| ☐ | Preliminary Proxy Statement |
| ☐ |
|
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material under §240.14a-12 |
| ☒ | No fee required |
| ☐ | Fee paid previously with preliminary materials |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and0-11 |
| ||||||||
| ||||||||
Organon launched in 2021 withOn behalf of Organon’s Board of Directors and Executive Leadership Team, we are pleased to invite you to our 2024 Annual Meeting of Shareholders on Tuesday, June 4, 2024 at 9 a.m.
In the two years since Organon’s launch, we’ve built a unique long-term vision:profitable company that is helping patients around the world and advancing an important global vision – a better and healthier every day for every woman. OverWe feel energized by the past year, it has been my privilege to serve as the first Chairman of Organon, leading a Board that embodies and embraces this vision on behalf of our shareholders, with a deep commitment to our purpose to advance women’s health,foundation we’re building today as well as Organon’s prospects for the company’sfuture.
2023 was a critical year that showed that we continue to have the right strategy to deliver value to our shareholders and all our stakeholders – one defined by solid growth across all our geographies and franchises. We made important progress in expanding access to existing solutions and bringing to market new solutions for unmet health needs. Our financial success.performance enabled us to return $294 million in cash dividends to shareholders in 2023.
Board LeadershipThroughout last year, we continued our strategic focus on expanding the definition of women’s health, by advancing our pipeline and Compositionthrough new business development. A highlight was our new commercialization partnership in Europe with Eli Lilly for two medicines for migraine, a condition that disproportionately affects women. This partnership further bolsters our offerings to women while also aligning with our existing therapeutic and geographic capabilities.
The Board was constructed fromOur company and our commitment to help tackle the beginning to reflect the value of independent Board oversight as a foundational governance principle. Director candidates were chosen through a deliberate and thoughtful process over many months, based on extensive consideration of theunmet health needs of the new companywomen is being recognized. Importantly, we are nearly halfway to our goal to help prevent 120 million unplanned pregnancies by 2030. In 2023, we launched “Her Plan is Her Power,” an initiative that builds on and aided by a professional search firm with spinoff experience.
The resulting Board is one with a wide and deep variety of skills, experiences, and areas of expertise. Our 12 independent directors bring significant leadership and industry accomplishments; financial acumen; medical degrees; substantial experience in healthcare delivery, pharmacy, public health policy, and scientific research; and operational, marketing, and digital backgrounds.
We also represent both gender and racial diversity, which positions Organon as a leader among boards: nearly 70 percent of the directors are women, and 46 percent are from underrepresented ethnic groups. In addition, about half have lived and worked outside the United States, bringing a trueaccelerates this important work, focusing on global perspective, appropriate for a company with significant revenue outside the United States.
Over the eight months before Organon separated from Merck & Co., Inc., the future directors were supported with an extensive orientation program to ensure their readiness to provide oversight and strategic direction to the new company upon spin.
Board Oversight of Strategy and Risk
The Board engages regularly with the CEO,action as well as each membercommunity-led responses.
Building on our strong foundation
We enter 2024 with strong momentum, and a clear roadmap for again delivering low single-digit revenue growth, with an aim to drive growth in profitability measures even faster. Our focus now is to build on the strong foundation we set in 2023 by driving profitable growth, remaining disciplined on operating costs, and investing in new opportunities – inside and outside our business – that complement our strengths.
Importantly, we are well-positioned to move beyond incurring many of the Executive Leadership Team, onone-time costs related to standing up the company. One notable example is our global Enterprise Resource Planning system, which we expect to complete the implementation of this year, increasing our efficiency and agility as we move forward.
Looking ahead, we are poised to further unlock this company’s great potential for 2024 and beyond. Our leadership team and Board continue to work closely to advance Organon’s strategy, oversightgrowth strategy. And we’re proud of the business,company’s approximately 10,000 founders and key risks facingtheir commitment and passion for the company. Board members
Thank you for your continued investment in Organon and support of our global vision. We’re confident that we have drawn on their leadershipthe right strategy and other diverse experiencesteam in place to provide input on strategic decisions relating to eachseize the many opportunities in front of the
|
us as we remain here for her health. Sincerely,
Our Business Performance1 Organon delivered strong business results in 2023, our second full year as a standalone company. Revenue grew 3% excluding the impact of foreign exchange. Our vision is to create a better and healthier every day for every woman. As part of our journey to help patients around world, we are maximizing our foundational strengths in Women’s Health, Biosimilars, and Established Brands, while selectively expanding our therapeutic areas through business development. Fiscal Year 2023 Business Performance
To Organon Shareholders: You are cordially invited to the Annual Meeting of Shareholders of Organon & Co. to be held on Tuesday, June Items of Business:
Thank you for your continued support of and interest in Organon.
Your Vote is Important—Vote Right Away We encourage you to read the accompanying proxy statement with care and vote right away using any of the following methods, even if you intend to attend the Annual Meeting webcast. Voting early will help avoid additional solicitation costs and will not prevent you from voting during the Annual Meeting, if you wish to do so.
To vote by Internet or telephone, have the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, proxy card, or voting instruction form in hand and follow the instructions. Internet and telephone voting facilities will close at 11:59 p.m. Eastern Daylight Time on June To be admitted to the virtual meeting, have the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, proxy card or voting instruction form in hand and visit www.virtualshareholdermeeting.com/ Only shareholders listed on Organon’s records at the close of business on April 8, If you have any questions or need assistance voting your shares, please contact Morrow Sodali LLC, our proxy solicitor, by calling 800-662-5200 (or banks and brokers can call collect at
This proxy statement includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about management’s expectations about Organon’s ESG strategy, and the expected benefits of Organon’s ESG efforts, as well as Organon’s future financial performance and prospects, including those relating to Organon’s ability to drive profitable growth, remain disciplined with respect to operating costs, and invest in new opportunities that complement Organon’s strengths. Forward-looking statements may be identified by words such as “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “will” or words of similar meaning. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements. Risks and uncertainties include, but are not limited to, an inability to execute upon our ESG strategy within expected timeframes, if at all; an inability to execute on our business development strategy and commercialization strategy or realize the benefits of our planned acquisitions; an inability to adapt to the industry-wide trend toward highly discounted channels; changes in tax laws or other tax guidance that could adversely affect our cash tax liability, effective tax rates, and results of operations and lead to greater audit scrutiny; efficacy, safety, or other quality concerns with respect to marketed products, including market actions such as recalls, withdrawals, or declining sales; political and social pressures, or regulatory developments, that adversely impact demand for, availability of, or patient access to contraception or fertility products; general economic factors, including interest rate fluctuations, inflation, recessionary pressures, and currency exchange rate fluctuations; general industry conditions and competition; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances; new products and patents attained by competitors; the impact of higher selling and promotional costs; any failure by Organon to obtain an additional period of market exclusivity in the United States for Nexplanon subsequent to the expiration of certain key patents in 2027; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict its future financial results and performance; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; difficulties developing and sustaining relationships with commercial counterparties; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s filings with the Securities and Exchange Commission (“SEC”), including the company’s Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent SEC filings, available at the SEC’s Internet site (www.sec.gov). In addition, our environmental, social and governance (“ESG”) goals are aspirational and may change. Statements regarding our goals are not guarantees or promises that they will be met. Website References Throughout this proxy statement, we identify certain materials that are available in full on our website and refer the reader to additional information available on our website. The information contained on, or available through Organon’s internet website, is not and shall not be deemed to be incorporated by reference in this proxy statement.
The accompanying proxy is solicited on behalf of the Board of Directors (the “Board”) for use at the
Who We Are Organon is a global healthcare company formed with the vision to We focus on three key areas to achieve our vision of a better and healthier every day for every woman:
Led by the women’s health Organon has a global footprint with significant scale and geographic reach, and world-class commercial capabilities. As of December 31, 2023, Organon had approximately 10,000 employees worldwide and is On June 2, 2021, Organon separated from Merck & Co., Inc. (“Merck”; known as MSD outside the U.S. and Canada) as a result of a pro rata distribution of Organon’s common stock to shareholders of Merck. We refer to this transaction as the “spinoff.” Since 2021, Organon
Executive Compensation Highlights The Talent Committee
Our executive compensation practices
commitment to responsible pay and governance principles. For additional information on the components of our Say-on-Pay Advisory Vote (Page 53) In 2023, shareholders demonstrated their support for our executive compensation program with approximately 93% of the votes cast voted in favor of the say-on-pay proposal. Consistent with Organon’s strong interest in shareholder engagement and our pay-for-performance approach, the Talent Committee continues to evaluate our executive compensation program to promote alignment between the respective interests of our executives and shareholders. We ask that our shareholders approve, on an advisory basis, the compensation of our named executive officers (“NEOs”) as further described in Proposal 2 on page 45.
Our Continuing Directors and Director Nominees (Page 31) Our directors and director nominees possess broad expertise, skills, experience, and perspectives to provide the strong oversight and strategic direction required to govern Organon’s business and strengthen and support senior management. As illustrated by the following charts, our directors and director nominees consist of individuals with expertise in fields that align with Organon’s business and long-term strategy and reflect the Board’s commitment to diverse perspectives.
The following provides summary information about each director nominee and continuing director. Detailed information about each individual’s background, skill sets, and areas of expertise can be found beginning on page
● = Committee Chair ● = Committee Member
● = Committee Chair ● = Committee Member
Director Qualifications and Expertise Our continuing directors and director nominees are responsible for overseeing the company’s business consistent with their fiduciary duties. This significant responsibility requires highly skilled individuals with various qualities, attributes, and professional experiences. We believe the Board is well-rounded, with a balance of relevant perspectives and experience, as illustrated by the following chart.
The Board has the legal responsibility for overseeing the management of Organon and its business. The Board’s primary mission is to represent and protect the interests of our shareholders. To that end, the Board selects the CEO and oversees the senior management team, which is charged with conducting Organon’s daily business. The Board has adopted corporate governance principles (the “Principles of Corporate Governance”) that, together with our Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, and Board committee charters, form the governance framework for the Board and its committees. The Principles of Corporate Governance cover a wide range of subjects, including the role and composition of the Board; functioning of the Board and Board committees; director qualifications; diversity, overboarding, resignation, and retirement age policies; director compensation; share ownership guidelines; succession planning; evaluation of the CEO; director orientation and continuing education; Board, committee, and director performance evaluations; and shareholder engagement. The Principles of Corporate Governance and Board committee charters are reviewed at least annually and revised, as appropriate, in response to changing legal, regulatory and stock exchange listing requirements, evolving best practices and the perspectives of our shareholders and other constituents.
Governance Materials The following items relating to corporate governance at Organon are available on our website at https://www.organon.com/about-organon/leadership/
In addition, as part of our ethics and compliance program, our Board has approved a Code of Conduct, which is available on our website at www.organon.com/about-organon/mission-vision-and-values/code-of-conduct. The information contained on or accessible through our website does not constitute a part of this proxy Board’s Role in Strategic Planning The Board The Board’s oversight and guidance are inextricably linked to the development and review of Organon’s strategic plan. By exercising sound and independent business judgment on the strategic issues important to Organon’s business, the Board facilitates its long-term success. The Board’s oversight of Organon’s risk is an important component of the Board’s engagement on strategic planning, and the Board has two primary methods of overseeing risk. The first method is through Organon’s Enterprise Risk Management (“ERM”) process, which allows for Board oversight of the most significant risks facing Organon. The second method is through the functioning of the three standing committees of the Board
Management has established the ERM process to
The goal of the ERM process is to provide an ongoing
The ERM process and Board committee approach to risk management leverages the Board’s leadership structure to facilitate the Board’s oversight of risk on both an enterprise-wide approach and through specific areas of competency.
Board Oversight of Information Security, Including Cybersecurity and Data Privacy Our Audit Committee has primary responsibility for overseeing our risk-management program relating to cybersecurity, although the Board participates in periodic reviews and discussion dedicated to cyber risks, threats, and
protections. Our information security and privacy programs provide that the Board receives an annual report from our Chief Information Security Officer and Chief Ethics and Compliance Officer to discuss our program for managing information security risks, including Program Highlights
The Principles of Corporate Governance require a substantial majority of our directors to be independent. In making independence determinations, the Board observes all relevant criteria established by the To be considered independent, an outside director must meet the bright-line independence tests established by the NYSE, and the Board must affirmatively determine that the director has no direct or indirect material relationship with Organon. The Board also rigorously considers
Independence Determinations The Board has determined that each of Organon’s directors and director nominees, with the exception of our CEO, Kevin
respectively in the NYSE Listing Standards. In making these determinations, the Board considered relationships that exist between Organon and other organizations where each director serves, as well as the fact that in the ordinary course of business, transactions may occur between such organizations and Organon or one of our subsidiaries. The Board also evaluated whether there were any other facts or circumstances that might impair a director’s independence. Related Person Transaction Policies and Procedures The Board has adopted written Related Person Transaction Policies and Procedures (the Pursuant to the Related Person Policy, management will provide the Audit Committee all material information relevant to transactions that require the Audit Committee’s approval. In approving or
Certain Related Person Transactions Each director, director nominee and executive officer of Organon is required to annually complete a Director & Officer (“D&O”) Questionnaire. The D&O Questionnaire requests, among other things, information regarding whether any director, director nominee, executive officer, or their immediate family members had an interest in any related person transaction or proposed transaction with Organon or its subsidiaries or has a relationship with a company that has entered or proposes to enter into such a transaction. After review of the D&O Questionnaires by the Office of Corporate Secretary, the responses are collected, summarized, and distributed to responsible areas within Organon to identify any potential related person transactions. All relevant relationships and any transactions, along with payables and receivables, are compiled for each person and affiliation. Management submits a report of the affiliations, relationships, transactions, and
appropriate supplemental information to the Audit Committee for its review. Based on this information, Board Leadership Structure
The Board met five times in 2023 and the independent directors of the Board met in The Board’s three standing committees, each of which is made up solely of independent directors, are the Audit, Talent and ESG Committees. In addition, the Board from time to time may establish
Audit Committee
Talent Committee
Environmental, Social and Governance Committee
Our Approach to Environmental, Social, and Governance
In addition to the governance matters discussed within this proxy statement and the foundational elements that we believe are essential to conducting our business in an ethical, compliant, and transparent manner, there are focus areas within our ESG strategy that demonstrate our commitment to being a purpose-driven
ESG Governance at Organon We have developed practices and policies designed to promote strong Board oversight over the entirety of our ESG program.
Organon’s ESG Strategy In 2021, Organon published its first ESG Report The 2022 ESG Report, our latest report published in June 2023, includes expanded and
In March 2023, we launched a three-year initiative called “Her Plan is Her Power.” This programming builds on our efforts to help reduce unplanned pregnancies and empower women and girls through a global collaboration with UNFPA, the United Nations sexual and reproductive health agency, that is focused on innovation, education, and advocacy; a global grants program that focuses on providing resources to help women and girls take control of their reproductive health; and new U.S. programming with NGOs to expand access to education, products, and other resources in so-called “contraceptive deserts” around the country and historically Black colleges and universities (HBCUs). These efforts contribute to our ESG goal of preventing 120 million unplanned pregnancies by reaching 100 million women and girls with affordable access to contraceptive options. At the end of 2022, we had reached approximately 47 million women with access to our contraceptive products since the beginning of the initiative. For more information about Organon’s ESG strategy and initiatives, please review our
Criteria for Board Membership and Director Nomination Process The ESG Committee is responsible for screening and nominating director candidates to be considered for election by the Board. As part of this process, the ESG Committee considers the composition of the Board at the time, including the depth of experience, balance of professional skills, expertise, and diversity of perspectives represented by its
Individual Experience, Qualifications, Attributes, and Skills The ESG Committee evaluates the composition of the Board annually to assess whether the skills, experience, characteristics, and other criteria established by the Board are currently represented on the Board as a whole, and in individual directors, and to assess the criteria that may be needed in the future in light of Organon’s anticipated needs. The Board should have a balanced membership, with representation of relevant areas of experience, types of expertise, and backgrounds. These include pharmaceutical industry expertise, global management experience, marketing, sales and public relations skills, public company governance expertise, women’s health experience, medical expertise, risk management experience, and financial expertise. The ESG Committee uses this input in its planning and director search process. Each of our current directors initially joined the Board in connection with our spinoff from
The Board endorses the principle that it should have a balance of skills, experience, and diversity of perspectives appropriate to Organon’s current and future global business and strategic initiatives, opportunities, and challenges. The Board recognizes that maintaining a
To be considered for membership on the Board, a candidate must also meet the following minimum criteria:
The ESG Committee, acting on behalf of the Board, is committed to actively identifying and recruiting a broad range of highly qualified The ESG Committee and the Board have adopted a Board diversity policy as part of the Principles of Corporate Governance that formalizes Organon’s
As a company with a vision of a better and healthier every day for every woman, our Board values gender diversity in its membership. Organon is a leader in Board gender diversity, with women constituting nearly 70% of the Board.
Organon is committed to racial and ethnic diversity. Our Board is 46% ethnically or racially diverse.
