NOMINEES FOR ELECTION TO THE BOARD
Each of the proposed director nominees
iswill be an incumbent director. Each director nominee elected at the
20212023 Annual Meeting will hold office until the close of the
20222024 Annual Meeting of Shareholders, his or her successor is duly elected or appointed, or such director’s earlier resignation or removal.
The results from the
20202022 election of directors are as follows:
| | | | | | | | | | | | |
Name | | For | | | Withheld | | | Broker Non-Votes | |
Richard U. De Schutter | | | 216,315,704 | | | | 5,259,134 | | | | 59,178,282 | |
D. Robert Hale | | | 211,714,041 | | | | 9,860,797 | | | | 59,178,282 | |
Dr. Argeris (Jerry) N. Karabelas | | | 215,596,446 | | | | 5,978,392 | | | | 59,178,282 | |
Sarah B. Kavanagh | | | 217,011,297 | | | | 4,563,541 | | | | 59,178,282 | |
Joseph C. Papa | | | 212,494,697 | | | | 9,080,141 | | | | 59,178,282 | |
John A. Paulson | | | 219,853,068 | | | | 1,721,770 | | | | 59,178,282 | |
Robert N. Power | | | 208,740,697 | | | | 12,834,141 | | | | 59,178,282 | |
Russel C. Robertson | | | 215,372,886 | | | | 6,201,952 | | | | 59,178,282 | |
Thomas W. Ross, Sr. | | | 215,468,972 | | | | 6,105,866 | | | | 59,178,282 | |
Andrew C. von Eschenbach, M.D. | | | 219,493,913 | | | | 2,080,925 | | | | 59,178,282 | |
Amy B. Wechsler, M.D. | | | 216,271,318 | | | | 5,303,520 | | | | 59,178,282 | |
Thomas J. Appio | | | 208,484,011 | | | 4,473,053 | | | 70,926,205 |
Richard U. De Schutter(1) | | | 204,019,165 | | | 8,937,899 | | | 70,926,205 |
Brett M. Icahn | | | 202,357,292 | | | 10,599,772 | | | 70,926,205 |
Dr. Argeris N. Karabelas(1) | | | 201,356,292 | | | 11,600,478 | | | 70,926,205 |
Sarah B. Kavanagh | | | 204,141,525 | | | 8,815,539 | | | 70,926,205 |
Steven D. Miller | | | 203,021,418 | | | 9,935,646 | | | 70,926,205 |
Dr. Richard C. Mulligan | | | 195,477,842 | | | 17,479,222 | | | 70,926,205 |
Joseph C. Papa(2) | | | 176,759,880 | | | 36,197,184 | | | 70,926,205 |
Robert N. Power | | | 153,014,215 | | | 59,942,849 | | | 70,926,205 |
Russel C. Robertson | | | 199,201,436 | | | 13,755,628 | | | 70,926,205 |
Thomas W. Ross, Sr. | | | 199,710,479 | | | 13,246,585 | | | 70,926,205 |
Amy B. Wechsler, M.D. | | | 204,605,343 | | | 8,351,721 | | | 70,926,205 |
(1)
| On February 28, 2023, Mr. De Schutter and Dr. Karabelas notified the Company of their decision to retire from the Board, effective at the 2023 Annual Meeting. The retirement of each of Mr. De Schutter and Dr. Karabelas was not the result of any dispute or disagreement with the Company or the Board on any matter relating to the operations, policies or practices of the Company. |
(2)
| On June 23, 2022, Mr. Papa resigned from the Board. Mr. Papa's decision to resign from the Board was not due to any dispute or disagreement with the Company, its management or the Board on any matter relating to the Company's operations, policies, or practices. The Board appointed Mr. Paulson to rejoin the Board to fill the resulting vacancy and to serve as the Non-Executive Chairperson of the Board, effective upon Mr. Papa's resignation. |
The following narratives provide details about each of the director nominees’ background and experience, and summarizes the specific attributes, competencies and characteristics that led to the determination of the Nominating and Corporate Governance Committee and the Board to nominate such individual as a director for election by the shareholders at the
Annual Meeting. In addition, the narrative lists the number of meetings of the Board and any applicable committee each director nominee attended during
20202022 and any public company directorships, other than with the Company, held by the nominees during the past five years. The narrative also sets out (i) the number of securities of the Company each director nominee beneficially owned, controlled or directed, directly or indirectly, as of March
1, 2021;17, 2023; (ii) the aggregate value of such securities based on the
$31.75$ per share closing price of our Common Shares on March
1, 2021,17, 2023, as reported on the NYSE; and (iii) the progress of each director nominee toward the director share ownership requirement established by the Board. For further detail regarding the share ownership requirement for
non-employee Directors, see the discussion in the section titled “Statement of Corporate Governance Practices — Directors’ Share Ownership” on page
31.26. For further detail regarding the share ownership requirement for Mr.
Papa,Appio, see the discussion in the section titled “Compensation Discussion and Analysis — Other Compensation Governance Practices — Share Ownership Guidelines” on page
64.56.
Mr. De Schutter has served on the Board since January 2017. Mr. De Schutter is the owner of asset management firm L.B. Gemini, Inc., where he has served as President and director since 2000. He previously served as the Chairman and CEO of DuPont Pharmaceuticals Company from July 2000 until its acquisition by Bristol-Myers Squibb in October 2001. Mr. De Schutter was also a director and Chief Administrative Officer of Pharmacia Corporation, which was created through the merger of Monsanto Company and Pharmacia & Upjohn in 2000. Prior to this merger, Mr. De Schutter was a director, Vice Chairman and Chief Administrative Officer for Monsanto. From 1995 to 1999, he served as Chairman and CEO of G.D. Searle & Co., Monsanto’s wholly owned pharmaceutical subsidiary. Mr. De Schutter earned a Bachelor of Science degree in 1963, and a Master of Science Degree in Chemical Engineering in 1965 from the University of Arizona.
Mr. De Schutter has served as a director of AuVen Therapeutics, a private equity company focused on the healthcare industry, since 2007, and as a director of Sermonix Pharmaceuticals Inc., a private biotechnology company, since April 2019. He previously served as Chairman of publicly traded pharmaceutical companies Incyte Corporation, from 2003 to 2015, and Durata Therapeutics, Inc., from 2012 to 2014. Mr. De Schutter also served as a director of Smith & Nephew plc, a publicly traded medical device company, from 2001 to 2014, during which time he also served as the Lead Independent Director from 2011 to 2014.
Director Qualifications:
The Board has determined that Mr. De Schutter’s many years of experience in senior management and board positions of publicly traded companies, as well as his extensive insight and knowledge of the pharmaceutical industry and healthcare-related issues qualify him to serve as a member of the Board and the committees on which he serves.
12
Mr. Richard U. De Schutter
Arizona, USA
Age 80
Independent
Stock Ownership:
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273,620 Common Shares — $8,687,435
37,402 Restricted Share Units (“RSUs”) (comprised of 26,365 vested RSUs — $837,089, and 11,037 unvested RSUs — $350,425)
Age: 61
New Jersey, USA
Director Since: 2022
Non-Independent
Committees:
• Science & Technology Committee | • | | Mr. Appio has been the Chief Executive Officer of the Company since May 2022. He previously served as the Company’s President & Co-Head Bausch + Lomb/ International and Executive Vice President, Company Group Chairman, International. Prior to joining Bausch Health in 2013, Mr. Appio served in several positions with Bausch + Lomb, including as Vice President, North Asia/Japan and as Managing Director, Greater China and Japan. Prior to joining Bausch + Lomb, Mr. Appio served 23 years with Schering-Plough in a wide range of leadership and operations responsibilities. Mr. Appio holds a Bachelor of Science in Accounting from Arizona State University, W.P. Carey School of Business.
| | | Stock Ownership:
• 194,862 Common Shares — $1,480,051
• 695,999 RSUs (comprised of 695,999 unvested RSUs — $5,289,592)
• 482,201 Stock Options
• Total Equity Value at RiskRisk: $1,480,051 based on the value of the Common Shares beneficially owned by Mr. Appio (but excluding all options and unvested RSUs).
Mr. Appio is subject to share ownership guidelines under the terms of his employment agreement with the Company, as further described in the section titled “Compensation Discussion and Analysis — Other Compensation Governance Practices – Share Ownership Guidelines” on page 56.
2022 Meeting Attendance:1: $9,524,524,
• Board: 9/9
Qualifications:
The Board has determined that Mr. Appio’s extensive management experience and demonstrated leadership with the Company is a valuable contribution to the Board. |
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Age: 43
Florida, USA
Director Since: 2021
Independent
Committees:
• Nominating & Corporate Governance (Chair)
• Finance & Transactions Committee | | | Mr. Icahn was appointed to the Board on March 17, 2021 pursuant to the Nomination Agreement described under “Certain Transactions” beginning on page 80. Since October 2020, he has been a portfolio manager for Icahn Capital LP, a subsidiary of Icahn Enterprises L.P., a diversified holding company engaged in a variety of businesses, including investment, automotive, energy, food packaging, metals, real estate and home fashion. Mr. Icahn has held a variety of investment advisory roles at Icahn Enterprises L.P. since 2002, including as an investment strategy consultant from 2017 to October 2020, and as portfolio manager of the Sargon Portfolio from 2010 to 2017.
Mr. Icahn joined the board of directors of Bausch + Lomb Corporation, a publicly traded eye health company, in May 2022, and has served on the board of Icahn Enterprises L.P., a private entity since October 2020. He has also been a director of Dana Inc., a supplier of automotive products and services, since January 2022. Mr. Icahn was previously a director of Nuance Communications, Inc., a provider of voice and language solutions, from October 2013 to March 2016, and Newell Brands Inc., a publicly traded global marketer of consumer and commercial products, since March 2018 to March 2023. Mr. Icahn also previously served on the boards of American Railcar Industries, Inc., Take-Two Interactive Software Inc., The Hain Celestial Group, Inc. and Voltari Corporation. Mr. Carl C. Icahn, the founder and controlling shareholder of Icahn Enterprises L.P., has or previously had non-controlling interests in Nuance Communications, Inc., Hain Celestial Group, Inc. and Take-Two Interactive Software Inc. Mr. Icahn received a B.A. from Princeton University. | | | Stock Ownership:
• 8,389 Common Shares — $63,756
• 17,424 Restricted Share Units (“RSUs”) (comprised of 17,424 vested RSUs — $132,514, and 34,387 unvested RSUs — $261,341)
• Total Equity Value at Risk: $196,270 representing 1,905%39% of both the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 196% of the annual Board retainer. Mr. Icahn has until March 17, 2026 to achieve the expected minimum equity ownership under such share ownership guidelines.
2022 Meeting Attendance:
• Board: 13/13
• Finance & Transactions Commit tee: 13/13
• Special Transactions Committee: 2/2
Qualifications:
The Board has determined that Mr. Icahn’s experience at the Icahn entities, and his service as a director of multiple public company boards, and his tenure as a Portfolio Manager provide him with expertise in investing and capital allocation, which qualifies him to serve as a member of the Board and the committees on which he serves. |
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Age: 66
Ontario, Canada
Director Since: 2016
Independent
Committees:
• Audit & Risk Committee
• Finance & Transactions Committee | | | Ms. Kavanagh has served on the Board since July 2016. She is currently a corporate director. From 2011 through May 2016, Ms. Kavanagh served as a Commissioner of the Ontario Securities Commission, where she also served as chairperson of the audit committee starting in 2014. Between 1999 and 2010, Ms. Kavanagh served in various senior investment banking roles at Scotia Capital Inc., including Vice-Chair and Co-Head of Diversified Industries Group, Head of Equity Capital Markets, and Head of Investment Banking. Prior to Scotia Capital, she held several senior financial positions with operating companies. She started her career as an investment banker with a multinational bank in New York. Ms. Kavanagh graduated from Harvard Business School with a Master of Business Administration and received a Bachelor of Arts degree in Economics from Williams College.
Ms. Kavanagh joined the board of directors of Bausch + Lomb Corporation, a publicly traded eye health company, in May 2022. Since 2013, Ms. Kavanagh has been a director of Hudbay Minerals Inc., a publicly traded Canadian mining corporation Ms. Kavanagh previously served as a member of the board of trustees of WPT Industrial REIT, a publicly traded open-ended real estate investment trust, from 2013 to October 2021. In addition to her public company directorships, she is a director of AST and Cymax Technology Group and also serves as a director of Sustainable Development Technology Canada. She completed the Directors Education Program at the Institute of Corporate Directors in 2011. | | | Stock Ownership:
• 0 Common Shares — $0
• 117,447 Restricted Share Units (“RSUs”) (comprised of 83,060 vested RSUs — $631,256 and 34,387 unvested RSUs — $261,341)
• Total Equity Value at Risk: $631,256, representing 126% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 9,525% 631% of the annual Board retainer.
2022 Meeting Attendance:
• Board: 13 /13
• Audit & Risk Committee: 8/8
• Nominating & Corporate Governance Committee: 6/6
• Finance & Transactions Committee: 13/13
• Special Transactions Committee: 2/2
Qualifications:
The Board has determined that Ms. Kavanagh’s extensive experience of complex financial and capital market issues at various banking institutions, and her in-depth knowledge of financial and operational matters qualify her to serve as a member of the Board and the committees on which she serves. |
2020 Meeting Attendance:
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Talent and Compensation Committee — 7/7
Finance and Transactions Committee — 7/7
Special Transactions Committee — 4/4
Age: 34
Florida, USA
Director Since: 2021
Independent
Committees:
• Audit & Risk Committee
• Finance & Transactions Committee (Chair) | | | Mr. Miller has served on the Board since March 2021 pursuant to the Nomination Agreement described under “Certain Transactions” beginning on page 80. Since October 2020, Mr. Miller has been a portfolio manager for Icahn Capital LP, a subsidiary of Icahn Enterprises L.P., a diversified holding company engaged in a variety of businesses. Prior to joining Icahn Capital L.P., Mr. Miller was an analyst in the Distressed and Special Situations investment group in the New York office of BlueMountain Capital Management, LLC from 2013 to 2019. Mr. Miller represented BlueMountain on the Ad Hoc Group of Puerto Rico Electric Power Authority Bondholders from 2014 to 2019, and from 2011 to 2013 he was an analyst in the Distressed Products Group in the New York office of Goldman, Sachs & Co. Mr. Miller received a B.S. summa cum laude from Duke University in 2011.
Mr. Miller has served as a director of Conduent Incorporated, a publicly traded business process services company, since February 2021, and Xerox Holdings Corporation, a publicly traded office equipment company, since May 2021. Mr. Miller was previously a director of Herc Holdings Inc., a publicly traded equipment rental supplier, from May 2022 to March 2023 | | | Stock Ownership:
• 68,4891 | TheCommon Shares — $520,516
• 51,823 Restricted Share Units (“RSUs”) (comprised of 17,436 vested RSUs — $132,514, and 34,387 unvested RSUs — $261,341)
• Total Equity Value at Risk calculationRisk: $653,030 representing 131% of both the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for each directornon-employee Directors and 653% of the annual Board re tainer.
2022 Meeting Attendance:
• Board: 13/13
• Finance & Transactions Committee: 13/13
• Special Transactions Committee: 2/2
Director Qualifications:
The Board has determined that Mr. Miller’s experience as a portfolio manager and securities analyst has provided him with experience in investing and finance and complex debt matters, respectively, which qualifies him to serve as a member of the Board and the committees on which he serves. |
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Age: 68
Massachusetts, USA
Director Since: 2022
Independent
Committees:
• Nominating & Corporate Governance
• Science & Technology Committee (Chair) | | | Dr. Mulligan has served on the Board since May 2022. Dr. Mulligan is currently the Mallinckrodt Professor of Genetics, Emeritus, at Harvard Medical School, after serving as the Mallinckrodt Professor of Genetics and Director of the Harvard Gene Therapy Initiative from 1996 to 2013. Dr. Mulligan also currently serves as Executive Vice Chairman of the Board of Sana Biotechnology, Inc. a public biotechnology company, and a director of Biogen Inc., a public biotechnology company. Prior to Harvard, Dr. Mulligan was a professor of Molecular Biology at the Massachusetts Institute of Technology, a member of the Whitehead Institute for Biomedical Research and chief scientific officer of Somatix Therapy Corporation, a drug discovery and development company that he founded. Dr. Mulligan was a founding partner of Sarissa Capital Management LP from 2013 to 2016 and from March 2017 to October 2018 served as Portfolio Manager at Icahn Capital LP. He was named a MacArthur Foundation Fellow in 1981. | | | Stock Ownership:
• 2,317 Common Shares — $17,609
• 34,387 Restricted Share Units (“RSUs”) (comprised of 0 vested RSUs — $0, and 34,387 unvested RSUs — $261,341)
• Total Equity Value at Risk: $17,609 representing 4% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 18% of the annual Board retainer. Dr. Mulligan has until May 10, 2027 to achieve the expected minimum equity ownership under such share ownership guidelines.
2022 Meeting Attendance:1
• Board: 9/9
• Science & Technology Committee: 2/2
Qualifications:
The Board has determined that Dr. Mulligan’s extensive experience in the biotechnology and life sciences industries and international reputation in academia qualifies him to serve as a member of the Board and the committees on which he serves. |
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Age: 67
New York, USA
Director Since: 20171
Independent
Chairperson of the Board | | | Mr. Paulson rejoined the Board as our Non-Executive Chairperson on June 23, 2022, after resigning, as previously announced, on the IPO Closing Date. Mr. Paulson previously served on the Board from June 2017 through May 2022. Mr. Paulson is the President and Portfolio Manager of Paulson & Co. Inc., an investment management company specializing in global mergers, event arbitrage and credit strategies, which he founded in 1994. Prior to forming Paulson & Co. Inc., Mr. Paulson was a Partner of Gruss Partners and a Managing Director in mergers and acquisitions at Bear Stearns. Mr. Paulson received his undergraduate degree from New York University in 1978 and his Master of Business Administration from Harvard Business School in 1980.
Mr. Paulson joined the board of directors of Bausch + Lomb Corporation, a publicly traded eye health company, in May 2022. Mr. Paulson has been a director of BrightSphere Investment Group Inc., a publicly traded asset management holding company, since November 2018, and has served as Chairman since April 2020. Mr. Paulson previously served as a member of the advisory board of Harvard Business School, from June 2008 to June 2022, and as a director of American International Group Inc., a multinational finance and insurance corporation, from May 2016 to June 2017. | | | Stock Ownership:
• 26,439,035 Common Shares — $200,936,666
• 142,290 RSUs (comprised of 107,903 vested RSUs — $820,063, and 34,387 unvested RSUs — $261,341)
• Total Equity Value at Risk: $201,756,729, representing 40,351% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 201,757% of the annual Board retainer.
2022 Meeting Attendance:1
• Board: 11/11
• Finance & Transactions Committee: 2/2
• Special Transactions Committee: 2/2
Qualifications:
The Board has determined that the skills and expertise that Mr. Paulson acquired founding and leading Paulson & Co. Inc., including his in-depth knowledge of financial transactions and leadership abilities, qualify him to serve as a member of the Board and the committee on which he serves. |
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Age: 66
Pennsylvania, USA
Director Since: 2008
Independent
Committees:
• Talent & Compensation Committee (Chair)
• Nominating & Corporate Governance | | | Mr. Power has served on the Board since August 2008. He is currently a corporate director. From 2009 to 2011, Mr. Power was a faculty member at The Wharton School of Business, University of Pennsylvania, where he taught multinational marketing. Mr. Power has over 25 years’ experience working in the pharmaceutical and biotechnology industry, which he gained serving in a number of leadership positions with Wyeth from 1985 through 2007, including Director — New Product Development, Managing Director — U.K./Ireland, Vice President — Global Marketing, President — Europe, Middle East, Africa, President — International and Executive Vice President — Global Business Operations. Mr. Power also has completed the Director Professionalism course offered by the relevant director. It does not includeNational Association of Corporate Directors. Mr. Power has a B.S. in statistics from the valueState University of any options (as applicable) orNew York and an M.S. in biostatistics from the Medical College of Virginia- Virginia Commonwealth University. | | | Stock Ownership:
• 6,601 Common Shares — $50,168
• 129,210 Restricted Share Units (“RSUs”) (comprised of 94,823 vested RSUs — $720,655, and 34,387 unvested RSUs.RSUs — $261,341)
• Total Equity Value at Risk: $770,822, representing 154% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 771% of the annual Board retainer.
2022 Meeting Attendance:1
• Board: 13/13
• Audit & Risk Committee: 8/8
• Nominating & Corporate Governance Committee: 6/6
• Talent & Compensation Committee: 4/4
• Science & Technology Committee: 1/1
Qualifications:
The Board has determined that Mr. Power’s extensive experience in the pharmaceutical industry and international business is a valuable contribution to the Board. In addition, his experience in general management, strategic planning, working with Research and Development organizations, business development, product marketing, merging and streamlining of organizations and his demonstrated leadership in a multi-billion-dollar business qualify Mr. Power as a member of the Board and the committees on which he serves. |
Mr. Hale has served on the Board since August 2015. He is a Partner of ValueAct Capital Management, L.P. (“ValueAct Capital”), a governance-oriented investment fund which invests in a concentrated portfolio of public companies and works collaboratively with management and the board of directors on matters such as strategy, capital structure, M&A and talent management. During his tenure at ValueAct Capital as a Partner, and formerly as a Vice President and Associate, Mr. Hale has worked on investments in the pharmaceutical, medical device, information technology and business services industries. Prior to joining ValueAct Capital in January 2011, Mr. Hale was a Principal with The Parthenon Group, a strategy consultancy firm, working with corporate and private equity clients in industries such as investment management, media, education and retail in both the Boston and Mumbai offices of Parthenon’s strategic consulting practice. He also worked in an investment role at Parthenon’s long-short public equity vehicle, Strategic Value Capital. Mr. Hale has an A.B. from Dartmouth College.
Mr. Hale has served as a director of Olympus Corporation, a publicly traded manufacturer of optics and reprography products, since June 2019.
Director Qualifications:
The Board has determined that Mr. Hale’s in-depth knowledge of complex financial and global capital market issues, his proven leadership experience in investment and governance positions, and his extensive knowledge of financial and operational matters qualify him to serve as a member of the Board and the committees on which he serves.
Mr. D. Robert Hale
California, USA
Age 36
Independent
Stock Ownership:
17,941,603 Common Shares — $569,645,895
11,037 RSUs (comprised of 0 vested RSUs — $0, and 11,037 unvested RSUs — $350,425)
Total Equity Value at Risk: $569,645,895, representing 113,929% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 569,646% of the annual Board retainer.
2020 Meeting Attendance:
Talent and Compensation Committee — 7/7
Finance and Transactions Committee — 7/7
Special Transactions Committee — 4/4
Mr. Icahn was appointed to the Board on March 17, 2021 pursuant to the Appointment and Nomination Agreement described under “Certain Transactions” begining on page 90 (the “Nomination Agreement”). Since October 2020, he has been a portfolio manager for Icahn Capital LP, a subsidiary of Icahn Enterprises L.P., a diversified holding company engaged in a variety of businesses, including investment, automotive, energy, food packaging, metals, real estate and home fashion. Mr. Icahn has held a variety of investment advisory roles at Icahn Enterprises L.P. since 2002, including as an investment strategy consultant from 2017 to October 2020, and as portfolio manager of the Sargon Portfolio from 2010 to 2017.
Mr. Icahn has served on the board of Icahn Enterprises L.P., a private entity, since October 2020. He has also been a director of Newell Brands Inc., a publicly traded global marketer of consumer and commercial products, since March 2018, and was previously a director of Nuance Communications, Inc., a provider of voice and language solutions, from October 2013 to March 2016. Mr. Icahn also previously served on the boards of American Railcar Industries, Inc., Take-Two Interactive Software Inc., The Hain Celestial Group, Inc. and Voltari Corporation. Mr. Carl C. Icahn, the founder and controlling shareholder of Icahn Enterprises L.P., has or previously had non-controlling interests in Nuance Communications, Inc., Hain Celestial Group, Inc. and Take-Two Interactive Software Inc. Mr. Icahn received a B.A. from Princeton University.
Director Qualifications:
The Board has determined that Mr. Icahn’s experience at the Icahn entities, and his service as a director of multiple public company boards, and his tenure as a Portfolio Manager provide him with expertise in investing and capital allocation, which qualifies him to serve as a member of the Board and the committees on which he serves.
Brett Icahn
Florida, USA
Age 41
Independent
Stock Ownership:
Total Equity Value at Risk: $0 representing 0% of both the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and the annual Board retainer. Mr. Icahn has until March 17, 2026 to achieve the expected minimum equity ownership under such share ownership guidelines.
2020 Meeting Attendance:
Not applicable.
