENTICAL TO THE BOARD OF DIRECTORS’ RECOMMENDATION. This proxy, when properly executed, will be voted in the manner directed herein. In their discretion, the Named Proxies are authorized to vote upon such other matters that may properly come before the meeting or any adjournment or postponement thereof.

This proxy will also serve to instruct the trustee of Edwards Lifesciences CorporationCorporations 401(k) Savings and Investment Plan and the Edwards Lifesciences Technology Sarl Retirement Savings Plan (formerly known as the Edwards Lifesciences Corporation of Puerto Rico Savings and Investment Plan) (collectively,(together, the "Plans"“Plans”) to vote in accordance with the instructions on the reverse side all shares held for the undersigned in the Plans. For shares held in the Plans, voting instructions submitted over the Internet, by telephone or by mail must be received by the Plans'Plan’s trustee by 11:59 p.m., ET on Monday, May 4, 2020.April 28, 2022. The Plans'Plan’s trustee will vote allocated shares for which it receives no written instructions in the same proportion as the allocated shares for which voting instructions have been received. IMPORTANT

You are encouraged to specify your choice by marking the appropriate box (SEE REVERSE SIDE) but you need not mark any box if you wish to vote in accordance with the Board of Directors’ recommendation. The Named Proxies cannot vote your shares unless you sign (on the reverse side) and return this card.

PLEASE BE SURE TO SIGN AND DATE THIS PROXY CARD AND MARK ON THE REVERSE SIDE.


Edwards Lifesciences Corporation

Annual Meeting of Stockholders

Please make your marks like this:

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.

PROPOSALYOUR VOTEBOARD OF
DIRECTORS
RECOMMENDS

1.

Election of Directors

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FORAGAINSTABSTAIN
1.1     Kieran T. GallahueFOR
1.2     Leslie S. HeiszFOR
1.3     Paul A. LaVioletteFOR
1.4     Steven R. LorangerFOR
1.5     Martha H. MarshFOR
1.6     Michael A. MussallemFOR
1.7     Ramona SequeiraFOR
1.8     Nicholas J. ValerianiFOR

2.

Advisory Vote to Approve Named Executive Officer CompensationFOR

3.

Ratification of Appointment of Independent Registered Public Accounting FirmFOR
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL 4.

4.

Stockholder Proposal for an Advisory Vote to Reduce the Share Ownership Threshold to Call a Special MeetingAGAINST

You must register to attend the meeting online at www.proxydocs.com/EW.

This Proxy must beproxy card is valid only when signed and dated on the reverse side if voting by mail. (continued anddated.

Authorized Signatures - Must be completed for your instructions to be signedexecuted.

Please sign exactly as your name(s) appears on reverse side)your account. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations or partnerships should provide full name of corporation or partnership and title of authorized officer signing the Proxy Card/Voting Instruction Form. You may hold Edwards shares in multiple accounts and therefore receive more than one Proxy Card or Voting Instruction Form and related materials. Please vote EACH Proxy Card and Voting Instruction Form that you receive.

Signature (and Title if applicable)DateSignature (if held jointly)Date