Organon’s Principles of Corporate Governance require that a substantial majority of the Board be made up of independent directors. The Board has determined that each of Organon’s directors and director nominees, with the exception of our CEO, Kevin Ali, is independent under the NYSE Listing Standards. Average Age of Continuing Directors and Director Nominees
The average age of our continuing directors and director nominees is 65.3 years, with ages ranging from 49 to 76 years old. The median age is 65 years. Shareholder Recommendations of Director Candidates The ESG Committee will consider recommendations for director candidates made by shareholders and will evaluate those individuals using the same criteria applied to other candidates. Shareholder recommendations must be sent to the Office of Corporate Secretary, 30 Hudson Street, Floor 33, Jersey City, New Jersey 07302, and must include detailed background information regarding the recommended candidate that demonstrates how that candidate meets the Board membership criteria. Shareholders may make recommendations at any time Candidates are evaluated initially based on materials submitted by them or on their behalf. If a proposed or recommended candidate continues to be of interest to the ESG Committee, Management Succession Planning The Talent Committee is responsible for oversight of succession planning for certain senior management positions. At least annually, the Talent Committee reviews with the Board succession planning and management development, including recommendations and evaluations of potential successors to fill the CEO and other senior management positions. The succession planning process includes consideration of both ordinary course succession, in the event of planned promotions and retirements, and planning for situations where the CEO or another member of senior management unexpectedly becomes unable to perform the duties of
Board Succession Planning The Board also considers its own composition and succession plans. In director succession planning, the ESG Committee and the Board will consider, among other things, the needs of the Board and Organon in light of the overall composition of the Board, with a view toward achieving a balance of the skills, experience, and attributes that are essential to the Board’s oversight role. In particular, the Board is deliberate in ensuring the Board has the right mix of diverse perspectives, skills, and expertise to address Organon’s current and anticipated needs as
opportunities and challenges facing it evolve. In addition, the Principles of Corporate Governance provide that non-management directors may not stand for re-election to the Board after they reach the age of 75, unless the Board determines that it is in the best interests of Organon and its shareholders to extend the director’s service for an additional period of time. The Board believes this policy promotes regular refreshment of the Board. Continuing director education is essential for the Board to remain a strategic asset for the Company. Our directors are encouraged to participate in, and are reimbursed for, continuing education programs at external organizations and universities to enhance the skills and knowledge used to perform their duties. Additionally, we offer regular in-house director education sessions covering areas of relevance to our Company, emerging and evolving trends, initiatives and strategies, along with topics that would assist them in discharging their duties. For example, in 2023, the Board received education sessions on topics such as cybersecurity training led by both internal and external experts. Directors also receive frequent updates on recent developments, press coverage, and current events relevant to our strategy and business. Annual Board, Committee, and Individual Director Evaluations The Board conducts an annual self-evaluation to assess its performance and the performance of individual directors. The Audit, Talent, and ESG Committees also conduct annual self-evaluations to assess their performance. In the event it is believed an individual director is not making meaningful contributions to the overall effectiveness of the Board, the Chairman of the Board or another Board member should raise the matter with the ESG Committee, which will then seek the views of the other Board members and, if appropriate, make a recommendation to the Board regarding the future role of the director in question. The ESG Committee is responsible for developing, administering and overseeing processes for conducting evaluations. The
The Board self-evaluation process yielded several recommendations, notably focusing on priority agenda topics for the Board to address in 2024, adjustments to the Board committee structures, and enhancements in Board processes and management succession planning. Shareholder Engagement and Feedback Organon regularly communicates with shareholders to better understand their perspectives and has established a shareholder engagement program that is proactive and cross-functional. Throughout the year, our CEO, CFO, members of
Our shareholder engagement program includes outreach focused on governance and executive compensation at least once a year, as well as our business strategy, risk management, human capital management and ESG matters. We believe it is most productive to discuss governance and compensation issues well in advance of the Key Topics of Engagement During 2023
Shareholder Communications with the Board The Board welcomes input from shareholders and other interested parties and has established a process to receive these communications. Shareholders and other interested parties may communicate directly with the Board, the Chairman of the Board, the non-management or independent directors as a group, or other members of the Board by email at secretaryoffice@organon.com or by writing to the following address: Board of Directors c/o Office of Corporate Secretary Organon & Co. 30 Hudson Street, Floor 33 Jersey City, New Jersey
Upon receipt of such communications, the correspondence will be directed to the appropriate person, including individual directors. A copy of any such written communication may also be forwarded to our legal counsel and a copy of such communication may be retained for a reasonable period of time. You may submit your concern anonymously or confidentially. In order to manage efficiently the volume of correspondence received, communications will be reviewed by the Office of Corporate Secretary for the purpose of determining whether the contents are appropriate for transmission. The Office of Corporate Secretary will not transmit:
Comments or questions regarding the nomination of directors and other corporate governance matters will be referred to the Chair of the ESG Committee. Comments or questions regarding executive compensation will be referred to the Chair of the Talent Committee. In addition, the Audit Committee has established procedures for the receipt, retention and treatment, on a confidential basis, of complaints regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters. Delinquent Section 16(a) Reports Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC reports of ownership and reports of changes in ownership of our equity securities. Based solely on our review of reports filed electronically with the SEC during the fiscal year ended December 31, 2022, including any amendments thereto, our officers, directors and greater than 10% shareholders timely filed all reports required by Section 16(a) of the Exchange Act during the fiscal year ended December 31, 2023, except that the following reports were not filed on a timely basis: (1) a Form 4 relating to an RSU grant on March 31, 2023, with respect to Kirke Weaver and (2) a Form 4 relating to an RSU grant on March 31, 2023, with respect to Vittorio Nisita, in each case due to an administrative error.
We have determined beneficial ownership in accordance with the rules of the SEC. Under these rules, a person is deemed to be a “beneficial owner” of a security if that person has sole or shared “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. Under these rules, more than one person may be deemed a beneficial owner of the same securities, and a person may be deemed a beneficial owner of securities as to which she or he has no economic interest. Except as otherwise indicated in the footnotes to the tables below, we believe that the beneficial owners of the common stock listed below, based on the information furnished by such owners, have sole voting power and investment power with respect to such shares, subject to applicable community property laws. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of common stock as to which the person has the right to acquire beneficial ownership within 60 days of April 8, 2024, including shares of our common stock underlying RSUs and PSUs that are currently releasable or releasable within 60 days of April 8, 2024. We did not deem these shares outstanding for purposes of computing the percentage ownership for any other person. Share Ownership of Directors and Officers The table below reflects the number of shares of Organon common stock beneficially owned by (i) each of our executive officers named in the Summary Compensation Table; (ii) each of our directors and director nominees; and (iii) all directors and executive officers as a group. As of April 8,
Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Organon & Co., 30 Hudson Street, Floor 33, Jersey City, New Jersey 07302. The information provided in the table is based on our records, information filed with the SEC and information provided to us, except where otherwise noted.
The table below reflects the number of shares beneficially owned by persons or entities known to us to own more than 5% of the outstanding shares of Organon common stock as of
Organon’s Amended and Restated Certificate of Incorporation provides that, until the annual meeting of shareholders in 2025, our Board will be divided into three classes, with each class consisting, as nearly as may be possible, of one-third of the total number of directors. The Each member of our Board initially became a director of Organon in connection with the spinoff, and was each chosen through a deliberate and thoughtful process over many months, based on extensive consideration of the needs of the new company and aided by a professional search firm with spinoff experience. Each of the Class I and Class II directors subsequently stood for election at our 2022 and 2023 annual shareholders’ meetings, respectively. Beginning at the 2025 annual meeting of Organon’s shareholders, each of our directors will stand for election each year for a one-year term, and our Board will no longer be divided into three classes. Nominees for Director The Board has As further described in the Principles of Corporate Governance, the company’s policy regarding the number of public company boards on which directors may serve provides that, ordinarily, directors may generally not serve on the boards of more than four public companies, including the company’s Board, with consideration given to public company leadership roles and other outside commitments. Directors who are chief executive officers of public companies may not serve on the boards of more than two public companies, including the company’s Board. Each nominee is compliant with the company’s policy regarding the number of public company boards on which directors may serve. The ESG Committee has also considered each nominee’s ability and willingness to devote the required amount of time to Organon’s affairs. If elected, each nominee will serve Any director nominee who does not receive a majority of the votes cast with respect to his or her election If any nominee becomes unavailable for election (which we do not expect), votes will be cast for such substitute nominee or nominees as may be designated by the Board, unless the Board reduces the size of the Board. There are no family relationships among Organon’s executive officers and directors. We provide below biographical information for each director nominee, including key experience, qualifications, and skills such director nominee contributes to the Board in light of our current needs and business priorities.
Continuing Class I Directors Whose Terms Will Expire in 2025
Continuing Class II Directors Whose Terms Will Expire in
The
Directors’ Deferral Plan Mandatory Annual Equity Retainer Deferral Under the Directors’ Deferral Plan, upon election Directors may specify the timing of the payment of their accounts under the Directors’ Deferral Plan by choosing either a specified payment date (up to 15 years following separation from service) or electing payment upon separation from service,
Director Stock Ownership Guidelines In order to align the interests of directors with the long-term interests of Organon’s shareholders, the Board has adopted stock ownership guidelines.
The table below summarizes the annual compensation for our non-employee directors for the fiscal year ended December 31,
Proposal 2 Approval, on a Non-Binding Advisory Basis, of the Compensation of Organon’s Named Executive Officers We are pleased to provide our shareholders the opportunity to vote on a non-binding, advisory resolution to approve the compensation of our We are asking shareholders to indicate their support for the NEO compensation as described in this proxy statement, in accordance with Rule “Resolved, that the compensation paid to Organon’s The shareholder vote on this resolution will not be binding on management, the Talent Committee or the Board and will not be construed as overruling any decision by management, the Talent Committee or the Board. However, the Board and the Talent Committee value the opinions of our shareholders as expressed through their votes and other communications. We will give careful consideration to the outcome of the say-on-pay vote and to the opinions of our shareholders when making compensation decisions. The Board’s current policy is to hold annual say-on-pay votes, and thus, we expect that we will conduct our next say-on-pay vote following the 2024 Annual Meeting at the 2025 annual meeting of shareholders.
Below we provide biographical information for each of Organon’s executive officers, other than Mr. Ali, whose biographical information is presented above under
Juan Camilo Arjona Ferreira, M.D. Title: Executive Vice President, Head of Research and Development and Chief Medical Officer Executive Since: 2024 Age: 54 Dr. Arjona Ferreira leads Organon Research & Development, which includes early and late stage development, Global Pharmacovigilance and Safety Science, Medical Affairs and Outcomes Research, Global Regulatory Affairs, and R&D Strategic Planning. Dr. Arjona Ferreira is responsible for strategy and execution of the company’s clinical development plans, helping ensure patient safety, and strategy of medical, scientific and regulatory activities in support of product commercialization. He provides the medical and scientific perspective that informs science-based corporate internal and external discussions and decisions. Dr. Arjona Ferreira has over 20 years of experience in clinical research and development. Most recently, he was Chief Medical Officer of Myovant Sciences Inc., where he provided strategic direction and execution oversight to the global development team. Previously, he was Senior Vice President of clinical development at Shionogi Inc., where he led the development of clinical and regulatory strategies and provided execution oversight for late-stage development programs. Prior to Shionogi, Dr. Arjona Ferreira was the Executive Director of Clinical Research in Women’s Health at Merck and led the product development teams for all programs in contraception and women’s health. Dr. Arjona Ferreira received his medical and specialist in obstetrics and gynecology degrees from Colegio Mayor del Rosario (Bogota D.C., Colombia).
Joseph Morrissey Title: Executive Vice President and Head of Manufacturing & Supply Executive Since: 2021 Age: 59 Mr. Morrissey is responsible for Organon’s global manufacturing and supply chain capabilities leading the company to deliver the medicines and solutions that make it a healthier every day around the world. In his role, Mr. Morrissey helps ensure cross-functional coordination to drive uninterrupted, compliant and timely supply of Organon’s diverse portfolio, with products that reach people in more than 140 markets around the world. Mr. Morrissey came to Organon from Merck, where he spent more than 30 years of his career. Most recently, from 2017 until the spinoff, Mr. Morrissey served as Senior Vice President of Merck’s Animal Health Global Manufacturing and Supply, and from 2014 to 2016 as Senior Vice President and leader of Global Human Health Pharmaceutical Manufacturing. Mr. Morrissey received an M.B.A. from Villanova University and a bachelor’s degree in engineering from Lafayette College.
Vittorio Nisita Title: Executive Vice President and Head of Global Business Services Executive Since: 2021 Age: 56 Mr. Nisita is responsible for Organon’s Global Business Services, which focuses on driving an operating model for the company that continually enhances agility, efficiency, quality and innovation. Mr. Nisita leads a team that provides integrated governance and business practices for all shared services, both transactional and knowledge intensive, to create a learning organization and best-in-class experiences for employees and customers. Most recently, from 2017, Mr. Nisita was the Vice President of Commercial Operations for Merck’s international business. In this role, he provided support to country teams across several capability areas, including strategy development, digital transformation, and sales and marketing operations and excellence. His nearly two-decade career at Merck includes leadership roles in emerging markets, corporate strategy and global operational excellence. Prior to joining Merck, Mr. Nisita worked for McKinsey & Co., supporting clients in the telecommunications and banking industries, and also led engineering and manufacturing operations at Kimberly Clark Corporation and Georgia-Pacific. Mr. Nisita received an M.B.A. from the Kellogg School of Management at Northwestern University and a bachelor’s degree in mechanical engineering from the University of Minnesota.
Rachel Stahler Title: Executive Vice President and Chief Information Officer Executive Since: 2021 Age: 48 Ms. Stahler leads business technology for the company to help Organon realize a better and healthier every day for every woman. In her role, Ms. Stahler drives digital capabilities across all aspects of Organon’s strategy to build value for the company’s offerings and customers. Ms. Stahler joined Organon with two decades of global technology experience in the healthcare industry and a passion for bringing new medicines and solutions to patients in need. Most recently, from 2019 to 2020, Ms. Stahler served as CIO at Allergan plc, a global pharmaceutical company. Previously, Ms. Stahler held CIO positions at Syneos Health (from 2017 to 2019), inVentiv Health (from 2014 to 2017) and Optimer Pharmaceuticals (from 2011 to 2014). Earlier in her career, she held senior technology roles at Pfizer. She received an M.B.A. from Columbia University and an undergraduate degree from the University of Pennsylvania.
Matthew Walsh Title: Executive Vice President and Chief Financial Officer Executive Since: 2021 Age: 57 Mr. Walsh is responsible for the development and execution of Organon’s financial strategy. He is focused on driving profitability and shareholder value and ensuring the highest standard of financial integrity for Organon so it can reach its vision of becoming a leading women’s health company. Over his career, Mr. Walsh has served in several public companies as the CFO and in related roles. Before joining Organon, Mr. Walsh was the Executive Vice President and CFO at Allergan plc, a global pharmaceutical company, from 2018 to 2020, and Catalent, Inc., a global provider of delivery technologies, development, and manufacturing solutions for drugs, biologics, cell and gene therapies, and consumer health products from 2008 to 2018, as Senior Vice President from 2008 to 2012 and Executive Vice President from 2012 to 2018. Previously, he held finance and leadership positions at Escala Group and GenTek. Mr. Walsh has also served in corporate development and other roles in the chemical and banking industries. Mr. Walsh is a CFA® Charterholder. Since 2020, he has served on the board of directors and as Chair of the Audit Committee of Certara, Inc., a provider of software and consulting services to the life sciences industry, and previously was a board member of Multicolor Corporation, a label solutions provider. Mr. Walsh received an M.B.A. and bachelor’s degree in chemical engineering from Cornell University.
Kirke Weaver Title: Executive Vice President, General Counsel and Corporate Secretary Executive Since: 2023 Age: 51 Mr. Weaver serves as the senior legal adviser responsible for the company’s worldwide legal affairs, compliance, ESG and sustainability, and global environmental, health and safety functions. Prior to his appointment as General Counsel and Corporate Secretary, Mr. Weaver served as Senior Vice President, Commercial, Regulatory, Securities, Employment and Deputy Corporate Secretary at Organon. He was critical to launching Organon as a standalone company in June 2021, as a senior member of the legal leadership team. Before joining Organon, Mr. Weaver was the Vice President for Regulatory Legal at Merck. Over his 18-year career at Merck, he developed a deep expertise in the pharmaceutical industry and held positions of increasing responsibility counseling the business in areas such as litigation, regulatory, commercial, and compliance. Mr. Weaver also led the Customer Alliances & Innovation group to develop and commercialize new software tools to support medication adherence. Mr. Weaver holds a J.D. from the Yale Law School and a Bachelor of Arts in history and government from the College of William and Mary.
Introduction
For As a
For
Executive Compensation Practices We employ a number of best practices in our executive compensation processes and programs:
Overview of Pay Elements This table identifies and describes the primary elements of the 2023 executive compensation program for our NEOs. The pay elements below are designed to align with our compensation philosophy and objectives, as described below. For a more detailed discussion, see the “Elements of 2023 Compensation Program” section on page 56.
How Compensation Decisions Are Made Shareholder Engagement and Results of 2023 Say on Pay Vote We have established a robust shareholder outreach program, allowing our shareholders to discuss a variety of topics with us, including executive compensation (see page 25 for more details about our shareholder engagement program). At the 2023 Annual Shareholder Meeting, approximately 93% of the say-on-pay votes cast were in favor of our NEOs’ compensation. Given the continued support of our shareholders, the Talent Committee did not make any changes to the program based on these results, although we expect that our executive compensation philosophy, policies and practices for setting compensation will continue to evolve as our business matures. Role of the Committee The Talent Committee has overall responsibility for the design of our executive compensation program, which is intended to support our executive compensation philosophy and objectives, align executive pay with shareholder interests and promote our ongoing business strategy. In the last quarter of each year, the Talent Committee reviews and discusses the Board’s evaluation of the CEO performance and makes preliminary recommendations for his base salary, annual incentive and LTI equity compensation for the following year. The Chairman of the Talent Committee discusses those recommendations with the independent Directors of the Board for their approval. The Talent Committee reviews and approves the compensation for our other executive officers at the committee’s meeting during the first quarter of each year. For additional details on the role of the Talent Committee in determining executive compensation, please refer to the Corporate Governance section of this proxy statement.
Role of the Chief Executive Officer The CEO reviews and discusses the performance and proficiency of each executive officer (excluding himself) and provides the Talent Committee with compensation recommendations considering the market insights provided by Korn Ferry, our independent compensation consultant (as described below). The Talent Committee approves all compensation changes for our executive officers and recommends the compensation of our CEO to the independent Directors of the Board. Role of Independent Compensation The Talent Committee retains the services of an independent compensation consultant to serve as an objective third-party advisor on the reasonableness of compensation levels and on the appropriateness of the compensation program structure in supporting our business strategy and human resource objectives.
Peer Group Framework and Methodology The Talent Committee utilizes
purposes of benchmarking compensation levels and measuring relative performance will best support our ability to understand competitive pay levels compared to companies of a similar size, while also measuring our performance relative to a broader set of industry peers that will better represent the evolution of our business over time. Compensation Peer Group
Based on the above selection criteria and considering the recommendations of Korn Ferry, the Talent Committee approved the following peer
Our 2023 Compensation Peer Group remained the same as our 2022 Compensation Peer Group. Danaher Corporation was removed from our 2024 Compensation Peer Group due to its incomparable revenue size relative to Organon. The Talent Committee believes that compensation decisions are complex and require Performance Peer Group The Talent Committee utilizes a second peer group to measure Organon’s relative
Elements of
Kevin Ali, Chief Executive Officer
Matthew Walsh, Executive Vice President and Chief Financial Officer
Susanne Fiedler, Executive Vice President and Chief Commercial Officer
Kirke Weaver, Executive Vice President, General Counsel and Corporate Secretary
Sandra Milligan, M.D., Former Executive Vice President and Head of Research and Development
Base Salary Base salaries were
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3%
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
|
Annual Cash Incentive
At the beginningEach of 2021, the NEOs werewas designated as participantsa participant in Merck’s annual incentive plan. Annual incentivethe 2023 AIP. AIP awards are generally paidearned based upon achievement of company performance measures as reflected byset forth in a performance scorecard (the “Company Scorecard”). The table below sets forth the 2021tables above reflect each NEOs’ 2023 annual incentive target, as a percentage of base salary. The target annual incentive for Mr. Ali was increased from 125% of base salary for each of our NEOs, as approved by Merck:
|
| ||||
| |||||
| |||||
| |||||
| |||||
| |||||
In light ofin 2022 to 150% in 2023 to better align with the spinoff, the 2021competitive market practices. Mr. Weaver’s AIP applicabletarget was also increased compared to our employees, including the NEOs, was determined based on the weighted average result of the pre-spin period (which result was determined by Merck2022 levels due to be 100%)his promotion to General Counsel and the post-spin periodCorporate Secretary during which Organon operated as an independent public company. The post-spin period was based on our Company Scorecard, which included the following pre-established financial and non-financial metrics:2023.
| ||||||
| ||||||
|
Our Company Scorecard establishes a set of common financial and non-financial (organizational health) goals for our NEOs and other AIP-eligible employees. For 2021, the goals established under ourThe 2023 AIP Company Scorecard applied only with respect toincluded the post-spin period. following metrics, weighted as indicated below:
 | 40% Revenue | |||
| | 40% Adjusted EBITDA | |||
| | 20% Organizational Health Priorities |
Our financial metrics Constant Currency— Revenue and Adjusted EBITDA — are equally weighted at 40% each based on the Talent Committee’s belief that they are the key financial measures of our
 |
| ||||||
success during the year. The organizational health goalspriorities are collectively weighted at 20% and are designed to ensure we are focusedfocus management on making progress against critical management priorities to execute on our long-term strategy.