1
| On the IPO Closing Date, Mr. Power was appointed to the Talent and Compensation Committee and resigned from the Science and Technology Committee. |
Dr. Karabelas has served on the Board since June 2016. Since January 2021, he has been a Venture Partner at Apple Tree Partners, a life sciences venture firm. From December 2001 until December 2020, he was a Partner at Care Capital, LLC, a life sciences venture firm. Dr. Karabelas was previously the founder and Chairman at Novartis BioVenture Fund, and served as Head of Healthcare and CEO of Worldwide Pharmaceuticals for Novartis Pharma AG. Prior to joining Novartis, Dr. Karabelas was Executive Vice President of SmithKline Beecham, where he was responsible for U.S. and European operations, regulatory and strategic marketing. Dr. Karabelas received a B.S. from the University of New Hampshire and a Ph.D. from the Massachusetts College of Pharmacy.
Dr. Karabelas has been a director of REGENXBIO Inc., a publicly held clinical-stage biotechnology company, since May 2015, and since July 2020 has also served as Lead Independent Director. He has also served on the board of Braeburn Pharmaceuticals, Inc., a privately held specialty pharmaceuticals company, since September 2015. Dr. Karabelas previously served as Chairman of the board of Inotek Pharmaceuticals Corporation, a clinical-stage biopharmaceutical company (which merged with Rocket Pharmaceuticals, Inc. in 2017), from July 2012 until June 2016.
Director Qualifications:
The Board has determined that Dr. Karabelas’s many years of experience in senior management positions, his strong knowledge of strategic and regulatory issues, his insight into international operations and his international perspective on the pharmaceutical industry and healthcare related issues qualify him to serve as a member of the Board and the committees on which he serves.
Dr. Argeris (Jerry) N. Karabelas
New Hampshire, USA
Age 68
Independent
Stock Ownership:
4,000 Common Shares — $127,000
77,683 RSUs (comprised of 66,646 vested RSUs — $2,116,011, and 11,037 unvested RSUs —$350,425)
Total Equity Value at Risk: $2,243,011, representing 449% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 2,243% of the annual Board retainer.
2020 Meeting Attendance:
Talent and Compensation Committee — 7/7
Science and Technology Committee — 6/6
Special Transactions Committee — 4/4
Ms. Kavanagh has served on the Board since July 2016. She is currently a corporate director. From 2011 through May 2016, Ms. Kavanagh served as a Commissioner of the Ontario Securities Commission, where she also served as chairperson of the audit committee starting in 2014. Between 1999 and 2010, Ms. Kavanagh served in various senior investment banking roles at Scotia Capital Inc., including Vice-Chair and Co-Head of Diversified Industries Group, Head of Equity Capital Markets, and Head of Investment Banking. Prior to Scotia Capital, she held several senior financial positions with operating companies. She started her career as an investment banker with a bulge bracket firm in New York. Ms. Kavanagh graduated from Harvard Business School with a Master of Business Administration and received a Bachelor of Arts degree in Economics from Williams College.
Since 2013, Ms. Kavanagh has been a director of Hudbay Minerals Inc., a publicly traded Canadian mining corporation, and a member of the board of trustees of WPT Industrial REIT, a publicly traded open-ended real estate investment trust. In addition to her public company directorships, she is a director of AST and AST Trust Company (Canada) (formerly Canadian Stock Transfer Company) and also serves as a director of Sustainable Development Technology Canada. She completed the Directors Education Program at the Institute of Corporate Directors in 2011.
Director Qualifications:
The Board has determined that Ms. Kavanagh’s extensive experience of complex financial and capital market issues at various banking institutions, and her in-depth knowledge of financial and operational matters qualify her to serve as a member of the Board and the committees on which she serves.
Sarah B. Kavanagh
Ontario, Canada
Age 64
Independent
Stock Ownership:
75,415 RSUs (comprised of 64,378 vested RSUs — $2,044,002, and 11,037 unvested RSUs —$350,425)
Total Equity Value at Risk: $2,044,002, representing 409% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 2,044% of the annual Board retainer.
2020 Meeting Attendance:
Audit and Risk Committee — 9/9
Nominating and Corporate Governance Committee — 4/4
Finance and Transactions Committee — 7/7
Special Transactions Committee — 4/4
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Age: 75
Ontario, Canada
Director Since: 2016
Independent
Committees:
• Audit & Risk Committee (Chair) | | | Mr. Robertson has served on the Board since June 2016. He is currently a corporate director. From 2013 through August 2016, Mr. Robertson served as EVP and Head, Anti-Money Laundering, at BMO Financial Group (“BMO”), a diversified financial services organization. Prior to that role, he served as EVP, Business Integration, at BMO Financial Group, and as Vice Chair at BMO Financial Corp. from 2011. He joined BMO as interim Chief Financial Officer, BMO Financial Group in 2008 and was appointed Chief Financial Officer, BMO Financial Group in 2009. Before joining BMO, Mr. Robertson spent over 35 years as a Chartered Public Accountant. In this capacity, he held various senior positions with a number of major accounting firms, including Vice Chair, Deloitte & Touche LLP in Toronto, Canada, from 2002 to 2008, and Canadian Managing Partner, Arthur Andersen LLP, from 1994 to 2002. Mr. Robertson holds a Bachelor of Arts degree (Honours) from the Ivey School of Business at the University of Western Ontario.
Mr. Robertson joined the board of directors of Bausch + Lomb Corporation, a publicly traded eye health company, in May 2022. Mr. Robertson has served on the board of Hydro One Limited, a publicly traded electricity transmission and distribution utility serving the Canadian province of Ontario, since August 2018. Mr. Robertson previously served on the board of Turquoise Hill Resources, a publicly traded Canadian mineral exploration and development company, from 2012 to December 2022, and Virtus Investment Partners, Inc., a multi-manager asset management business, from 2013 to August 2016. | | | Stock Ownership:
• 0 Common Shares — $0
• 177,416 Restricted Share Units (“RSUs”) (comprised of 143,029 vested RSUs — $1,087,020, and 34,387 unvested RSUs — $261,341)
• Total Equity Value at Risk: $1,087,020, representing 217% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 1087% of the annual Board re tainer.
2022 Meeting Attendance:
• Board: 13/13
• Audit & Risk Committee: 8/8
• Nominating & Corporate Gover nance Committee: 6/6
Qualifications:
The Board has determined that Mr. Robertson’s extensive experience of complex financial matters at Deloitte & Touche LLP and Arthur Andersen LLP, in-depth knowledge of financial and accounting matters and leadership capabilities in senior finance positions qualify him to serve as a member of the Board and as Chairman of the Audit and Risk Committee. |
Mr. Miller was appointed to the Board on March 17, 2021 pursuant to the Nomination Agreement described under “Certain Transactions” beginning on page 90. Since October 2020, Mr. Miller has been a portfolio manager for Icahn Capital LP, a subsidiary of Icahn Enterprises L.P., a diversified holding company engaged in a variety of businesses, including investment, automotive, energy, food packaging, metals, real estate and home fashion. Prior to joining Icahn Capital L.P., Mr. Miller was an analyst in the Distressed and Special Situations investment group in the New York office of BlueMountain Capital Management, LLC from 2013 to 2019. Mr. Miller represented BlueMountain on the Ad Hoc Group of Puerto Rico Electric Power Authority Bondholders from 2014 to 2019, and from 2011 to 2013 he was an analyst in the Distressed Products Group in the New York office of Goldman, Sachs & Co. Mr. Miller received a B.S. summa cum laude from Duke University in 2011.
Mr. Miller has been a director of Conduent Incorporated, a publicly traded business process services company, since February 2021.
Director Qualifications:
The Board has determined that Mr. Miller’s experience as a portfolio manager and securities analyst has provided him with experience in investing and finance and complex debt matters, respectively, which qualifies him to serve as a member of the Board and the committees on which he serves.
20
Steven D. Miller
Florida, USA
Age 32
Independent
Stock Ownership:
100 Common Shares — $3,175
Total Equity Value at Risk: $3,175 representing 1% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 3% of the annual Board retainer. Mr. Miller has until March 17, 2026 to achieve the expected minimum equity ownership under such share ownership guidelines.
2020 Meeting Attendance:
Mr. Papa has been Chairman of the Board and Chief Executive Officer of the Company since May 2016. Mr. Papa has more than 35 years of experience in the pharmaceutical, healthcare and specialty pharmaceutical industries, including 20 years of branded prescription drug experience. He served as the CEO of Perrigo Company plc (“Perrigo”) from 2006 to April 2016, where he also served as Chairman from 2007 to April 2016. Prior to joining Perrigo, Mr. Papa served from 2004 to 2006 as Chairman and CEO of the Pharmaceutical and Technologies Services segment of Cardinal Health, Inc. From 2001 to 2004, he served as President and Chief Operating Officer of Watson Pharmaceuticals, Inc. (“Watson”). Prior to joining Watson, Mr. Papa held management positions at DuPont Pharmaceuticals, Pharmacia/Searle and Novartis AG. Mr. Papa holds a BS in pharmacy from the University of Connecticut and an MBA from Northwestern University’s Kellogg Graduate School of Management.
Mr. Papa joined the board of directors of Prometheus Biosciences, Inc., a privately held biopharmaceutical company, in August 2020, and previously served as a director of Smith & Nephew plc, a publicly traded medical device company, from 2008 to April 2018.
Director Qualifications:
The Board has determined that Mr. Papa’s extensive experience as a chief executive officer of a public company, where he demonstrated leadership capability and extensive knowledge of complex financial and operational issues facing large organizations, and his understanding of operations and financial strategy in challenging environments, qualify him to serve as a member of the Board. Additionally, Mr. Papa’s knowledge of the pharmaceutical industry and business, combined with his drive for innovation and excellence, position him well to serve as the Chairman of the Board.
Joseph C. Papa
New Jersey, USA
Age 65
Not Independent
Stock Ownership:
618,535 Common Shares — $19,638,486
153,138 RSUs (comprised of 153,138 unvested RSUs —$4,862,132)
Total Equity Value at Risk: $19,638,486, based on the value of the Common Shares beneficially owned by Mr. Papa (but excluding all options and unvested RSUs).
Mr. Papa is subject to share ownership guidelines under the terms of his employment agreement with the Company, as further described in the section titled “Compensation Discussion and Analysis – Other Compensation Governance Practices – Share Ownership Guidelines” on page 64.
2020 Meeting Attendance:
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Age: 72
North Carolina, USA
Director Since: 2016
Independent
Committees:
• Talent & Compensation Committee | | | Mr. Ross has served on the Board since March 2016. He served as our Lead Independent Director from June 2016 through June 2022. Mr. Ross joined the board of directors of Bausch + Lomb Corporation, a publicly traded eye health company, in May 2022. He served as president of the Volcker Alliance from July 2016 until December 2021. He continues to serve as a Senior Advisor to the Volcker Alliance as well as a director on the Alliance board. He is President Emeritus of the University of North Carolina (“UNC”), having served as President from 2011 to January 2016. Mr. Ross was named the Sanford Distinguished Fellow in Public Policy at the Duke University Sanford School of Public Policy in 2016. Prior to becoming President of the UNC system, Mr. Ross served as President of Davidson College, Executive Director of the Z. Smith Reynolds Foundation, director of the North Carolina Administrative Office of the Courts, a Superior Court judge, chief of staff to U.S. Congressman Robin Britt, a member of the Greensboro, NC law firm Smith, Patterson, Follin, Curtis, James & Harkavy, and Assistant Professor of Public Law and Government at UNC Chapel Hill’s School of Government. Mr. Ross holds a B.A. in Political Science from Davidson College and a J.D. from University of North Carolina School of Law. | | | Stock Ownership:
• 11,500 Common Shares — $87,400
• 120,811 Restricted Share Units (“RSUs”) (comprised of 86,424 vested RSUs — $656,822, and 34,387 unvested RSUs — $261,341)
• Total Equity Value at Risk: $744,222, representing 149% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 744% of the annual Board retainer.
2022 Meeting Attendance:
• Board: 13/13
• Audit & Risk Committee: 8/8
• Nominating & Corporate Governance Committee: 6/6
• Special Transactions Committee: 2/2
Qualifications:
The Board has determined that Mr. Ross’s demonstrated leadership in senior management positions, extensive experience with corporate governance responsibilities and complex knowledge of legal, compliance and operational issues qualify him to serve as a member of the Board and the committees on which he serves. |
Mr. Paulson has served on the Board since June 2017. Mr. Paulson is the President and Portfolio Manager of Paulson & Co. Inc., an SEC-registered investment management company specializing in global mergers, event arbitrage and credit strategies, which he founded in 1994. Prior to forming Paulson & Co. Inc., Mr. Paulson was a Partner of Gruss Partners and a Managing Director in mergers and acquisitions at Bear Stearns. Mr. Paulson received his undergraduate degree from New York University in 1978 and his Master of Business Administration from Harvard Business School in 1980.
Mr. Paulson has been a director of BrightSphere Investment Group Inc., a publicly traded asset management holding company, since November 2018, and has served as Chairman since April 2020. He also currently serves as a member of the advisory board of Harvard Business School. Mr. Paulson previously served as a director of American International Group Inc., a multinational finance and insurance corporation, from May 2016 to June 2017.
Director Qualifications:
The Board has determined that the skills and expertise that Mr. Paulson acquired founding and leading Paulson & Co. Inc., including his in-depth knowledge of financial transactions and leadership abilities, qualify him to serve as a member of the Board and the committee on which he serves.
21
John A. Paulson
New York, USA
Age 65
Independent
Stock Ownership:
25,839,035 Common Shares — $820,389,361
73,440 RSUs (comprised of 62,403 vested RSUs — $1,981,295, and 11,037 unvested RSUs — $350,425)
Total Equity Value at Risk: $822,370,656, representing 164,474% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 822,371% of the annual Board retainer.
2020 Meeting Attendance:
Finance and Transactions Committee — 7/7
Special Transactions Committee — 4/4
Mr. Power has served on the Board since August 2008. He is currently a corporate director. From 2009 to 2011, Mr. Power was a faculty member at The Wharton School of Business, University of Pennsylvania, where he taught multinational marketing. Mr. Power has over 25 years’ experience working in the pharmaceutical and biotechnology industry, which he gained serving in a number of leadership positions with Wyeth from 1985 through 2007, including Director — New Product Development, Managing Director — U.K./Ireland, Vice President — Global Marketing, President — Europe, Middle East, Africa, President — International and Executive Vice President — Global Business Operations. Mr. Power also has completed the Director Professionalism course offered by the National Association of Corporate Directors. Mr. Power has a B.S. in statistics from the State University of New York and an M.S. in biostatistics from the Medical College of Virginia- Virginia Commonwealth University.
Director Qualifications:
The Board has determined that Mr. Power’s extensive experience in the pharmaceutical industry and international business is a valuable contribution to the Board. In addition, his experience in general management, strategic planning, working with Research and Development organizations, business development, product marketing, merging and streamlining of organizations and his demonstrated leadership in a multi-billion-dollar business qualify Mr. Power as a member of the Board and the committees on which he serves.
Robert N. Power
Pennsylvania, USA
Age 64
Independent
Stock Ownership:
6,601 Common Shares — $209,582
87,178 RSUs (comprised of 76,141 vested RSUs — $2,417,477, and 11,037 unvested RSUs — $350,425)
Total Equity Value at Risk: $2,627,059, representing 525% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 2,627% of the annual Board retainer.
2020 Meeting Attendance:
Audit and Risk Committee — 9/9
Nominating and Corporate Governance Committee — 4/4
Science and Technology Committee — 6/6
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Age: 53
New York, USA
Director Since: 2016
Independent
Committees:
• Talent & Compensation Committee
• Science & Technology Committee | | | Dr. Wechsler has served on the Board since June 2016. She has been a practicing dermatologist in New York City since 2005. Dr. Wechsler is the author of The Mind-Beauty Connection, published by Simon & Schuster in 2008. She is board certified in both dermatology and psychiatry and is also an Adjunct Clinical Professor in Psychiatry at the Weill Cornell Medical College. As an expert on skin health, Dr. Wechsler serves as an advisor for Chanel Skin Care and is also a certified trainer and well-known KOL Speaker, qualified to teach physicians and other medical professionals in the use of various dermatological products. Dr. Wechsler is an active member of several medical professional organizations, including the American Academy of Dermatology, the American Psychiatric Association, the American Academy of Child and Adolescent Psychiatry, the Independent Doctors of New York, The Physicians Scientific Society, and The Skin Cancer Foundation. Dr. Wechsler completed her residency in psychiatry and a fellowship in child and adolescent psychiatry at New York Presbyterian Hospital’s Payne Whitney Clinic, and completed a residency in dermatology at SUNY Downstate Medical Center. Dr. Wechsler is currently pursuing a Master of Business Administration at Columbia Business School. | | | Stock Ownership:
• 7,645 Common Shares —$58,102
• 136,654 Restricted Share Units (“RSUs”) (comprised of 94,622 vested RSUs — $719,127 and 34,387 unvested RSUs — $)
• Total Equity Value at Risk: $777,229, representing 155% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 777% of the annual Board retainer.
2022 Meeting Attendance:
• Board: 13/13
• Talent & Compensation Committee: 8/8
• Science & Technology Committee: 3/3
Qualifications:
The Board has determined that Dr. Wechsler’s many years of experience as a board-certified dermatologist and psychiatrist, her strong knowledge of medical products to assist patients with their medical needs and her insight into the medical field and pharmaceutical industry and healthcare related issues qualify her to serve as a member of the Board and on the committees on which she serves. |
Mr. Robertson has served on the Board since June 2016. He is currently a corporate director. From 2013 through August 2016, Mr. Robertson served as Executive Vice President and Head, Anti-Money Laundering, at BMO Financial Group (“BMO”), a diversified financial services organization. Prior to that role, he served as Executive Vice President, Business Integration, at BMO Financial Group, and as Vice Chair at BMO Financial Corp. from 2011. He joined BMO as interim Chief Financial Officer, BMO Financial Group in 2008 and was appointed Chief Financial Officer, BMO Financial Group in 2009. Before joining BMO, Mr. Robertson spent over 35 years as a Chartered Public Accountant. In this capacity, he held various senior positions with a number of major accounting firms, including Vice Chair, Deloitte & Touche LLP in Toronto, Canada, from 2002 to 2008, and Canadian Managing Partner, Arthur Andersen LLP, from 1994 to 2002. Mr. Robertson holds a Bachelor of Arts degree (Honours) from the Ivey School of Business at the University of Western Ontario.
Mr. Robertson has served on the board of Hydro One Limited, a publicly traded electricity transmission and distribution utility serving the Canadian province of Ontario, since August 2018, and since 2012 has served on the board of Turquoise Hill Resources, a publicly traded Canadian mineral exploration and development company. Mr. Robertson previously served on the board of Virtus Investment Partners, Inc., a multi-manager asset management business, from 2013 to August 2016.
Director Qualifications:
The Board has determined that Mr. Robertson’s extensive experience of complex financial matters at Deloitte & Touche LLP and Arthur Andersen LLP, in-depth knowledge of financial and accounting matters and leadership capabilities in senior finance positions qualify him to serve as a member of the Board and as Chairman of the Audit and Risk Committee.
22
Russel C. Robertson
Ontario, Canada
Age 73
Independent
Stock Ownership:
113,704 RSUs (comprised of 102,667 vested RSUs — $3,259,677, and 11,037 unvested RSUs — $350,425)
Total Equity Value at Risk: $3,259,677, representing 652% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 3,260% of the annual Board retainer.
2020 Meeting Attendance:
Audit and Risk Committee — 9/9
Nominating and Corporate Governance Committee — 3/4
Mr. Ross has served on the Board since March 2016 and was appointed our Lead Independent Director in June 2016. He has served as the President of Volcker Alliance since July 2016, where he also serves as a director. He is President Emeritus of the University of North Carolina (“UNC”), having served as President from 2011 to January 2016. Mr. Ross was named the Sanford Distinguished Fellow in Public Policy at the Duke University Sanford School of Public Policy in 2016 and continues to serve in that role. Prior to becoming President of the UNC system, Mr. Ross served as President of Davidson College, Executive Director of the Z. Smith Reynolds Foundation, director of the North Carolina Administrative Office of the Courts, a Superior Court judge, chief of staff to U.S. Congressman Robin Britt, a member of the Greensboro, NC law firm Smith, Patterson, Follin, Curtis, James & Harkavy, and Assistant Professor of Public Law and Government at UNC Chapel Hill’s School of Government. Mr. Ross holds a B.A. in Political Science from Davidson College and a J.D. from University of North Carolina School of Law.
Director Qualifications:
The Board has determined that Mr. Ross’s demonstrated leadership in senior management positions, extensive experience with corporate governance responsibilities and complex knowledge of legal, compliance and operational issues qualify him to serve as a member of the Board and the committees on which he serves.
Thomas W. Ross, Sr.
North Carolina, USA
Age 70
Independent
Stock Ownership:
11,500 Common Shares — $365,125
78,779 RSUs (comprised of 67,742 vested RSUs — $2,150,809, and 11,037 unvested RSUs — $350,425)
Total Equity Value at Risk: $2,515,934, representing 503% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 2,516% of the annual Board retainer.
2020 Meeting Attendance:
Audit and Risk Committee — 9/9
Nominating and Corporate Governance Committee — 4/4
Special Transactions Committee — 4/4
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Dr. von Eschenbach has served on the Board since October 2018. Dr. von Eschenbach has been the President of Samaritan Health Initiatives, Inc., a health care policy consultancy, and an Adjunct Professor at University of Texas MD Anderson Cancer Center, since 2010. From 2005 to 2009, Dr. von Eschenbach served as Commissioner of the U.S. Food and Drug Administration (the “FDA”). He was appointed Commissioner of the FDA after serving for four years as Director of the National Cancer Institute at the National Institutes of Health. As a researcher, clinician and administrator, Dr. von Eschenbach served for twenty-six years at the University of Texas MD Anderson Cancer Center as Chairman of Urology, Director of the Prostate Cancer Research Program and Executive Vice President and Chief Academic Officer. He earned a B.S. from St. Joseph’s University and a medical degree from Georgetown University School of Medicine in Washington, D.C. He completed his residency in surgery and urology at Pennsylvania Hospital and University of Pennsylvania, respectively, and his urologic oncology fellowship at University of Texas MD Anderson Cancer Center.
Dr. von Eschenbach has served as a director of Radius Health, Inc., a publicly traded biopharmaceutical company, since January 2021. He has served as a director of Celularity, Inc., a private biotechnology company, and as a director of Wren Therapeutics, Ltd, a private biopharmaceutical company, since February 2018 and November 2019, respectively. Dr. von Eschenbach also been a member of the board of the Regan Udall Foundation of the FDA, a non-profit organization formed to advance regulatory science, since December 2018.
Director Qualifications:
The Board has determined that Dr. von Eschenbach’s broad experience serving as a director of public and private companies and non-profit organizations in the pharmaceutical and healthcare industries, as well as serving as an advisor and consultant to entities engaged in policy development in the pharmaceutical industry, qualify him to serve as a member of the Board and the committee on which he serves.
Andrew C. von Eschenbach, M.D.
Texas, USA
Age 79
Independent
Stock Ownership:
2,100 Common Shares — $66,675
27,502 RSUs (comprised of 16,465 vested RSUs — $522,764, and 11,037 unvested RSUs — $350,425)
Total Equity Value at Risk: $589,439, representing 118% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 589% of the annual Board retainer.
2020 Meeting Attendance:
Science and Technology Committee — 6/6
Dr. Wechsler has served on the Board since June 2016. She has been a practicing dermatologist in New York City since 2005. Dr. Wechsler is the author of The Mind-Beauty Connection, published by Simon & Schuster in 2008. She is board certified in both dermatology and psychiatry and is also an Adjunct Clinical Professor in Psychiatry at the Weill Cornell Medical College. As an expert on skin health, Dr. Wechsler serves as an advisor for Chanel Skin Care and is also a certified trainer and well-known KOL Speaker, qualified to teach physicians and other medical professionals in the use of various dermatological products. Dr. Wechsler is an active member of several medical professional organizations, including the American Academy of Dermatology, the American Psychiatric Association, the American Academy of Child and Adolescent Psychiatry, the Independent Doctors of New York, The Physicians Scientific Society, and The Skin Cancer Foundation. Dr. Wechsler completed her residency in psychiatry and a fellowship in child and adolescent psychiatry at New York Presbyterian Hospital’s Payne Whitney Clinic, and completed a residency in dermatology at SUNY Downstate Medical Center.
Director Qualifications:
The Board has determined that Dr. Wechsler’s many years of experience as a board-certified dermatologist and psychiatrist, her strong knowledge of medical products to assist patients with their medical needs and her insight into the medical field and pharmaceutical industry and healthcare related issues qualify her to serve as a member of the Board and on the committees on which she serves.
Amy B. Wechsler, M.D.
New York, USA
Age 51
Independent
Stock Ownership:
101,501 RSUs (comprised of 90,464 vested RSUs — $2,872,232, and 11,037 unvested RSUs — $350,425)
Total Equity Value at Risk: $2,872,232, representing 574% of the Company’s current aggregate amount of $500,000 required under the share ownership guidelines for non-employee Directors and 2,872% of the annual Board retainer.
2020 Meeting Attendance:
Talent and Compensation Committee — 5/7
Science and Technology Committee — 6/6
Messrs. Icahn and Miller were appointed to the Board on March 17, 2021 pursuant to the Nomination Agreement described under “Certain Transactions” beginning on page 90. No other directors or director nominees of the Company were selected for nomination at the Annual Meeting pursuant to any arrangement or understanding. None of the directors or director nominees are related by blood, marriage or adoption to one another or to any executive officer of the Company.
STATEMENT OF CORPORATE GOVERNANCE PRACTICES
The Board is committed to sound and effective corporate governance practices with the goal of ensuring the Company’s financial strength and overall business success. Our governance practices are periodically assessed against those practices suggested by recognized governance authorities and are designed to maintain alignment with shareholder interests and key governance best practices.
The Board believes that, in order to be effective, our Board must be able to operate independently of management. As described in our Corporate Governance Guidelines, available on our website at
www.bauschhealth.com (under the tab “Investors” and under the subtab “Corporate Governance — Corporate Governance Documents”), a sufficient number of directors must satisfy the applicable tests of independence, such that the Board complies with all independence requirements under corporate and securities laws and stock exchange requirements applicable to the Company. The Corporate Governance Guidelines further provide that the Nominating and Corporate Governance Committee, as well as the Board, reviews the relationships that each director has with the Company in order to satisfy itself that these independence criteria have been met. On an annual basis, as part of our disclosure procedures, all directors complete a questionnaire pertaining to, among other things, share ownership, family and business relationships, and director independence standards. The Board must then disclose in the Company’s annual management proxy circular and proxy statement the identity of each of the independent directors and the basis for the Board’s determination for each of the directors who are not independent.
The
As of the date of the Meeting, the Board
is currentlywill be comprised of
thirteenten members. The Board has determined that
twelvenine of our
thirteenten current directors (or
92%90%) are “independent directors” within the meaning of applicable regulatory and stock exchange requirements in Canada and the United States, as none of them have a material relationship with the Company that could be reasonably expected to interfere with their exercise of independent judgment. The
twelvenine independent directors currently on the board are: Mr.
Ross (Lead Independent Director), Mr. De Schutter, Mr. Hale, Mr. Icahn,
Dr. Karabelas, Ms. Kavanagh, Mr. Miller,
Dr. Mulligan, Mr. Paulson, Mr. Power, Mr.
Ross, Mr. Robertson,
Dr. von Eschenbach, and Dr. Wechsler.
None of our current directors (all of whom are director nominees) have entered into employment, service or similar contracts with us, with the exception of Mr.
Papa. On April 25, 2016, Mr. Papa entered into an employment agreementAppio, as further discussed in the section titled “Compensation Discussion and Analysis – Arrangements with
the Company as its Chairman of the Board and Chief Executive Officer (“CEO”)Our NEOs” on page 53. For this reason, the Board has determined that
heMr. Appio is not an independent director and will not be eligible to serve on the Audit and Risk Committee, the Talent and Compensation Committee, or the Nominating and Corporate Governance Committee.
Board Leadership Structure
Our Corporate Governance Guidelines provide
In connection with the resignation of Mr. Papa as CEO and director, the Board appointed Mr. Paulson as the Non-Executive Chairperson of the Board. With Mr. Paulson serving as the Non-Executive Chairperson of the Board, there was no need for a Lead Independent Director and Mr. Ross resigned that ourposition, but remained a director. With the roles of Chairperson and CEO separated, the Board may determine from timedetermined to timehave the most effective leadership structure forChairperson in a presiding capacity, coordinating the Company, including whether the same individual should serve both as Chairmanactivities of the Board and perform the CEO. Mr. Papa, our CEO, also serves as Chairman of the Board. Due to the in-depth knowledge of the Company’s operations gained by serving as CEO, Mr. Papa is well positioned to identify and lead Board deliberations regarding important matters relating to the Company’s operations, strategic priorities, and overall development. The Board believes that serving as both CEO and Chairman of the Board enables Mr. Papa to facilitate effective communication between Company management and the Board and to
ensure key issues and recommendations are brought to the attention of the Board. The Board believes that this leadership structure, in conjunction with the appointment of a Lead Independent Director, is the most effective for the Company at this time, and that the existing corporate governance practices effectively achieve independent oversight and management accountability.
Our Corporate Governance Guidelines also provide that, if the same individual serves as Chairman of the Board and CEO, or if the Chairman of the Board is otherwise not independent, our Board shall appoint a Lead Independent Director. Our independent directors annually appoint a Lead Independent Director. Mr. Ross has been appointed to serve as Lead Independent Director each year since June 2016.
The responsibilities of the Lead Independent Director areduties set forth in the Company’s Position Description for the Lead Independent Director,Chairperson of the Board, which is posted on the Company’s website at www.bauschhealth.com (under the tab “Investors” and under the subtab “Corporate Governance — Corporate Governance Documents”). These responsibilities include: (i) fostering processes that allowleading, managing and organizing the Board to function independently of management and encouraging open and effective communication between the Board and management of the Company; (ii) providing input to the Chairman on behalf of the independent directors with respect to Board agendas; (iii) presiding at all meetings of the Board at which the Chairman is not present, as well as regularly scheduled executive sessions of independent directors; (iv) in the case of a conflict of interest involving a director, if appropriate, asking the conflicted director to leave the room during discussion concerning such matter and, if appropriate, asking such director to recuse him or herself from voting on the relevant matter; (v) communicatingconsistent with the Chairman and the CEO, as appropriate, regarding meetings of the independent directors and resources and information necessary for the Boardapproach to effectively carry out its duties and responsibilities; (vi) serving as liaison between the Chairman and the independent directors; (vii) being available to directors who have concerns that cannot be addressed through the Chairman; (viii) calling meetings of the independent directors, as needed or when appropriate; and (ix) performing other functions as may reasonably be requestedcorporate governance adopted by the Board from time to time; (ii) guiding the Board’s deliberations so that appropriate strategic and policy decisions are made; (iii) promoting cohesiveness among the Directors; (iv) satisfying himself or the Chairman. In the event the Company appoints an independent Chairman of the Board,herself that the responsibilities of the Lead Independent Director will be assumedBoard and its committees are well understood by the independent Chairman ofDirectors; and (v) acting as spokesperson for the Board.
Meetings of Independent Directors
The Corporate Governance Guidelines provide that the independent directors of the Board may meet in executive session at any meeting of the Board, and that an opportunity shall be provided during the meeting for any member of the Board to make such a request. The independent directors generally meet in executive sessions without management present during their regularly scheduled board and committee meetings, and on an as-needed basis during ad hoc meetings. Mr. Ross,Paulson, our Lead Independent Director,Chairperson of the Board, presides over executive sessions of the Board, and the committee chairs, all of whom are independent, preside over executive sessions of the Committees. During 2020,2023, our independent directors held executive sessions at each of the four regularly scheduled Board meetings and at one ad hoc meeting.meetings.
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The Board meets regularly, at least four times per year, including at least once annually to review our strategic plan. Additional meetings can be called when necessary. From January 1,
20202022 to December 31,
2020,2022, the Board had four regularly scheduled meetings and
fivenine ad hoc meetings to review specific matters. All agendas for Board and Board committee meetings are set by the
ChairmanChairperson of the Board in consultation with the Board committee Chairpersons, as necessary.
As required by the Company’s Articles, at least 50% of the directors then in office must be present in order to transact business at any Board meeting.
AtAll incumbent directors attended at least
91% of our directors participated in each94% of the
total Board
and Committee meetings
held during 2020.on which he or she served in 2022.
During 2020,2022, the Board had fivesix standing committees: the Audit and Risk Committee, the Talent and Compensation Committee, the Nominating and Corporate Governance Committee, the Finance and Transactions
Committee, and the Science and Technology Committee. In addition, on June 3, 2020, the Board established an ad hocCommittee, and Special Transactions Committee, to assist with evaluating strategic alternatives, including the proposed separation of the Company’s eye health business into an independent, publicly traded entity.
which was dissolved on October 25, 2022.
Directors are expected to attend and participate in substantially all meetings of the Board and of all committees on which they serve. The Board and Board committee attendance records for all directors who served on the Board during
20202022 are set forth below.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Board
9 Meetings | | | Audit
and Risk
Committee
9 Meetings | | | Talent and
Compensation
Committee
7 Meetings | | | Nominating
and
Corporate
Governance
Committee
4 Meetings | | | Finance and
Transactions
Committee
7 Meetings | | | Science and
Technology
Committee
6 Meetings | | | Special
Transactions
Committee
4 Meetings | | | Overall | |
Director | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | |
Richard U. De Schutter | | | 9 | | | | 100 | % | | | — | | | | — | | | | 7 | | | | 100 | % | | | — | | | | — | | | | 7 | | | | 100 | % | | | — | | | | — | | | | 4 | | | | 100 | % | | | 27/27 | | | | 100 | % |
D. Robert Hale | | | 9 | | | | 100 | % | | | — | | | | — | | | | 7 | | | | 100 | % | | | — | | | | — | | | | 7 | | | | 100 | % | | | — | | | | — | | | | 4 | | | | 100 | % | | | 27/27 | | | | 100 | % |
Dr. Argeris (Jerry) N. Karabelas | | | 9 | | | | 100 | % | | | — | | | | — | | | | 7 | | | | 100 | % | | | — | | | | — | | | | — | | | | — | | | | 6 | | | | 100 | % | | | 4 | | | | 100 | % | | | 26/26 | | | | 100 | % |
Sarah B. Kavanagh | | | 8 | | | | 89 | % | | | 9 | | | | 100 | % | | | — | | | | — | | | | 4 | | | | 100 | % | | | 7 | | | | 100 | % | | | — | | | | — | | | | 4 | | | | 100 | % | | | 32/33 | | | | 97 | % |
Joseph C. Papa | | | 9 | | | | 100 | % | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 9/9 | | | | 100 | % |
John A. Paulson | | | 9 | | | | 100 | % | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 7 | | | | 100 | % | | | — | | | | — | | | | 4 | | | | 100 | % | | | 20/20 | | | | 100 | % |
Robert N. Power | | | 9 | | | | 100 | % | | | 9 | | | | 100 | % | | | — | | | | — | | | | 4 | | | | 100 | % | | | — | | | | — | | | | 6 | | | | 100 | % | | | — | | | | — | | | | 28/28 | | | | 100 | % |
Russel C. Robertson | | | 8 | | | | 89 | % | | | 9 | | | | 100 | % | | | — | | | | — | | | | 3 | | | | 75 | % | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 20/22 | | | | 91 | % |
Thomas W. Ross, Sr. | | | 9 | | | | 100 | % | | | 9 | | | | 100 | % | | | — | | | | — | | | | 4 | | | | 100 | % | | | — | | | | — | | | | — | | | | — | | | | 4 | | | | 100 | % | | | 26/26 | | | | 100 | % |
Andrew C. von Eschenbach, M.D. | | | 9 | | | | 100 | % | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 6 | | | | 100 | % | | | — | | | | — | | | | 15/15 | | | | 100 | % |
Amy B. Wechsler, M.D. | | | 8 | | | | 89 | % | | | — | | | | — | | | | 5 | | | | 71 | % | | | — | | | | — | | | | — | | | | — | | | | 6 | | | | 100 | % | | | — | | | | — | | | | 19/22 | | | | 86 | % |
| | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % | | | # | | | % |
Thomas J. Appio(1) | | | 12 | | | 100% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Richard U. De Schutter | | | 12 | | | 100% | | | — | | | — | | | 8 | | | 100% | | | — | | | — | | | 12 | | | 92% | | | — | | | — | | | 2 | | | 100% | | | 34 | | | 94% |
Brett M. Icahn | | | 13 | | | 100% | | | — | | | — | | | — | | | — | | | — | | | — | | | 13 | | | 100% | | | — | | | — | | | 2 | | | 100% | | | 28 | | | 100% |
Dr. Argeris N. Karabelas | | | 13 | | | 100% | | | — | | | — | | | 8 | | | 100% | | | — | | | — | | | — | | | — | | | 3 | | | 100% | | | 2 | | | 100% | | | 26 | | | 100% |
Sarah B. Kavanagh | | | 13 | | | 100% | | | 8 | | | 100% | | | — | | | — | | | 6 | | | 100% | | | 13 | | | 100% | | | — | | | — | | | 2 | | | 100% | | | 42 | | | 100% |
Steven D. Miller | | | 13 | | | 100% | | | — | | | — | | | — | | | — | | | — | | | — | | | 13 | | | 100% | | | — | | | — | | | 2 | | | 100% | | | 28 | | | 100% |
Dr. Richard C. Mulligan(1) | | | 9 | | | 100% | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 2 | | | 100% | | | — | | | — | | | 11 | | | 100% |
Joseph C. Papa(3) | | | 7 | | | 100% | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 7 | | | 100% |
John A. Paulson(1)(3) | | | 11 | | | 100% | | | — | | | — | | | — | | | — | | | — | | | — | | | 2 | | | 100% | | | — | | | — | | | 2 | | | 100% | | | 15 | | | 100% |
Robert N. Power(2) | | | 13 | | | 100% | | | 8 | | | 100% | | | 4 | | | 100% | | | 6 | | | 100% | | | — | | | — | | | 1 | | | 100% | | | — | | | — | | | 32 | | | 100% |
Russel C. Robertson | | | 13 | | | 100% | | | 8 | | | 100% | | | — | | | — | | | 6 | | | 100% | | | — | | | — | | | — | | | — | | | — | | | — | | | 27 | | | 100% |
Thomas W. Ross, Sr. | | | 13 | | | 100% | | | 8 | | | 100% | | | — | | | — | | | 6 | | | 100% | | | — | | | — | | | — | | | — | | | 2 | | | 100% | | | 29 | | | 100% |
Andrew C. von Eschenbach(1) | | | 4 | | | 100% | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 1 | | | 100% | | | — | | | — | | | 5 | | | 100% |
Amy B. Wechsler, M.D. | | | 13 | | | 100% | | | — | | | — | | | 8 | | | 100% | | | — | | | — | | | — | | | — | | | 3 | | | 100% | | | — | | | — | | | 24 | | | 100% |
(1)
| On the IPO Closing Date, Mr. Appio and Dr. Mulligan joined the Board and Dr. von Eschenbach and Mr. Paulson resigned from the Board. Dr. Mulligan joined the Science & Technology Committee. |
(2)
| On the IPO Closing, Mr. Power resigned from the Science & Technology Committee and joined the Talent & Compensation Committee. |
(3)
| On June 23, 2022, Mr. Papa resigned from the Board and Mr. Paulson rejoined the Board as the Non-Executive Chairperson. |
(4)
| On October 25, 2022, the Board dissolved the Special Transactions Committee. |
Although we do not have a formal policy requiring our directors to attend our Annual Meetings of Shareholders, we expect all directors to attend the Annual Meeting absent exceptional circumstances. The 20202022 Annual Meeting of Shareholders was attended by all directors who were serving on the Board at that time and we anticipate that our directors will attend this year’s virtual Annual Meeting.
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The Board is responsible for the overall stewardship of the Company and its business, including supervising the management of the Company’s business and affairs. The Board discharges this responsibility directly and through delegation of specific responsibilities to committees of the Board and to our officers. Under the charter of the Board (the “Board Charter”), the Board has established committees to assist with its responsibilities. Our current standing Board committees are: the Audit and Risk Committee, the Talent and Compensation Committee, the Nominating and Corporate Governance Committee, the Finance and Transactions Committee, and the Science and Technology Committee.
The Board has also established an ad hoc Special Transactions Committee to assist with evaluating strategic alternatives, including the proposed separation of the Company’s eye health business into an independent, publicly traded entity.Under the Board Charter, the Board is responsible for, among other things, the following corporate governance-related matters: (i) overseeing the Company’s performance and the quality, depth and continuity of management needed to meet the Company’s strategic objectives; (ii) developing and approving the Company’s approach to and practices regarding corporate governance; (iii) succession planning; (iv) overseeing orientation and education programs for new directors and ongoing education opportunities for continuing directors; (v) reviewing, discussing and approving the Company’s strategic planning and organizational structure and supervising management to oversee that the strategic planning and organizational structure preserve and enhance the business of the Company and the Company’s underlying value; (vi) approving and assessing compliance with all significant policies and procedures by which the Company is operating, including the Company’s Standards
Bausch Health Code of Business Conduct (as described below); (vii) reviewing the Company’s principal risks and assessing whether appropriate systems are in place to manage such risks; and (viii) ensuring the integrity and adequacy of the Company’s internal controls.
The Board Charter is attached to this Proxy Statement as Exhibit A and is available on our website at
www.bauschhealth.com (under the tab “Investors” and under the subtab “Corporate Governance – Corporate Governance Documents”).
The Board has developed written position descriptions for the
ChairmanChairperson of the Board, the CEO,
the Lead Independent Director, and the Chairpersons of each of the Audit and Risk Committee, the Nominating and Corporate Governance Committee, the Talent and Compensation Committee, the Finance and Transactions Committee, and the Science and Technology Committee. The position descriptions are reviewed annually and are posted on our website at
www.bauschhealth.com (under the tab “Investors” and under the subtab “Corporate Governance — Corporate Governance Documents”).
Orientation and Continuing Education
The Nominating and Corporate Governance Committee oversees the Board’s continuing education program, which was developed to assist directors in maintaining or enhancing their skills and abilities as directors and updating their knowledge and understanding of the Company and the pharmaceutical industry. New directors are oriented to the roles of the Board and individual directors and the business and affairs of the Company through discussions with the incumbent directors and the Company’s management by periodic presentations from senior management on major business, industry and competitive issues. Management and outside advisors provide information and education sessions to the Board and its committees as necessary to keep the directors
up-to-date with, among other things, (i) disclosure and corporate governance requirements and best practices; (ii) the Company, its business and the environment in which it operates; and (iii) developments in the responsibilities of directors. The Board may invite representatives of various business units to Board meetings to discuss business strategy and market analysis, as well as make
on-site visits of the operations of the Company at the various facilities of the Company. Directors may also attend outside conferences and seminars that are relevant to their roles at the Company’s expense, with the approval of the Chairman of the Board. In
2020,2022, our directors participated in
an outside
seminars and conferencesseminar on
educational topics that included financial reporting and audit matters, debt, transfer pricing, indigenous history, environmental, social and governance (“ESG”)
matters and
issues of general importancethe Company’s annual compliance training, and certain directors participated in educations sessions related to
board members, as well as(i) personal development, taxes, and accounting; (ii) financial reporting; (iii) climate change; (iv) product recalls; (vi) litigation; and (vii) the
impactInflation Reduction Act and
implications of the
COVID-19 pandemic on accounting issues, executive compensation and cybersecurity.340B Program.
Ethical Business Conduct
Standards of Business Conduct
We have a written code of business conduct and ethics the Standards(the “Code of Business Conduct (the “Standards”)Conduct), that applies to all employees (including our officers) and directors of the Company and its worldwide subsidiaries. Among other things, the Standards areCode of Conduct is designed to deter wrongdoing and promote honest and ethical conduct, including (i) the ethical
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handling of actual or apparent conflicts of interest; (ii) full, fair, accurate, timely and understandable public disclosure; (iii) compliance with applicable laws and regulations; (iv) protection of the Company’s assets; and (v) maintaining a harassment-free work environment.
Our employees and directors are required to maintain an understanding of, and ensure their compliance with, the Standards,Code of Conduct, which we review annually. Supervisors are responsible for maintaining awareness of the Standards,Code of Conduct, and for reporting any deviations from the Standards.Code of Conduct. The StandardsCode of Conduct also requirerequires the Company to conduct regular audits to test compliance with the Standards.Code of Conduct. Subject to Board approval, responsibility for the establishment and periodic review and update of the StandardsCode of Conduct falls within the mandate of the Audit and Risk Committee.
All individuals subject to the StandardsCode of Conduct are obligated to promptly report violations and potential violations of law, the Standards,Code of Conduct, or applicable policies of the Company referenced in the Standards.Company. Such violations or suspected violations may be reported to the appropriate Company representative, or anonymously and confidentially through the Company’s business ethics hotline. All potential violations must in turn be reported to the Company’s General Counsel or Chief Compliance & Ethics Officer. The Board has established reporting procedures in order to encourage employees and directors to raise concerns regarding matters addressed by the StandardsCode of Conduct on a confidential basis free from discrimination, retaliation or harassment. Employees of the Company who violate the StandardsCode of Conduct may face disciplinary actions, including dismissal.
In addition to our Code of
Conduct, we maintain additional policies and procedures that provide specific requirements governing the day-to-day behavior of our personnel. Examples include: (1) our Global Anti-Bribery Policy, establishing our commitment to complying with anti-bribery and anti-corruption laws in all countries in which we operate; (2) our Business Ethics
Our Standards also include Reporting Policy, describing the way in which employees, contractors and third-parties can raise concerns regarding a Codevariety of Ethics for the CEO and Senior Finance Executives (the “Codematters, including violations of Ethics”), which is designed to deter wrongdoing and promote (i) honest and ethical conduct in the practice of financial management; (ii) full, fair, accurate, timely and understandable disclosure; and (iii) compliance with all applicable laws and regulations. Violationslaw or of the Code of Ethics are reported toConduct, (3) our US Healthcare Compliance Policy outlining the General Counsel or Chief Compliance & Ethics Officer. Failure to observelegal and ethical standards under which we operate in the termsUnited States, (4) our Insider Trading and Black Out Policies, ensuring that individuals only trade in Company securities when permitted by applicable law, and never when in possession of the Codematerial non-public information, and (5) various region and country-level policies regarding interactions with healthcare providers and other customers, including ethical review and approval of Ethics may result in disciplinary action, including dismissal.
promotional materials.
The foregoing description of the
Standards, including the Code of
Ethics,Conduct is intended as a summary only, and does not purport to be complete. It is subject to, and qualified in its entirety by, reference to all of the provisions of the
Standards,Code of Conduct, a copy of which is available on our website at
www.bauschhealth.com (under the tab “Investors” and under the subtab “Corporate Governance – Governance Documents”).
These documents areIt is also available in print to shareholders upon request. Shareholders may submit their request to Investor Relations, Bausch Health Companies Inc., 2150 Saint Elzéar Blvd. West, Laval, Québec H7L 4A8, Canada.
We intend to satisfy any disclosure requirements regarding amendments to, or waivers of, any provision of the
Standards, including the Code of
Ethics,Conduct , by posting such information on the Company’s website at
www.bauschhealth.com (under the tab “Investors” and under the subtab “Corporate Governance – Governance Documents”).
Directors’ Share Ownership
To support the alignment of directors’ interests with our interests and those of our shareholders, the Board has adopted share ownership guidelines for our non-employee directors. The directors’ share ownership guidelines, which are set forth in our Corporate Governance Guidelines, provide that each non-employee director is expected to hold or control Common Shares, vested restricted or deferred share units, or a combination thereof, valued at five (5) times the annual Board cash retainer not later than the fifth anniversary of his or her first election or appointment to the Board. Based on the current annual cash retainer of the Board of $100,000, the minimum value of equity each of our non-employee directors are required to hold is $500,000. Messrs. Icahn and Miller, who were appointed to the Board on March 17, 2021, will have until March 17, 2026 to meet the director share ownership requirements described in this paragraph. Dr. Mulligan who was appointed to the Board on May 10, 2022, will have until May 10, 2027 to meet the director share ownership requirements described in this paragraph. All of our other non-employee directors as of March 17, 2023 have satisfied the minimum equity ownership requirement based on the $31.75$7.60 per share closing price of our Common Shares on March 1, 2021,17, 2023, as reported on the NYSE.
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Mr.
PapaAppio is excluded from the share ownership guidelines for
non-employee directors. He is subject to share ownership guidelines established by our Talent and Compensation Committee, as further discussed in the section titled “Compensation Discussion and Analysis – Other Compensation Governance Practices – Share Ownership Guidelines” on page
64.56.
Our Board recognizes the importance of effective risk oversight in the achievement of organizational objectives, including strategic objectives, improving long-term organizational performance and enhancing shareholder value.