The proposed performance ranges and corresponding payout levels for Constant Currency Revenue and Adjusted EBITDA were established based on the May 2021 forecastCompany’s Board-approved financial plan for 2023 and a consideration of market practices, governance principles, and desirewere intended to balance the reasonableness of the goals with an appropriate amount of stretch performance required to reach a maximum payout. Each financial component has a performancepayout range of 25% to 200% from threshold to maximum performance. Failure to achieve threshold performance on any of the metricsfinancial metric would result in forfeiture of the opportunity for that metric.
The Talent Committee has approved a framework tothat can be used to make adjustments to our GAAP reported revenue and EBITDA financial resultsmeasures to arrive at the non-GAAP Revenue and Adjusted EBITDA measures used for incentive plan purposes, in years when the Talent Committee determines itpurpose of our 2023 AIP. These adjustments were made to be necessary and/or appropriateremove the impact of currency exchange rates and certain business development expenses, as further described below. No adjustments were made to our non-GAAP results in the context of our Company Scorecard for 2021.
The 2023 Company Scorecard structure and results are as follows:
| * |
|
| ** | Result shown |
Constant Currency
| 59 | 2024 Proxy Statement |
| ||||||
Revenue
In establishing the Revenue target for 2023, the Talent Committee aligned the target goal with the Board approved financial plan for 2023. Reported revenue for the post-spin period of $3.72B$6.263 billion was adjusted to $3.76B$6.303 billion to remove the negative impact of currency exchange rates (versus currency exchange rates budgeted in the annual operating plan). This result fellwas slightly below our internal Revenuerevenue target of $3.81B but above ourthe threshold goal.performance level, as shown above.
Adjusted EBITDA
In establishing the Adjusted EBITDA target for 2023, the Talent Committee aligned the target goal with the Board approved financial plan for 2023. Adjusted EBITDA of $1.944 billion was $1.44B,adjusted to $2.0 billion for 2023, which represents reported EBITDA for the post-spinoff period adjusted to exclude the impact of currency exchange rate changes, fromcertain business development expenses that were not included in the May 2021 forecast2023 financial plan approved by the Board in 2022 and share-based compensation expense. This result was aboveslightly below our Adjusted EBITDA target but above the threshold performance level, as shown above.
Organizational Health Priorities
Each year, the company establishes three to five critical business priorities. As a recently independent company, our 2023 priorities were focused on the social aspect of our ESG strategy, the launch of our enterprise resource planning system in accordance with our replan timeline, and continuing to make significant progress towards full operational independence from our former parent company, Merck, through the successful exits of transition service agreements.
Our 2023 organizational health priorities and performance were as follows:
= | Maintained progress toward our aspirational gender representation goals through all levels of the company globally by 2030. | |
+ | Increased participation rate and above median overall employee engagement score against benchmark | |
= | Achieved 100% of replan milestones in 2023 for the launch of our enterprise resource planning system | |
+ | Continued progress toward full operational independence from our former parent company through the successful exits of 109 transition service agreements during 2023 (compared to a planned exit from 86 transition service agreements) |
Overall performance for the post-spinoff period of $1.38B.organizational health priorities was 125%.
20212023 Annual Incentive Payouts
The table below shows the 2021 annual cash incentives paid2023 payouts to the NEOs forunder the full 2021 performance period.2023 AIP. The “Final Award” paid for each NEO is also reflected in the “Non-Equity“Non-Equity Incentive Plan Compensation” column of the 20212023 Summary Compensation Table on page 59.66.
 | 60 |
| Compensation Discussion and Analysis | ||||||
| ||||||
| ||||||
NEO 2021 Annual Incentive Payments
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Named Executive Officer | Base Salary ($)* | Annual Incentive Target (%) | Annual Incentive Target ($)* | Company Scorecard Results (%) | Final Award ($) | Base Salary ($)* | Annual Incentive Target (%) | Annual Incentive Target ($)* | Company Scorecard Results (%) | Final Award ($) | ||||||||||||||||||||||
Kevin Ali | 1,133,000 | 125 | 1,416,250 | 105 | 1,487,063 | |||||||||||||||||||||||||||
Kevin Ali | ||||||||||||||||||||||||||||||||
Kevin Ali | ||||||||||||||||||||||||||||||||
Kevin Ali | 1,250,000 | 150% | 1,875,000 | 98 | 1,837,500 | |||||||||||||||||||||||||||
Matthew Walsh | ||||||||||||||||||||||||||||||||
Matthew Walsh | ||||||||||||||||||||||||||||||||
Matthew Walsh | ||||||||||||||||||||||||||||||||
Matthew Walsh | 824,000 | 80 | 659,200 | 105 | 692,160 | 900,000 | 80% | 720,000 | 98 | 705,600 | ||||||||||||||||||||||
Susanne Fiedler** | 677,884 | 80 | 542,307 | 105 | 569,423 | |||||||||||||||||||||||||||
Susanne Fiedler** | ||||||||||||||||||||||||||||||||
Susanne Fiedler** | ||||||||||||||||||||||||||||||||
Susanne Fiedler** | 734,923 | 80% | 587,938 | 98 | 576,180 | |||||||||||||||||||||||||||
Joseph Morrissey | ||||||||||||||||||||||||||||||||
Joseph Morrissey | ||||||||||||||||||||||||||||||||
Joseph Morrissey | ||||||||||||||||||||||||||||||||
Joseph Morrissey | 750,000 | 80% | 600,000 | 98 | 588,000 | |||||||||||||||||||||||||||
Kirke Weaver | ||||||||||||||||||||||||||||||||
Kirke Weaver | ||||||||||||||||||||||||||||||||
Kirke Weaver | ||||||||||||||||||||||||||||||||
Kirke Weaver | 650,000 | 70% | 455,000 | 98 | 445,900 | |||||||||||||||||||||||||||
Sandra Milligan, M.D. | 669,500 | 70 | 468,650 | 105 | 492,083 | |||||||||||||||||||||||||||
Deborah H. Telman | 669,500 | 70 | 468,650 | 105 | 492,083 | |||||||||||||||||||||||||||
Sandra Milligan, M.D. | ||||||||||||||||||||||||||||||||
Sandra Milligan, M.D. | ||||||||||||||||||||||||||||||||
Sandra Milligan, M.D. | 800,000 | 80% | 640,000 | 98 | 627,200 | |||||||||||||||||||||||||||
| * | Reflects base salary and |
| ** | Ms. Fiedler’s compensation was paid in Swiss francs and has been converted to U.S. dollars based on an exchange rate of |
Long-Term Equity Incentives
PriorOur LTI awards are designed to provide a compensation link to long-term shareholder value. The tables beginning on page 56 set forth the 2023 annual target LTI awards for each of our NEOs along with information regarding increases from 2022 levels. The 2023 LTI award values were determined after considering market data from Korn Ferry as well as individual performance. The LTI target award values reflect the positioning of TTDC relative to the spinoff,competitive market as well as considerations regarding internal pay equity and individual NEO’s performance and duties. As shown on page 56, in accordance with our compensation philosophy, a significant portion of each NEO’s TTDC is delivered in the form of equity incentives to directly align NEOs participated in Merck’s long-term equity incentive programwith shareholder interests. Pursuant to such review and accordingly, the 2021 equity awards received by our NEOs reflect the long-term equity compensation practices of Merck. In addition, in August 2021,philosophy, the Talent Committee granted Founders’ Grantsapproved an increase in target LTI levels in 2023 for our NEOs, with more significant increases for Mr. Ali and Mr. Morrissey to our Executive Leadership Team, including eachbetter align with market practice and Mr. Weaver due to his promotion to General Counsel and Corporate Secretary during 2023.
Once target LTI awards were established, the awards were allocated among PSUs, RSUs, and NQSOs according to the following weightings 50% PSUs, 25% RSUs and 25% NQSOs. The LTI awards and their terms (other than the PSU performance goals) were approved in early 2023 with PSU performance goals finalized after the company’s strategic planning process was completed in August 2023.
The annual LTI grants for 2023 were comprised of the NEOs and our directors.
Merck Equity Awards
For 2021, the NEOs received a mix of PSUs, restricted stock units (“RSUs”) and stock options under the Merck long-term equity incentive program, with the grant decisions and amounts determined by Merck. As determined by Merck, all Merck stock options (whether then-vested or unvested) and time-based RSU awards held by Organon employees were generally converted into Organon awards in connection with the spinoff. Such adjusted awards were intended to preserve the same intrinsic value and general terms and conditions (including vesting) as were in place immediately prior to the spinoff. PSUs were similarly adjusted, with different treatment based on the performance period:following:
For any 2019 PSU awards with a 2019-2021 performance period, performance was assessed based on a truncated performance period that ended on December 31, 2020, and attained performance through such date was applied to 100% of the award and each such earned award was then converted into a time-based Organon RSU award (on the same basis described above with respect to converted Organon RSU awards) that otherwise vested in accordance with the previously applicable time-based vesting schedule; and
For 2020 and 2021 PSU awards with a 2020-2022 or 2021-2023 performance period, performance was deemed to have been met at the target level and such awards were then converted into time-based Organon RSU awards (on the same basis described above with respect to converted Organon RSU awards) that otherwise vest in accordance with the previously applicable time-based vesting schedule.
While these awards were granted by Merck, SEC disclosure rules require that the grant date fair values of such awards be disclosed in our 2021 Summary Compensation Table.
Founders’ Grants
In August 2021, the Talent Committee granted the Founders’ Grants to our Executive Leadership Team, including each of the NEOs. These Founders’ Grants were determined after consultation with Korn Ferry regarding market practices with respect to founder grants for newly public companies. These grants were intended to align the recipients’ interests with those of Organon, incentivize management to maximize the value of Organon and retain critical talent. The Talent Committee elected to deliver the Founders’ Grants entirely as performance-based
PSUs | ● 50% of target LTI opportunity ● Performance Goals: three-year cumulative free cash flow (weighted 70%) and three-year relative TSR (weighted 30%) ● Threshold performance required for payout at 50% of target shares, with potential to earn up to 200% of target shares. Payout with respect to the relative TSR metric is capped at target if our absolute TSR over the performance period is negative ● Three-year cliff vesting following conclusion of the applicable performance period and subject to continued service and achievement of the applicable performance goals | |
RSUs | ● 25% of target LTI opportunity ● Three-year vesting schedule, with one-third vesting on each of the three anniversaries of the grant date | |
NQSOs | ● 25% of target LTI opportunity ● Three-year vesting schedule, with one-third vesting on each of the three anniversaries of the grant date | |
| 61 | |
| |||||||||
| |||||||||
compensationPSU Performance Metrics
For 2023, similar to our 2022 PSUs, the Talent Committee selected three-year cumulative free cash flow and relative TSR as the performance metrics, weighted at 70% and 30%, respectively. These metrics were selected to complement the measures used in the form2023 AIP to provide a balanced executive compensation program that focuses on driving profitable growth while effectively managing capital allocation and the creation of PSUs and options, each weighted 50%. The PSUs vest based on Organon’s TSR relative to the companies included in the NYSE Arca Pharmaceutical Index aslong-term shareholder value.
Free cash flow for purposes of the beginning of2023 PSUs is defined as our earnings before interest, taxes, depreciation, amortization and in-process research & development (IPRD) milestone payments minus net cash interest expense, cash taxes, change in net working capital, and capital expenses and excluding one-time costs associated with the three-year performance period ending on August 16, 2024, while the stock options only have value if Organon’s stock price appreciatesseparation from the date of grant.Merck as well as principal debt repayments, shareholder dividends and business development spending. The Talent Committee believes that these grants provide immediate alignmentestablished the PSU free cash flow performance goals after considering the company’s long-term operating plan, with the interestsgoals designed to encourage strong, focused performance. Given the economic and market conditions at the time the targets were set, the target payout levels were designed to be challenging but achievable, while payouts at the maximum levels were designed to be stretch goals. For competitive reasons, we currently intend to disclose our free cash flow goals for the 2023 program at the end of the performance period, once our shareholders and the execution of our strategic plan as a standalone company.financial results are publicly available.
The table below sets forthsummarizes the target value of the Founders’ Grants granted to each of the NEOs:
|
| |||
| ||||
| ||||
| ||||
| ||||
| ||||
The table below sets forth the relative TSR goalsperformance range and corresponding payout levels for the PSUTSR portion of the Founders’ Grants.awards. The payout for the TSR portion will be capped at target if our absolute TSR performance is negative for the performance period.
| ||||||
| ||||||
| ||||||
| ||||||
2023 PSUs (performance period January 1, 2023 – December 31, 2025) | ||||||
Relative TSR Performance Goals | ||||||
Performance Objective | Threshold | Target | Maximum | |||
3-year TSR relative to NYSE Arca Pharmaceutical Index* | 25th percentile | 55th percentile | 75th percentile | |||
Payout | 50% | 100% | 200% | |||
| * | Relative TSR compares Organon’s TSR over the three-year performance period |
|
SeveranceEmployment Arrangements
In connectionPrior to the spinoff, Merck entered into letter agreements with the NEOs appointing them, effective as of the spinoff, to their positions with Organon, adoptedexcept for Mr. Weaver who was appointed as General Counsel and Corporate Secretary, effective January 1, 2023. The letter agreements describe the basic terms of the NEOs’ employment, including initial base salary levels, AIP and LTI targets. The letter agreements do not specify a period of employment, instead, the terms of the NEO’s employment are based on sustained good performance rather than contractual terms, and the company’s plans and policies, such as its severance plans, will apply as applicable.
The company maintains the Executive Severance Program (the “Severance Plan”). The and the Executive Change in Control Severance Plan providesProgram (the “CIC Severance Plan”), which provide payments and benefits to certain eligible members of Organon’s management team, including each of the NEOs, in the event of a termination of employment without cause (as defined in certain circumstances, including the Severance Plan). Payments and benefits under the Severance Plan are conditioned upon execution of a release of claims, which may contain restrictive covenants, and include (i) a lump sum cash payment in an amount equal to 1.0 times (or 2.0 times in the casedeparture of the CEO) the sum of the executive officer’s annual base salary and target annual cash incentive opportunity, (ii) with respect to a termination of employment that occurs between June 30th and December 31st of the calendar year, a pro-rata annual cash incentive payment based on the executive officer’s target incentive opportunity for the year of termination and (iii) subsidized medical and dental coverage for up to 12 months (or 24 months in the case of the CEO); provided, that with respect to participants who were previously employed by Merck or any of its subsidiaries immediately prior to the spinoff, (A) the amount described in clause (i) will be no less than a certain number of weeks’ worth of base salary determined based on the participant’s number of years of continuous service with Merck and Organon as of the termination date and (B) if such participants have 20 or more complete years of continuous service with Merck and Organon, then they will be eligible to receive the subsidized medical and dental coverage described in clause (iii) for up to 78 weeks. The Severance Plan does not provide for any payments or benefits upon a termination for cause or any resignation of an eligible employee’s employment. Furthermore, severance payments and benefits are subject to forfeiture in the event an employee breaches any obligations of his or her terms and conditions of employment or makes any false
| ||||||
or misleading statements about Organon or any of its affiliates or their products, officers or employees to competitors, customers, potential customers or to current employees or former employees.
In addition to the Severance Plan, Organon also adopted the Executive Change in Control Severance Program (the “CIC Severance Plan”). The CIC Severance Plan provides “double trigger” severance payments and benefits to eligible employees, including the executive officers, in the event of a termination of employment without cause or a resignation for good reason (each as defined in the CIC Severance Plan) during the two-year periodNEO following a change in control (as defined in the CIC Severance Plan). Payments and benefits under the CIC Severance Plan are conditioned upon execution of a release of claims and include (i) a lump sum cash payment in an amount equal to 2.0 times the sum of the executive officer’s annual base salary and target annual cash incentive opportunity, (ii) a pro-rata annual cash incentive payment based on the executive officer’s target incentive opportunity for the year of termination, and (iii) a lump sum cash payment intended to offset the costs of continued medical and dental coverage for up to 24 months.
company. The Talent Committee believes the Severance Plan and CIC Severance Plan help attract and retain exemplary talent. The Talent Committee believesthat it is appropriate to provide executives with the rewards and protections afforded by the plans, andthat such plans reduce the need to negotiate individual severance arrangements with departing executives and protectsthat they protect our executives fromin the event of a termination for circumstances not of their doing. The Talent Committee also believes the policy promotesthat these policies promote management independence and helpshelp retain, stabilize, and focus the executive officers in the event of a change in control. See the subsection titled “Potential
| | 62 |
| Compensation Discussion and Analysis | ||||||
| ||||||
Payments Upon Termination or Change in Control” for a description of the Severance Plan and CIC Severance Plan, and for more information regarding accelerated vesting under our stock-based award agreements in connection with qualifying termination events. Dr. Milligan’s termination of employment constituted a termination without cause under the Severance Plan. See the subsection titled “Departure of NEO” for a description of the severance benefits she received under the Severance Plan.
Other Employee Benefits
Employment Arrangements
Prior to the spinoff, Merck entered into letter agreements with the NEOs appointing them, effective as of the spinoff, to their positions with Organon. The letter agreements describe the basic terms of the NEOs’ employment, including base salary, annual incentive target and long-term incentive award target. The letter agreements for Mr. Walsh and Ms. Telman also provided for sign-on bonuses in the amounts of $200,000 and $250,000, respectively, which Mr. Walsh and Ms. Telman must repay in full if they voluntarily terminate their employment or their employment is terminated by Organon for “cause” within two years of their start dates. The letter agreements for Ms. Fiedler and Ms. Telman provide for the reimbursement of relocation expenses in connection with their relocations to Switzerland and New Jersey, respectively.
Retirement and Health and Welfare Plans
Similar to Organon’s other salaried, U.S.-based employees, the NEOs participate in a variety of retirement, health and welfare and paid time-off benefits designed to enable us to attract and retain our workforce in a competitive marketplace. Savings plans help employees save and prepare financially for retirement. We maintain a nonqualified401(k) plan and a non-qualified savings plan for certain U.S. employees, including each NEO other than Ms. Fiedler, pursuantFiedler. Under Organon’s U.S. 401(k) plan (and subject to applicable limitations imposed by the Internal Revenue Code), participants can receive company contributions which consist of i) employer matching contributions of up to 4.5% of participants’ eligible compensation and ii) a retirement contribution ranging between 4.5% and 10% of participants’ eligible compensation based on their age and service. Pursuant to the non-qualified savings plan, participants can receive company contributions from Organon based on amounts that would have been contributed to Organon’s U.S. 401(k) plan but for certain contribution and compensation limits imposed by the Internal Revenue Code. Ms. Fiedler, who is based in Switzerland, participates in the Organon Pensionskasse Schweiz, a cash balance pension plan for Swiss employees (the “Swiss Savings Plan”). HealthIn addition, health and welfare and paid time-off benefits help ensure that we have a healthy, productive and focused workforce. Prior to the spinoff, the NEOs were also eligible to participate in Merck’s nonqualified deferred compensation and pension programs; however, those programs were not replicated in connection with the spinoff and remain the liability of Merck and the NEOs ceased active participation in such plans.