OurThe BHC management is responsible for identifying, assessing and managing our exposure to various risks. The global Enterprise Risk Management (“ERM”) office, which reports to our Executive Vice President, and General Counsel, was established to assist with this process. Our ERM office routinely meets with the Company’s Executive CommitteeLeadership Team and members of senior leadership to (i) identify emerging risks across the Company’s operations; (ii) review, assess and prioritize identified risks; and (iii) develop risk mitigation plans, and each quarter provides the Audit and Risk Committee with updates on these activities. Risks identified through this process include those related to our R&D pipeline, strategic planning, debt and finance, human capital, IT and cybersecurity, business disruption, and legal and compliance. During 2020, the ERM office expanded this process to include risks across all risk categories arising from the COVID-19 pandemic.
While our executive officers and members of our senior leadership team are responsible for our
day-to-day risk management, including identifying risks and implementing risk mitigation plans, our Board is responsible for promoting a culture of risk management within the Company and overseeing the Company’s principal risks and assessing whether appropriate systems are in place to manage such risks. The Board exercises its risk oversight responsibilities both directly as well as through its standing committees. The Board committees regularly review and discuss risk topics that fall under the duties and responsibilities described in their committee charters, as summarized below, and report to the Board any significant risks identified during their review. The Board discusses those risks, and also receives regular reports regarding material legal, IT and cybersecurity, commercial, finance and business development matters.
Committees and Oversight
The Audit and Risk Committee, in addition to its oversight of the ERM office as described above, oversees risks relating to (i) financial statements, reporting and internal controls; (ii)
information technology, information security and cybersecurity; (iii) compliance and ethics programs, including receipt and handling of business ethics reports received through the reporting program; and (iv) legal and regulatory issues.
The Talent and Compensation Committee oversees risks related to human capital and compensation, including (i) the Company’s compensation policies and practices; (ii) the Company’s incentive and equity compensation plans; (iii) workforce staffing; and (iv) executive and senior leadership succession. For additional information regarding the Talent and Compensation Committee’s oversight of risk relating to compensation policies and practices, see “Talent and Compensation Committee — Compensation Risk Determination” on page
65.57.
The Nominating and Corporate Governance Committee provides oversight with respect to risks related to the Company’s corporate governance, including: (i) the composition, size, structure, and effectiveness of the Board and its committees; (ii) director succession; (iii) director independence; and (iv) the Company’s corporate governance policies and practices.
The Finance and Transactions Committee oversees risks relating to the Company’s (i) debt; (ii) credit and liquidity; (iii) capital structure; and (iv) business development activities.
The Science and Technology Committee oversees risks relating to (i) the Company’s product pipeline; (ii) R&D initiatives; and (iii) regulatory matters.
Information Security
Our information security and risk management team is responsible for the operationalization of information security and data privacy practices and is overseen by the Executive Leadership Team and the Audit and Risk Committee of the Board, both of which receive quarterly updates. Bausch Health has implemented an information security program based on the NIST Cybersecurity Framework, an industry better practice. The program has clearly defined responsibilities for information security, a governance structure, and risk management framework to enable informed
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decision making on information security matters. Multiple layers of technical controls have been implemented in addition to a response capability to identify and contain any cyber incidents which may occur. Bausch Health provides information security simulations and training for employees throughout the year.
ESG and Sustainability; Board Oversight
Our vision is to continue to be a trusted health care partner, and our mission is improving people’s lives with our health care products. Bausch Health’s mission is supported by the following five guiding principles that are foundational to our success and future growth, and provide direction for the company:
(iv)
| (iv) | quality health care outcomes; and |
Our mission and five guiding principles define how we approach ESG matters. Based on them, we have framed our ESG work around five key ESG commitment areas:
(i)
| (i) | operate with integrity; |
(ii)
| (ii) | respect the environment; |
(iii)
| (iii) | advance global health and patient care; |
(iv)
| (iv) | improve our communities; and |
(v)
| (v) | support employee growth and well-being. |
We believe that focusing on these commitment areas
areis integral to the success of the Company and the health of the communities we operate in and serve. We
publish a corporate social responsibility (“CSR”) report that highlightshave also incorporated our ESG commitments into our corporate
responsibility commitments. The CSR report provides an overviewstrategic priorities such that ESG initiatives impact the variable remuneration paid to employees and members of
executive management under our short-term incentive plans. Additional information about our ESG practices and
programs. Our 2019 CSR reportprograms is available on our website at
www.bauschhealth.comhttps://www.bauschhealth.com/ (under the tab
“Responsibility” and under the subtab “CSR Report”“Responsibility/ESG”).
Neither the CSR report nor our website are incorporated by reference to this proxy statement.
Board Oversight of ESG Matters
Each of the Board, the Audit and Risk Committee, the Nominating and Corporate Governance Committee, and the Talent and Compensation Committee shares responsibility for oversight of various aspects of our ESG practices and programs. Our Talent and Compensation Committee oversees our human capital management programs, and the processes, policies and governance related to our executive compensation practices. Our Audit and Risk Committee oversees our compliance and ethics program. Finally, our Nominating and Corporate Governance Committee oversees our Board governance practices, environmental and sustainability programs, and corporate governance policies. In its oversight role, the Board receives periodic updates from each of these standing committees and from management,
and a complete ESG status update is provided to the Nominating and Corporate Governance Committee quarterly, including on the Company’s environmental and sustainability efforts and programs.
Key Areas of Focus and Progress
Below are a few examples of initiatives we have undertaken with respect to each of our five ESG commitment areas:
I. Operate with Integrity
I. Operate with Integrity |
1. Corporate Governance | •
| | • We have implemented a broad system of internal controls and policies.polices.
• We provide annual corporate governance training for employees. Our Board provides independent leadership of the Company, and our Non-Executive Chairperson of the Board provides independent leadership of the Board.
• The Audit and Risk Committee oversees our compliance and ethics programs. |
We provide annual corporate governance training for employees.
Our Board provides independent leadership of the Company, and our Lead Independent Director provides independent leadership of the Board.
28
The Audit and Risk Committee oversees our compliance and ethics programs.TABLE OF CONTENTS
| | | |
2. Patient Access and& Pricing | •
| | We formed a• Our management-level Patient Access and Pricing Committee whichTeam works to enable patients to have access to the Company’s products at cost consistent with their ability to pay. We also offer a variety of copay support programs across our major product lines, including in gastroenterology, neurology and dermatology, which can reduce eligible patients’ monthly out of pocket costs for our products. In addition, we offer a patient assistance program in the United States, and product donation programs in other markets, which provide no-cost access to our products for patients who are otherwise unable to obtain the products through applicable insurance or reimbursement systems |
We have pledged that the average annual price increase for our branded prescription products will be set at no greater than single digits.
| | | |
3. Commitment to Diversity and Inclusion | •
| | • Through consistent and increased efforts, we attract, develop and retain talented people with a variety of perspectives from all backgrounds and cultures. We formed a Diversitybelieve that working in an environment that enables them to apply their collective talents to our shared principles and Inclusion (“D&I”) Councilcommitments will enable us to provide oversight of D&I initiatives, includingdeliver the recent introduction of unconscious bias training for employees.greatest value to our customers and the patients we serve. |
Our Supplier Diversity Program works with various organizations to strengthen our outreach and engagement with the diverse business community, including: Women’s Business Enterprise National Council, National Minority Supplier Development Council, Diversity Alliance for Science, HUBZone Contractors National Council, National LGBT Chamber of Commerce, and Elite Service-Disabled Veteran Owned Business.
Our Women’s Leadership Network has facilitated discussions and hosted events addressing leadership, building resilience and managing stress.
II. Respect the Environment
II. Respect the Environment |
1. EHS+S Organization | | | • Our global Environment, Health, Safety + Sustainability (“EHS+S”) organization provides the leadership and infrastructureguidance to enable our regional sites around the world to achieve a more sustainable and regenerative state, while reducing the adverse environmental impact of our products.manufacturing operations on the environment. |
| | | |
2. Carbon Emissions | | | • We monitor and continue to make progress to reduce carbon emissions within our global manufacturing operations. We remain committed to satisfying the requirements to monitor and/or disclose relevant information surrounding our carbon emissions as may be required by the Security and Exchange Commission and/or the European Union Corporate Sustainability Reporting Directive. |
| | | |
3. Energy and Water Usage | | | • Our Energy Efficiency Group helps us continue to make progress to reduce overall energy usage at our global manufacturing and supply chain sites by assessing and investigating our energy use and energy reduction efforts. SomeAmong other things, we have undertaken a series of energy audits in our recent activities include: |
We installed a solar farm in our manufacturing site in France, which will support approximately 10% of the site’s total energy needs.
We conducted energy audits in Poland and Italy to identify and design energy reduction projects.
We installed reverse osmosis-powered equipment and a wastewater monitoring system in our facility in Milan, Italy to, respectively, reduce waste water generation and evaluate water conservation strategies.
We upgraded the cooling system in our Berlin, Germany facility to reduce energy consumption and wastewater disposal.
3. Carbon Emissions
| We monitor and continuemanufacturing facilities that are designed to make progressidentify opportunities to reduce consumption.
• With a series of energy recommendations now identified, our global carbon emissions. For example:facilities are progressing with the implementation of these initiatives. The projects under development include LED lighting upgrades, the introduction of heat recovery systems and the replacement of HVAC equipment with more energy efficient alternatives. |
We consider the environmental impact of vehicles we use for our in-field sales and support teams, and recently launched our Scope 3 Emissions Tracking Initiative to track the environmental impact of these vehicles.
We reduced our global carbon dioxide emissions by nearly 20,000 metric tons in 2020 as compared to 2018 levels.
Our new nitrogen-generating plant at our Waterford, Ireland facility reduces carbon dioxide emissions by almost 200 tons per year.
4. Waste Management
| •
| | Bausch + Lomb’s ONE by ONE Recycling Program, the first contact lens recycling program of its kind, continues to expand its efforts to reduce the environmental impact of contact lens materials. |
Our Zero Waste to Landfill initiative yielded a 94% landfill diversion rate in our Rochester, NY site.
III. Advance Global Health & Patient Care
III. Advance Global Health & Patient Care |
1. Philanthropy – Bausch Foundation | We established
| | • In the Bausch Foundation in 2017 to supportpast year, we have continued our proud tradition of supporting initiatives aimed at disease prevention, improving patient outcomes and lives, and education relatededucation. In 2022, Bausch Health, among other initiatives, has:
○ Contributed millions of dollars’ worth of financial and product donations to our core businesses. In 2020,charitable health organizations:
○ Funded scholarship programs for students with dermatological and gastrointestinal conditions: and
○ Partnered with Global Giving, a non-profit organization, to match employee contributions in support of Ukraine citizens impacted by the Bausch Foundation has:Russia conflict. |
Contributed millions of dollars’ worth of financial and product donations to charitable health organizations, including, but not limited to: (i) National Society to Prevent Blindness; (ii) Children’s Skin Disease Foundation; (iii) the National Psoriasis Foundation; (iv) Eye Bank Association of America; (v) American Association for the Study of Liver Disease; and (vi) Feeding America.
Funded scholarship programs for students with dermatological and gastrointestinal conditions.
| • | | In response to COVID-19, donated hand sanitizers to first responders and volunteers, contact lenses to frontline medical workers in China, and ARTELAC®Splash™ eye dropsto health care providers in hospitals in Spain.
|
2. Patient Safety and Health Advocacy | •
| | • We invest millions of dollars each year to support provider education, research grants and charitable organizations devoted to improving patient care and quality of life and advancing the safety and effectiveness of health care products. |
| | | |
IV. Improve our CommunitiesTABLE OF CONTENTS
IV. Improve our Communities |
1. Community Enrichment | | | • We believe the Company’s long-term success is linked directly to our ability to make a positive difference in our communities. As such, we support community enrichment activities, such as volunteering, investing in scholarship programs, and donating to local charities. Examples include: |
| • | | In collaboration with TerraCycle®, we donated custom training modules to the Guide Dog Foundation.
|
We supported Camp Wonder and Camp Discovery, week-long free programs for children with chronic skin conditions.
Employees throughout the world led volunteering and fundraising efforts in their communities.
We supported World Sight Day Challenge fundraising efforts.
V. Employee Growth and Well-Being
V. Employee Growth and Well-Being |
1. Health and Safety | •
| | In 2020, for• On an ongoing basis, we measure how well we are fostering the fifth year in a row, we exceededhealth and safety of our employees through our Days Away Rate (“DAR”) annual goal. Our DAR measures, which is a standard used in our industry to capture the number of days that our employees are unable toaway from work due to workplaceas a result of a work-related injury or illness. With a “Not to Exceed”For the year 2022, Bausch Health’s, excluding its publicly traded subsidiary Bausch + Lomb, DAR Goal of 13, our Global Manufacturing and Supply Chain achieved an actualwas 17 days per 100 employees. This was higher than the goal we established for DAR of 11; surpassing both the annual goal and the blended business rate for competitors which averaged aless than 7 days per 100 employees but was favorable to our industry’s average DAR of 24 days per 100 employees. The higher than target DAR was primarily attributable to two extended absences and DAR stabilized and trended downward in 2020.the 2nd half of 2022. |
In 2020, we supported our employees during the COVID-19 pandemic by expanding opportunities for remote work and offering wellbeing resources.
| | | |
2. Employee GrowthDiversity, Equity & Inclusion | •
| | In 2020, we expanded• We are dedicated to fostering an inclusive work environment where everyone feels welcomed, supported and valued for their talents and contributions. Our Bausch Health Diversity, Equity & Inclusion (“DE&I”) strategy centers on connecting our Employee Resource Groups that provide opportunityemployees to our Company, each other, and our communities to cultivate a sense of trust, respect and belonging for professional growth, developmentall.
• We strive to advance candid conversations among employees regarding such key topics as inclusion, racism and informal networking.gender equality. Through our diversity and inclusion training and education efforts, all employees have been provided with educational tools and resources to understand how to talk about these topics at work and how to become more aware of unconscious biases they may have. During 2022, all employees were invited to participate in interactive workshops on various topics including equitable leadership, understanding and managing conflict styles, building awareness, skills and confidence to support LGBTQ+ colleagues, and creating and fostering inclusive environments. |
| | | |
3. Employee Health and Wellness Program Enhances Offerings | •
| | Our holistic approach• We recognize that physical, emotional and financial wellbeing are significant contributors to supporting employee healthour employees’ success at work and wellness is centeredhome. We aim to support our employees in their everyday life by centering programs and activities around these three pillars of well-being: physical, emotional,wellbeing. Across each of these pillars, we offer a range of resources to help our employees be healthy and financial.feel successful in both their professional and personal lives, including through employee assistance programs. |
Across each of these pillars, we offer a range of benefits and support resources to help our employees be healthy and feel successful in both their professional and personal lives.
In 2020, we strengthened many of our U.S. offerings in light of the COVID-19 pandemic.
| | | |
4. Talent Management Focuses on Broadening Leader Development | •
| | Our Talent Management strategy continues• We are committed to evolvethe development of our employees and expandbelieve that our success coincides with primary focus on D&I engagementour employees’ achievements of personal and leadership development.professional goals.
• Through our Employee Development Framework, we endeavor to support our employees’ interests to grow to their full potential, achieve career goals, and contribute to the success of our Company.
• We empower employees to explore roles that are of interest and gain insights into their strengths and development needs. We provide a variety of development programs to support our employees at every stage of their career and incorporate individual development plans that aim to help our employees reach their career goals. |
We embed our leadership competencies into our succession planning to help calibrate potential and identify leaders with the ability to advance to larger, more complex positions in the organization, and have rounded out our leadership development offerings to support employees at every stage of career growth.TABLE OF CONTENTS
5. Annual Employee Survey Results Affirm Company Direction and Culture
| •
| | Our 2019 annual employee survey was provided to over 22,000 employees worldwide. This survey, which had a high response rate, showed year-over-year improvement in five out of six survey categories and overall results that were generally higher than the industry norm. |
During
2020,2022, the Board had
fivesix standing committees: the Audit and Risk Committee, the Talent and Compensation Committee, the Nominating and Corporate Governance Committee, the Finance and Transactions Committee,
and the Science and Technology
Committee, and the Special Transactions Committee.
In addition, on June 3, 2020,On October 25, 2022, the Board
established an ad hocdissolved the Special Transactions Committee,
to assist with evaluating strategic alternatives, including the
proposed separationduties of
which committee were assumed by the
Company’s eye health business into an independent, publicly traded entity. No member of any committee is an employee of the Company or its subsidiaries.Board. The specific responsibilities of each of the Audit and Risk Committee, the Talent and Compensation Committee, the Nominating and Corporate Governance Committee, the Finance and Transactions Committee, and the Science and Technology Committee are identified in the respective committee’s charter. Copies of the charters for each of the foregoing committees are available on our website at
www.bauschhealth.com (under the tab “Investors” and under the subtab “Corporate Governance — Corporate Governance Documents”) and are also available in print to shareholders upon request submitted to Investor Relations, Bausch Health Companies Inc., 2150 Saint Elzéar Blvd. West, Laval, Québec H7L 4A8, Canada.
The
ChairmanChairperson of the Board and the Chairperson of each of the Audit and Risk Committee, the Talent and Compensation Committee and the Nominating and Corporate Governance Committee are expected to be available to respond to questions from shareholders at the
Annual Meeting.
The table below sets forth each current director’s membership on our Board committees.
| | Audit and Risk
Committee | | | Talent and
Compensation
Committee | | | Nominating and
Corporate
Governance
Committee | | | Finance and
Transactions
Committee | | | Science and
Technology
Committee | | Special
Transactions
Committee |
Richard U. De Schutter
Thomas J. Appio | | | | ✓ | | | | ✓ | | | | ✓ | | | ✔ |
D. Robert Hale
Brett M. Icahn | | | | ✓ | | | | Chairperson | Chairperson | | | ✓✔ | | | |
Brett Icahn
| | | | | | | | ✓ | | | | ✓ |
Dr. Argeris (Jerry) N. Karabelas
| | | | Chairperson | | | | | | ✓ | | ✓ |
Sarah B. Kavanagh | | ✓ | ✔ | | | ✓ | | ✓ | | | | ✓✔ | | | |
Steven D. Miller | | | ✔ | | | | | ✓ | | | | ✓Chairperson | | | |
JosephDr. Richard C. Papa(1)Mulligan
| | | | | | | | | ✔ | | | | | | Chairperson |
John A. Paulson(1) | | | | | | | | ✓ | | | | ✓ | | | |
Robert N. Power | | ✓ | | | | Chairperson | | | ✔ | ✓ | | | | | |
Russel C. Robertson | | Chairperson | Chairperson | | | ✓ | | | | | | | | | |
Thomas W. Ross, Sr.(2)
| | ✓ | | | | ✓✔ | | | | | | Chairperson | | | |
Andrew C. von Eschenbach, M.D.
| | | | | | | | | | Chairperson | | |
Amy B. Wechsler, M.D. | | | | ✓ | | ✔ | | | | ✓ | | | | | ✔ |
(1)
| ChairmanChairperson of the Board
|
(2) | Lead Independent Director
|
The Audit and Risk Committee is comprised of
fourthree independent directors: Mr. Robertson (Chairperson), Ms. Kavanagh,
Mr. Power and Mr.
Ross.Miller. The responsibilities, powers and operation of the Audit and Risk Committee are set out in the written charter of the Audit and Risk Committee. Pursuant to the Audit and Risk Committee Charter, each member of the Audit and Risk Committee is an independent director as defined and required by applicable regulatory and stock exchange rules. The Board has concluded that each member of the Audit and Risk Committee is “financially literate” as defined under National Instrument
52-110 —
Audit Committees and as required under NYSE rules, and each of Mr. Robertson and Ms. Kavanagh qualify as an “audit committee financial expert” under the regulations promulgated by the U.S. Securities and Exchange Commission (the “SEC”).
The Audit and Risk Committee operates pursuant to the Audit and Risk Committee Charter. Its responsibilities include, among other things, responsibility for reviewing and recommending to the Board our annual financial statements and management’s discussion and analysis of results of operation and financial condition (“MD&A”) and reviewing and approving our interim financial statements and MD&A. As contemplated in the Audit and Risk Committee Charter, the Audit and Risk Committee periodically meets with our internal auditor and with our external auditor without management being present. The Audit and Risk Committee also recommends to the Board the external auditor to be nominated for approval by the Company’s shareholders, as well as the compensation of the external auditor. The Audit and Risk Committee Charter provides that the Audit and Risk Committee must establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing practices.
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In accordance with the Audit and Risk Committee Charter, the Audit and Risk Committee also provides assistance to the Board in fulfilling its oversight function, including with respect to: (i) the quality and integrity of our financial statements; (ii) compliance with our
StandardsBausch Health Code of
Business Conduct, and legal and regulatory requirements, including with respect to disclosure of financial information; (iii) the qualifications, performance and independence of our external auditor; (iv) the performance of our senior finance employees and internal audit function; (v) internal controls and certifications; (vi) monitoring the appropriateness and effectiveness of the Company’s risk management systems and policies, including evaluating on a regular basis the effectiveness and prudence of senior management in managing the Company’s operations and the risks to which it is exposed; and (vii) overseeing the Company’s compliance programs, policies and procedures, and investigating compliance matters.
The Audit and Risk Committee Charter provides that no member of the Audit and Risk Committee may hold 10% or more of the Company’s outstanding Common Shares or serve simultaneously on the audit committee of more than two other public companies, unless the Board determines that such simultaneous service would not impair his or her ability to serve effectively on the Audit and Risk Committee.
Talent and Compensation Committee
The Talent and Compensation Committee is comprised of
fourthree independent directors:
Dr. KarabelasMr. Power (Chairperson), Mr.
De Schutter, Mr. Hale,Ross, and Dr. Wechsler. The responsibilities, powers and operation of the Talent and Compensation Committee are set out in the written charter of the Talent and Compensation Committee. In accordance with the Talent and Compensation Committee Charter, each member of the Talent and Compensation Committee is an independent director as defined and required by applicable regulatory and stock exchange rules.
As described in the Talent and Compensation Committee Charter, the key responsibilities of the Talent and Compensation Committee include: (i) reviewing and approving corporate goals and objectives in connection with
the compensation of our CEO, evaluating the CEO’s performance in light of those goals and objectives, and (either as a committee or together with the other independent directors who satisfy the independence, “non-employee”“non-employee” and “outside director” requirements under the Talent and Compensation Committee Charter) determining and approving the compensation of the CEO based on such evaluation; (ii) reviewing and approving each element of total compensation for all officers (as such term is defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)); (iii) reviewing and approving arrangements with executive officers relating to their employment relationships with us; (iv) reviewing talent management and succession planning materials for key roles; (v) providing strategic supervision of our benefit plans, programs and policies; and (vi) reviewing and recommending to the Board for approval the Compensation Discussion & Analysis to be included in the Company’s annual management proxy circular and proxy statement and/or annual report on Form 10-K, and preparing the Talent and Compensation Committee Report.
For details on the philosophy and approach adopted by the Talent and Compensation Committee with respect to compensation of our officers, please see “Compensation Discussion and Analysis” beginning on page
48.39.
The Talent and Compensation Committee has the authority to retain and compensate any consultants and advisors it considers necessary to fulfill its mandate. It shall, annually or on an
as-needed basis, specify the work to be performed by, and agree on the associated fees to be paid to the compensation consultants. It shall also review annually the work performed and fees paid. In addition, the Talent and Compensation Committee Charter provides that the Talent and Compensation Committee shall report to the Board, on an annual basis, the nature of any additional work or
non-Board based services conducted by any such compensation consultant and associated fees paid, if approved by the Chairperson of the Talent and Compensation Committee.
Periodically, and at least annually, the Talent and Compensation Committee selects and retains independent consultants to conduct comprehensive reviews and assessments of our policies, procedures and internal controls for setting compensation of the CEO and other members of senior management. The consultant prepares and submits relevant information and analyses to the Talent and Compensation Committee. As discussed below under “Compensation Discussion and Analysis,” in 2020,2022, the Talent and Compensation Committee retained Pay Governance LLC (“Pay Governance”), as its independent consultant to provide advice on compensation matters.matters, including in connection with the B+L IPO. Pay Governance’s services included the following: (i) periodically reviewing our executive compensation programs, including base salary, short-term incentives, equity-based incentives, total cash compensation levels and total direct compensation of certain senior positions, against those of
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a peer group; (ii) advising the Talent and Compensation Committee with regard to the compensation packages of the CEO and other members of senior management; (iii) reviewing the proxy and specifically the Compensation Discussion and Analysis; and (iv) preparing materials for and attending select Talent and Compensation Committee Meetings. Pay Governance did not provide any additional services to the Company during the fiscal year
2020.2022. The Talent and Compensation Committee has assessed, at the relevant times, the independence of Pay Governance and concluded that its engagement of Pay Governance did not raise any conflict of interest with the Company or any of the Company’s directors or executive officers.
The Talent and Compensation Committee considers the advice and analysis of the independent compensation consultants, together with other factors the Talent and Compensation Committee considers appropriate (including feedback from shareholders and corporate governance groups, market data, knowledge of the comparator group and personal knowledge and experience of the Talent and Compensation Committee members), in reaching its decisions and making compensation determinations for the CEO and executive officers.
The Board regularly undertakes a thorough review of succession planning for the members of the Company’s Executive
Committee,Leadership Team, including our CEO, over the course of the year, led by the efforts of the Talent and Compensation Committee. The Talent and Compensation Committee continuously reviews the Executive
CommitteeLeadership Team and key positions within the Company to ensure the continuity and comprehensiveness of succession planning company-wide. Among other factors, the Talent and Compensation Committee considers the level of representation of women in executive officer and managerial positions when making appointments and during succession planning by taking into account the overall number of women currently serving in such roles at the Company and by actively considering women candidates for such positions when they become available; however, the Company does not have a specific target number or date by which to achieve a specific level of representation of women in executive officer and managerial positions, as it considers a multitude of factors in determining the best person for any position. Women currently lead a substantial portion of our businesses and global functions, in the following roles:
EVP,Executive Vice President, General Counsel
and Head of Commercial Operations (who also serves as an executive officer of the Company); SVP and Chief Human Resources Officer;
President, Diversified Products; SVP, HeadVPs of
functional areas, including Finance, HR, and Legal,
International; SVP, Global Head of Ethics and Compliance; VP, International Vision Care; andas well as, VPs of Marketing and/or Sales for various lines of business. Currently, one (representing
17%30%) of the Company’s executive officers is a woman.
The Board regularly receives exposure to executives, managers and other personnel in the organization by having the executives and managers participate in Board meetings and present on the Company’s business and strategy. The Board’s participation in these events provides significant exposure to the Company’s leadership team and strategic focus, which greatly enhances the Board’s ability to conduct succession planning, as well as to gain insight as it oversees organization risk and strategy.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is comprised of
fourthree independent directors: Mr.
PowerIcahn (Chairperson)
, Ms. Kavanagh, Mr. Robertson Dr. Mulligan and Mr.
Ross.Power. The responsibilities, powers and operation of the Nominating and Corporate Governance Committee are set out in the committee’s written charter. As required by the Nominating and Corporate Governance Committee Charter, each member of the Nominating and Corporate Governance Committee is an independent director as defined and required by applicable regulatory and stock exchange rules.
As described in the Nominating and Corporate Governance Committee Charter, the key responsibilities of the Nominating and Corporate Governance Committee include: (i) identifying individuals qualified to become directors and recommending to the Board new nominees for election by shareholders or for appointment by the Board, and engaging the services of third party search firms to assist in identifying such individuals; (ii) providing recommendations to the Board regarding the competencies and skills the Board should possess, and the qualifications of its directors; (iii) recommending for Board approval, if appropriate, revisions to our corporate governance practices and procedures; (iv) developing new charters for any new committees established by the Board, if not otherwise mandated by the Board; (v) monitoring relationships and communication between management and the Board and monitoring emerging best practices in corporate governance; (vi) reviewing the composition and mandate of the Board and each committee of the Board annually and, if appropriate, recommending to the Board any changes it considers desirable with respect thereto; and (vii) overseeing our orientation process for new directors and our continuing education program for all directors.
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The Nominating and Corporate Governance Committee annually develops and recommends processes for assessing the performance and effectiveness of the Board and the committees of the Board and reports the results of such assessments to the Board on an annual basis. Pursuant to these processes established by the Nominating and Corporate Governance Committee and adopted by the Board, the Board and each committee conduct annual self-assessments of their performance and effectiveness. The self-assessments include a review of the compliance
of the Board and each committee with their respective charters, the adequacy of information provided, the skills and experience of the members, and other matters. The results of the individual directors’ surveys are compiled by the Chairperson of the Nominating and Corporate Governance Committee and presented to the Lead Independent director and Chairman of the Board for discussion. Following these discussions, the Chairperson of the Nominating and Corporate Governance Committee provides a report to the full Board identifying the opportunities for improvement identified in the self-assessment process. The Board has previously conducted periodic peer reviews of the directors to supplement the annual Board and committee self-assessments and will do so again when the Board determines peer reviews will add value to these annual self-assessments. The Nominating and Corporate Governance Committee also makes recommendations to the Board regarding director compensation and may retain advisors to assist with evaluating and making these recommendations. For additional information regarding the compensation of our non-employee directors, and the role of the Nominating and Corporate Governance Committee in reviewing and recommending changes to non-employee director compensation, please see “Director Compensation” beginning on page 81.
74.
Finance and Transactions Committee
The Finance and Transactions Committee is currently comprised of
six independent directors:three directors, two of whom are independent: Mr.
HaleMiller (Chairperson), Mr.
De Schutter, Ms. Kavanagh, Mr. Paulson, and Messrs. Icahn and
Miller, who joined this Committee upon their appointment to the Board on March 17, 2021.Ms. Kavanagh. It was established to assist the Board in providing fiduciary oversight and strategic advice with respect to the Company’s significant transactional and financing activities, and monitoring the overall financial condition of the Company, including the impact of these activities on the Company’s financial condition.
Science and Technology Committee
The Science and Technology Committee is comprised of
fourthree independent directors: Dr.
von EschenbachMulligan (Chairperson),
Dr. Karabelas, Mr.
Power,Appio, and Dr. Wechsler. The Science and Technology Committee was established to provide oversight and strategic advice with respect to the Company’s research and development programs and pipeline, and the Company’s strategic direction and development in research and development and technology.
Special Transactions Committee
The Special Transactions Committee is currently comprised of eight independent directors: Mr. Ross (Chairperson), Mr. De Schutter, Mr. Hale, Dr. Karabelas, Ms. Kavanagh, Mr. Paulson, and Messrs. Icahn and Miller, who joined this Committee upon their appointment to the Board on March 17, 2021. The Special Transactions Committee was established on June 3, 2020 to assist the Company with evaluating strategic alternatives, including the proposed separation of the Company’s eye health business into an independent, publicly traded entity.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
Each of Dr. Karabelas, Mr. De Schutter, Mr.
Hale,Power, and Dr. Wechsler, representing all of the directors who served on the Talent and Compensation Committee during
2020,2022, and Mr. Ross, who currently serves on the Talent and Compensation Committee, is (i) a
non-employee director for purposes of Rule
16b-3 of the Exchange Act, as
amended;amended, (ii) an “outside director” under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), to the extent applicable; and (iii) an independent director. None of the members of the Talent and Compensation Committee is a current or former officer of the Company. There were no compensation committee interlocks with other companies in
20202021 within the meaning of Item 407(e)(4)(iii) of Regulation
S-K. See “Certain Transactions — Certain Related-Party Transactions” on page
9080 for a description of related-party transactions.
OWNERSHIP OF THE COMPANY’S SECURITIES
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial ownership of our Common Shares and the percentage of Common Shares owned beneficially by holders of more than 5% of our outstanding Common Shares as of March
1, 202117, 2023 (unless otherwise noted).
| | | | | | | | |
Identity of Owner or Group | | Number of Shares
and Nature of
Beneficial
Ownership | | | Percentage of
Class(1) | |
Mr. Carl C. Icahn | | | 34,109,152 | (2) | | | 9.59 | % |
c/o Icahn Associates Holding LLC, 16690 Collins Ave., Suite PH-1, Sunny Isles Beach, FL 33160 | | | | | | | | |
Paulson & Co. Inc. | | | 25,839,035 | (3) | | | 7.27 | % |
1251 Avenue of the Americas, New York, NY 10020 | | | | | | | | |
VA Partners I, LLC | | | 17,952,640 | (4) | | | 5.05 | % |
One Letterman Drive, Building D. Fourth Floor, San Francisco, CA 94129 | | | | | | | | |
Mr. Carl C. Icahn
c/o Icahn Associates Holding LLC, 16690 Collins Ave., Suite PH-1,
Sunny Isles Beach, FL 33160
| | | 34,721,118(2) | | | 9.55% |
Paulson & Co. Inc.
1251 Avenue of the Americas, New York, NY 10020
| | | 26,439,035(3) | | | 7.27% |
Mr. Alex Meruelo
c/o 2500 E. Second Street, Reno,
Nevada 89595, Attn: Management Office
| | | 19,604,777(4) | | | 5.39% |
GoldenTree Asset Management, L.P.
300 Park Avenue, 21st Floor, New York, NY 10022
| | | 19,421,054(5) | | | 5.34% |
This table is based upon information supplied by the principal shareholders,
Schedules 13D and 13G filedfilings with the SEC, and
“early warning reports” and similar regulatory filings
filed on SEDAR and on the Canadian System for the Electronic Disclosure by Insiders. Unless otherwise indicated in the footnotes to this table, we believe that the shareholders named in the table have sole voting and investment power with respect to the Common Shares indicated as beneficially owned.
(1)
| Based on 355,661,440363,602,888 Common Shares outstanding on March 1, 2021. 17, 2023. |
(2)
| Based on information contained in a Schedule 13D/A filed by Mr. Carl C. Icahn with the SEC on March 11, 2021 (“the Schedule 13D/A”), Mr. Icahn and the following entities associated with Mr. Icahn may be deemed to beneficially own, in the aggregate, 34,109,152 Common Shares (including 29,076,005 Common Shares underlying forward contracts): Icahn Partners Master Fund LP (“Icahn Master”), Icahn Offshore LP (“Icahn Offshore”), Icahn Partners LP (“Icahn Partners”), Icahn Onshore LP (“Icahn Onshore”), Icahn Capital LP (“Icahn Capital”), IPH GP LLC (“IPH”), Icahn Enterprises Holdings L.P. (“Icahn Enterprises Holdings”), Icahn Enterprises G.P. Inc. (“Icahn Enterprises GP”), and Beckton Corp. (“Beckton”). According to thisthe Schedule 13D/A, Icahn Master has sole voting and dispositive power with respect to 14,169,189 Common Shares; Icahn Offshore has shared voting and dispositive power with respect to 14,169,189 Common Shares; Icahn Partners has sole voting and dispositive power with respect to 19,939,963 Common Shares; Icahn Onshore has shared voting and dispositive power with respect to 19,939,963 Common Shares; and Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Becton and Mr. Icahn each have shared voting and dispositive power with respect to 34,109,152 Common Shares. Based on information contained in a Schedule 13F filed by Mr. Icahn on February 14, 2023, the total number of Common Shares as to which Mr. Icahn had voting authority as of December 31, 2022 was 34,721,118. |
EachAccording to the Schedule 13D/A, each of Icahn Offshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn may be deemed to indirectly beneficially own (as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended, the “Act”) the Common Shares which Icahn Master directly beneficially owns. Each of Icahn Offshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn disclaims beneficial ownership of such Common Shares for all other purposes. Each of Icahn Onshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn may be deemed to indirectly beneficially own (as that term is defined in Rule 13d-3 under the Act) the Common Shares which Icahn Partners directly beneficially owns. Each of Icahn Onshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and
Mr. Icahn disclaims beneficial ownership of such Common Shares for all other purposes.
The address for each of Icahn Master, Icahn Offshore, Icahn Partners, Icahn Onshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, and Beckton is 16690 Collins Avenue, Sunny Isles Beach, FL 33160.
(3)
| According to information provided to the Company by Paulson & Co., Inc. on February 5, 2021,March 17, 2023, it has sole voting and dispositive power with respect to 25,839,03526,439,035 Common Shares. According to information provided to the Company by Paulson & Co., Inc. on March 17, 2023, Mr. Paulson may be deemed an indirect beneficial owner of these Common Shares, which are directly owned by investment funds which he manages. Mr. Paulson disclaims beneficial ownership of these Common Shares, except to the extent he has a pecuniary interest therein. |
(4)
| According toBased on the information provided tocontained in a Schedule 13G filed by Mr. Alex Meruelo with the Company by VA Partners I, LLCSEC on February 9, 2021, VA Partners I, LLC has the sole power to vote and dispose of 17,941,603 of our Common Shares. This number includes 16,993,250 Common Shares owned directly by ValueAct Capital Master Fund, L.P. and 948,353 Common Shares owned directly by ValueAct Co-Invest Master Fund, L.P. These sharesApril 23, 2021. Mr. Meruelo may be deemed to be indirectly beneficially ownedown 19,604,777 Common Shares, consisting of (i) 18,096,977 shares held for the account of the Alex Meruelo Living Trust dated August 6, 1996, of which Mr. Meruelo is the sole trustee, including 11,399,000 shares underlying call options currently exercisable, (ii) 1,236,900 shares held for the account of Monterey Insurance Company, Inc., of which Mr. Meruelo is the sole shareholder, including 458,000 shares underlying call options currently exercisable, (iii) 175,000 shares in the account of Liset Meruelo, the spouse of Mr. Meruelo, (iv) 5,000 shares in the joint account of Liset Meruelo and her mother, (v) 37,400 shares in the account of Alexander Meruelo, an adult child of Mr. Meruelo, including 21,500 shares underlying call options currently exercisable, (vi) 31,000 shares in the account of Alexis Meruelo, an adult child of Mr. Meruelo and (vii) 22,500 shares in the account of Lisette Meruelo, an adult child of Mr. Meruelo. Mr. Meruelo disclaims ownership of the Common Shares held in the accounts of Liset Meruelo and her mother, and his adult children.
|
(5)
| Based on information contained in a Schedule 13G filed by (i) VA Partners I, LLC as General Partner of ValueAct Capital Master Fund, L.P.GoldenTree Asset Management LP (“GT LP”), (ii) ValueAct Capital Management, L.P. as the manager of ValueAct Capital Master Fund, L.P., (iii) ValueAct CapitalGoldenTree Asset Management LLC (“GT LLC”) and Steven A. Tananbaum on February 13, 2023, as General Partner of ValueAct Capital Management, L.P., (iv) ValueAct Holdings, L.P.that date each of GT LP and GT LLC may be deemed to beneficially own an aggregate of 19,421,054 Common Shares and Mr. Tananbaum may be deemed to beneficially own an aggregate of 19,753,054 Common Shares (including 332,000 Ordinary Shares as to which Mr. Tananbaum is the majority ownerholder of record). According to the membership interestsSchedule 13G, the Common Shares reported include 19,421,054 Common Shares held of VA Partners I,record by certain managed accounts (collectively, the “Accounts”) for which GT LP serves as investment manager. In addition, Mr. Tananbaum is the managing member of GT LLC, (v) ValueAct Holdings II, L.P. aswhich is the sole ownergeneral partner of the membership interestsGT LP. As a result of ValueAct Capital Management,these relationships, each of GT LP, GT LLC and as the majority owner of the limited partnership interests of ValueAct Capital Management, L.P., and (vi) ValueAct Holdings GP, LLC as General Partner of ValueAct Holdings, L.P. and ValueAct Holdings II, L.P. This total includes the transferMr. Tananbaum may be deemed to ValueAct Capital Master Fund, L.P. of 10,009 Common Shares, which were previously awarded to Mr. Hale as compensation for his services as a director and held by him pursuant to an agreement with ValueAct Capital for the benefit of the limited partners of ValueAct Capital Master Fund, L.P. The number reported above also includes 11,037 RSUs that will vest within 60 days of March 1, 2021. Each person disclaimsshare beneficial ownership of anythe securities deemed to be ownedheld of record by the group that are not directly owned by such person.Accounts. |
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The following table sets forth, as of March
1, 202117, 2023 (unless otherwise noted below), certain information regarding the beneficial ownership of our Common Shares and the percentage of Common Shares beneficially owned by (i) each director and each director nominee; (ii) each executive officer named in the Summary Compensation Table on page
6759 (together, the “named executive officers,” or “NEOs”); and (iii) all directors and
current executive officers as a group. None of the shares held by directors and executive officers included in the table are pledged as security.
| | | | | | | | |
Identity of Owner or Group | | Number of
Shares
and Nature of
Beneficial
Ownership(1) (2) (3) | | | Percentage
of Class(4) | |
Named Executive Officers, Directors and Director Nominees | | | | | | | | |
Christina M. Ackermann | | | 296,955 | | | | * | |
Thomas J. Appio | | | 336,499 | | | | * | |
Richard U. De Schutter | | | 311,022 | | | | * | |
D. Robert Hale(5) | | | 17,952,640 | | | | 5.05 | % |
Paul S. Herendeen | | | 1,529,744 | | | | * | |
William D. Humphries(6) | | | 205,675 | | | | * | |
Brett Icahn | | | — | | | | * | |
Dr. Argeris (Jerry) N. Karabelas | | | 81,683 | | | | * | |
Sarah B. Kavanagh | | | 75,415 | | | | * | |
Steven D. Miller | | | 100 | | | | | |
Joseph C. Papa | | | 1,948,288 | | | | * | |
John A. Paulson(7) | | | 25,912,475 | | | | 7.29 | % |
Robert N. Power | | | 93,779 | | | | * | |
Russel C. Robertson | | | 113,704 | | | | * | |
Thomas W. Ross, Sr. | | | 90,279 | | | | * | |
Andrew C. von Eschenbach, M.D. | | | 29,602 | | | | * | |
Amy B. Wechsler, M.D. | | | 101,501 | | | | * | |
Directors and executive officers of the Company as a group (19 persons) | | | 49,383,910 | | | | 13.75 | % |
Christina M. Ackermann(5) | | | 358,285 | | | * |
Thomas J. Appio | | | 1,463,322 | | | * |
Seana Carson | | | 540,114 | | | * |
Richard U. De Schutter(6) | | | 383,565 | | | * |
Sam A. Eldessouky | | | 380,514 | | | * |
Brett M. Icahn | | | 60,190 | | | * |
Argeris N. Karabelas | | | 123,715 | | | * |
Sarah B. Kavanagh | | | 117,447 | | | * |
Steven D. Miller(6) | | | 120,312 | | | * |
Richard C. Mulligan | | | 36,704 | | | * |
Joseph C. Papa(5) | | | 3,072,039 | | | * |
John A. Paulson(7) | | | 26,581,325 | | | 7.3% |
Robert N. Power | | | 135,811 | | | * |
Russel C. Robertson | | | 177,416 | | | * |
Thomas W. Ross, Sr. | | | 132,311 | | | * |
Robert A. Spurr(8) | | | 112,741 | | | * |
Tom G. Vadaketh | | | 738,790 | | | * |
Amy B. Wechsler, M.D | | | 136,654 | | | * |
Directors, director nominees and current executive officers of the Company as a group (14 persons) | | | 30,747,676 | | | 7.3% |
*
| Less than 1% of the outstanding Common Shares. |
(1)
| This table is based on information supplied by current executive officers and directors.the individuals identified above. We believe that Common Shares shown as beneficially owned are those as to which the named persons possess sole voting and investment power. However, under the laws of California and certain other states, personal property owned by a married person may be community property, which either spouse may manage and control, and we have no information as to whether any Common Shares shown in this table are subject to community property laws. |
(2)
| The amounts reported include the following vested RSUs which are payable in Common Shares followingin connection with the applicable director’s separation of service from the Company: Mr. De Schutter, 26,365;46,876; Mr. Icahn, 17,414; Dr. Karabelas, 66,646;85,328; Ms. Kavanagh, 64,378;83,060; Mr. Miller, 17,436; Mr. Paulson, 62,403;107,903; Mr. Power, 76,141;94,823; Mr. Robertson, 102,667;143,029; Mr. Ross, 67,742; Dr. von Eschenbach, 16,465;86,424; Dr. Wechsler, 90,464.94,387. These vested RSUs represent either or both of the following: (i) director fees paid in RSUs, pursuant to the election of the applicable director to defer such fees; and (ii) annual grants of RSUs, for which delivery of Common Shares underlying the RSUs was deferred pursuant to the election of the applicable director. For further information regarding director compensation, see the section titled “Director Compensation” beginning on page 81.74. |
(3)
| The amounts reported include (i) the following stock options that are exercisable currently or will become exercisable within 60 days of March 1, 2021: Ms. Ackermann, 229,294; Mr. Appio, 187,074; Mr. Herendeen, 1,313,214; Mr. Humphries, 14,763; Mr. Papa, 1,291,869; and all executive officers as a |
| group (and excluding our directors, who do not receive stock options), 3,262,059; and (ii) the following unvested RSUs that will vest within 60 days of March 1, 2021: Ms. Ackermann, 8,282; Mr. Appio, 7,388;17, 2023: Mr. De Schutter, 11,037;34,387; Mr. Hale, 11,037; Mr. Herendeen, 19,889;Icahn, 34,387; Dr. Karabelas, 11,037;34,387; Ms. Kavanagh, 11,037;34,387; Mr. Papa, 37,884;Miller, 34,387; Dr. Mulligan, 34,387; Mr. Paulson, 11,037;34,387; Mr. Power, 11,037;34,387; Mr. Robertson, 11,037;34,387; Mr. Ross, 11,037; Dr. von Eschenbach, 11,037;34,387; Dr. Wechsler, 11,037;34,387; and all directors and current executive officers as a group, 188,359.
378,257. |
(4)
| Applicable percentage ownership is based on 355,661,440363,602,888 Common Shares outstanding on March 1, 2021.17, 2023. In computing the number of Common Shares beneficially owned by a person and the percentage ownership of that person, we deemed outstanding all Common Shares subject to options, warrants, rights or conversion privileges held by that person that are currently exercisable or exercisable within 60 days of March 1, 2021.17, 2023. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Under Rule 13d-3 of the SEC, certain Common Shares may be deemed to be beneficially owned by more than one person (if, for example, a person shares the power to vote or the power to dispose of the Common Shares). |
(5)
| According to information provided toIn connection with the Company by VA Partners I, LLC on February 9, 2021, VA Partners I, LLC hasB+L IPO, Mr. Papa ceased serving as our Chairperson of the sole power to voteBoard and disposeChief Executive Officer and became the Chairperson and Chief Executive Officer of 17,941,603Bausch + Lomb and Ms. Ackermann ceased serving as our Executive Vice President, General Counsel and Head of our Common Shares. This numberCommercial Operations and became Executive Vice President & General Counsel and President, Ophthalmic
|
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Pharmaceuticals of Bausch + Lomb. Mr. Papa ceased to be employed with B+L on March 6, 2023. The amount in the table above reported for Mr. Papa is based on information available to the Company as of March 6, 2023. The amount in the table above reported for Ms. Ackermann is based on information available to the Company as of March 17, 2023.
(6)
| The amounts reported includes 16,993,25010,000 Common Shares owned directlyindirectly by ValueAct Capital Master Fund, L.P.Mr. Miller through an individual retirement arrangement and 948,35313,500 Common Shares owned directly by ValueAct Co-Invest Master Fund, L.P. These shares may be deemed to be indirectly beneficially owned by (i) VA Partners I, LLC as General Partner of ValueAct Capital Master Fund, L.P., (ii) ValueAct Capital Management, L.P. as the manager of ValueAct Capital Master Fund, L.P., (iii) ValueAct Capital Management, LLC as General Partner of ValueAct Capital Management, L.P., (iv) ValueAct Holdings, L.P. as the majority owner of the membership interests of VA Partners I, LLC, (v) ValueAct Holdings II, L.P. as the sole owner of the membership interests of ValueAct Capital Management, LLC and as the majority owner of the limited partnership interests of ValueAct Capital Management, L.P., and (vi) ValueAct Holdings GP, LLC as General Partner of ValueAct Holdings, L.P. and ValueAct Holdings II, L.P. This total includes the transfer to ValueAct Capital Master Fund, L.P. of 10,009 Common Shares, which were previously awarded to Mr. Hale as compensation for his services as a director and held by him pursuant to an agreement with ValueAct Capital for the benefit of the limited partners of ValueAct Capital Master Fund, L.P. The number reported above also includes 11,037 RSUs that will vest within 60 days of March 1, 2021. Each person disclaims beneficial ownership of any securities deemed to be owned by the group that are not directly owned by such person. |
(6) | Mr. Humphries ceased being an employee on December 31, 2020. The beneficial ownership reported for Mr. Humphries reflects, as of that date, the number of vested stock options and the number of Common Shares beneficially and directly held by Mr. Humphries.
De Schutter through his spouse. |
(7)
| According to information provided to the Company by Paulson & Co., Inc. on February 5, 2021,March 17, 2023, it has the sole power to vote and sole power to dispose of 25,839,03526,439,035 of our Common Shares. Mr. Paulson may be deemed an indirect beneficial owner of these Common Shares, which are directly owned by investment funds which he manages. Mr. Paulson disclaims beneficial ownership of these Common Shares, except to the extent he has a pecuniary interest therein. This number also includes 220 Common Shares owned indirectly as a Uniform Gift to Minors Act custodian for minor children. |
(8)
| On June 1, 2022, we announced that BHC eliminated the position of President, U.S. Businesses, held by Robert A. Spurr, effective June 10, 2022. The amount in the table above reported for Mr. Spurr is the balance on information available to the Company as of June 10, 2022. |
DELINQUENT SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCEREPORTS
Section 16(a) of the Exchange Act requires the Company’s executive officers and directors, and persons who own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the SEC and the NYSE. Such executive officers, directors and shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.