Please see the 20212023 Nonqualified Deferred Compensation Table for further information regarding Organon’s nonqualifiednon-qualified savings plan and the 20212023 Pension Benefits Table for further information regarding the Swiss Savings Plan, both on page 65.pages 73 and 74, respectively.
|
| ||||||
Perquisites and Other Personal Benefits
Additionally, senior management employees, including the NEOs, are provided a limited number of other benefits, which the Talent Committee believes are reasonable, appropriate and consistent with our executive compensation philosophy. As described above, Ms. Fiedler and Ms. Telman werewas entitled to benefits in connection with her relocation benefits pursuantfrom Germany to Switzerland at the termsrequest of their letter agreements.the company. Ms. Fiedler also receives an automobile allowance consistent with local practices.
Under certain circumstances, the Talent Committee recognizes that special arrangements with respect to an executive’s employment may be necessary or desirable. For example, due to regulatory considerations, Mr. Ali maintains residency in the United States as well as Switzerland. Because his residence in both the United States and Switzerland is deemed beneficial to Organon and supports the performance of his duties, Mr. Ali receives limited benefits related to his residency in Switzerland, such as housing reimbursements, tax compliance services, moving costs for the shipment of household items to the United States, miscellaneous relocation costs, and tax reimbursements relating to the housing and moving costs. Mr. Ali is not tax equalized by Organon for any income taxes due as a result of his residency in both the United States and Switzerland,although he receives legacy tax equalization payments from Merck associated with equity awards granted in 2020 and prior years asbecause he received such grants in connection with his service to Merck. Because theMerck, and such tax equalization payments to be paid by Merckare consistent with Merck’s historical policies. While Mr. Ali’s tax equalization payments are not obligations of Organon and relate to grants from his prior service rendered to Merck, such payments have been excluded fromare included in the 20212023 Summary Compensation Table.Table because they were funded by Merck at the time of spinoff. Mr. Ali is responsible for the tax payments associated with his equity awards granted after 2020, all of which were granted after he relocated back to the United States and commenced services with Organon.
During 2021,2023, Organon hired an outside security provider to perform aan updated, comprehensive security assessment with respect to Mr. Ali. Based on its security assessment, the outside security provider recommended certain home security services be provided to Mr. Ali as well as advanced intelligence monitoring, secure transportation for Mr. Ali and his immediate family members and security personnel. Accordingly, Organon paid for certain security services for Mr. Ali.Ali and his immediate family members. Because Organon believes it is in the
| 63 | 2024 Proxy Statement |
| ||||||
best interests of Organon and its shareholders to protect Mr. Ali against possible security threats to him and his family members, Organon requires Mr. Ali to accept such personal security protection. Organon also believes that the costs of this security are appropriate and necessary. Although Organon does not consider Mr. Ali’s security services to be a perquisite or other personal benefit for the reasons described above, weWe have reported the costs related to security services for Mr. Ali and his immediate family members in the 20212023 All Other Compensation Table. Mr. Ali hasand our other NEOs have limited use of chartered aircraft and, when traveling for business, guests, including family members, may occasionally accompany himMr. Ali when he is using such aircraft for business purposes and such aircraft can accommodate them, in which case there is no additional aggregate incremental cost to Organon. Accordingly, no amount is reflected for such guest travel in the “All Other Compensation” column of the 20212023 Summary Compensation Table. Personal use of the chartered aircraft by the CEO requires prior approval of the CFO and the General Counsel and Mr. Ali did not have any personal use of the aircraft during 2023. Personal use of Company chartered aircraft by other NEOs is not permitted.
Please see the “All Other Compensation” column of the 20212023 Summary Compensation Table for further information regarding the perquisites and personal benefits received by the NEOs with respect to 2021.2023.
20222024 Executive Compensation DecisionsProgram
During 2022, the Talent Committee will continue toIn connection with its review and refineof the executive compensation program, including Organon’sthe Talent Committee has approved the following for our 2024 compensation philosophy and incentive programs, in order to support appropriate alignment between pay and performance.program:
As in 2021, the performance metrics under our 2022 AIP relate to Constant Currency Revenue (weighted 40%), Adjusted EBITDA (weighted 40%) and Organizational Health Priorities (weighted 20%).
Equity awards to be granted in 2022 will consist of 50% PSUs, 25% RSUs and 25% non-qualified stock options (“NQSOs”). RSUs and NQSOs will vest one-third on each of the first through third anniversaries of the grant date. PSUs will vest following the end of the three-year performance period on December 31, 2024, subject to achievement with respect to performance measures relating to Earnings Per Share (weighted 60%) and Net Debt Ratio (weighted 40%). 2022 PSUs are also subject to a relative TSR performance modifier.
| • | No increases to the 2023 base salary, target AIP, or target LTI awards for our NEOs, as the Talent Committee believes current levels are in line with market practices and adequately reflect NEOs’ responsibilities and experience. |
| • | For our 2024 PSUs: | |||||
| ||||||
| – | The PSU performance goals will be set at the beginning of the fiscal year for each year of the three-year performance period and Organon’s cumulative performance over the performance period will be assessed against the aggregate total of such annual goals. The use of this structure is intended to provide us with greater flexibility given our status as a recently independent company and permit us to timely respond and adjust to the macroeconomic environment so that we continue to set challenging but achievable performance goals. |
| – | Constant currency revenue has been added as an additional financial metric (weighed at 25%) along with free cash flow (weighed at 50%). The weighting of the relative TSR metric has been reduced to 25%. In addition, we added a circuit breaker for the financial metrics portion of the PSUs (i.e., 75% of the PSUs) based on our two-year adjusted EBITDA achievement, pursuant to which there will be no payout for the financial metrics portion unless such adjusted EBITDA performance is achieved. Such modifications are intended to incentivize our NEOs to focus on driving long-term financial growth and capital efficiency as we progress towards establishing full operational independence. |
Other Compensation Practices
Executive Stock Ownership Guidelines
The Talent Committee believes that, in order to more closely align the interests of executives with the interests of Organon’s other shareholders, all executives should maintain a minimum level of equity interests in Organon’s common stock. The Talent Committee has adopted stock ownership guidelines requiring ownership of six times base salary for our CEO, three times base salary for members of our Executive Leadership Teamexecutive officers other than our CEO, and one and one-half times base salary for our other executiveSection 16 officers. Until the guideline is met, an executive officer is required to retain 50% (75% for our CEO) of the after-tax shares acquired upon exercise of stock optionsNQSOs and vesting of PSUs and RSUs. Shares subject to unexercised stock optionsNQSOs and unvested and unsettledunearned PSUs and RSUs do not count for purposes of determining whether an executive is in compliance with the guidelines, but time-vesting RSUs are counted towards the guidelines.
Return of Incentive Compensation (“Clawback Policy”)
UnderIn 2023, we adopted a clawback policy, which is intended to comply with the requirements of NYSE Listing Standards 303A.14 implementing Rule 10D-1 under the Securities Exchange Act of 1934. In the event we are required to prepare an accounting restatement of our incentivefinancial statements due to material non-compliance with any financial reporting requirement under the federal securities laws, we will recover, on a reasonably prompt basis, the excess incentive-based compensation received by any covered executive, including our NEOs, during the
| | 64 |
| Compensation Discussion and Analysis | ||||||
| ||||||
prior three fiscal years that exceeds the amount that the executive otherwise would have received had the incentive-based compensation been determined based on the restated financial statements. In addition, under our compensation recoupment policy, we are permitted to seek reimbursement of incentive compensation (including both time and performance-based awards) in the event, we determine that incentive compensation was based on results calculated by Organon in a materially inaccurate manner or ifamong others, the Talent Committee determines that the covered executive has engaged in egregious conduct that is substantially detrimental to Organon (whether financially, reputationally or otherwise).
Hedging and Pledging
As part of our insider trading policy, we prohibit directors and specified key employees, including officers, from engaging in short sales, publicly traded options, hedging transactions and pledging of Organon common stock.
The Talent Committee has reviewed our compensation policies and programs and does not believe that our executive and non-executive compensation programs encourage excessive or unnecessary risk taking, and any risk inherent in our compensation programs is unlikely to have a material adverse effect on us.
Talent Committee Report
Our Talent Committee has reviewed and discussed the section entitled “Compensation Discussion and Analysis” with our management. Based upon this review and discussion, the Talent Committee recommended to the Board of Directors that the section entitled “Compensation Discussion and Analysis” be included in this proxy statement, which will be incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.2023.
Talent Committee
Carrie S. Cox (Chairman)
Ma. Fatima de Vera Francisco(1)
Martha E. McGarry
Grace Puma
| (1) | Ma. Fatima de Vera Francisco, who is currently serving as a member of the Talent Committee, is not standing for re-election at this Annual Meeting. |
| 65 | |
|
| ||||||||
| Executive Compensation | |||||||||
20212023 Summary Compensation Table
The following table sets forth information concerning the compensation of our NEOs for 2023 and, to the extent required by SEC disclosure rules, 2022 and 2021. As noted above, on June 2, 2021, Organon became an independent, publicly traded company as a result of the spinoff. Prior to the spinoff, our NEOs received compensation from Merck for service in 2021. Compensation paid by Merck is reflected in the 2021 Summary Compensation Table below; however, this table excludes any compensation under Merck’s pension plans and nonqualifiednon-qualified deferred compensation plans, as such plans remain at Merck and we did not assume any liability with respect to such plans.
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock ($)(1) | Option ($)(2) | Non-equity ($)(3) | Change in ($)(4) | All Other ($)(5) | Total ($) | |||||||||||||||||||||
Kevin Ali Chief Executive Officer | 2021 | 1,134,451 | — | 7,731,558 | 5,979,437 | 1,487,063 | — | 455,114 | 16,787,623 | |||||||||||||||||||||
Matthew Walsh EVP and Chief Financial Officer | 2021 | 825,055 | — | 2,808,152 | 2,179,784 | 692,160 | — | 53,338 | 6,558,489 | |||||||||||||||||||||
Susanne Fiedler EVP and Chief Commercial Officer(6) | 2021 | 672,948 | — | 1,611,914 | 1,257,861 | 569,423 | 158,623 | 265,716 | 4,536,485 | |||||||||||||||||||||
Sandra Milligan, M.D. EVP and Head of Research & Development | 2021 | 670,357 | — | 1,611,914 | 1,257,861 | 492,083 | — | 43,149 | 4,075,364 | |||||||||||||||||||||
Deborah H. Telman EVP and General Counsel and Corporate Secretary | 2021 | 670,357 | — | 1,473,355 | 1,145,891 | 492,083 | — | 331,267 | 4,112,953 | |||||||||||||||||||||
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | Change in ($)(4) | All Other Compensation ($)(5) | Total ($) | |||||||||||||||||||||||||
Kevin Ali | 2023 | 1,244,231 | — | 8,260,650 | 2,749,368 | 1,837,500 | — | 740,523 | 14,832,272 | |||||||||||||||||||||||||
Chief Executive Officer | 2022 | 1,203,769 | — | 7,345,176 | 2,249,992 | 1,837,500 | — | 896,544 | (6) | 13,532,980 | ||||||||||||||||||||||||
| 2021 | 1,134,451 | — | 7,746,837 | 7,663,630 | 1,487,063 | — | 518,756 | 18,550,737 | ||||||||||||||||||||||||||
Matthew Walsh | 2023 | 890,077 | — | 2,553,291 | 849,799 | 705,600 | — | 214,100 | 5,212,866 | |||||||||||||||||||||||||
EVP and Chief Financial Officer | 2022 | 849,385 | — | 2,652,410 | 812,500 | 822,720 | — | 169,570 | 5,306,585 | |||||||||||||||||||||||||
| 2021 | 825,055 | — | 2,808,152 | 2,378,360 | 692,160 | — | 53,338 | 6,757,065 | ||||||||||||||||||||||||||
Susanne Fiedler(7) | 2023 | 726,696 | — | 1,652,125 | 549,871 | 576,180 | 259,270 | 72,259 | 3,836,401 | |||||||||||||||||||||||||
EVP and Chief Commercial Officer | 2022 | 686,275 | — | 1,632,250 | 499,992 | 664,535 | 80,086 | 92,900 | 3,656,038 | |||||||||||||||||||||||||
| 2021 | 672,948 | — | 1,621,092 | 2,008,368 | 569,423 | 178,727 | 265,716 | 5,316,274 | ||||||||||||||||||||||||||
Joseph Morrissey(8) | 2023 | 740,769 | — | 1,652,125 | 549,871 | 588,000 | — | 206,244 | 3,737,009 | |||||||||||||||||||||||||
EVP and Head of Manufacturing and Supply | 2022 | 688,769 | — | 1,346,603 | 412,492 | 681,600 | — | 165,735 | 3,295,199 | |||||||||||||||||||||||||
Kirke Weaver(8) | 2023 | 650,000 | 210,656(9) | 1,314,174 | 437,394 | 445,900 | — | 134,569 | 3,192,693 | |||||||||||||||||||||||||
EVP, General Counsel and Corporate Secretary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Sandra Milligan, M.D.(10) | 2023 | 788,462 | — | 2,065,157 | 687,337 | 627,200 | — | 188,558 | 4,356,713 | |||||||||||||||||||||||||
Former EVP and Head of Research and Development | 2022 | 731,423 | — | 2,040,286 | 624,993 | 720,000 | — | 152,938 | 4,269,640 | |||||||||||||||||||||||||
| 2021 | 670,357 | — | 1,622,634 | 2,104,512 | 492,083 | — | 43,149 | 4,932,735 | ||||||||||||||||||||||||||
| (1) | The amounts reported in this column represent the grant date fair value of PSUs and RSUs granted in |
| (2) | The amounts reported in this column represent the grant date fair value of |
| | 66 |
| Executive Compensation | ||||||
| ||||||
incremental cost associated with the conversion of each NEO’s Merck options into Organon stock options in each NEO’s 2021 compensation in our 2022 and 2023 proxy statements. We have adjusted each NEO’s 2021 compensation, as reflected above, to correct these values. |
| (3) | The amounts reported for |
| (4) | The amount reported in this column for Ms. Fiedler for |
| (5) | The following table summarizes the compensation and benefits included under All Other Compensation in the |
All Other Compensation
| ||||||
Name | 401(k) Plan ($) | U.S. ($) | Relocation ($)(a) | Relocation ($)(a) | Automobile ($) | Security ($)(b) | Total ($) | 401(k) Plan Company Contributions ($) | U.S. Non-Qualified Savings Plan Company Contributions ($)(a) | Relocation Expenses ($)(b) | Tax Gross-Up ($)(b) | Automobile Allowance ($) | Security Services ($)(c) | Total ($) | ||||||||||||||||||||||||||||||||||||||||||
Kevin Ali | 17,996 | 78,679 | 218,498 | 83,788 | — | 56,153 | 455,114 | |||||||||||||||||||||||||||||||||||||||||||||||||
Kevin Ali | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kevin Ali | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kevin Ali | 14,850 | 432,001 | 168,882 | 4,241 | — | 120,549 | 740,523 | |||||||||||||||||||||||||||||||||||||||||||||||||
Matthew Walsh | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew Walsh | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew Walsh | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew Walsh | 27,574 | 25,764 | — | — | — | — | 53,338 | 14,850 | 199,250 | — | — | — | — | 214,100 | ||||||||||||||||||||||||||||||||||||||||||
Susanne Fiedler | — | — | 54,834 | 175,305 | 35,577 | — | 265,716 | |||||||||||||||||||||||||||||||||||||||||||||||||
Susanne Fiedler | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Susanne Fiedler | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Susanne Fiedler | — | — | 26,826 | 16,475 | 28,958 | — | 72,259 | |||||||||||||||||||||||||||||||||||||||||||||||||
Joseph Morrissey | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joseph Morrissey | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joseph Morrissey | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joseph Morrissey | 14,850 | 191,394 | — | — | — | — | 206,244 | |||||||||||||||||||||||||||||||||||||||||||||||||
Kirke Weaver | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kirke Weaver | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kirke Weaver | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kirke Weaver | 14,850 | 119,719 | — | — | — | — | 134,569 | |||||||||||||||||||||||||||||||||||||||||||||||||
Sandra Milligan, M.D. | 26,070 | 17,079 | — | — | — | — | 43,149 | |||||||||||||||||||||||||||||||||||||||||||||||||
Deborah H. Telman | 13,453 | 29,885 | 262,836 | 25,093 | — | — | 331,267 | |||||||||||||||||||||||||||||||||||||||||||||||||
Sandra Milligan, M.D. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sandra Milligan, M.D. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sandra Milligan, M.D. | 14,850 | 173,708 | — | — | — | — | 188,558 | |||||||||||||||||||||||||||||||||||||||||||||||||
| (a) | The amounts reported in this column consist of crediting for company (i) matching contributions in 2023 and (ii) retirement contributions for 2023 (with payments made in early 2024 per applicable 401(k) plan rules), that could not be made into the Organon U.S. 401(k) plan due to applicable IRS contribution limits. |
| (b) | As noted above, due to Mr. Ali’s dual residency in the United States and Switzerland, Mr. Ali received benefits relating to housing costs ($ |
As noted above, during |
| (6) | Due to an administrative error, we previously overstated the amount of Organon contributions to Mr. Ali’s non-qualified savings plan in 2022 in our 2023 proxy statement. Thus, we have adjusted his 2022 “All Other Compensation” amount to reflect the corrected value. |
| (7) | Ms. Fiedler’s compensation, with the exception of LTI awards, was paid in Swiss francs and has been converted to U.S. dollars based on an exchange rate of |
| (8) | Mr. Morrissey and Mr. Weaver were not NEOs in 2021 and Mr. Weaver was not an NEO in 2022. |
| (9) | Prior to his appointment as an executive officer, Mr. Weaver entered into a retention agreement with the Company in 2022. The retention bonus, is payable in two installments in each of June 2023 and 2024. The amount reported above reflects payment of the first installment during 2023. |
| (10) | Dr. Milligan’s employment was terminated without cause on January 5, 2024. For a description of the payments and benefits payable to Dr. Milligan following her termination, see “Departure of NEO” in the Potential Payments Upon Termination or Change in Control section below. |
| 67 | 2024 Proxy Statement |
| ||||||
2023 Grants of Plan-Based Awards Table
The following table provides information on the 2023 AIP that the NEOs participated in during 2021 and the PSUs, RSUs and stock optionsNQSOs granted in 20212023 to the NEOs. The table includes equitynumber of shares subject to such awards granted prior to the spinoff by Merck, which were converted into awards with respect to Organon common stock, as described above. Awards made after the spinoff were determined based on Organon’s stock price on the date of such grant.