Based solely upon its review of the copies of such forms it received, or written representations from certain reporting persons for whom no such forms were required, the Company believes that during fiscal year 2020,2022, all executive officers, directors and 10% beneficial owners of the Company timely filed all forms required by Section 16(a) except for the following: Mr. De Schutter filed one late Form 4 relating to a single transaction, and Mr. Humphries filed two late reports relating to nine transactions..
Our Compensation Philosophy
Bausch Health’s compensation philosophy is designed to attract, retain, and motivate
talented executives, including our NEOs, who are committed to the ongoing transformation of
our companyBHC and to improving people’s lives through our products. Our compensation program is
intendeddesigned to retain our critical leaders through the transition of BHC, to link executive compensation to long-term business performance,
while providingand provide compensation opportunities that are competitive as compared to our peers and align the interests of our executives with those of our shareholders. Our programs also balance appropriate risk-taking and incorporate shareholder feedback.
A significant portion of total compensation is linked to satisfying our financial
targets andtargets. Our strategic initiatives
in additionfocus on areas that are critical to
achieving positive total returnsour success, including an emphasis on fostering an inclusive work environment where everyone feels welcomed, supported and valued for their talents and contributions through our Diversity, Equity & Inclusion (“DE&I”) strategy, and identifying and addressing current and emerging environmental, social, and governance (“ESG”) trends that help us understand the needs of our patients and customers and provide us with the ability to
shareholders.enrich the communities and natural environments where we live and work.
In determining the appropriate mix of base salary and incentive pay (including annual cash incentives and long-term equity) for our NEOs, the
BHC Talent and Compensation Committee seeks to balance:
Attractingattracting and retaining our executives with the stability of a competitive base salary;
Promoting promoting pay-for-performance, as we believe thatour compensation program should emphasize incentive pay that appropriately rewards executives for their contribution to our overall performance; and
Aligningaligning compensation with company performance and shareholder value creation through the use of performance-basedwith equity compensation awards.
In allocating between short-term and long-term compensation, the
BHC Talent and Compensation Committee seeks to establish a balance between rewarding past performance and recognizing potential future contributions. In that respect, the
BHC Talent and Compensation Committee designs our annual incentive program to reward executives
who achieve for the achievement of pre-determined financial metrics and strategic priorities, and it grants equity awards under our long-term incentive program to provide an opportunity for additional compensation based on delivering on our long-term performance and shareholder value creation.
The compensation opportunity provided to our NEOs is primarily performance-based. In
2020,2022, 90% of our CEO’s and
77%79%, on average, of our other NEOs’ compensation opportunity was
performance-based pay, subject to the achievement of annual and long-term performance goals, including the growth of our Common Share price over time.Despite the pandemic, the Talent and Compensation Committee determined that our current executive compensation programs should remain in place during 2020. The Committee determined that financial metrics under the annualat-risk variable incentive program would be measured on a quarterly basis (versus on an annual basis) for 2020 only and capped at a total payout of 90%, as discussed in more detail on page 54 under “Components of Executive Compensation — Annual Incentive Program.” In addition, no changes were made to outstanding awards under our long-term incentive program or to other benefits during 2020 as a result of the pandemic.
compensation.
Shareholder-Friendly Compensation Practices
We maintain the following shareholder-friendly compensation practices, which further align the interests of our executives with those of our shareholders and balance appropriate risk taking.
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| • | Share ownership guidelines — All NEOs are subject to significant share ownership guidelines. Pursuant to our Share Ownership Guidelines, our CEO is required to hold Common Shares equivalent to 6 times his base salary, and our other NEOs are required to hold Common Shares the equivalent to 3 times their base salary. |
| • | Holding requirements — Our CEO and NEOs are required to hold 50% of their net shares that vest under our long-term incentive plans until they satisfy our Share Ownership Guidelines. |
| • | Capped award payouts — We set maximum award levels under our annual and long-term incentive program, with award payouts capped at 200%. |
| • | Clawback — The Board may exercise its discretion to require any employee who receives equity-based compensation to reimburse bonus, incentive or equity-based compensation awarded in the event of (1) a material restatement or adjustment to our financial statements or (2) detrimental conduct by the employee that has caused material financial, operational, or reputational harm to us. |
| • | Double trigger acceleration following a change in control — No unvested equity awards accelerate on a “single-trigger” basis in connection with a change in control. Instead, unvested equity awards accelerate on a “double-trigger” basis upon a qualifying termination of employment in connection with a change in control. |
| • | Limited severance — Our severance arrangements provide a cash severance payment as follows: for our NEOs, a cash severance payment equal to one and a half times annual base salary and annual target incentive and two times in the event of termination following a change in control; and for our CEO, a cash severance payment of two times annual base salary and annual target incentive. |
| • | Independent compensation consultant — The BHC Talent and Compensation Committee has engaged an independent compensation consultant that has no other ties to us or to our management. |
| • | Shareholder engagement — We are committed to ongoing engagement with our shareholders through structured, engaged investor outreach that enables us to obtain ongoing feedback on our compensation program. |
| • | Performance-based equity — We grant performance share units with rigorous absolute and relative performance goals, which align the interests of our executives with our shareholders. |
Share ownership guidelines — All NEOs are subject to significant share ownership guidelines. Pursuant to our Share Ownership Guidelines, our CEO is required to hold 6 times base salary, and our other NEOs are required to hold 3 times base salary.
Holding requirements — In connection with his hiring, our CEO was required to purchase $5,000,000 of Common Shares, and our other NEOs are required to hold 50% of their net shares that vest under our long-term incentive plans, until they satisfy our Share Ownership Guidelines.
Performance-based equity — We grant performance share units with rigorous absolute and relative performance goals, which align the interest of our executives with our shareholders.
Capped award payouts — We set maximum award levels under our annual incentive program and performance share units, with award payouts capped at 200%. In addition, payout for the portion of performance share units based on total shareholder return (“TSR”) performance is capped at 100% if absolute TSR is negative over the performance period.
Clawback — The Board may exercise its discretion to require any employee who receives equity-based compensation to reimburse bonus, incentive or equity-based compensation awarded in the event of (1) a material restatement or adjustment to our financial statements or (2) detrimental conduct by the employee that has caused material financial, operational, or reputational harm to us.
Double trigger following a change in control — No unvested equity awards accelerate upon a change in control, unless a qualifying event results in the termination of employment.
Limited severance — Our severance arrangements are modest, providing a cash severance payment for our NEOs (other than our CEO) equal to one and a half times annual base salary and annual target incentive and two times in the event of termination following a change in control; our CEO’s severance arrangement provides a cash severance payment of two times annual base salary and annual target incentive.
Independent compensation consultant — The Talent and Compensation Committee has engaged an independent compensation consultant that has no other ties to us or to our management.
Shareholder engagement — We are committed to ongoing engagement with our shareholders through structured, engaged investor outreach that enables us to obtain ongoing feedback on our compensation program.
What We Don’t Do
| • | No hedging — Our anti-hedging policy prohibits officers, directors and certain “designated employees” (as designated by the General Counsel in consultation with the CEO) from engaging in hedging, short selling, or monetization transactions with our Common Shares. |
| • | No pledging — Our anti-pledging policy prohibits officers, directors and designated employees from holding our securities in a margin account where the securities are subject to margin sales or pledging our securities as loan collateral. The anti-pledging policy exempts any margin accounts in existence at the time the policy was adopted by BHC. None of our NEOs or directors hold our securities in margin accounts subject to margin sales or pledging as loan collateral. |
| • | No repricing of underwater options — Repricing of stock options is expressly prohibited by BHC’s Amended and Restated 2014 Omnibus Incentive Plan (the “2014 Plan”). |
| • | No excise tax gross-ups — We will not gross-up any excise tax that may be triggered as a result of a change in control severance payment under Section 280G and 4999 of the Internal Revenue Code of 1986 (the “Code”). |
| • | No single trigger vesting or payments — We do not provide for “single trigger” equity award vesting or other “single trigger” payments or benefits upon a change in control. |
| • | No dividend or dividend equivalents on unearned incentive awards. |
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No hedging — Our anti-hedging policy prohibits officers, directors and employees from engaging in hedging, short selling, or monetization transactions with our Common Shares.
No pledging — Our anti-pledging policy prohibits officers, directors and employees from holding our securities in a margin account where the securities are subject to margin sales or pledging our securities as loan collateral. The anti-pledging policy exempts any margin accounts in existence at the time the policy was adopted by the Company. None of our NEOs or directors hold our securities in margin accounts subject to margin sales or pledging as loan collateral.
| • | No supplemental executive retirement plan — Executives are only eligible to participate in our tax-qualified Retirement Savings Plan (or, in the case of our Canadian-based executives, the Canadian equivalent) that is provided on the same terms to all employees. |
| • | No automatic or guaranteed annual salary increases. |
No repricing of underwater options — Repricing of stock options is expressly prohibited by our Omnibus Incentive Plan.
No excise tax gross-ups — We will not gross-up any excise tax that may be triggered as a result of a change in control severance payment.
No single trigger vesting — We do not provide for “single trigger” equity award vesting or other “single trigger” payments or benefits upon a change in control.
No dividend or dividend equivalents on unearned incentive awards
No supplemental executive retirement plan — Executives are only eligible to participate in our tax-qualified Retirement Savings Plan that is provided on the same terms to all employees.
No automatic or guaranteed annual salary increases
20202022 Shareholder Engagement
At our 20202022 Annual Meeting of Shareholders, we held a non-binding advisory vote with respect to the compensation of our NEOs (commonly referred to as a “say-on-pay”“say-on-pay” vote) with approximately 90%. Approximately 65% of the total
For
2020,2022, the threshold, target, and stretch performance and corresponding payouts were as follows, with award payouts capped at 200% of incentive
target if original, full-year EBITDA and Revenue plans were achieved. These payouts were further capped at 90% if original, full-year EBITDA and Revenue plans were not achieved. | | | | | | | | | | | | | | | | |
| | | EBITDA/EBITA | | | Revenue | | | | | | | |
| | | Performance versus Plan | | | Payout If
Original Full
Year Plan
Achieved | | | Payout If
Original Full
Year Plan Not
Achieved | |
Below Threshold | | | <90 | % | | | <93 | % | | | 0 | % | | | 0 | % |
Threshold | | | 90 | % | | | 95 | % | | | 10 | % | | | 10 | % |
Target | | | 100 | % | | | 100 | % | | | 100 | % | | | Capped at 90 | % |
Stretch | | | 110 | % | | | 107 | % | | | 200 | % | | | Capped at 90 | % |
Above Stretch | | | >110 | % | | | >107 | % | | | 200 | % | | | Capped at 90 | % |
target.
Below Threshold | | | <90% | | | <93% | | | 0% |
Threshold | | | 90% | | | 93% | | | 10% |
Target | | | 100% | | | 100% | | | 100% |
Stretch | | | 110% | | | 107% | | | 200% |
Above Stretch | | | >110% | | | >107% | | | 200% |
The
BHC Talent and Compensation Committee determines whether the financial metrics and strategic priorities have been achieved. In addition, it retains the ability to reduce or eliminate payouts for individual executives, including
the NEOs, even if financial metrics and strategic priorities are met, as well as to increase payouts based on individual performance. In making these decisions, the
BHC Talent and Compensation Committee may consider factors such as the performance of the individual executive against their individual objectives in support of strategic priorities or additional financial metrics applicable to the business or functional area for which the NEO is responsible.
2020
2022 BHC AIP Financial Objectives
In
The financial targets for 2022 were established at the beginning of
2020,2022 by the
BHC Board
approved the Company’sbased on BHC’s budget for
the fullfiscal year
2022, including Adjusted EBITDA
(non-GAAP) and Revenue
targets.targets (the “2022 BHC Financial Targets”). These same
financial metrics2022 BHC Financial Targets were reviewed and approved by the
BHC Talent and Compensation Committee to determine achievement under the
Annual Incentive Program. The Board also reviewed the Adjusted EBITDA and Revenue targets for the third and fourth quarters of 2020, which were used by the Talent and Compensation Committee to calculate the 2020 payout on a quarterly basis as described above.2022 BHC AIP.
For our NEOs, the
financial targetsBHC 2022 Financial Targets are based on attaining budget (to receive a payout at target) or stretch targets (to receive a payout above target) for Adjusted EBITDA and
Adjusted Revenue, as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Q1 Financial Metric(1) | | Weighting | | | Threshold | | | Target | | | Stretch | | | Actual | | | Achieved | | | Payout(2) | |
Adjusted EBITDA | | | 60 | % | | $ | 662B | | | $ | 735B | | | $ | 809B | | | $ | 804B | | | | 109.4 | % | | | 194 | % |
Revenue(3) | | | 40 | % | | $ | 1.874B | | | $ | 2.015B | | | $ | 2.156B | | | $ | 2.001B | | | | 99.3 | % | | | 90 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 152 | % |
| | | | | | | |
Q2 Financial Metric(1) | | Weighting | | | Threshold | | | Target | | | Stretch | | | Actual | | | Achieved | | | Payout(2) | |
Adjusted EBITDA | | | 60 | % | | $ | 781B | | | $ | 868B | | | $ | 955B | | | $ | 619B | | | | 71.3 | % | | | 0 | % |
Revenue(3) | | | 40 | % | | $ | 2.023B | | | $ | 2.175B | | | $ | 2.327B | | | $ | 1.671B | | | | 76.8 | % | | | 0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 0 | % |
| | | | | | | |
Q3 Financial Metric(1) | | Weighting | | | Threshold | | | Target | | | Stretch | | | Actual | | | Achieved | | | Payout(2) | |
Adjusted EBITDA | | | 60 | % | | $ | 707B | | | $ | 785B | | | $ | 864B | | | $ | 946B | | | | 120.6 | % | | | 200 | % |
Revenue(3) | | | 40 | % | | $ | 1.808B | | | $ | 1.944B | | | $ | 2.080B | | | $ | 2.126B | | | | 109.4 | % | | | 200 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 200 | % |
Adjusted EBITDA (non-GAAP)(1) | | | 60% | | | $2.156B | | | $2.396B | | | $2.636B | | | $2.236B | | | 93.3% | | | 20.0% |
Revenue(4) | | | 40% | | | $3.989B | | | $4.289B | | | $4.589B | | | $4.134B | | | 96.4% | | | 19.4% |
| | | | | | | | | | | | | | | | | | | | | 39.4% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Q4 Financial Metric(1) | | Weighting | | | Threshold | | | Target | | | Stretch | | | Actual | | | Achieved | | | Payout(2) | |
Adjusted EBITDA | | | 60 | % | | $ | 745B | | | $ | 828B | | | $ | 911B | | | $ | 900B | | | | 108.7 | % | | | 187 | % |
Revenue(3) | | | 40 | % | | $ | 1.953B | | | $ | 2.100B | | | $ | 2.247B | | | $ | 2.177B | | | | 103.7 | % | | | 152 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 173 | % |
| | | | | | | | | | | Payout Before Cap (Quarterly Average) | | | | 131 | % |
| | | | | | | | | | | Actual Capped Payout | | | | 90 | % |
(1)
| Adjusted EBITDA is a non-GAAP financial measure and may not be comparable to similar measures used by other companies. Please see Appendix 1 for a reconciliation of our non-GAAP financial measures to GAAP financial measures and related disclosures. |
(2)
| In determining final payout versusThe Financial targets and the 2020actual results under the 2022 BHC AIP were determined without reference to, and do not reflect in the table above, the financial plan,performance of B+L or our Solta Medical business in 2022. At the beginning of 2022, the BHC Talent and Compensation Committee established three separate 2022 annual incentive programs for the senior executives of BHC, B+L, and our Solta Medical business in 2022, each of which provided for annual incentive payouts based on the performance of the applicable executive’s business against the pre-established Adjusted EBITDA(non-GAAP) and Revenue targets in 2022 for such business. As a result, the targets and results under the 2022 BHC AIP reflected in the table above reflect only the financial targets and actual results for BHC (and do not reflect targets or results attributable to performance of B+L or our Solta Medical business for 2022).
|
(3)
| In determining the 2022 Financial Targets and final payouts for purposes of the 2022 BHC AIP, the BHC Talent and Compensation Committee reviewed and approved certain modifications to the previously reported results for Adjusted EBITDA (non-GAAP) and Revenues metrics for purposes of the 2022 BHC AIP relating to certain external factors outside of management’s control (e.g. foreign exchange, or an earlier or later than anticipated loss of exclusivity and approved adjustments)exclusivity). |
(3)(4)
| Revenue for these purposes is the same as GAAP revenue, except that the exchange rates are those used for the Annual Incentive Plan. 2022 BHC AIP. |
Based on the foregoing results, the Talent and Compensation Committee certified that the total payout based on the Company’sBHC’s Adjusted EBITDA (non-GAAP) and Revenue was capped at 90%39.4% for all NEOs for 75% ofparticipating in the total payout.2022 BHC AIP.
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20202022 BHC Strategic Priorities
In the beginning of
2020,2022, the
BHC Talent and Compensation Committee reviewed and approved the following strategic priorities, which make up the remaining 25% of our NEOs’ payout:
| | | | | | | | |
Strategic Priority | | Weighting | | | Payout | |
Continue to cultivate a high-performance, results-oriented culture by recruiting, engaging, developing, rewarding and retaining talent | | | 25 | % | | | 125 | % |
Drive operational excellence across the enterprise | | | 25 | % | | | 125 | % |
Increase size, breadth, and value of product pipeline | | | 25 | % | | | 100 | % |
Further develop “paths to win” across the enterprise | | | 25 | % | | | 100 | % |
| | | | | | | | |
| | | Total | | | | 113 | % |
Some of the specific goals for 2020 under each initiative were updated during 2020 to reflect the impact of COVID-19 on the ability to complete certain projects. However, our overall Strategic Priorities remained the same.
Create a vision for the organization, providing clarity and direction for leaders and employees on how we will create value, what we will achieve and how we will get there | | | 20% | | | 130% |
Cultivate a high-performance, results oriented culture that values diversity, equality and inclusion (DEI). Focus on recruiting, engaging, developing, rewarding and retaining our employees | | | 20% | | | 160% |
Accelerate growth and drive operational excellence across the enterprise to optimize sales and EBITA | | | 20% | | | 140% |
Increase size, breadth, and depth of product pipeline through R&D and strategic Business Development investment activities | | | 20% | | | 130% |
Accomplish key milestones required to separate B+L into an independent company | | | 20% | | | 180% |
| | | Total | | | 148% |
Achievement for each initiative was reviewed
and determined by the
BHC Talent and Compensation Committee
and credit was determined based on results against each initiative, including the following:
We continuedCreate a vision for the organization, providing clarity and direction for leaders and employees on how we will create value, what we will achieve and how we will get there
Set our new mission values and behaviors framework as well as branding which will be rolled out aligned to cultivatetiming of the full distribution of B+L.
Increased Government Relations outreach and executed regular updated meetings with all national health plans and PBMs.
Cultivate a high-performance, results-orientedresults oriented culture by (i) ensuring the healththat values diversity, equality and safetyinclusion (DEI). Focus on recruiting, engaging, developing, rewarding and retaining our employees
In 2022, we hired and onboarded seventeen percent of our employeesworkforce. Introduced a global approach to pay and performance with all sites remaining operational with no material disruption to our supply chain or significant safety impact to our employees or products; (ii) developing new toolsusing one central system.
Launched learning platform for US sales force and selling techniques for commercial teams to maintain business continuity; (iii) designingincreased learning and launching a robust employee development framework that includes career development, capability building and leadership development; and (iv) continuing to progress our diversity and inclusion efforts, through our D&I Council that is led by our Company’s Executive Committee members sponsored by our Chief Human Resources Officer, General Counsel, and Chief Medical Officer/President R&D. Specifically, we have provided all employees with educational tools and resources and have introduced training aimed at helping employees become more aware of unconscious biases. We have also focused on continuing to expand our Employee Resource Groups (“ERGs”), providing opportunities for professionalall leaders.
Enhanced our website to publish ESG data and developed and deployed new ESG policies.
Accelerate growth development and informal networking.
We drovedrive operational excellence across the Company by (i) reducing finished goods/raw material inventory, taking into consideration challenges faced as a result of COVID-19enterprise to optimize sales and deliveringEBITA
Identified and initiated implementation on 3 key initiatives for Xifaxan growth.
Manufacturing operations successfully met demand and delivered favorable financial results despite very difficult global supply chain and inflationary conditions. Exceeded 2022 Quality savings target across manufacturing networks and continuous improvement verification.
| continuous improvement programs, all of which well exceeded targets set, and (ii) enhancing our operational excellence program through our right-first-time program, as we further embed our total quality culture.
|
We increased theIncrease size, breadth, and valuedepth of our product pipeline by (i) exceeding planned filings and approvals; (ii) meeting expectations on phase III, early stage, and late stage projects; and (iii) acquiring new assets.
We further developed “paths to win” by (i) ensuring product launches remained on schedule, despite the challenges created by COVID-19 and (ii) quickly responding to the need to change the way our sales teams were making calls, implementing virtual selling approaches and creative ways to distribute samples, service machines and respond to customer requirements.
Our strong results and achievements for these Company-wide strategic priorities resulted in a payout of 113%, for 25% of the total payout.
2020 Annual Incentive Program Payouts
Based on this performance against pre-established financial targets (90% payout, comprising 75% of the total payout)through R&D and strategic priorities (113% payout, comprising 25% of the total payout) as approved by the Board, the following total payouts, which were capped at 90%, were approvedBusiness Development investment activities
Reviewed and refined R&D pipeline to focus on core programs and reduce costs related to non-core programs.
Filed new drug application for
our NEOs: | | | | | | | | | | | | | | | | |
NEO | | Incentive
Target (%) | | | Incentive Target
($) | | | Bonus
Payout | | | Bonus Payout as
% of Target(1) | |
Joseph C. Papa | | | 150 | % | | $ | 2,400,000 | | | $ | 2,160,000 | | | | 90 | % |
Paul S. Herendeen | | | 120 | % | | $ | 1,200,000 | | | $ | 1,080,000 | | | | 90 | % |
Christina M. Ackermann | | | 80 | % | | $ | 600,000 | | | $ | 540,000 | | | | 90 | % |
Thomas J. Appio | | | 80 | % | | $ | 620,000 | | | $ | 558,000 | | | | 90 | % |
William D. Humphries | | | 80 | % | | $ | 600,000 | | | $ | 540,000 | | | | 90 | % |
(1) | Bonus Payout as % of Target is shown at the nearest whole percent.
|
If we had not moved to a quarterly approach for 2020, our NEOs would have received an estimated payout above threshold but below 90%,IDP-126 with the calculation virtually solely impacted by the effects of the pandemic on our results. As described in this CD&AFDA.
Accomplish key milestones required to separate B+L into an independent company
B+L IPO executed.
Completed open market repurchases as well as in our Form 10-Ka debt exchange to reduce net debt by $3.2B since the B+L IPO. The lock ups have expired, and we have now achieved the target leverage ratios pending further conditions that was filed on February 24, 2021, lower volumes driven by social restrictions and other precautionary measures taken in responseneed to be satisfied.
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2022 B+L AIP
For B+L senior executives, including the
COVID-19 pandemic were a primary driver ofFormer B+L NEOs, the
reduction in our financial results for 2020. Prior to the pandemic, we had delivered results that demonstrated the consistency and durability of the Company as illustrated in our first quarter results. In 2019 we had reported our first full year of reported revenue growth since 2015. These strong results continued in Q1 2020 and, absent the pandemic, we expected would have carried through in subsequent quarters.The Talent and Compensation Committee did not make any further adjustments to the payouts as calculated above2022 B+L AIP is based on B+L’s performance against these pre-established financial targets and strategic priorities approved by the BHC Board.
Long-Term Performance against financial targets makes up 80% of the total payout, while performance against strategic priorities makes up 20% of the total payout.