| Estimated Future Payouts under Non-Equity Incentive Plan Awards | Estimated Future Payouts under Equity Incentive Plan Awards | All Other shares of (#) | All Other Number of options (#) | Exercise Option ($/Sh) | Grant Date Stock and ($) | |||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||||||||||||||||
Kevin Ali |
| (2) | — | 1,416,250 | 2,832,500 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| 3/31/2021 | 2/24/2021 | (3) | — | — | — | — | — | — | 87,372 | — | — | 3,142,644 | |||||||||||||||||||||||||||||||||||
| 5/4/2021 | 2/24/2021 | (4) | — | — | — | — | — | — | 66,477 | — | — | 2,400,009 | |||||||||||||||||||||||||||||||||||
| 5/4/2021 | 2/24/2021 | (5) | — | — | — | — | — | — | — | 515,471 | 36.11 | 4,479,443 | |||||||||||||||||||||||||||||||||||
| 8/17/2021 | 7/26/2021 | (6) | — | — | — | 21,198 | 42,396 | 84,792 | — | — | — | 2,188,905 | |||||||||||||||||||||||||||||||||||
| 8/17/2021 | 7/26/2021 | (7) | — | — | — | — | — | — | — | 133,928 | 35.38 | 1,499,994 | |||||||||||||||||||||||||||||||||||
|
| ||||||
| Estimated Future Payouts under Non-Equity Incentive Plan Awards | Estimated Future Payouts under Equity Incentive Plan Awards | All Other shares of (#) | All Other Number of options (#) | Exercise Option ($/Sh) | Grant Date Stock and ($) | Estimated Future Payouts under Non-Equity Incentive Plan Awards | Estimated Future Payouts under Equity Incentive Plan Awards | All Other (#) | All Other (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date ($) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Grant Date | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kevin Ali | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kevin Ali | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kevin Ali | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kevin Ali | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kevin Ali |
| (2) | — | 1,875,000 | 3,750,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/31/2023 | 2/6/2023 | (3) | — | — | — | — | — | — | 116,921 | — | — | 2,749,982 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/31/2023 | 2/6/2023 | (4) | — | — | — | — | — | — | — | 419,847 | 23.52 | 2,749,368 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8/11/2023 | 7/25/2023 | (5) | — | — | — | 118,790 | 237,580 | 475,160 | — | — | — | 5,510,668 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew Walsh | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew Walsh | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew Walsh | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew Walsh | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew Walsh | Matthew Walsh |
| (2) | — | 659,200 | 1,318,400 | — | — | — | — | — | — | — |
| (2) | — | 720,000 | 1,440,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/31/2021 | 2/24/2021 | (3) | — | — | — | — | — | — | 32,764 | — | — | 1,178,473 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/4/2021 | 2/24/2021 | (4) | — | — | — | — | — | — | 24,930 | — | — | 900,044 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/31/2023 | 2/6/2023 | (3) | — | — | — | — | — | — | 36,139 | — | — | 849,989 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/4/2021 | 2/24/2021 | (5) | — | — | — | — | — | — | — | 193,302 | 36.11 | 1,679,794 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8/17/2021 | 7/26/2021 | (6) | — | — | — | 7,066 | 14,132 | 28,264 | — | — | — | 729,635 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8/17/2021 | 7/26/2021 | (7) | — | — | — | — | — | — | — | 44,642 | 35.38 | 499,990 | 3/31/2023 | 2/6/2023 | (4) | — | — | — | — | — | — | — | 129,770 | 23.52 | 849,799 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8/11/2023 | 7/25/2023 | (5) | — | — | — | 36,717 | 73,434 | 146,868 | — | — | — | 1,703,302 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Susanne Fiedler | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Susanne Fiedler | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Susanne Fiedler | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Susanne Fiedler | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Susanne Fiedler | Susanne Fiedler |
| (2) | — | 542,307 | 1,084,614 | — | — | — | — | — | — | — |
| (2) | — | 587,938 | 1,175,877 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/31/2021 | 2/24/2021 | (3) | — | — | — | — | — | — | 19,659 | — | — | 707,106 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/4/2021 | 2/24/2021 | (4) | — | — | — | — | — | — | 14,957 | — | — | 539,990 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/31/2023 | 2/6/2023 | (3) | — | — | — | — | — | — | 23,384 | — | — | 549,992 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/4/2021 | 2/24/2021 | (5) | — | — | — | — | — | — | — | 115,980 | 36.11 | 1,007,866 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8/17/2021 | 7/26/2021 | (6) | — | — | — | 3,533 | 7,066 | 14,132 | — | — | — | 364,818 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8/17/2021 | 7/26/2021 | (7) | — | — | — | — | — | — | — | 22,321 | 35.38 | 249,995 | 3/31/2023 | 2/6/2023 | (4) | — | — | — | — | — | — | — | 83,969 | 23.52 | 549,871 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8/11/2023 | 7/25/2023 | (5) | — | — | — | 23,758 | 47,516 | 95,032 | — | — | — | 1,102,134 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joseph Morrissey | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joseph Morrissey | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joseph Morrissey | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joseph Morrissey | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joseph Morrissey |
| (2) | — | 600,000 | 1,200,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/31/2023 | 2/6/2023 | (3) | — | — | — | — | — | — | 23,384 | — | — | 549,992 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/31/2023 | 2/6/2023 | (4) | — | — | — | — | — | — | — | 83,969 | 23.52 | 549,871 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8/11/2023 | 7/25/2023 | (5) | — | — | — | 23,758 | 47,516 | 95,032 | — | — | — | 1,102,134 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kirke Weaver | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kirke Weaver | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kirke Weaver | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kirke Weaver | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kirke Weaver |
| (2) | — | 455,000 | 910,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/31/2023 | 2/6/2023 | (3) | — | — | — | — | — | — | 18,601 | — | — | 437,496 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/31/2023 | 2/6/2023 | (4) | — | — | — | — | — | — | — | 66,793 | 23.52 | 437,394 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8/11/2023 | 7/25/2023 | (5) | — | — | — | 18,898 | 37,796 | 75,592 | — | — | — | 876,678 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sandra Milligan, M.D. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sandra Milligan, M.D. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sandra Milligan, M.D. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sandra Milligan, M.D. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sandra Milligan, M.D. | Sandra Milligan, M.D. |
| (2) | — | 468,650 | 937,300 | — | — | — | — | — | — | — |
| (2) | — | 640,000 | 1,280,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/31/2021 | 2/24/2021 | (3) | — | — | — | — | — | — | 19,659 | — | — | 707,106 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/4/2021 | 2/24/2021 | (4) | — | — | — | — | — | — | 14,957 | — | — | 539,990 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/31/2023 | 2/6/2023 | (3) | — | — | — | — | — | — | 29,230 | — | — | 687,490 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/4/2021 | 2/24/2021 | (5) | — | — | — | — | — | — | — | 115,980 | 36.11 | 1,007,866 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8/17/2021 | 7/26/2021 | (6) | — | — | — | 3,533 | 7,066 | 14,132 | — | — | — | 364,818 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8/17/2021 | 7/26/2021 | (7) | — | — | — | — | — | — | — | 22,321 | 35.38 | 249,995 | 3/31/2023 | 2/6/2023 | (4) | — | — | — | — | — | — | — | 104,961 | 23.52 | 687,337 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deborah H. Telman |
| (2) | — | 468,650 | 937,300 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/31/2021 | 2/24/2021 | (3) | — | — | — | — | — | — | 17,474 | — | — | 628,514 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/4/2021 | 2/24/2021 | (4) | — | — | — | — | — | — | 13,296 | — | — | 480,023 | 8/11/2023 | 7/25/2023 | (5) | — | — | — | 29,698 | 59,395 | 118,790 | — | — | — | 1,377,667 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5/4/2021 | 2/24/2021 | (5) | — | — | — | — | — | — | — | 103,095 | 36.11 | 895,896 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8/17/2021 | 7/26/2021 | (6) | — | — | — | 3,533 | 7,066 | 14,132 | — | — | — | 364,818 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8/17/2021 | 7/26/2021 | (7) | — | — | — | — | — | �� | — | — | 22,321 | 35.38 | 249,995 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | The amounts reported represent the grant date fair value associated with the grant of |
| (2) | These amounts represent threshold (for which no values are included because the Talent Committee has the authority to reduce awards to a $0 payout), target and maximum cash award levels set in |
| (3) | Represents |
|
|
|
|
| ||||||
Outstanding Equity Awards at 2021 Fiscal Year-End Table
The following table summarizes outstanding option awards and unvested stock awards held by each NEO on December 31, 2021.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option ($) | Option Expiration Date | Number of (#) | Market ($)(1) | Equity (#) | Equity ($)(1) | |||||||||||||||||||||||||||
Kevin Ali | 5/2/2014 | 27,021 | — | 27.67 | 5/1/2024 | — | — | — | — | |||||||||||||||||||||||||||
| 5/1/2015 | 60,281 | — | 28.44 | 4/30/2025 | — | — | — | — | |||||||||||||||||||||||||||
| 5/10/2016 | 38,120 | — | 25.98 | 5/9/2026 | — | — | — | — | |||||||||||||||||||||||||||
| 5/5/2017 | 72,063 | — | 30.40 | 5/4/2027 | — | — | — | — | |||||||||||||||||||||||||||
| 5/4/2018 | 77,028 | — | 27.44 | 5/3/2028 | — | — | — | — | |||||||||||||||||||||||||||
| 5/3/2019 | (2) | 39,608 | 19,805 | 38.01 | 5/2/2029 | — | — | — | — | ||||||||||||||||||||||||||
| 5/3/2019 | (3) | — | — | — | — | 2,631 | 80,114 | — | — | ||||||||||||||||||||||||||
| 3/31/2020 | (4) | — | — | — | — | 11,393 | 346,917 | — | — | ||||||||||||||||||||||||||
| 5/1/2020 | (2) | 21,191 | 42,387 | 36.91 | 4/30/2030 | — | — | — | — | ||||||||||||||||||||||||||
| 5/1/2020 | (3) | — | — | — | — | 5,420 | 165,039 | — | — | ||||||||||||||||||||||||||
| 3/31/2021 | (4) | — | — | — | — | 88,121 | 2,683,284 | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (2) | — | 515,471 | 36.11 | 5/3/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (3) | — | — | — | — | 66,477 | 2,024,225 | — | — | ||||||||||||||||||||||||||
| 8/17/2021 | (2) | — | 133,928 | 35.38 | 8/16/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 8/17/2021 | (5) | — | — | — | — | — | — | 42,396 | 1,290,958 | ||||||||||||||||||||||||||
Matthew Walsh | 8/5/2020 | (3) | — | — | — | — | 44,690 | 1,360,811 | — | — | ||||||||||||||||||||||||||
| 3/31/2021 | (4) | — | — | — | — | 33,044 | 1,006,190 | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (2) | — | 193,302 | 36.11 | 5/3/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (3) | — | — | — | — | 24,930 | 759,119 | — | — | ||||||||||||||||||||||||||
| 8/17/2021 | (2) | — | 44,642 | 35.38 | 8/16/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 8/17/2021 | (5) | — | — | — | — | — | — | 14,132 | 430,319 | ||||||||||||||||||||||||||
|
| ||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option ($) | Option Expiration Date | Number of (#) | Market ($)(1) | Equity (#) | Equity ($)(1) | |||||||||||||||||||||||||||
Susanne Fiedler | 5/10/2016 | (2) | 26,123 | — | 25.98 | 5/9/2026 | — | — | — | — | ||||||||||||||||||||||||||
| 5/5/2017 | (2) | 45,039 | — | 30.40 | 5/4/2027 | — | — | — | — | ||||||||||||||||||||||||||
| 5/4/2018 | (2) | 46,215 | — | 27.44 | 5/3/2028 | — | — | — | — | ||||||||||||||||||||||||||
| 5/3/2019 | (2) | 23,762 | 11,885 | 38.01 | 5/2/2029 | — | — | — | — | ||||||||||||||||||||||||||
| 5/3/2019 | (3) | — | — | — | — | 1,579 | 48,081 | — | — | ||||||||||||||||||||||||||
| 3/31/2020 | (4) | — | — | — | — | 9,116 | 277,582 | — | — | ||||||||||||||||||||||||||
| 5/1/2020 | (2) | 16,954 | 33,909 | 36.91 | 4/30/2030 | — | — | — | — | ||||||||||||||||||||||||||
| 5/1/2020 | (3) | — | — | — | — | 4,336 | 132,031 | — | — | ||||||||||||||||||||||||||
| 3/31/2021 | (4) | — | — | — | — | 19,827 | 603,732 | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (2) | — | 115,980 | 36.11 | 5/3/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (3) | — | — | — | — | 14,957 | 455,441 | — | — | ||||||||||||||||||||||||||
| 8/17/2021 | (2) | — | 22,321 | 35.38 | 8/16/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 8/17/2021 | (5) | — | — | — | — | — | — | 7,066 | 215,160 | ||||||||||||||||||||||||||
Sandra Milligan, M.D. | 5/10/2016 | (2) | 48,931 | — | 25.98 | 5/9/2026 | — | — | — | — | ||||||||||||||||||||||||||
| 5/5/2017 | (2) | 63,054 | — | 30.40 | 5/4/2027 | — | — | — | — | ||||||||||||||||||||||||||
| 5/4/2018 | (2) | 53,919 | — | 27.44 | 5/3/2028 | — | — | — | — | ||||||||||||||||||||||||||
| 5/3/2019 | (2) | 27,724 | 13,865 | 38.01 | 5/2/2029 | — | — | — | — | ||||||||||||||||||||||||||
| 5/3/2019 | (3) | — | — | — | — | 1,842 | 56,089 | — | — | ||||||||||||||||||||||||||
| 3/31/2020 | (4) | — | — | — | — | 7,976 | 242,869 | — | — | ||||||||||||||||||||||||||
| 5/1/2020 | (2) | 14,834 | 29,670 | 36.91 | 4/30/2030 | — | — | — | — | ||||||||||||||||||||||||||
| 5/1/2020 | (3) | — | — | — | — | 3,795 | 115,558 | — | — | ||||||||||||||||||||||||||
| 3/31/2021 | (4) | — | — | — | — | 19,827 | 603,732 | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (2) | — | 115,980 | 36.11 | 5/3/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (3) | — | — | — | — | 14,957 | 455,441 | — | — | ||||||||||||||||||||||||||
| 8/17/2021 | (2) | — | 22,321 | 35.38 | 8/16/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 8/17/2021 | (5) | — | — | — | — | — | — | 7,066 | 215,160 | ||||||||||||||||||||||||||
| ||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option ($) | Option Expiration Date | Number of (#) | Market ($)(1) | Equity (#) | Equity ($)(1) | |||||||||||||||||||||||||
Deborah H. Telman | 8/5/2020 | (3) | — | — | — | — | 12,892 | 392,561 | — | — | ||||||||||||||||||||||||
| 3/31/2021 | (4) | — | — | — | — | 17,623 | 536,620 | �� | — | — | |||||||||||||||||||||||
| 5/4/2021 | (2) | — | 103,095 | 36.11 | 5/3/2031 | — | — | — | — | ||||||||||||||||||||||||
| 5/4/2021 | (3) | — | — | — | — | 13,296 | 404,863 | — | — | ||||||||||||||||||||||||
| 8/17/2021 | (2) | — | 22,321 | 35.38 | 8/16/2031 | — | — | — | — | ||||||||||||||||||||||||
|
| 8/17/2021 | (5) | — | — | — | — | — | — | 7,066 | 215,160 | ||||||||||||||||||||||||
|
|
|
| (4) |
|
| | 68 |
| Executive Compensation | ||||||
| ||||||
| (5) | Represents PSUs granted to the NEOs in 2023. These PSUs are scheduled to vest on December 31, |
Outstanding Equity Awards at 2023 Fiscal Year-End Table
The following table summarizes outstanding option awards and unvested stock awards held by each NEO on December 31, 2023.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | |||||||||||||||||||||||||||
Kevin Ali | 5/2/2014 | 27,021 | — | 27.67 | 5/1/2024 | — | — | — | — | |||||||||||||||||||||||||||
| 5/1/2015 | 60,821 | — | 28.44 | 4/30/2025 | — | — | — | — | |||||||||||||||||||||||||||
| 5/10/2016 | 38,120 | — | 25.98 | 5/9/2026 | — | — | — | — | |||||||||||||||||||||||||||
| 5/5/2017 | 72,063 | — | 30.40 | 5/4/2027 | — | — | — | — | |||||||||||||||||||||||||||
| 5/4/2018 | 77,028 | — | 27.44 | 5/3/2028 | — | — | — | — | |||||||||||||||||||||||||||
| 5/3/2019 | 59,413 | — | 38.01 | 5/2/2029 | — | — | — | — | |||||||||||||||||||||||||||
| 5/1/2020 | 63,578 | — | 36.91 | 4/30/2030 | — | — | — | — | |||||||||||||||||||||||||||
| 3/31/2021 | (3) | — | — | — | — | 88,121 | 1,270,705 | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (4) | 343,644 | 171,827 | 36.11 | 5/3/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (5) | — | — | — | — | 22,161 | 319,562 | — | — | ||||||||||||||||||||||||||
| 8/17/2021 | (6) | — | 133,928 | 35.38 | 8/16/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 8/17/2021 | (7) | — | — | — | — | — | — | 21,198 | 305,675 | ||||||||||||||||||||||||||
| 3/31/2022 | (4) | 66,137 | 132,275 | 34.93 | 3/30/2032 | — | — | — | — | ||||||||||||||||||||||||||
| 3/31/2022 | (5) | — | — | — | — | 42,943 | 619,238 | — | — | ||||||||||||||||||||||||||
| 8/9/2022 | (8) | — | — | — | — | — | — | 121,853 | 1,757,127 | ||||||||||||||||||||||||||
| 3/31/2023 | (4) | — | 419,847 | 23.52 | 3/30/2033 | — | — | — | — | ||||||||||||||||||||||||||
| 3/31/2023 | (5) | — | — | — | — | 116,921 | 1,686,001 | — | — | ||||||||||||||||||||||||||
| 8/11/2023 | (9) | — | — | — | — | — | — | 201,943 | 2,912,018 | ||||||||||||||||||||||||||
Matthew Walsh | 3/31/2021 | (3) | — | — | — | — | 33,044 | 476,494 | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (4) | 128,866 | 64,436 | 36.11 | 5/3/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (5) | — | — | — | — | 8,310 | 119,830 | — | — | ||||||||||||||||||||||||||
| 8/17/2021 | (6) | — | 44,642 | 35.38 | 8/16/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 69 | 2024 Proxy Statement |
| ||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | |||||||||||||||||||||||||||
| 8/17/2021 | (7) | — | — | — | — | — | — | 7,066 | 101,892 | ||||||||||||||||||||||||||
| 3/31/2022 | (4) | 23,883 | 47,766 | 34.93 | 3/30/2032 | — | — | — | — | ||||||||||||||||||||||||||
| 3/31/2022 | (5) | — | — | — | — | 15,507 | 223,611 | — | — | ||||||||||||||||||||||||||
| 8/9/2022 | (8) | — | — | — | — | — | — | 44,003 | 634,520 | ||||||||||||||||||||||||||
| 3/31/2023 | (4) | — | 129,770 | 23.52 | 3/30/2033 | — | — | — | — | ||||||||||||||||||||||||||
| 3/31/2023 | (5) | — | — | — | — | 36,139 | 521,124 | — | — | ||||||||||||||||||||||||||
| 8/11/2023 | (9) | — | — | — | — | — | — | 62,419 | 900,081 | ||||||||||||||||||||||||||
Susanne Fiedler | 5/10/2016 | 26,123 | — | 25.98 | 5/9/2026 | — | — | — | — | |||||||||||||||||||||||||||