The financial targets under the 2022 B+L AIP were established at the beginning of 2022 by the BHC Board based on B+L’s budget for fiscal year 2022, including Adjusted EBITDA (non-GAAP) and Revenue targets (the “2022 B+L Financial Targets”). These same 2022 B+L Financial Targets were reviewed and approved by the B+L TCC to determine achievement under the 2022 B+L AIP. The 2022 B+L Financial Targets for Mr. Papa were as follows:
Adjusted EBITDA (non-GAAP)(1)(2) | | | 60% | | | $787M | | | $875M | | | $963M | | | $786M | | | 89.8% | | | 0% |
Revenue(2) | | | 40% | | | $3.749B | | | $4.031B | | | $4.313B | | | $3.995B | | | 99.1% | | | 35% |
| | | | | | | | | | | | | | | | | | | | | 35% |
For all other Former B+L NEOs, the 2022 B+L Financial Targets are based on attaining budget (to receive a payout at target) or stretch targets (to receive a payout above target) for Adjusted EBITDA and Revenues, are as follows:
Adjusted EBITDA (non-GAAP)(1)(2) | | | 60% | | | $752M | | | $835M | | | $919M | | | $786M | | | 94.1% | | | 25% |
Revenue(2) | | | 40% | | | $3.749B | | | $4.031B | | | $4.313B | | | $3.995B | | | 99.1% | | | 35% |
| | | | | | | | | | | | | | | | | | | | | 60% |
(1)
| Adjusted EBITDA is a non-GAAP measure. Please see Appendix 1 for additional information and a reconciliation of non-GAAP financial measures to the most comparable GAAP financial measures. |
(2)
| In determining the 2022 B+L Financial Targets and final payouts for purposes of the 2022 B+L AIP, the B+L TCC reviewed and approved certain modifications to the previously reported results for FY 2022 Adjusted EBITDA (non-GAAP) and FY 2022 Revenues metrics for purposes of the 2022 B+L AIP relating to certain external factors outside of management’s control (e.g. foreign exchange and exclusion of other material non-recurring items). |
Following the end of 2022, the B+L TCC determined achievement of the 2022 B+L Financial Targets and the applicable strategic priorities under the 2022 B+L AIP.
For more information about the 2022 B+L AIP and the payout determinations approved by the B+L TCC for the Former B+L NEOs, please refer the B+L 2023 Proxy Statement.
2022 Annual Incentive Program
The Payouts
Based on the achievement of the applicable financial performance metrics and the strategic priorities for 2022, the total payouts approved by the BHC Talent and Compensation Committee introduced a newfor Messrs. Appio and Vadaketh and Ms. Carson under the 2022 BHC AIP and by the B+L TCC for Messrs. Papa and Eldessouky and Ms. Ackermann under the 2022 B+L AIP were as follows:
Thomas J. Appio | | | 2022 BHC AIP | | | 1,200,000 | | | 798,000 | | | 66.5% |
Tom G. Vadaketh | | | 2022 BHC AIP | | | 360,000 | | | 239,472 | | | 66.5% |
Seana Carson | | | 2022 BHC AIP | | | 303,954 | | | 202,190 | | | 66.5% |
Joseph C. Papa | | | 2022 B+L AIP | | | 2,400,000 | | | 1,128,000 | | | 47% |
Sam A. Eldessouky | | | 2022 B+L AIP | | | 560,000 | | | 375,200 | | | 67% |
Christina M. Ackermann | | | 2022 B+L AIP | | | 600,000 | | | 402,000 | | | 67% |
BHC’s Long-Term Incentive program in 2017 (the “LTIP”) for our senior executives, including our NEOs, to better align the awards with Bausch Health’s business strategy and plan to transform the Company, as well as to align with pharmaceutical industry practices pertaining to these grants. This program provides an opportunity for our senior executives to be granted a balanced portfolio of Performance Share Units (“PSUs”), Restricted Share Units (“RSUs”), and Stock Options.Program
Despite the pandemic and its significant impact on our stock price during 2020, theThe BHC Talent and Compensation Committee did not make any changes tobelieves that our LTIPexecutive compensation program design or how payouts under outstanding PSU cycles would be calculated,should emphasize pay-for-performance and deliver a significant portion of our NEOs’ compensation in the form of long-term equity incentive awards that align our NEOs’ interests with company performance and shareholder value creation.
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Given the transformation and transition of BHC and our business in 2022 (including in connection with the B+L IPO), the BHC Talent and Compensation Committee
has approved continuing this balanced portfolio approachdetermined to award each of Messrs. Appio and Vadaketh and Ms. Carson annual equity incentive awards for
2021.2020 Grants2022 that were granted 50% in the form of time-based restricted stock units (“RSUs”) and 50% in the form of time-based stock options (“Stock Options”). The BHC Talent and Compensation Committee determined not to NEOs
For 2020, all ofgrant any performance-based restricted stock units (“PSUs”) to our NEOs received 2020 LTIPin 2022 in light of the pending B+L IPO and the challenge of setting PSU metrics in the midst of this transformational time for BHC.
In 2023, we reintroduced PSUs to our long-term incentive compensation program by granting our CEO’s annual equity compensation awards
which were granted for our CEO 60% in
the form of PSUs
20%and 40% in
the form of RSUs, and for all other NEOs, 40% in the form of PSUs, 40% in the form of RSUs and 20% in
the form of Stock
OptionsOptions. The PSUs granted by the BHC Talent and
forCompensation Committee in early 2023 will be earned and vest based on achievement of an Adjusted Operating Cash Flow metric and Relative Total Shareholder Return modifier performance metric. For additional details regarding our 2023 long-term incentive program, see page 50 below. The Former B+L NEOs did not receive any BHC equity awards in 2022. Instead, the
otherFormer B+L NEOs
40%received B+L founder equity awards, as described in
PSUs, 30%more detail on page 49 below. 2022 BHC Equity Awards
In early 2022, the BHC Talent and Compensation Committee approved the 2022 annual BHC equity awards to each of Messrs. Appio, Vadaketh, Spurr and Ms. Carson, which, as described above, were granted 50% in
the form of RSUs and
30%50% in
the form of Stock Options, with the following approximate values.
| | | | |
NEO | | Approved Value | |
Joseph C. Papa | | $ | 11,250,000 | |
Paul S. Herendeen | | $ | 4,200,000 | (1) |
Christina M. Ackermann | | $ | 2,300,000 | (2) |
Thomas J. Appio | | $ | 1,800,000 | |
William D. Humphries | | $ | 1,250,000 | |
Thomas J. Appio | | | $7,500,000 |
Tom G. Vadaketh | | | $2,150,000 |
Seana Carson | | | $1,650,000 |
Robert A. Spurr | | | $1,750,000 |
(2) | Includes RSU grant with a grant date fair market value of $500,000, which was awarded in August 2020 in recognition of Ms. Ackermann’s performance during 2020.
|
2020 Performance Share Units
PSUs provide senior executives with the right to receive Common Shares at a future date, assuming performance against pre-determined metrics are achieved, specifically our Return on Tangible Capital (“ROTC”) and relative TSR.
The Talent and Compensation Committee determined that, starting in 2019, the senior executive team would have a portion of their PSU grant based solely on performance against relative TSR (versus absolute TSR), with any payout capped at 100% if absolute TSR is negative over the three-year period, in order to align more closely with external pay practices while maintaining a strong focus on aligning shareholder interests and our NEOs’ long-term compensation. In addition, the ROTC and TSR PSU metrics would be equally weighted 50% each for all NEOs, including the CEO, in order to further align the approach across the senior executive team.
For 2020, ROTC and TSR each comprised a portion of the total PSU award, with the number of PSUs that may be achieved capped at 200%. The value ultimately received is based on our performance against these metrics, which are two key measures of our long-term performance, as well as the growth of our Common Share price over time. 2020 PSUs vest in February 2023, subject to continued employment and achievement of minimum performance criteria.
Return On Tangible Capital Metrics
For 2020, ROTC comprised 50% of the total PSU award granted to all NEOs. ROTC is measured over three years, from 2020 through 2022. ROTC performance is measured each year; for 2020, one-third of the PSUs achieved was based on 2020 performance, one-third will be based on 2021 performance, and one-third will be based on 2022
performance.Starting in 2019, the Talent and Compensation Committee updated the ROTC calculation by weighting the two components that comprise ROTC – Net Operating Profit After Taxes (“NOPAT”) (75%) and Net Operating Assets (25%) – with a higher weighting on the profitability component of this calculation. The following ROTC
RSUs
goals were set at the beginning of 2020 and apply to the grants made to our NEOs in 2020. Goals for 2021 were set at the beginning of 2021 and will be disclosed in the 2022 proxy statement. Goals for 2022 will be set at the beginning of 2022.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial Metric | | Weighting | | | Threshold | | | Target | | | Stretch | | | Actual | | | Achieved | | | Payout | |
NOPAT | | | 75 | % | | $ | 2,674B | | | $ | 2,972B | | | $ | 3,269B | | | $ | 2,918B | | | | 98.2 | % | | | 86.5 | % |
Net Operating Assets | | | 25 | % | | $ | 1,542B | | | $ | 1,402B | | | $ | 1,262B | | | $ | 1,564B | | | | 89.6 | % | | | 0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 65 | % |
The Talent and Compensation Committee has determined that, based on our combined NOPAT and Net Operating Asset results, 65% of the ROTC PSUs were achieved for 2020. Despite the pandemic, the Talent and Compensation Committee did not make any changes to how this payout would be calculated. The number of PSUs ultimately delivered in 2023 for this portion of the 2020 award is dependent on ROTC performance for 2020, 2021, and 2022.
Total Shareholder Return Metrics
For 2020, relative TSR comprised 50% of the total PSU award granted to all NEOs. The relative TSR performance period is three years, from January 1, 2020 through December 31, 2022, and is measured as compared to the NYSE ARCA PHARMACEUTICAL INDEX peers. The following targets were set at the beginning of 2020 and apply to grants made in 2020:
| | | | | | | | |
| | | Percentile | | | Payout | |
Below Threshold | | | <30 | % | | | 0 | % |
Threshold | | | 30 | % | | | 50 | % |
Target | | | 50 | % | | | 100 | % |
Stretch | | | 80 | % | | | 200 | % |
Above Stretch | | | >80 | % | | | 200 | % |
TSR is calculated as the stock price appreciation for the 20 days preceding the beginning of the performance period as compared to the 20 days preceding the end of the performance period, plus dividends and distributions made or declared (assuming such dividends or distributions are reinvested in the Common Shares of the Company) during the performance period. Further, if our absolute TSR is negative over the three-year period, any payout will in no event exceed 100%.
2020 Restricted Share Units
RSUs provide senior executives with the right to receive Common Shares at a future date. The value ultimately received is based on the growth of our Common Share price over time. RSUs vest one-third per year, assumingon each of the first three anniversaries of the grant date, subject to continued employment.
2020employment through such date.
Stock optionsOptions provide senior executives the opportunity to purchase our Common Shares at a price equal to the market price at the time of the grant. The value ultimately received is based on the growth of our Common Share price over time. Stock optionsOptions vest one-third per year, and remain exercisable for a ten-year term,on each of the first three anniversaries of the grant date, subject to continued employment.employment through such date. The Stock Options will remain exercisable until the 10-year anniversary of the grant date.
B+L Long-Term Incentive Program
The B+L Board of Directors approved a long-term incentive program for 2022 that provided for the grant of founder equity awards granted to the Former B+L NEOs in May 2022 in connection with the B+L IPO (the “B+L Founder Awards”), which were granted in the form of RSUs and Stock Options.
Founder Awards Granted to the Former B+L NEOs For 2022, the Former B+L NEOs received Founder Awards in connection with the B+L IPO, which were granted 50% in the form of RSUs (the “B+L Founder RSUs”) and 50% in the form of Stock Options (the “B+L Founder Stock Options”), with the following approximate values.
Joseph C. Papa | | | $17,000,000 |
Sam A. Eldessouky | | | $4,500,000 |
Christina Ackermann | | | $3,000,000 |
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2018The B+L Founder RSUs will vest 50% on each of the second and third anniversaries of the grant date or, if later, upon of B+L’s full separation from BHC or a change in control of B+L, assuming continued employment through the applicable vesting date. The B+L Founder Stock Options will vest ratably on the first three anniversaries of the grant date, or, if later, upon B+L’s full separation from BHC or a change in control of the Company, subject to continued employment from the grant date. The B+L Founder Stock Options will remain exercisable until the ten-year anniversary of the grant date.
BHC CEO Mr. Appio B+L Founder RSU Award In appreciation of his leadership as the former President, Co-Head of B+L international and in recognition of the integral role he plays in the successful separation of B+L into an independent company, the B+L TCC granted Mr. Appio a B+L Founder RSU Award in the amount of $1,000,000. The B+L Founder RSU Award granted by B+L to Mr. Appio will vest on the same schedule described above for the Former B+L NEOs and unless otherwise determined by the B+L Talent and Compensation Committee will also be subject to forfeiture if the full distribution of B+L does not occur on or prior to December 31, 2023.
2020 and 2021 BHC Performance Share Unit Vesting
On March 7, 2021,
In early 2022, the BHC Talent and Compensation Committee approved the following changes in light of the separation of the BHC and B+L businesses in connection with the B+L IPO, due to the difficulty of assessing the achievement of the PSU performance metrics following the B+L IPO, in order to provide consistent treatment of these grants for both leadership teams, and based on input from Pay Governance regarding common market practice for similar situations: (i) BHC Return on Tangible Capital (“ROTC”) performance in respect of the 2022 performance period and the 2023 performance period applicable to the PSUs granted in 2018each of 2020 and 2021, as applicable, would be deemed to Mr.be achieved at target as of the closing of the B+L IPO in May 2022, (ii) the last day of the TSR performance period applicable to such PSUs was the date of the closing of the B+L IPO in May 2022, with actual achievement of the TSR performance metrics measured by the BHC Talent and Compensation Committee through such date, and (iii) the 2021 ROTC PSUs would service vest early on March 3, 2023 (versus March 3, 2024) as required under Section 409A of the Internal Revenue Code.
Based on the foregoing, the following summarizes the level of achievement and resulting payout of the BHC PSUs granted to our NEOs in 2020 and 2021:
2020 BHC PSUs
The 2020 ROTC award was calculated using the average of actual performance for 2020 (65%) and 2021 (123%), and target performance (100%) for 2022, resulting in a payout of 96%.
The 2020 TSR award was measured relative to BHC’s peers in the ARCA index at the time of the closing of the B+L IPO, using a 20-day stock price trail. BHC’s TSR ranked 20 of 23 peers (13th percentile), resulting in a payout of 0%.
On February 27, 2023, the BHC PSUs granted in 2020 to Messrs. Appio, Papa Mr. Herendeen, Ms.and Eldessouky and Mses. Carson and Ackermann and Mr. Appio vested based on their continued employment through the vesting date. Mr. Humphries did not receive a 2018
PSU award. For 2018,2021 BHC PSUs
The 2021 ROTC
comprised 25% of the total PSU award
and TSR comprised 75% of the total PSU award for Mr. Papa, ROTC and TSR comprised 50% each of the total PSU award for Mr. Herendeen, and ROTC comprised 75% of the total PSU award and TSR comprised 25% of the total PSU award for Ms. Ackermann and Mr. Appio, with the number of PSUs that could be achieved capped at 200%.ROTC was measured over three years, from 2018 through 2020. 2018 ROTC was achieved at 200% and 2019 ROTC was achieved at 117%, and as disclosed above, 2020 ROTC was achieved at 65%. The average of these three years resulted in a final ROTC payout of 127% for the 2018 ROTC PSUs.
TSR was measured on both an absolute and relative basis on the measurement date (March 5, 2021)calculated using the average of actual performance for 2021 (123%), and target performance (100%) for 2022 and 2023, resulting in a payout of 107%.
The 2021 TSR award was measured relative to BHC’s peers in the ARCA index at the time of the closing price forof the 20 trading days preceding. The following absoluteB+L IPO, using a 20-day stock price targets were set attrail. BHC’s TSR ranked 17 of 25 peers (33rd percentile), resulting in a payout of 58% of the beginning of 2018target award.
On March 3, 2023, the PSUs granted in 2021 to Messrs. Appio, Papa and Eldessouky and Mses. Carson and Ackermann vested based on our Common Share price at that time ($17.60)their continued employment through the vesting date.
These 2020 and
applied to these grants. | | | | |
Stock Price in 2021 | | PSUs Achieved | |
Less than $21.86 | | | 0 | % |
$21.86 | | | 50 | % |
$26.76 | | | 100 | % |
$43.30 | | | 200 | % |
Greater than $43.30 | | | 200 | % |
Based on the average closing price of our Common Shares for the 20-trading day measurement period of $30.85, this resulted in a final payout of 124%. Since our TSR over the measurement period was above the 50th percentile ranking of the TSR for NYSE ARCA PHARMACEUTICAL INDEX, the 100% cap was not applied.
These 20182021 PSUs were delivered in February and March 2021,2023, respectively, as shown in the Outstanding Equity Awards at Fiscal Year End Table beginning on page 71.63.
2023 BHC Long-Term Incentive Program As noted above, in early 2023, the BHC Talent and Compensation Committee approved our 2023 long-term incentive program, including granting our CEO’s annual equity compensation awards 60% in the form of PSUs and 40% in
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the form of RSUs and for all other NEOs, 40% in the form of PSUs, 40% in the form of RSUs and 20% in the form of Stock Options. After taking into account shareholder feedback during 2022, the BHC Talent and Compensation Committee has decided to measure 2023 PSUs using a balanced approach, measuring performance based on achievement of an Adjusted Operating Cash Flow metric and Relative Total Shareholder Return modifier performance metric. The BHC Talent and Compensation Committee determined that Adjusted Operating Cash Flow aligns with BHC’s priorities of creating flexibility to service debt, manage working capital and improve profitability and Relative Shareholder Return aligns the program with the interest of shareholders.
B+L Separation Bonus Opportunity
In October 2020, the BHC Talent and Compensation Committee approved Messrs. Appio’s, Spur’s and Eldessouky’s, and Mses. Carson’s and Ackermann’s eligibility for a performance-based separation bonus, which requires the achievement of pre-determined milestones related to the separation transaction. Payment is made in cash, with 50% conditioned upon meeting internal readiness criteria for the separation of the two companies and the remaining 50% conditioned upon the successful close of the B+L separation transaction. The first 50% was paid in October 2021. Payment is subject to continued employment, except in limited circumstances. The total amount of the remaining unvested separation bonuses is $250,000 for each of Mr. Appio, Mr. Eldessouky, Ms. Ackermann and $50,000 for Ms. Carson. In connection with his termination of employment, Mr. Spurr received the remaining unvested separation bonus of $250,000.
BHC Retention Program
In order to retain and incentivize certain members of our senior leadership team who are critical to positioning BHC for long-term future growth during the transformation of the company, on September 5, 2022, the BHC Talent and Compensation Committee approved a retention program for certain of BHC’s executive officers (including Mr. Vadaketh and Ms. Carson). Under the retention program, each of Mr. Vadaketh and Ms. Carson were granted a one-time award of BHC RSUs (the “BHC Retention RSU Grant”) under the 2014 Plan. Mr. Vadaketh received a BHC Retention RSU Grant with an aggregate grant date value of $2,150,000 and Ms. Carson received a BHC Retention RSU Grant with an aggregate grant date value of $1,650,000. The BHC Retention RSU Grants will generally vest ratably on each of the first three anniversaries of the grant date subject to continuous employment with BHC (except the BHC Retention RSU Grant will fully vest earlier upon the executive’s termination of employment due to death, disability, involuntary termination without “cause” or resignation for “good reason”). The value ultimately received is based on the growth of our Common Share price over time.
In light of the announced departure of B+L’s CEO, Mr. Papa, and in order to retain the members of the executive leadership team who are essential to B+L’s future success, on July 25, 2022, the B+L TCC (and not the BHC Talent and Compensation Committee) approved a retention program that includes the Former B+L NEOs (other than Mr. Papa) (the “B+L Retention Program”).
Under the B+L Retention Program, the severance benefits payable to the Former B+L NEOs (other than Mr. Papa) were updated to provide that, in the event of an involuntary termination of the Former B+L NEO’s employment by B+L without “cause” or the NEO’s resignation for “good reason” (as described below), in each case within one-year following B+L’s appointment of Mr. Papa’s successor (a “qualifying termination”), then (i) the Former B+L NEO will be eligible to receive a cash severance payment equal to two times the sum of his or her annual base salary and annual target incentive award, plus payment of his or her annual cash bonus award for the year of termination (based on actual achievement of applicable performance goals and prorated based on the number of days employed during the year prior to termination) and (ii) with respect to the B+L Founder Awards, (a) the B+L Founder RSUs will vest and be settled on a pro-rata basis (based on his or her period of service prior to the termination date relative to the original three year vesting period associated with such awards), but the shares received upon settlement will be nontransferable until the earliest to occur of (A) the date BHC completes the spin-off distribution of B+L, (B) a “change in control” of B+L, (C) the date the Board determines that BHC will no longer pursue the spin-off distribution of the B+L (a “Strategy Change”) and (D) the two-year anniversary of the Former B+L NEO’s termination of employment (such applicable date, the “Unrestricted Date”) and (b) the B+L Founder Stock Options will vest and become exercisable on the Unrestricted Date on a pro-rata basis (based on his or her period of service prior to the date of his or her termination of employment relative to the original three year vesting period associated with such awards), and the B+L Founder Stock Options will be exercisable for two years following the later of the
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Unrestricted Date and the date of his or her termination of employment. Solely for purposes of the above-described severance benefits, “good reason” is defined pursuant to the terms of the executive’s existing employment agreement with B+L, except that a Strategy Change was added as an additional event giving rise to “good reason”. All other terms and conditions under each Former B+L NEO’s employment agreement with B+L remain unchanged.
In addition, each of Former B+L NEOs (other than Mr. Papa) was granted a one-time award of 35,000 RSUs under the Retention Program (the “B+L Retention RSU Grant”) pursuant to B+L’s 2022 Omnibus Incentive Plan. The B+L Retention RSU Grant will generally vest in one-third installments on each of the first three anniversaries of the grant date subject to the NEO’s continuous employment with B+L (except the B+L Retention RSU Grant will fully vest earlier upon the Former B+L NEO’s termination of employment due to death, disability, involuntary termination without “cause” or resignation for “good reason”).
BHC’s Matching Share Program
Starting in August 2018,
Senior Leaders, including our NEOs,
becameare eligible to participate in
the Bausch Health CompaniesBHC’s Matching Share Program. Under this program,
sharesCommon Shares purchased on the open market by recipients are matched with one Matching
Restricted Stock UnitRSU (“MRSU”) issued under the 2014 Plan. Generally, MRSUs granted for a period of three years may not exceed the value of 50% of the sum of the NEO’s annual base salary and target annual cash bonus, less any shares sold within the past six months (excluding any shares sold to cover a tax obligation resulting from a vesting event).
Subject to the provisions of the 2014 Plan and applicable award agreements, MRSUs vest
pro-rata over a three-year period, provided that the recipient is employed through the applicable vesting dates. Vesting ceases upon
a termination of employment (except in limited circumstances), and any MRSUs that do not become vested prior to the recipient’s termination of employment or that do not become vested according to the provisions of the terms of the award are forfeited.
In 2020, Ms. Ackermann
The Former B+L NEOs were no longer eligible to participate in the plan effective at the time of the B+L IPO. None of our NEOs or the Former B+L NEOs purchased shares under this program
and received an MRSU grant, as shown in the Grants of Plan-Based Awards Table beginning on page 69.Bausch + Lomb Separation Bonus Opportunity
The Talent and Compensation Committee approved Mr. Herendeen, Ms. Ackermann, and Mr. Appio’s eligibility for a performance-based separation bonus, which requires the achievement of pre-determined milestones related to the separation transaction. Payment will be made in cash, with 50% conditioned upon the successful operational separation of the two companies and the remaining 50% conditioned upon the successful close of the separation transaction. Payment is subject to continued employment, except in limited circumstances. Additional details are shown below in the Grant of Plan Based Awards table on page 69.
during 2022. Retirement and Welfare Benefits
The retirement and welfare benefit programs are a necessary element of the total compensation package to ensure a competitive position in attracting and maintaining a committed workforce. Participation in these programs is not tied to performance.
Our specific contribution levels to these programs are adjusted annually to maintain a competitive position while considering costs.
U.S. Retirement Savings Plan — All employees of BHC and B+L in the United States, including our NEOs in the U.S., are eligible to participate in a tax-qualified retirement savings plan (the “Retirement Savings Plan”) under Section 401(k) of the Code. Eligible employees are able to contribute to the Retirement Savings Plan, on a before-tax basis, up to 75% of their eligible compensation, subject to the limit prescribed by the Code. In 2020,2022, we matched 100% of the first 3% of pay and 50% on the next 3% of pay that is contributed to the Retirement Savings Plan. All employee contributions to the Retirement Savings Plan are fully vested upon contribution; matching contributions vest ratably over three years.
Canadian Retirement Savings Plan — All employees in Canada, including Ms. Carson, are eligible to participate in a tax-qualified retirement savings plan under The Canada Revenue Agency (the “Canadian Retirement Savings Plan”). Eligible employees are able to contribute to the Canadian Retirement Savings Plan, on a before-tax basis, up to 85% of their eligible compensation subject to the limits prescribed by the Canada Revenue Agency. In 2022 BHC made a base contribution of 3% of base salary and bonus and we could match 100% of the employee’s contribution up to a maximum of 2% of base salary and bonus that is contributed to the Canadian Retirement Savings Plan. All employee contributions to the Canadian Retirement Savings Plan are fully vested upon contribution.