| 5/5/2017 | 45,039 | — | 30.40 | 5/4/2027 | — | — | — | — | |||||||||||||||||||||||||||
| 5/4/2018 | 46,215 | — | 27.44 | 5/3/2028 | — | — | — | — | |||||||||||||||||||||||||||
| 5/3/2019 | 35,647 | — | 38.01 | 5/2/2029 | — | — | — | — | |||||||||||||||||||||||||||
| 5/1/2020 | 50,863 | — | 36.91 | 4/30/2030 | — | — | — | — | |||||||||||||||||||||||||||
| 3/31/2021 | (3) | — | — | — | — | 19,827 | 285,905 | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (4) | 77,318 | 38,662 | 36.11 | 5/3/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (5) | — | — | — | — | 4,989 | 71,941 | — | — | ||||||||||||||||||||||||||
| 8/17/2021 | (6) | — | 22,321 | 35.38 | 8/16/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 8/17/2021 | (7) | — | — | — | — | — | — | 3,533 | 50,946 | ||||||||||||||||||||||||||
| 3/31/2022 | (4) | 14,697 | 29,394 | 34.93 | 3/30/2032 | — | — | — | — | ||||||||||||||||||||||||||
| 3/31/2022 | (5) | — | — | — | — | 9,543 | 137,610 | — | — | ||||||||||||||||||||||||||
| 8/9/2022 | (8) | — | — | — | — | — | — | 27,078 | 390,471 | ||||||||||||||||||||||||||
| 3/31/2023 | (4) | — | 83,969 | 23.52 | 3/30/2033 | — | — | — | — | ||||||||||||||||||||||||||
| 3/31/2023 | (5) | — | — | — | — | 23,384 | 337,197 | — | — | ||||||||||||||||||||||||||
| 8/11/2023 | (9) | — | — | — | — | — | — | 40,389 | 582,404 | ||||||||||||||||||||||||||
Joseph Morrissey | 5/2/2014 | 46,323 | — | 27.67 | 5/1/2024 | — | — | — | — | |||||||||||||||||||||||||||
| 5/1/2015 | 52,132 | — | 28.44 | 4/30/2025 | — | — | — | — | |||||||||||||||||||||||||||
| 5/10/2016 | 57,177 | — | 25.98 | 5/9/2026 | — | — | — | — | |||||||||||||||||||||||||||
| 5/5/2017 | 45,039 | — | 30.40 | 5/4/2027 | — | — | — | — | |||||||||||||||||||||||||||
| 5/4/2018 | 30,810 | — | 27.44 | 5/3/2028 | — | — | — | — | |||||||||||||||||||||||||||
| 5/3/2019 | 23,765 | — | 38.01 | 5/2/2029 | — | — | — | — | |||||||||||||||||||||||||||
| 5/1/2020 | 34,967 | — | 36.91 | 4/30/2030 | — | — | — | — | |||||||||||||||||||||||||||
| 3/31/2021 | (3) | — | — | — | — | 14,319 | 206,480 | — | — | ||||||||||||||||||||||||||
| | 70 |
| Executive Compensation | ||||||
| ||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | |||||||||||||||||||||||||||
| 5/4/2021 | (4) | 55,840 | 27,924 | 36.11 | 5/3/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (5) | — | — | — | — | 3,604 | 51,970 | — | — | ||||||||||||||||||||||||||
| 8/17/2021 | (6) | — | 22,321 | 35.38 | 8/16/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 8/17/2021 | (7) | — | — | — | — | — | — | 3,533 | 50,946 | ||||||||||||||||||||||||||
| 3/31/2022 | (4) | 12,125 | 24,250 | 34.93 | 3/30/2032 | — | — | — | — | ||||||||||||||||||||||||||
| 3/31/2022 | (5) | — | — | — | — | 7,873 | 113,529 | — | — | ||||||||||||||||||||||||||
| 8/9/2022 | (8) | — | — | — | — | — | — | 22,340 | 322,138 | ||||||||||||||||||||||||||
| 3/31/2023 | (4) | — | 83,969 | 23.52 | 3/30/2033 | — | — | — | — | ||||||||||||||||||||||||||
| 3/31/2023 | (5) | — | — | — | — | 23,384 | 337,197 | — | — | ||||||||||||||||||||||||||
| 8/11/2023 | (9) | — | — | — | — | — | — | 40,389 | 582,404 | ||||||||||||||||||||||||||
Kirke Weaver | 5/4/2018 | 18,486 | — | 27.44 | 5/3/2028 | — | — | — | — | |||||||||||||||||||||||||||
| 5/3/2019 | 19,606 | — | 38.01 | 5/2/2029 | — | — | — | — | |||||||||||||||||||||||||||
| 5/1/2020 | 25,748 | — | 36.91 | 4/30/2030 | — | — | — | — | |||||||||||||||||||||||||||
| 3/31/2021 | (3) | — | — | — | — | 4,957 | 71,480 | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (4) | 19,330 | 9,666 | 36.11 | 5/3/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (5) | — | — | — | — | 1,248 | 17,996 | — | — | ||||||||||||||||||||||||||
| 3/31/2022 | (5) | — | — | — | — | 8,588 | 123,839 | — | — | ||||||||||||||||||||||||||
| 11/7/2022 | (10) | — | — | — | — | 6,250 | 90,125 | — | — | ||||||||||||||||||||||||||
| 3/31/2023 | (4) | — | 66,793 | 23.52 | 3/30/2033 | — | — | — | — | ||||||||||||||||||||||||||
| 3/31/2023 | (5) | — | — | — | — | 18,601 | 268,226 | — | — | ||||||||||||||||||||||||||
| 8/11/2023 | (9) | — | — | — | — | — | — | 32,127 | 463,266 | ||||||||||||||||||||||||||
Sandra Milligan, M.D.(11) | 5/10/2016 | 48,931 | — | 25.98 | 5/9/2026 | — | — | — | — | |||||||||||||||||||||||||||
| 5/5/2017 | 63,054 | — | 30.40 | 5/4/2027 | — | — | — | — | ||||||||||||||||||||||||||||
| 5/4/2018 | 53,919 | — | 27.44 | 5/3/2028 | — | — | — | — | |||||||||||||||||||||||||||
| 5/3/2019 | 41,589 | — | 38.01 | 5/2/2029 | — | — | — | — | |||||||||||||||||||||||||||
| 5/1/2020 | 44,504 | — | 36.91 | 4/30/2030 | — | — | — | — | |||||||||||||||||||||||||||
| 3/31/2021 | (3) | — | — | — | — | 19,827 | 285,905 | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (4) | 77,318 | 38,662 | 36.11 | 5/3/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 5/4/2021 | (5) | — | — | — | — | 4,989 | 71,941 | — | — | ||||||||||||||||||||||||||
| 71 | 2024 Proxy Statement |
| ||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | |||||||||||||||||||||||||||
| 8/17/2021 | (6) | — | 22,321 | 35.38 | 8/16/2031 | — | — | — | — | ||||||||||||||||||||||||||
| 8/17/2021 | (7) | — | — | — | — | — | — | 3,533 | 50,946 | ||||||||||||||||||||||||||
| 3/31/2022 | (4) | 18,371 | 36,743 | 34.93 | 3/30/2032 | — | — | — | — | ||||||||||||||||||||||||||
| 3/31/2022 | (5) | — | — | — | — | 11,928 | 172,002 | — | — | ||||||||||||||||||||||||||
| 8/9/2022 | (8) | — | — | — | — | — | — | 33,848 | 488,086 | ||||||||||||||||||||||||||
| 3/31/2023 | (4) | — | 104,961 | 23.52 | 3/30/3033 | — | — | — | — | ||||||||||||||||||||||||||
| 3/31/2023 | (5) | — | — | — | — | 29,230 | 421,497 | — | — | ||||||||||||||||||||||||||
|
| 8/11/2023 | (9) | — | — | — | — | — | — | 50,486 | 728,005 | ||||||||||||||||||||||||||
| (1) | The market value of shares or units of stock that have not vested reflects a stock price of $14.42, our closing stock price on December 29, 2023, the last trading day of 2023. |
| (2) | PSU awards are reflected at threshold performance for the 2021 PSUs and at target performance for the 2022 and 2023 PSUs based on the trending performance level achieved at fiscal year-end December 31, 2023. |
| (3) | Granted by Merck as PSU awards that converted into time-based RSU awards at spinoff. Subject to the original terms and conditions of the awards when granted, with a vest date of December 31, 2023, and a distribution date of February 28, 2024. |
| (4) | This NQSO vests in three substantially equal annual installments on each of the first through third anniversaries of the grant date, subject to the NEO’s continued employment through each applicable vesting date. |
| (5) | These RSUs vest in three substantially equal annual installments on each of the first through third anniversaries of the grant date, subject to the NEO’s continued employment through each applicable vesting date. |
| (6) | This NQSO vests in full on the third-year anniversary of the grant date, subject to the NEO’s continued employment through the vesting date. Due to an administrative oversight, we inadvertently disclosed these NQSOs as subject to the three-year annual vesting in our 2022 and 2023 proxy statements. We have adjusted the vesting status of such NQSOs, as reflected above, to reflect their correct vesting schedule. |
These PSUs are scheduled to vest on August 16, 2024, subject to the achievement of the |
| (8) | These PSUs are scheduled to vest on December 31, 2024, subject to the achievement of the applicable performance goals relating to free cash flow and relative TSR over the January 1, 2022, through December 31, 2024 performance period. |
| (9) | These PSUs are scheduled to vest on December 31, 2025, subject to the achievement of the applicable performance goals relating to free cash flow and relative TSR over the January 1, 2023, through December 31, 2025 performance period. |
| (10) | These remaining unvested RSUs vest in substantially equal installments on March 31 of 2024 and 2025, subject to the NEO’s continued employment through the vesting date. |
| (11) | For further information regarding the treatment of Dr. Milligan’s equity awards upon her termination of employment, see “Departure of NEO” in the Potential Payments Upon Termination or Change in Control section below. |
| | 72 |
| Executive Compensation | ||||||
| ||||||
2023 Option Exercises and Stock Awards Vested Table
The table below shows the aggregate number of shares of Merck common stock and Organon common stock acquired during 20212023 upon the vesting of RSU and PSU awards. None of the NEOs exercised any optionsNQSOs during 2021.2023.
| Stock Awards | ||||||
Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||
Kevin Ali | 32,118 | 1,730,314 | ||||
Matthew Walsh | 22,343 | 660,459 | ||||
Susanne Fiedler | 19,528 | 1,057,323 | ||||
Sandra Milligan, M.D. | 19,089 | 1,211,070 | ||||
Deborah H. Telman | 6,445 | 190,514 | ||||
| Stock Awards | ||||||
Name | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($) | ||||
Kevin Ali | 57,733 | 1,385,498 | ||||
Matthew Walsh | 38,410 | 861,582 | ||||
Susanne Fiedler | 21,039 | 513,093 | ||||
Joseph Morrissey | 15,291 | 372,035 | ||||
Kirke Weaver | 14,380 | 344,392 | ||||
Sandra Milligan, M.D. | 20,823 | 505,411 | ||||
|
| (1) | ||||||
| ||||||
20212023 Nonqualified Deferred Compensation Table
Name | Executive ($) | Registrant ($)(1) | Aggregate ($) | Aggregate ($) | Aggregate ($) | Executive ($) | Registrant Year ($)(1) | Aggregate ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($)(2) | |||||||||||||||||||||||||||||||
Kevin Ali | — | 78,679 | 187 | — | 78,866 | ||||||||||||||||||||||||||||||||||||
Kevin Ali | — | 432,001 | 59,062 | — | 901,041 | ||||||||||||||||||||||||||||||||||||
Matthew Walsh | — | 25,764 | 116 | — | 25,880 | ||||||||||||||||||||||||||||||||||||
Matthew Walsh | — | 199,250 | 46,934 | — | 420,527 | ||||||||||||||||||||||||||||||||||||
Susanne Fiedler(2) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Susanne Fiedler(3) | |||||||||||||||||||||||||||||||||||||||||
Susanne Fiedler(3) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Joseph Morrissey | |||||||||||||||||||||||||||||||||||||||||
Joseph Morrissey | — | 191,394 | 40,607 | — | 417,424 | ||||||||||||||||||||||||||||||||||||
Kirke Weaver | |||||||||||||||||||||||||||||||||||||||||
Kirke Weaver | — | 119,719 | 18,014 | — | 219,289 | ||||||||||||||||||||||||||||||||||||
Sandra Milligan, M.D. | — | 17,079 | 46 | — | 17,125 | ||||||||||||||||||||||||||||||||||||
Deborah H. Telman | — | 29,885 | 40 | — | 29,925 | ||||||||||||||||||||||||||||||||||||
Sandra Milligan, M.D. | — | 173,708 | 25,774 | — | 351,658 | ||||||||||||||||||||||||||||||||||||
| (1) | These amounts are included in the “All Other Compensation” column in the |
| (2) | The aggregate balance for each NEO includes the following amounts that are included as prior year compensation in the Summary Compensation Table: (i) for Mr. Ali, $428,905, (ii) for Mr. Walsh $181,609, (iii) for Mr. Morrissey, $152,010, (iv) for Mr. Weaver, $0, and (v) for Dr. Milligan, $156,293. |
| (3) | Ms. Fiedler does not participate in the NQ Savings Plan (as defined below) as she does not reside in the U.S. |
Narrative to 20212023 Nonqualified Deferred Compensation Table
We maintain a nonqualifiednon-qualified savings plan (the “NQ Savings Plan”) for certain of our employees on U.S. payroll, including each of our NEOs other than Ms. Fiedler. Under the NQ Savings Plan, participants receive credits equal to the company contributions, consisting of employer matching contributions of up to 4.5% of participants’ eligible compensation and retirement contributions ranging between 4.5% and 10% of participants’ eligible compensation based on their age and service, that a participant would have received under Organon’s U.S. 401(k) plan but for the contribution and compensation limitations imposed by the Internal Revenue Code, assuming the participant had contributed to the Organon U.S. Savings Plan at least 6% of “Total Pay” (as defined in Organon’s 401(k) plan) in respect of compensation that exceeds applicable compensation limits imposed by the Internal Revenue Code. In early 2022, it was determined that, due to a drafting omission prior to the spinoff, credits to the NQ Savings Plan were not being calculated based upon all 401(k) contribution limitations under the Internal Revenue Code and were, therefore, lower than intended. Accordingly, the Talent Committee (and the Board, with respect to Mr. Ali) approved one-time make-whole credits to participants in the NQ Savings Plan, including each of our NEOs other than Ms. Fiedler, which are reflected in the 2021 Nonqualified Deferred Compensation Table above.
Participants are generally permitted to choose from among the mutual funds available for investment under Organon’s U.S. 401(k) plan for purposes of determining the imputed earnings, gains, and losses applicable to their NQ Savings Plan accounts. The NQ Savings Plan is unfunded. Participants may specify the timing of initiating the payment of their
| 73 | 2024 Proxy Statement |
| ||||||
accounts by choosing either a specified payment date (up to 15 years following separation from service) or electing payment upon separation from service, (or a date up to 15 years following separation from service), and in either case may elect to receive their accounts in a lump sum or in annual installments over a period of up to 15 years. With respect to each year’s contributions and imputed earnings, the participant may make a separate distribution election.
20212023 Pension Benefits Table
The following table provides information regarding Ms. Fiedler’s pension benefits under the Swiss Savings Plan as of December 31, 2021.2023.
Name | Plan Name | Number of (#) | Present ($)(1) | Payments ($) | Plan Name | Number of (#) | Present ($)(1) | Payments During Last Fiscal Year ($) | ||||||||||||||||||||||
Susanne Fiedler | Organon Pensionskasse Schweiz | 1 | 178,650 | — | ||||||||||||||||||||||||||
Susanne Fiedler | ||||||||||||||||||||||||||||||
Susanne Fiedler | ||||||||||||||||||||||||||||||
Susanne Fiedler | Organon Pensionskasse Schweiz | 3 | 547,944 | — | ||||||||||||||||||||||||||
| (1) | The present value of Ms. Fiedler’s accumulated benefit as of December 31, |
| ||||||
Ms. Fiedler participated in the Swiss Savings Plan, which is a continuation of a plan made available to Swiss employees of Merck. The Swiss Savings Plan is a cash balance-based pension arrangement, under which Organon contributes an annual amount on behalf of each participant based on such participant’s salary, bonus and age. Participants may also make contributions based on their salary, bonus and age. Additionally, participants are credited with interest at a rate of 3.5% (or, if higher, the minimum interest credit rate required under applicable Swiss law). Payments to participants are based on accumulated capital in the participant’s plan account and may be taken as a lump sum or annuity at normal retirement, beginning at age 64 for women and age 65 for men. Participants may also elect to receive a reduced benefit beginning at age 58 in the event of early retirement.
Potential Payments Upon Termination or Change in Control
In connection with the spinoff, Organon adopted the Severance Plan. The Severance Plan provides payments and benefits to certain eligible members of Organon’s management team, including each of the NEOs, in the event of a termination of employment without cause (as defined in the Severance Plan). Payments and benefits under the Severance Plan are conditioned upon execution of a release of claims, which may contain restrictive covenants, and include (i) a lump sum cash payment in an amount equal to 1.0 times (or 2.0 times in the case of the CEO) the sum of the executive officer’s annual base salary and target annual cash incentive opportunity, (ii) with respect to a termination of employment that occurs between June 30th and December 31st of the calendar year, a pro-rata annual cash incentive payment based on the executive officer’s target incentive opportunity for the year of termination and (iii) subsidized medical and dental coverage (and continuation of basic life insurance coverage) for up to 12 months (or 24 months in the case of the CEO)CEO, which effective 2024, has been decreased to 18 months for the CEO’s life insurance continuation); provided, that with respect to participants who were previously employed by Merck or any of its subsidiaries immediately prior to the spinoff, (A) the amount described in clause (i) will be no less than a certain number of weeks’ worth of base salary determined based on the participant’s number of years of continuous service with Merck and Organon as of the termination date and (B) if such participants have 20 or more complete years of continuous service with Merck and Organon, then they will be eligible to receive the subsidized medical and dental coverage described in clause (iii) for up to 78 weeks. The Severance Plan does not provide for any payments or benefits upon a termination for cause or any resignation of an eligible employee’s employment. Furthermore, severance payments and benefits are subject to forfeiture in the event an employee breaches any obligations of his or her terms and conditions of employment or makes any false or misleading statements about Organon or any of its affiliates or their products, officers or employees to competitors, customers, potential customers or to current employees or former employees.
In addition to the Severance Plan, Organon also adopted the CIC Severance Plan. The CIC Severance Plan provides “double trigger” severance payments and benefits to eligible employees, including the executive officers, in the event of a termination of employment without cause or a resignation for good reason (each as defined in the CIC
| | 74 |
| Executive Compensation | ||||||
| ||||||
Severance Plan) during the two-year period following a change in control (as defined in the CIC Severance Plan). Payments and benefits under the CIC Severance Plan are conditioned upon execution of a release of claims and include (i) a lump sum cash payment in an amount equal to 2.0 times the sum of the executive officer’s annual base salary and target annual cash incentive opportunity, (ii) a pro-rata annual cash incentive payment based on the executive officer’s target incentive opportunity for the year of termination, and (iii) a lump sum cash payment intended to offset the costs of continued medical and dental coverage for up to 24 months.
Under the terms of the Severance Plan and the CIC Severance Plan, if the payments and benefits to an NEO under the Severance Plan, CIC Severance Plan or another plan, arrangement or agreement would subject the NEO to the excise tax imposed by Section 4999 of the Internal Revenue Code, then such payments will be reduced by the minimum amount necessary to avoid such excise tax, but only if such reduction will result in the NEO receiving a higher net after-tax amount.
|
| ||||||
The table below sets forth Organon’s payment obligations pursuant to the terms of the Severance Plan or CIC Severance Plan, as applicable, under the circumstances described below, assuming each NEO’s employment had been terminated on December 31, 2021.2023, except with respect to Dr. Milligan. For a description of the payments and benefits payable to Dr. Milligan following her termination, see the subsection titled “Departure of NEO” below. For a description of the value of stock-based awards held by the NEOs that are subject to vesting upon a termination of employment, see the subsection titled Accelerated“Accelerated Vesting of Stock-Based AwardsAwards” below.
Name | Type of Payment or Benefit(1) | Termination ($) | Termination ($) | Type of Payment or Benefit(1) | Termination ($) | Termination in Connection With | ||||||||||||||||
Kevin Ali | ||||||||||||||||||||||
Kevin Ali | Severance Pay | 5,098,500 | (2) | 5,098,500 | (5) | Severance Pay | 6,250,000 | (2) | 6,250,000 | (5) | ||||||||||||
| Pro-Rated Annual Incentive(3) | 1,416,250 | 1,416,250 | |||||||||||||||||||
| Pro-Rated Annual Incentive(3) | 1,875,000 | 1,875,000 | ||||||||||||||||||||
| Welfare Benefits Continuation(4) | 55,402 | 63,084 | |||||||||||||||||||
| Welfare Benefits Continuation(4) | 40,114 | 44,622 | |||||||||||||||||||
Matthew Walsh | ||||||||||||||||||||||
Matthew Walsh | Severance Pay | 1,483,200 | (2) | 2,966,400 | (5) | Severance Pay | 1,620,000 | (2) | 3,240,000 | (5) | ||||||||||||
| Pro-Rated Annual Incentive(3) | 659,200 | 659,200 | |||||||||||||||||||
| Pro-Rated Annual Incentive(3) | 720,000 | 720,000 | ||||||||||||||||||||
| Welfare Benefits Continuation(4) | 27,397 | 63,084 | |||||||||||||||||||
| Welfare Benefits Continuation(4) | 28,794 | 65,818 | |||||||||||||||||||
Susanne Fiedler(6) | ||||||||||||||||||||||
Susanne Fiedler(6) | Severance Pay | 1,559,134 | (2) | 2,440,383 | (5) | Severance Pay | 1,690,323 | (2) | 2,645,723 | (5) | ||||||||||||
| Pro-Rated Annual Incentive(3) | 542,037 | 542,037 | |||||||||||||||||||
| Pro-Rated Annual Incentive(3) | 587,938 | 587,938 | ||||||||||||||||||||
| Welfare Benefits Continuation(4) | — | — | |||||||||||||||||||
Sandra Milligan, M.D. | Severance Pay | 1,138,150 | (2) | 2,276,300 | (5) | |||||||||||||||||
| Welfare Benefits Continuation(4) | — | — | |||||||||||||||||||
Joseph Morrissey | ||||||||||||||||||||||
Joseph Morrissey | Severance Pay | 1,725,000 | (2) | 2,700,000 | (5) | |||||||||||||||||
| Pro-Rated Annual Incentive(3) | 468,650 | 468,650 | |||||||||||||||||||
| Pro-Rated Annual Incentive(3) | 600,000 | 600,000 | ||||||||||||||||||||
| Welfare Benefits Continuation(4) | 27,245 | 63,084 | |||||||||||||||||||
Deborah H. Telman | Severance Pay | 1,138,150 | (2) | 2,276,300 | (5) | |||||||||||||||||
| Welfare Benefits Continuation(4) | 42,938 | 65,818 | |||||||||||||||||||
Kirke Weaver | ||||||||||||||||||||||
Kirke Weaver | Severance Pay | 1,355,000 | (2) | 2,210,000 | (5) | |||||||||||||||||
| Pro-Rated Annual Incentive(3) | 468,650 | 468,650 | |||||||||||||||||||
| Pro-Rated Annual Incentive(3) | 455,000 | 455,000 | ||||||||||||||||||||
|
| Welfare Benefits Continuation(4) | 18,504 | 42,769 | |||||||||||||||||||
|
| ||||||||||||||||||||||
|
| Welfare Benefits Continuation(4) | 42,769 | 65,818 | |||||||||||||||||||
| (1) | Under the terms of the Severance Plan and the CIC Severance Plan, if the payments and benefits to an NEO under the Severance Plan, CIC Severance Plan or another plan, arrangement or agreement would subject the NEO to the excise tax imposed by Section 4999 of the Internal Revenue Code, then such payments will be reduced by the minimum amount necessary to avoid such excise tax, but only if such reduction will result in the NEO receiving a higher net after-tax amount. The amounts reflected in this table do not reflect the application of any reduction in compensation or benefits pursuant to the terms of the Severance Plan or the CIC Severance Plan. |
| (2) |
|
| 75 | 2024 Proxy Statement |
| ||||||
| (3) | Represents a pro-rata annual cash incentive payment based on the |
| (4) | Represents the incremental cost of subsidized medical and dental coverage for (i) with respect to a termination without cause, 24 months for Mr. Ali, 18 months for Mr. Morrissey and Mr. Weaver, and 12 months |
| (5) | Represents a cash payment in an amount equal to 2.0 times the sum of the |
| (6) | Amounts for Ms. Fiedler have been converted to U.S. dollars based on an exchange rate of |
| ||||||
Accelerated Vesting of Stock-Based Awards
The table below sets forth the value of Organon’s obligations upon the vesting of the stock-based awards held by our NEOs as described below and assumes that the triggering event took place on December 31, 2021.2023.
Name | Type of Payment or Benefit | Involuntary ($)(1)(5) | Death/Disability ($)(2)(5) | Sale ($)(3)(5) | Involuntary ($)(4)(5) | Type of Payment or Benefit | Involuntary Termination (not for poor performance)/ Termination Without Cause/Retirement ($)(1)(5) | Death/Disability ($)(2)(5) | Sale ($)(3)(5) | Involuntary Change in Control ($)(4)(5) | ||||||||||||||||||||||||||||||
Kevin Ali | ||||||||||||||||||||||||||||||||||||||||
Kevin Ali | Stock Option Accelerated Vesting | — | — | — | — | NQSO Accelerated Vesting | — | — | — | — | ||||||||||||||||||||||||||||||
| PSU Accelerated Vesting | 163,138 | 163,138 | 430,319 | 1,290,958 | |||||||||||||||||||||||||||||||||||
| PSU Accelerated Vesting | 1,807,201 | 1,807,201 | 2,308,048 | 5,866,996 | ||||||||||||||||||||||||||||||||||||
| RSU Accelerated Vesting | 1,711,139 | 5,299,579 | 2,161,240 | 5,299,579 | |||||||||||||||||||||||||||||||||||
| RSU Accelerated Vesting | 896,228 | 1,029,379 | 1,553,796 | 2,624,801 | |||||||||||||||||||||||||||||||||||
Matthew Walsh | ||||||||||||||||||||||||||||||||||||||||
Matthew Walsh | Stock Option Accelerated Vesting | — | — | — | — | NQSO Accelerated Vesting | — | — | — | — | ||||||||||||||||||||||||||||||
| PSU Accelerated Vesting | 54,379 | 54,379 | 143,440 | 430,319 | |||||||||||||||||||||||||||||||||||
| PSU Accelerated Vesting | 610,700 | 610,700 | 791,562 | 1,933,506 | ||||||||||||||||||||||||||||||||||||
| RSU Accelerated Vesting | 478,105 | 3,126,119 | 1,949,247 | 3,126,119 | |||||||||||||||||||||||||||||||||||
| RSU Accelerated Vesting | 303,013 | 352,942 | 535,718 | 864,566 | |||||||||||||||||||||||||||||||||||
Susanne Fiedler | ||||||||||||||||||||||||||||||||||||||||
Susanne Fiedler | Stock Option Accelerated Vesting | — | — | — | — | NQSO Accelerated Vesting | — | — | — | — | ||||||||||||||||||||||||||||||
| PSU Accelerated Vesting | 27,190 | 27,190 | 71,720 | 215,160 | |||||||||||||||||||||||||||||||||||
| PSU Accelerated Vesting | 383,699 | 383,699 | 494,998 | 1,224,687 | ||||||||||||||||||||||||||||||||||||
| RSU Accelerated Vesting | 282,813 | 1,516,867 | 810,752 | 1,516,867 | |||||||||||||||||||||||||||||||||||
Sandra Milligan, M.D. | Stock Option Accelerated Vesting | — | — | — | — | |||||||||||||||||||||||||||||||||||
| RSU Accelerated Vesting | 189,780 | 219,755 | 333,484 | 546,749 | |||||||||||||||||||||||||||||||||||
Joseph Morrissey | ||||||||||||||||||||||||||||||||||||||||
Joseph Morrissey | NQSO Accelerated Vesting | — | — | — | — | |||||||||||||||||||||||||||||||||||
| PSU Accelerated Vesting | 27,190 | 27,190 | 71,720 | 215,160 | |||||||||||||||||||||||||||||||||||
| PSU Accelerated Vesting | 344,745 | 344,745 | 436,566 | 1,134,930 | ||||||||||||||||||||||||||||||||||||
| RSU Accelerated Vesting | 259,871 | 1,473,689 | 767,573 | 1,473,689 | |||||||||||||||||||||||||||||||||||
Deborah H. Telman | Stock Option Accelerated Vesting | — | — | — | — | |||||||||||||||||||||||||||||||||||
| RSU Accelerated Vesting | 167,872 | 189,526 | 287,794 | 502,696 | |||||||||||||||||||||||||||||||||||
Kirke Weaver | ||||||||||||||||||||||||||||||||||||||||
Kirke Weaver | NQSO Accelerated Vesting | — | — | — | — | |||||||||||||||||||||||||||||||||||
| PSU Accelerated Vesting | 27,190 | 27,190 | 71,720 | 215,160 | |||||||||||||||||||||||||||||||||||
| PSU Accelerated Vesting | 128,146 | 128,146 | 128,146 | 566,184 | ||||||||||||||||||||||||||||||||||||
|
| RSU Accelerated Vesting | 137,913 | 1,334,045 | 706,389 | 1,334,045 | |||||||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||||
|
| RSU Accelerated Vesting | 171,287 | 178,785 | 335,896 | 500,187 | |||||||||||||||||||||||||||||||||||
| (1) | Under the terms of the applicable award agreements, upon the NEO’s involuntary termination (not for poor performance), termination without cause or retirement, a pro-rated portion of the NQSO and RSU awards will vest, and a pro-rated portion of the PSU award will vest based upon actual |
| (2) | Under the terms of the applicable award agreements, upon the NEO’s death or disability, (i) PSUs and RSUs granted by Merck in 2021 that were converted into time-based Organon RSUs will vest in full and (ii) a pro-rated portion of the |
| (3) | Under the terms of the applicable award agreements, upon a termination of the NEO’s employment following a sale of the subsidiary, division or joint venture of the entity by whom the NEO is employed, (i) the award will vest with respect to one-third of the shares subject to the award, in the case of a termination less than one year following the grant date, and (ii) the award will vest in full upon such termination of employment, in the case of a termination that occurs on or after the one-year anniversary of the grant |
| (4) | Under the terms of the applicable award agreements, the award will fully vest upon an involuntary termination of the NEO’s employment prior to the second anniversary of the closing of a change in control. PSU awards are converted to time-based RSU awards upon a change in control, based on (i) target performance with respect to PSUs granted in |
| (5) | Amounts in this table have been calculated based on a stock price of |
| | |
| ||||||
Departure of NEO
As noted in the CD&A, Dr. Milligan ceased serving as Executive Vice President and Head of Research and Development effective December 1, 2023, and served as a senior advisor to Organon until her separation from employment on January 5, 2024. While serving as a senior advisor, she continued to receive her normal base salary as described in the CD&A. Because Dr. Milligan’s separation from employment constituted a termination of her employment by Organon without cause under the Severance Plan, she received the following severance benefits in accordance with the Severance Plan and a separation agreement entered into between Organon and Dr. Milligan: (i) a lump sum cash payment of $1,440,000, which is equal to the sum of her 2023 annual base salary and target AIP, (ii) subsidized medical and dental coverage and continuation of basic life insurance coverage for up to 12 months at a total Company cost of approximately $28,682, and (iii) outplacement assistance for up to 12 months at a total Company cost approximately $4,650. Dr. Milligan also received full payout of her 2023 AIP based on actual performance because her termination of employment occurred after the end of 2023. With respect to Dr. Milligan’s unvested equity awards, upon her termination:
| • | NQSOs – She remained eligible to vest in a pro-rated portion of her unvested NQSOs (based on the number of months she was employed during the applicable vesting period) on the next scheduled vesting date of the applicable award. The remaining unvested NQSOs were forfeited upon her termination. Her vested NQSOs will expire on the day before the one-year anniversary of her termination (or, if earlier, the original expiration date of the applicable NQSO). |
| • | RSUs – She remained eligible to vest in a pro-rated portion of her unvested RSUs (based on the number of months she was employed during the applicable vesting period) on the next scheduled vesting date of the applicable award. The remaining unvested RSUs were forfeited upon her termination. |
| • | PSUs – She remained eligible to vest in a pro-rated portion (based on the number of months she was employed during the applicable performance period) of any earned PSUs based on actual performance for the performance period. Any earned PSUs will be settled on the dates the applicable PSUs are settled for our other executives. |
The separation agreement with Dr. Milligan also contains a general release of claims in favor of Organon, along with confidentiality, non-disparagement, a two-year employee non-solicitation, and other customary covenants.
| 77 | 2024 Proxy Statement |
| CEO Pay Ratio | |||||
Introduction
The following is a disclosure of (1) total annual compensation for our CEO, (2) the median total annual compensation for our employees globally, excluding our CEO and (3) the ratio of those two numbers. Under the SEC rules, companies may identify the median total annual compensation using a wide variety of methods including reasonable assumptions and estimations. Therefore, the pay ratio reported by other companies may not be comparable to Organon’s pay ratio below. Given the leverage of our executive compensation program towards performance-based elements, we expect that our pay ratio disclosure will fluctuate year-to-year based on the company’s performance against the pre-established performance goals.
Median Total Annual Compensation
We used base salary as of December 1, 2023, to identify the employee with the median total annual compensation (excluding our CEO). For this purpose, we annualized base salary for all full- and part-time employees (excluding our CEO) hired after January 1, 2023, and employed as of December 1, 2023.We converted foreign currency to USD based on the spot foreign exchange rate as of December 1, 2023.
Exemptions
Total Employees Before and After De Minimis Exemption
Organon’s employee population as of December 1, 2023, included 1,606 employees (16%) in the United States and 8,721 employees (84%) outside the United States. After excluding 516 employees in 11 countries, as detailed in the table below and up to the 5% limit allowable under the SEC disclosure rules, we identified our median employee from a group of approximately 9,811 employees globally.
Excluded Under De Minimis Exemption
| Country | Number of Employees | |
Algeria | 23 | |
Bosnia and Herzegovina | 2 | |
Dominican Republic | 2 | |
Egypt | 108 | |
Hungary | 19 | |
Indonesia | 209 | |
Malaysia | 63 | |
North Macedonia | 1 | |
Serbia | 12 | |
Turkey | 64 | |
Ukraine | 13 | |
Total | 516 |
The Ratio
The total annual compensation of our median employee, calculated in the same manner as we calculate total annual compensation for purposes of the Summary Compensation Table, was $77,946. The total annual compensation for our CEO, as reflected in the 2023 Summary Compensation Table, was $14,832,272. A reasonable estimation of the ratio of our CEO’s compensation to our median employee’s compensation is 190 to 1.