Welfare Plans — Our executives are also eligible to participate in our broad-based welfare benefits plans (including medical, dental, vision, life insurance and disability plans) upon the same terms and conditions as other employees.
Executive Benefits and Perquisites
We provide our NEOs with limited perquisites and other personal benefits that the
BHC Talent and Compensation Committee believes are reasonable and consistent with our overall compensation program to better attract and retain superior employees for key positions. The Talent and Compensation Committee periodically reviews the levels of perquisites and other personal benefits provided to our NEOs. The Talent and Compensation Committee intends to maintain only those perquisites and other benefits that it determines to be necessary components of total compensation and that are not inconsistent with shareholder interests.
The
BHC Talent and Compensation Committee
permits the Chairman and CEOpermitted Mr. Papa to use
ourBHC’s aircraft for his business travel and, on a limited basis, for personal travel up through the time of the B+L IPO. Certain travel for immediate family members was also permitted, as reported on page 60 in footnote 5(B) to the Summary Compensation Table. We did not gross up the income tax incurred by Mr. Papa resulting from his personal use of the aircraft. The BHC Talent and Compensation Committee believes that making the company aircraft available to Mr. Papa allowed him to serve shareholder interests by efficiently and securely conducting business during and when traveling.Following the B+L IPO, the B+L TCC also permitted Mr. Papa to use the company aircraft for his business travel and, on a limited basis, for personal travel. Certain travel for immediate family members is also permitted, as reported on page
6860 in footnote
45(B) to the Summary Compensation Table.
We doB+L does not gross up the income tax incurred by Mr. Papa resulting from his personal use of
ourthe aircraft.
The Talent and Compensation Committee believes that making our aircraft available to our Chairman and CEO allows him to serve shareholder interests by efficiently and securely conducting business during and when traveling.The Talent and Compensation Committee introduced an executive physical program for our NEOs. The Talent and Compensation Committee believes that this program aligns with its philosophy regarding perquisites by providing our NEOs with a convenient program to annually monitor their health, while allowing them to maintain their focus on day-to-day business operations and our ongoing transformation.
Attributed costs of the personal benefits described above for our NEOs for the fiscal year ended December 31,
20202022 are included in the column entitled “All Other Compensation” of the Summary Compensation Table on page
67.The Talent and Compensation Committee approved an update effective January 1, 2021 to the cash severance payment for which our NEOs are eligible, excluding our Chairman and CEO whose employment agreement remains unchanged, to ensure the severance program remained competitive59.
Arrangements with the external market. In connection with a qualifying termination of employment, the cash severance payment for which they are eligible will be equal to one and a half times the sum of annual base salary and annual target incentive. All other terms and conditions under each Executive Officer’s employment agreement remain unchanged. This provision was approved effective through December 31, 2023, at which time the Committee will review the appropriateness of continuing to provide this benefit.Our NEOS
Mr. Papa’sAppio’s Employment Agreement
In
April 2016,March 2017, we entered into an employment agreement with Mr.
Papa.Appio, which was amended in connection with his appointment to CEO effective as of the B+L IPO (the “Appio Agreement”). The initial
three-year term of
Mr. Papa’s agreementthe Appio Agreement commenced on
May 2, 2016 and continues until the fifth anniversary of the commencement date. Beginning at the expiration of the initialSeptember 1, 2021. The term
the term will
continue to automatically renew for successive
one-year periods unless either party gives notice of
non-renewal.Cash Compensation
Pursuant to
his agreement,the Appio Agreement, Mr.
PapaAppio receives
aan initial annual base salary
of $1,000,000 and a target annual incentive opportunity equal to
150%120% of his base salary, with a maximum annual incentive opportunity equal to 200% of his annual target incentive.
Equity Compensation
In connection with entering into his employment agreement,promotion to CEO, Mr. PapaAppio received (i) 373,367 RSUs and (ii) an option to acquire Common Sharesinitial equity grant with a grant-date fair value equal to $10,000,000 at an exercise price equal to the fair marketaggregate approved value of our Common Shares on$5,000,000, 50% in the dateform of grant. Additionally, pursuant to his employment agreement, Mr. Papa was required to purchase $5,000,000 worthPSUs and 50% in the form of Common Shares by no later than the first anniversary of his commencement date. Mr. Papa satisfied this obligation.
RSUs. As provided for under the RSU award agreement, 50% (186,684) of these RSUs vested on May 2, 2018, the second anniversary of his commencement date, based on pre-determined individual goals relating to (i) succession planning; (ii) government relations; (iii) employee relations; (iv) customer relations; and (v) shareholder relations being achieved. The remaining 50% vested on the fourth anniversary of his commencement date.
Options. The options vest 25% on each of the first four anniversaries following the commencement date, subject to Mr. Papa’s continued employment with the Company through the applicable vesting date.
FutureRSUs. Ongoing equity grants for Mr. Papa are at the sole discretion of the Board or theBHC Talent and Compensation Committee.
Termination
Mr. Appio’s expatriate assignment from New Jersey to China ended as of
EmploymentDecember 31, 2021, in connection with his appointment as CEO effective upon the B+L IPO; however, due to the continued COVID related lockdowns in China, BHC continued to maintain Mr. Appio’s residence in China and accordingly, Mr. Appio was liable for taxes in China. For 2022, BHC continued to provide for (i) Mr. Appio’s Company-paid housing in China; (ii) tax equalization, with Mr. Appio responsible for actual taxes due in the United States and BHC responsible for any taxes due in non-U.S. jurisdictions in which Mr. Appio earns taxable income; and (iii) tax preparation services. These benefits are reported in the “All Other Compensation” column of the Summary Compensation Table on page 59, including reimbursement related to the taxes on imputed income for these expatriate assignment benefits, as described on page 60 in footnote 5(D) to such table.
The consequences of Mr.
Papa’sAppio’s termination of employment, whether or not in connection with a “change in control,” are described in “Potential Payments Upon Termination or Change in Control,” beginning on page
75.Holding Requirements
Pursuant to his employment agreement, 66.
Mr. Papa is restricted from selling, assigning, transferring or otherwise disposing of Common Shares acquired pursuant to equity awards granted to him in accordance with the employment agreement (net of any shares sold or withheld by us in payment of the exercise price or tax withholding obligations) until the fourth anniversary of his commencement date (or, if later, in the case of all of Mr. Papa’s options, the first anniversary of the exercise date or vesting date and, in the case of 50% of Mr. Papa’s options, the second anniversary of the exercise date or vesting date). In addition, Mr. Papa is restricted from selling, assigning, transferring or otherwise disposing of Common Shares he purchases pursuant to the employment agreement until the fourth anniversary of the purchase date. Notwithstanding the foregoing, all sales restrictions will lapse upon a “change of control” (excluding any change of control following which Mr. Papa serves as the chief executive officer of the ultimate parent company), Mr. Papa’s death, disability and involuntary termination of employment without “cause” or for “good reason,” or, in the case of the purchased shares, Mr. Papa’s voluntary termination of employment.
Restrictive Covenants
Mr. PapaAppio is subject to customary restrictive covenants, including non-competition and non-solicitation covenants during his employment and for two years following a termination of employment for any reason.
Mr.
Herendeen’sVadaketh’s Employment Agreement
In August 2016,October 2021, we entered into an employment agreement with Mr. Herendeen.Vadaketh (the “Vadaketh Agreement”). The initial three-year term of Mr. Herendeen’sVadaketh’s agreement commenced on August 22, 2016January 3, 2022 and automatically renewed on August 22, 2019. Thecontinues until the third anniversary of the date of the commencement of his employment. Beginning at the expiration of the initial term, the Vadaketh Agreement will continue to automatically renew for successive one-year periods unless either party gives notice of non-renewal.
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Pursuant to
his agreement,the Vadaketh Agreement, Mr.
HerendeenVadaketh receives
aan annual base salary
of $600,000 and a target annual incentive opportunity equal to
120%60% of his base salary, with a maximum annual incentive opportunity equal to 200% of his annual target incentive.
In connection with entering into the Vadaketh Agreement, Mr. Vadaketh received a one-time cash sign-on bonus of $500,000 and a one-time initial equity grant with an aggregate value of $3,000,000, 50% in the form of RSUs and 50% in the form of stock options. Ongoing equity grants are at the sole discretion of the
BHC Talent and Compensation Committee.
The consequences of Mr.
Herendeen’sVadaketh’s termination of employment, whether or not in connection with a “change in control,” are described in “Potential Payments Upon Termination or Change in Control,” beginning on page
75.66.
Mr. HerendeenVadaketh is subject to customary restrictive covenants, including non-competition and non-solicitation covenants during his employment and for one year following a termination of employment for any reason.
Ms. Carson’s Employment Agreement
In December 2021, we entered into an employment agreement with Ms. Carson in connection with her appointment as the General Counsel of BHC effective as of the B+L IPO (the “Carson Agreement”).
Pursuant to the Carson Agreement, Ms. Carson receives an annual base salary of $665,000 CAD and a target annual incentive opportunity equal to 60% of her base salary, with a maximum annual incentive opportunity equal to 200% of her annual target incentive. In connection with entering into the Carson Agreement, Ms. Carson received a one-time equity grant with an aggregate value of $250,000 in the form of RSUs. Ongoing equity grants are at the sole discretion of the BHC Talent and Compensation Committee.
The consequences of Ms. Carson’s termination of employment, whether or not in connection with a “change in control,” are described in “Potential Payments Upon Termination or Change in Control,” beginning on page 66. Ms. Carson is subject to customary restrictive covenants, including non-competition and non-solicitation covenants during her employment and for one year following termination of employment for any reason.
Mr. Spurr’s Employment Agreement and Separation Agreement In May 2020, we entered into an employment agreement with Mr. Spurr, which was amended in connection with his appointment as President, U.S. Businesses in 2021 (as amended, the “Spurr Agreement”). The initial three-year term of the Spurr Agreement commenced September 1, 2021. The term would automatically renew for successive one-year periods unless either party gives notice of non-renewal. Pursuant to the Spurr Agreement, Mr. Spurr receives an annual base salary of $700,000 and a target annual incentive opportunity equal to 80% of his base salary, with a maximum annual incentive opportunity equal to 200% of his annual target incentive. In connection with his promotion to President, U.S. Businesses, Mr. Spurr received an equity grant with an aggregate approved value of $500,000, 50% in the form of RSUs and 50% in the form of stock options. Ongoing equity grants are at the sole discretion of the Talent and Compensation Committee.
On June 1, 2022, we entered into a separation agreement with Mr. Spurr in connection with his termination of employment by BHC without cause due to BHC’s elimination of the position of President, U.S. Businesses on June 1, 2022 (the “Spurr Separation Agreement”). In connection with his termination of employment, subject to his execution and nonrevocation of a release of claims in favor of BHC and his continued compliance with any restrictive covenants to which he is subject, Mr. Spurr was entitled to (i) a lump sum payment equal to the product of (x) 1.5 multiplied by (y) the sum of Mr. Spurr’s annual base salary plus his target annual bonus, (ii) a prorated portion of his annual bonus for the year in which his termination of employment occurred and (iii) continued coverage under BHC’s health, medical, dental and vision policies at the active employee rates for a period of one year following his termination of employment. In addition, Mr. Spurr was also entitled to receive the second installment of his B+L Separation Bonus in accordance with its existing terms.
Mr. Papa’s Employment Agreement and Separation Agreement In April 2016, BHC entered into an employment agreement with Mr. Papa, which was assigned to B+L upon the closing of the B+L IPO (the “Papa Agreement”). The initial term of the Papa Agreement commenced on May 2, 2016, and continued until the fifth anniversary of the commencement date. Beginning at the expiration of the initial term, the term automatically renewed for successive one-year periods.
Pursuant to the Papa Agreement, Mr. Papa received an annual base salary of $1,500,000 and a target annual incentive opportunity equal to 150% of his base salary, with a maximum annual incentive opportunity equal to 200% of his
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annual target incentive. Ongoing equity grants for Mr. Papa were at the sole discretion of the Board or the Talent and Compensation Committee (in each case, since the B+L IPO date, the Board of Directors of B+L and the B+L TCC).
On July 20, 2022, B+L announced that the Board of Directors of B+L begun a search for a new Chief Executive Officer. On February 15, 2023, B+L announced the appointment of Mr. Saunders as Chief Executive Officer of B+L, effective March 6, 2023. He replaced Mr. Papa, who stepped down from his role as Chief Executive Officer on March 6, 2023. Mr. Papa continued to serve as Chief Executive Officer until such date (March 6, 2023) (such period, the “Interim Period”). During the Interim Period, Mr. Papa continued to receive the same compensation and benefits and remained eligible to continue to vest in his equity awards. In connection with the foregoing, B+L and Mr. Papa entered into a separation agreement which was approved by the B+L TCC (and not the BHC Talent and Compensation Committee) effective as of July 19, 2022 (the “Papa Separation Agreement”), which provided for the terms of Mr. Papa’s separation from B+L following the Interim Period. Consistent with the Papa Agreement, the Papa Separation Agreement provided for a lump sum cash payment equal to two times the sum of Mr. Papa’s current base salary and target annual bonus, earned but unpaid annual bonus for the year prior to his termination date, a pro-rata annual bonus based on actual performance, and continued health benefits for two years at active employee rates. The treatment of Mr. Papa’s equity awards would be consistent with their terms for a termination due to retirement and, for Mr. Papa’s B+L program separation PSUs, by B+L without cause, except that Mr. Papa’s B+L Founder RSUs would vest upon his termination of service date (prorated based on his period of service relative to the original three year vesting period associated with such grants), but the Common Shares received upon settlement would remain fully restricted and nontransferable until the Unrestricted Date, and the B+L Founder Stock Options would remain eligible to vest (prorated based on his period of service relative to the original three year vesting period associated with such grants) upon the Unrestricted Date and exercisable for two years following the Unrestricted Date. B+L would reimburse Mr. Papa for an amount up to twenty thousand dollars in legal fees incurred by Mr. Papa in connection with the negotiation of the Papa Separation Agreement.
On December 22, 2022, B+L announced that B+L and Mr. Papa entered into the Amended and Restated Separation Agreement (the “A&R Papa Separation Agreement”) which was approved by the B+L TCC (and not the BHC Talent and Compensation Committee), pursuant to which Mr. Papa agreed to continue serving as Chief Executive Officer until at least March 4, 2023, and lasting until such date as the Board determines in its discretion or his successor is appointed, but no later than June 30, 2023. As noted above, on February 15, 2023, B+L announced the appointment of Mr. Saunders as CEO of B+L, effective March 6, 2023. In addition, pursuant to the A&R Papa Separation Agreement: (i) Mr. Papa’s severance benefits in respect of his 2023 prorated annual bonus would be, in lieu of an annual bonus based on actual performance that is prorated based on the date of his termination, an amount equal to $1,200,000, representing his target annual bonus that is prorated by fifty percent, and payable upon his termination date; and (ii) on Mr. Papa’s termination date, in lieu of prorated vesting, partial vesting of a set number of his Founder Awards, in the amount of (a) 315,592 of his Founder RSUs that would accelerate and vest, but the shares received upon settlement would still remain fully restricted and nontransferable until Unrestricted Date, and (b) 1,248,496 of his B+L Founder Stock Options that would remain eligible to vest upon the Unrestricted Date and remain exercisable for two years following the Unrestricted Date.
All of the foregoing is conditioned on Mr. Papa’s execution and nonrevocation of a release of claims upon his termination of employment and continued compliance with his restrictive covenants, which include non-competition, non-solicitation, confidentiality and non-disparagement covenants.
The consequences of Mr. Papa’s termination of employment had he separated with B+L on December 31, 2022, whether or not in connection with a “change in control,” are described in “Potential Payments Upon Termination or Change in Control,” beginning on page 66. As of the date of this Proxy Statement, Mr. Papa is no longer an employee of B+L or BHC. Mr. Eldessouky’s Employment Agreement
On June 1, 2021, we entered into an employment agreement with Mr. Eldessouky upon his appointment as CFO, which was assigned to B+L upon the closing of the B+L IPO (the “Eldessouky Agreement”). The initial three-year term of the Eldessouky Agreement commenced on June 1, 2021. The term will automatically renew for successive one-year periods unless either party gives notice of non-renewal.
Pursuant to his agreement, Mr. Eldessouky receives an annual base salary of $700,000 and a target annual incentive opportunity equal to 80% of his base salary, with a maximum annual incentive opportunity equal to 200% of his annual target incentive. In connection with his promotion to Chief Financial Officer, Mr. Eldessouky received an
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equity grant with an aggregate value of $2,000,000, 50% in the form of RSUs and 50% in the form of stock options. Ongoing equity grants are at the sole discretion of the B+L Talent and Compensation Committee.
The consequences of Mr. Eldessouky’s termination of employment, whether or not in connection with a “change in control,” are described in “Potential Payments Upon Termination or Change in Control,” beginning on page 66. Mr. Eldessouky is subject to customary restrictive covenants, including non-competition and non-solicitation covenants during his employment and for one year following termination of employment for any reason.
Effective June 1, 2021, Mr. Herendeen will step down from his role as Chief Financial Officer, and will be appointed to the newly created role of Advisor to the Chairman and CEO. Mr. Herendeen’s employment agreement will be updated in connection with his change in position, and he will receive an annual base salary of $500,000.
Ms. Ackermann’s Employment Agreement
In
On July
8, 2016, we entered into an employment agreement with Ms.
Ackermann. Ms. Ackermann’s agreementAckermann, which was assigned to B+L upon, the closing of the B+L IPO (the “Ackermann Agreement”). The Ackermann Agreement commenced on August 8, 2016.
Pursuant to her agreement, Ms. Ackermann receives
aan annual base salary
of $600,000 and a target annual incentive opportunity equal to 80% of her base salary, with a maximum annual incentive opportunity equal to 200% of her annual target incentive. Ongoing equity grants are at the sole discretion of the Talent and Compensation Committee.
The consequences of Ms. Ackermann’s termination of employment, whether or not in connection with a “change in control,” are described in “Potential Payments Upon Termination or Change in Control,” beginning on page
75.66.
Ms. Ackermann is subject to customary restrictive covenants, including
non-competition and
non-solicitation covenants during her employment and for one year following termination of employment for any reason.
Mr. Appio’s Employment Agreement
In March 2017, we entered into an employment agreement with Mr. Appio. The initial three-year term of Mr. Appio’s agreement commenced on August 17, 2016 and automatically renewed on August 17, 2019. The term will continue to automatically renew for successive one-year periods unless either party gives notice of non-renewal.
Pursuant to his agreement, Mr. Appio receives a base salary and a target annual incentive opportunity equal to 80% of his base salary, with a maximum annual incentive opportunity equal to 200% of his annual target incentive. Ongoing equity grants are at the sole discretion of the Talent and Compensation Committee.
Mr. Appio is on an expatriate assignment from New Jersey to China. As a result, Mr. Appio receives (i) Company-paid housing in China; (ii) tax equalization, with Mr. Appio responsible for actual taxes due in the
United States and the Company responsible for any taxes due in non-U.S. jurisdictions in which Mr. Appio earns taxable income; and (iii) tax preparation services. These benefits are reported in the “All Other Compensation” column of the Summary Compensation Table on page 67, including reimbursement related to the taxes on imputed income for these expatriate assignment benefits, as described on page 68 in footnote 4 to such table.
The consequences of Mr. Appio’s termination of employment, whether or not in connection with a “change in control,” are described in “Potential Payments Upon Termination or Change in Control,” beginning on page 75.
Mr. Appio is subject to customary restrictive covenants, including non-competition and non-solicitation covenants during his employment and for one year following termination of employment for any reason.
Mr. Humphries’ Employment Agreement
On November 16, 2020, we announced the upcoming departure of Mr. Humphries. Mr. Humphries remained employed by the Company through December 31, 2020 in order to ensure a smooth transition of his responsibilities.
The consequences of Mr. Humphries’ termination of employment are described in “Potential Payments Upon Termination or Change in Control,” starting on page 75.
Mr. Humphries is subject to customary restrictive covenants, including non-competition and non-solicitation covenants for one year following termination of employment for any reason.
Other Compensation Governance Practices
Share Ownership Guidelines
The Talent and Compensation Committee believes that purchasing and holding Common Shares with one’s own money should create an incentive to manage the Company prudently. When our CEO was hired in 2016, he was required to purchase at least $5,000,000 worth of Common Shares by no later than the first anniversary of his commencement date, which he did.
The Talent and Compensation Committee has
also established minimum share ownership requirements for our NEOs. Our CEO is required to hold
Common Shares with a value equivalent to 6 times
his base salary, and our other NEOs are required to hold
Common Shares with a value equivalent to 3 times
their base salary. Common Shares and unvested RSUs are included in the calculation of share ownership. NEOs have five years to achieve these guidelines and must retain 50% of their net shares vesting until this requirement is met.
The Committee did not make any changes to these guidelines or the timeline to achieve in light of the pandemic. Mr. Papa, Mr. Herendeen,Messrs. Appio and Vadaketh and Ms.
Ackermann and Mr. Appio (and Mr. Humphries, prior to his departure)Carson have satisfied this requirement.
Anti-Pledging, Anti-Hedging and Clawback Policies
In 2014, we
We have adopted Anti-Hedging, Anti-Pledging, and recoupment (“Clawback”) Policies. The Anti-Hedging Policy generally prohibits officers, directors and designated employees from engaging in new hedging or monetization transactions with Company stock.Common Shares. This prohibition prevents officers, directors and designated employees from owning securities without the full risks and rewards of ownership and preserves the common interests and objectives of the CompanyBHC and its officers, directors and employees.Designated Employees. The Anti-Pledging Policy generally prohibits officers, directors and employeesDesignated Employees from holding our securities in a margin account where the securities are subject to margin sales or pledging our securities as loan collateral.
In February 2017, the Company strengthened itsThe Clawback Policy to provideprovides that the Board may exercise its discretion to require any employee who receives equity-based compensation to reimburse bonus, incentive or equity-based compensation awarded to such employees beginning in 2017 in the event of:
A material restatement or adjustment to our financial statements as a result of such employee’s knowing or intentional fraudulent or illegal misconduct; or
Such employee’s detrimental conduct that has caused material financial, operational or reputational harm to us, including (i) acts of fraud or dishonesty during the course of employment; (ii) improper conduct that causes material harm to us or our affiliates; (iii) improper disclosure of confidential material that causes material harm to us or our affiliates; (iv) the commission of a felony or crime of comparable magnitude that subjects us to material reputational harm; (v) commission of an act or omission that causes a violation of federal or other applicable securities law; or (vi) gross negligence in exercising supervisory authority.
Following a material restatement or adjustment of our financial statements, the compensation subject to clawback is the amount in excess of what would have been awarded based on the corrected performance measures, calculated on
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a
pre-tax basis. If the financial reporting measure applicable to the incentive or equity-based compensation is a stock price or TSR measure, the Board has broad authority to estimate the effect of the financial restatement on our share price in calculating recoverable compensation. In the case of detrimental conduct, the Board has the ability to recover all incentive compensation.
We may not indemnify any covered employee, directly or indirectly, for any losses incurred in connection with the recovery of any compensation under the policy, including through the payment of insurance premiums,
gross-up payments or supplemental payments. The policy will continue to apply to covered employees even after they cease to be employed by us.
Compensation Risk Determination
The Talent and Compensation Committee assesses the potential risks relating to our compensation policies and practices for our employees, including those related to our executive compensation programs. Periodically, the
BHC Talent and Compensation Committee reviews and discusses with management the relationship between
the Company’sBHC’s compensation policies and practices and its risk management, including the extent to which those policies and practices create risks for
the Company,BHC, to ensure that such policies and practices support not only economic performance, but also compliance with our risk management objectives, and to ensure that they do not encourage excessive or unnecessary risk-taking and are not reasonably likely to have a material adverse effect on
BHC. For our 2022 compensation programs, the
Company.BHC Talent and Compensation Committee determined that its compensation policies and practices appropriately comply with BHC’s risk management objectives and do not encourage excessive or unnecessary risk-taking.
Tax and Accounting Implications Tax Considerations of Our Executive Compensation
Section 162(m) of the Code generally limits the tax deductibility of annual compensation paid by public companies for certain executive officers to $1 million.
The Talent and Compensation Committee may continue to approve compensation that will not be fully-deductible in order to ensure competitive levels of total compensation for its executive officers.
Accounting for Our Stock-Based Compensation
We account for stock-based payments, including grants under each of our equity compensation plans in accordance with the requirements of FASB ASC Topic 718.