| | 78 |
Pay vs. Performance | ||||||
 | ||||||
Summary Compensation Table Total for CEO (1&2) | Compensation Actually Paid to CEO (1&3) | Average Summary Compensation Table Total for Other NEOs (1&2) | Average Compensation Actually Paid to Other NEOs (1&3) | Value of Initial Fixed $100 Investment Based On: | Net Income (millions) (5) | Adjusted EBITDA (millions) (6) | ||||||||||||||||||||||||||
Year | Total Shareholder Return (4) | Peer Group Total Shareholder Return (4) | ||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | ||||||||||||||||||||||||
| 2023 | $ | 14,832,272 | $ | (553,768 | ) | $ | 4,067,136 | $ | 761,713 | $ | 43.71 | $ | 126.39 | $ | 1,023 | $ | 2,000 | |||||||||||||||
| 2022 | $ | 13,532,980 | $ | 11,727,234 | $ | 4,131,865 | $ | 3,726,599 | $ | 79.65 | $ | 120.52 | $ | 917 | $ | 2,232 | ||||||||||||||||
| 2021 | $ | 18,550,737 | $ | 14,257,800 | $ | 5,306,233 | $ | 4,039,153 | $ | 83.72 | $ | 114.88 | $ | 1,351 | $ | 1,441 | ||||||||||||||||
| 1. | Kevin Ali served as the company’s CEO for the entirety of 2021, 2022, and 2023 and the company’s other NEOs for the applicable years were as follows: |
Year | Other NEOs | |
| 2023 | Matthew Walsh, Susanne Fiedler, Joseph Morrissey, Kirke Weaver, Sandra Milligan, M.D. | |
| 2022 | Matthew Walsh, Susanne Fiedler, Sandra Milligan, M.D., Joseph Morrissey | |
| 2021 | Matthew Walsh, Susanne Fiedler, Sandra Milligan, M.D., Deborah Telman | |
| 2. | Amounts reported in this column represent (i) the total compensation reported in the Summary Compensation Table for the applicable year in the case of Mr. Ali and (ii) the average of the total compensation reported in the Summary Compensation Table for the applicable year for our other NEOs. |
| 3. | To calculate compensation actually paid (“CAP”), adjustments were made to the amounts reported in the Summary Compensation Table for the applicable year. A reconciliation of the adjustments for Mr . Aliand for the average adjustments of theother NEOs is set forth in the following table. Amounts do not reflect actual compensation earned by or paid to our NEOs during the applicable year. |
| 79 | 2024 Proxy Statement |
 | ||||||
CEO | Other NEO Average (g) | |||||||||||||||||||||||
2023 | 2022 | 2021 | 2023 | 2022 | 2021 | |||||||||||||||||||
Summary Compensation Table Total (a) | $ | 14,832,272 | $ | 13,532,980 | $ | 18,550,737 | $ | 4,067,136 | $ | 4,131,865 | $ | 5,306,233 | ||||||||||||
Less: Reported Fair Value of Equity Awards (b) | $ | 11,010,018 | $ | 9,595,168 | $ | 15,410,467 | $ | 2,462,229 | $ | 2,505,381 | $ | 3,817,067 | ||||||||||||
Less: Reported Change in Pension Value (c) | 0 | $ | 0 | $ | 0 | $ | 51,854 | $ | 20,022 | $ | 44,682 | |||||||||||||
Add: Year-End Fair Value of Equity Awards Granted in the Year(d) | $ | 5,473,146 | $ | 8,321,063 | $ | 11,388,323 | $ | 1,223,989 | $ | 2,172,703 | $ | 2,783,489 | ||||||||||||
Add: Change in Fair Value (from Prior Year-End to Vesting Date) of Equity Awards Granted in Prior Years that Vested in the Year (d) | $ | (2,025,349 | ) | $ | 348,186 | $ | (88,844 | ) | $ | (470,764 | ) | $ | 96,889 | $ | (82,426 | ) | ||||||||
Add: Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years (d) | $ | (8,202,307 | ) | $ | (1,244,644 | ) | $ | (386,466 | ) | $ | (1,664,897 | ) | $ | (310,885 | ) | $ | (234,305 | ) | ||||||
Add: Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation (e) | $ | 378,489 | $ | 364,816 | $ | 204,517 | $ | 91,881 | $ | 103,534 | $ | 71,213 | ||||||||||||
Add: Service Cost and Prior Service Cost For Benefit and Actuarial Pension Plans (f) | $ | 0 | $ | 0 | $ | 0 | $ | 28,451 | $ | 57,896 | $ | 56,698 | ||||||||||||
| Compensation Actually Paid | $ | (553,768 | ) | $ | 11,727,234 | $ | 14,257,800 | $ | 761,713 | $ | 3,726,599 | $ | 4,039,153 | |||||||||||
| (a) | Represents “Total Compensation” as reported in the Summary Compensation Table for the indicated fiscal year. With respect to the other NEOs, amounts shown represent averages. As noted in the footnotes to the Summary Compensation Table, we have made certain correctional adjustments to the award values and total compensation reported in prior years’ proxy statements. The values and adjustments included herein reflect such corrected values. |
| (b) | Represents the aggregate grant date fair value reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. As noted in the footnotes to the Summary Compensation Table, we have made certain correctional adjustments to the equity award values and total compensation reported in prior years’ proxy statements. The values and adjustments included herein reflect such corrected values. |
| (c) | Represents the aggregate change in actuarial present value of the accumulated benefit under all defined benefit and actuarial pension plans reported in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column in the Summary Compensation Table for the applicable year, calculated using the same methodology as used in the company’s financial statements under generally accepted accounting principles. |
| (d) | In accordance with Item 402(v) requirements, the fair values of unvested and outstanding equity awards to our NEOs were remeasured starting with the date that Organon’s common stock became publicly traded in June 2021, and subsequently as of each vesting date and as of the end of each fiscal year, as applicable, during the years displayed in the table above. Fair values as of each measurement date were determined using valuation assumptions and methodologies (including volatility, dividend yield, and risk-free interest rates) that are materially consistent with those used to estimate fair value at grant under U.S. GAAP. |
| For options, a lattice valuation model was used to estimate the fair value as of the various measurement dates. For market-based PSUs, fair values were estimated using a Monte Carlo simulation model. The assumptions used in calculating the fair value of the equity awards did not differ in any material respect from the assumptions used to calculate the grant date fair value of the awards as reported in the Summary Compensation Table, except that the fair value calculations of (i) the options granted on or between May 1, 2020 and March 31, 2023 used an expected term between 6.01 – 8.19 years in 2023, as compared to an expected life of 5.89 years used to calculate the grant date fair value of such awards, and a dividend yield between 4.5% and 7.5% in 2023, as compared to a yield between 3.1% -4.8% used to calculate the grant date |
| | 80 |
| Pay vs. Performance | ||||||
| ||||||
fair value of the awards, and (ii) for performance awards that vest based on a Free Cash Flow metric, the PSU awards granted in 2022 and 2023 assumed a payout below target at the end of 2023 as compared to the grant date fair value calculations which assumed a payout at target. For more information, see “Stock-Based Compensation Plans” in the Notes to Consolidated Financial Statements contained in the company’s Annual Report on Form 10-K for the corresponding fiscal year, where we explain assumptions made in valuing equity awards at grant. |
| (e) | The values for 2021 and 2022 have been updated from those presented in the 2023 proxy statement. Last year, the value of dividends were included only upon payment of the underlying equity grant. This year, we have adjusted such values to include the value of dividends as they accrue over the vesting period of the underlying equity grant. |
| (f) | Represents the sum of the actuarial present value of the benefits under all defined benefit and actuarial pension plans attributable to services rendered during the indicated fiscal year, calculated using the same methodology as used in the company’s financial statements under generally accepted accounting principles. |
| (g) | See footnote 1 above for the other NEOs included in the average for each year. |
| 4. | The amounts reflect the cumulative total shareholder return of Organon common stock (column (f)) and the NYSE Arca Pharmaceutical Index (column (g)) at the end of each fiscal year. In each case, the comparison assumes an initial investment of $100 on June 3, 2021 (the day on which regular-way trading of Organon common stock commenced) in our common stock, and reinvestment of dividends. Historic stock price performance is not necessarily indicative of future stock price performance. Because we were not an independent company prior to the spinoff, we have assumed a $100 investment as of the first day of regular trading of our stock following the spinoff. |
| 5. | The dollar amounts reported represent the net income reflected in Organon’s audited financial statements for the applicable year. |
| 6. | While we use numerous financial and non-financial performance measures to evaluate performance under our compensation programs, Adjusted EBITDA is the financial performance measure that, in Organon’s assessment, represents the most important performance measure used to link compensation actually paid to NEOs to company performance in 2023. See Appendix A of this proxy statement for a reconciliation of Adjusted EBITDA used for purposes of determining the AIP, anon-GAAP measure, to the most directly comparable GAAP measure. The 2023 Adjusted EBITDA reported within this table differs from the Adjusted EBITDA amount reported in our fiscal year end 2023 earnings release filed with the SEC on February 15, 2024, because the Adjusted EBITDA reported herein was adjusted to exclude the impact of foreign currency exchange rates and certain business development expenses. The amount reported for 2021 ($1.441B) represents the Adjusted EBITDA for the post-spin period from June to December 2021. |
| 81 | 2024 Proxy Statement |
| ||||||
| | 82 |
| Pay vs. Performance | ||||||
| ||||||
| (1) | 2021 Adjusted EBITDA of $1,441M used for purposes of determining the AIP awards only reflects the post-spin period from June to December 2021. |
| 83 | 2024 Proxy Statement |
| Equity Compensation Plan Information | ||||||
| ||||||
The following table summarizes information about Organon’s equity compensation plans as of the close of business on December 31, 2021.2023. The table does not include information about tax qualified plans such as the Organon U.S. Savings Plan.401(k) plan.
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)(#) | Weighted-average exercise price of outstanding options, warrants and rights (b)($) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)(#) | Number of (a)(#) | Weighted-Average (b)($) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c)(#) | ||||||||||||||||||
Equity compensation plans approved by security holders(1) | 7,796,393 | 35.60(2) | 27,169,578 | |||||||||||||||||||||
Equity compensation plans approved by security holders(1) | ||||||||||||||||||||||||
Equity compensation plans approved by security holders(1) | ||||||||||||||||||||||||
Equity compensation plans approved by security holders(1) | 14,391,000 | 32.20 | (2) | 18,505,919 | ||||||||||||||||||||
Equity compensation plans not approved by security holders | ||||||||||||||||||||||||
Equity compensation plans not approved by security holders | ||||||||||||||||||||||||
Equity compensation plans not approved by security holders | ||||||||||||||||||||||||
Equity compensation plans not approved by security holders | — | — | — | — | — | — | ||||||||||||||||||
Total | 7,796,393 | 35.60 | 27,169,578 | |||||||||||||||||||||
Total | ||||||||||||||||||||||||
Total | ||||||||||||||||||||||||
Total | 14,391,000 | 32.20 | 18,505,919 | |||||||||||||||||||||
| (1) | Reflects |
| (2) |
|
| | 84 |
Proposal
| ||||||
| ||||||
The Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of Organon’s independent registered public accounting firm (the “independent auditors”). The Audit Committee has appointed PricewaterhouseCoopers LLP (“PwC”) to serve as our independent auditors with respect to our operations for the year ending December 31, 2022,2024, subject to ratification by shareholders. In taking this action, the Audit Committee considered carefully PwC’s performance in that capacity for Organon since its retention in 2019, its independence with respect to the services to be performed, and its general reputation for adherence to professional auditing standards. The Audit Committee is responsible for the determination of the fees associated with the retention of PwC. The Audit Committee annually evaluates the performance of PwC, including the senior audit engagement team, and determines whether to reengagere-engage the independent auditors.
The Audit Committee and the Board believe that the continued retention of PwC as our independent auditors is in the best interests of Organon and our shareholders. Because the members of the Audit Committee value shareholders’ views on our independent auditors, even though ratification is not legally required, there will be presented at the Annual Meetingannual meeting a proposal for the ratification of the appointment of PwC. If the appointment of PwC is not ratified, the matter of the appointment of independent auditors will be considered by the Audit Committee.
Representatives of PwC will be present during the Annual Meetingannual meeting to make a statement if they desire to do so. They will also be available to answer appropriate questions from shareholders.
Fees for Services Provided by the Independent Registered Public Accounting Firm
The following table presents fees for professional audit and other services rendered by PwC, our independent auditors, for the years ended December 31, 2023 and 2022.
|
| 2023 | 2022 | ||||||
Type of Payment or Benefit | ($ in thousands) | |||||||
Audit Fees(1) | 13,150 | 12,655 | ||||||
Audit-Related Fees(2) | 1,048 | 1,104 | ||||||
Tax Fees(3) | 816 | 611 | ||||||
All Other Fees(4) | 3 | — | ||||||
Total Fees | 15,017 | 14,370 | ||||||
| (1) | Fees for the audit of annual financial statements filed in the reports on Form 10-K, reviews of quarterly financial statements filed in the reports on Form 10-Q, and statutory audits. |
| (2) | Fees for audit-related services primarily related to due diligence for mergers and acquisitions, accounting consultations, attestation services related to financial reporting that are not required by statute or regulation, other audit-related reviews, and agreed-upon procedures. |
| (3) | Fees for tax services reported above included an insignificant amount for tax compliance services. |
| (4) | Consists of fees not included in the Audit, Audit-Related or Tax categories, including fees for miscellaneous permissible products and services as reported above. |
| 85 | 2024 Proxy Statement |
| ||||||
All fees describe above were approved in advance by the Audit Committee specifically or pursuant to pre-approval procedures similar to those outlined below.
Pre-Approval Policy for Services of Independent Registered Public Accounting Firm
As part of its duties, the Audit Committee is required to pre-approve audit and non-audit services performed by the independent auditors to see that the provision of such services does not impair the auditors’ independence. On an annual basis, the Audit Committee will review and provide pre-approval for certain types of non-audit services that may be provided by the independent auditors without obtaining specific pre-approval from the Audit Committee. If a type of service to be provided by the independent auditors has not received pre-approval during this annual process, it will require specific pre-approval by the Audit Committee. The Audit Committee does not delegate to management its responsibilities to pre-approve services performed by the independent auditors.
 | THE BOARD AND THE AUDIT COMMITTEE UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE FOR RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS ORGANON’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, |
| | |
| Proposal | ||||||
| ||||||
The Audit Committee is made up entirely of independent directors. The members of the Audit Committee meet the independence and financial literacy requirements of the NYSE and additional heightened independence criteria applicable to members of the Audit Committee under the SEC and NYSE rules. The Audit Committee has adopted, and annually reviews, a charter outlining the practices it follows. The charter complies with all current regulatory requirements and is available on our website at https://www.organon.com/about-organon/leadership/board-of-directors.corporate-governance/.
During 2021,2023, at each of its regularly scheduled meetings (which include meetings scheduled in conjunction with the regular Board meetings, as well as meetings to review the quarterly and annual financial statements filed with the SEC), the Audit Committee met as a group with senior members of Organon’s financial management, the independent auditors, and internal auditors. In addition, the Audit Committee held separate private sessions as necessary with senior management, the independent auditors, and internal audit.
The Audit Committee has reviewed and discussed the annual audited financial statements with management. The Audit Committee also has received from the independent auditors the written disclosures and a letter required by the applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”) regarding the independent auditors’ communications with the Audit Committee concerning independence and has discussed with the independent auditors their independence. Both the independent auditors and the internal auditors had full access to the Audit Committee.
The Audit Committee met with the independent auditors to discuss their fees, as well as the scope and results of their audit work, including the adequacy of internal controls and the quality of financial reporting. The Audit Committee also discussed with the independent auditors their judgments regarding the quality and acceptability of Organon’s accounting principles, the clarity of its disclosures, as well as other matters that are required to be discussed by applicable regulatory standards.the PCAOB and SEC. Based on the review and discussion referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in Organon’s 2021 Annual Report on Form 10-K filing filed with the SEC. Additional information about the Audit Committee and its responsibilities may be found on page 12 of this proxy statement.
Audit Committee
Shalini Sharp (Chair)
Alan Ezekowitz
Deborah Leone
Cynthia M. Patton
Pre-Approval Policy for Services of Independent Registered Public Accounting Firm
AsThe foregoing Audit Committee Report does not constitute soliciting material and shall not be deemed filed, incorporated by reference into or a part of its duties,any other filing by Organon (including any future filings) under the Securities Act or the Exchange Act, except to the extent Organon specifically incorporates such report by reference therein.
Additional information about the Audit Committee is required to pre-approve audit and non-audit services performed by the independent auditors to see that the provision of such services does not impair the auditors’ independence. On an annual basis, the Audit Committee will review and provide pre-approval for certain types of non-audit services thatits responsibilities may be provided by the independent auditors without obtaining specific pre-approval from the Audit Committee. If a typefound on page 14 of service to be provided by the independent auditors has not received pre-approval during this annual process, it will require specific pre-approval by the Audit Committee. The Audit Committee does not delegate to management its responsibilities to pre-approve services performed by the independent auditors.proxy statement.
| 87 | 2024 Proxy Statement |
| ||||||
Fees for Services Provided by the Independent Registered Public Accounting Firm
The following table presents fees for professional audit and other services rendered by PwC, our independent auditors, for 2021. We did not pay any fees for professional services to PwC in 2020. Prior to the spinoff, Merck paid any audit, audit-related, tax, or other fees related to Organon businesses.
| |||||
| |||||
| |||||
| |||||
| |||||
| |||||
|
|
|
|
All PwC services for 2021 were approved in advance by the Audit Committee specifically or pursuant to pre-approval procedures similar to those outlined above.
|
Questions and Answers About the Annual Meeting and Voting | ||||||
| ||||||
Organon & Co. | ||
Date and Time: | Tuesday, June | |
Location: | Via webcast at www.virtualshareholdermeeting.com/ | |
Record Date: | April 8, | |
We hope you will fully participate as a shareholder and exercise your right to vote. It is very important that you vote to play a part in Organon’s future. You do not need to attend the Annual Meeting webcast to vote your shares.
Please cast your vote right away on all of the following proposals to ensure that your shares are represented:
|
| Information | Recommendation | Votes Required for Approval | Effect of Abstentions | Effect of Broker Non-Votes (if any) | |||||||||
Proposal 1 | Election of Class III Directors Named Herein | Page | FOR each Nominee | Majority of votes cast | Do not count (no effect) | Do not count (no effect) | ||||||||
Proposal 2 | Page | FOR | Majority of the shares present and entitled to vote | Count as vote “against” | Do not count (no effect) | |||||||||
Proposal 3 | Page | Majority of the shares present and entitled to vote | Count as vote “against” | Not expected (no effect) | ||||||||||
| ||||||||||||||
Why did I receive this proxy statement?
The Board is soliciting your proxy to vote at the Annual Meeting because you were a shareholder of Organon at the close of business on April 8, 2022,2024, the record date, and are entitled to vote at the Annual Meeting.
This proxy statement and 2021the Annual Report, on Form 10-K (collectively, the “Proxy Materials”), along with either a proxy card, a voting instruction form, or a Notice of Internet Availability of Proxy Materials, as applicable (collectively, the “Proxy Materials”), are being distributed to shareholders beginning on April 28, 2022.25, 2024. The proxy statement summarizes the information you need to know to vote at the Annual Meeting. You do not need to attend the Annual Meeting webcast to vote your shares.
| ||||||
What is the difference between holding shares as a shareholder of record and holding shares as a beneficial owner?
If your shares are registered directly in your name with Organon’s transfer agent, Equiniti Shareowner Services, you are considered the shareholder of record for those shares. The Proxy Materials and proxy card have been sent directly to you by Organon.
| | 88 |
| Questions and Answers About the Annual Meeting and Voting | ||||||
| ||||||
If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of those shares. The Proxy Materials have been forwarded to you by your broker, bank, or nominee who is considered, with respect to those shares, the shareholder of record. As the beneficial owner, you have the right to direct your broker, bank, or nominee how to vote your shares by using the voting instruction form that the institution provides to you. You may also vote your shares via telephone or the Internet by following the specific instructions the institution provides to you for that purpose.
For beneficial owners,What happens if I do not give specific voting instructions?
If you are a shareholder of record and you properly submit a signed proxy card or submit your proxy by telephone or the Internet, but do not specify how you want to vote your shares on a particular proposal, then the named proxy holders will vote your shares in accordance with the recommendations of the Board on all matters presented in this proxy statement.
In accordance with applicable stock exchange rules, if you hold your shares through a brokerage account and you fail to provide voting instructions to your broker, is not permitted toyour broker may generally vote your uninstructed shares of our common stock in its discretion on your behalfroutine matters at a shareholder meeting. However, a broker cannot vote shares of our common stock held in street name on non-routine matters unless the broker receives voting instructions from the shareholder. Generally, if a broker exercises this discretion on routine matters at a shareholder meeting, a shareholder’s shares will be voted on the electionroutine matter in the manner directed by the broker but will constitute a “broker non-vote” on all of directors and otherthe non-routine matters to be consideredpresented at the Annual Meeting (except on ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for 2022). If you do not provide voting instructions,shareholder meeting.
Voting your shares will help to ensure that your interests are represented at the meeting. If you hold your shares in street name through a brokerage account and do not be voted on any proposal other than the ratification proposal. This is called a “broker non-vote.” For your vote to be counted, you must communicate yoursubmit voting decisionsinstructions to your broker, bank, or nominee beforeyour broker may be able to exercise its discretion to vote your shares on some but not all matters, and it will result in a broker non-vote for the datematters on which the broker cannot and does not vote. Broker non-votes will be considered present for quorum purposes. Effect of broker non-votes on the Annual MeetingProposals is summarized in the chart above.
What constitutes a quorum?
As of the record date, 253,637,179April 8, 2024, 257,172,661 shares of Organon common stock were issued and outstanding. Each share of common stock is entitled to one vote per share. A majority of the outstanding shares present at the Annual Meeting or represented by proxy constitutes a quorum for the transaction of business at the Annual Meeting. If you submit a properly executed proxy, then you will be considered part of the quorum.
How do I attend the Annual Meeting?
To increase shareholder accessibility, be fiscally and environmentally responsible, and support the health and well-being of our employees and shareholders, due to the public health impact of the COVID-19 pandemic, the Annual Meeting will be conducted exclusively online without an option for physical attendance.
All shareholders as of the record date, April 8, 2022,2024, may attend the Annual Meeting via webcast, vote their shares, and ask questions through an online meeting platform. To participate in the Annual Meeting, you should visit www.virtualshareholdermeeting.com/OGN2022OGN2024 and enter the 16-digit control number included on your proxy card, voting instruction form (if voting instruction form includes the control number), or Notice of Internet Availability of Proxy Materials. Otherwise, shareholders who hold their shares in street name should contact their bank, broker, or other nominee (preferably at least 5 days before the Annual Meeting) and obtain a “legal proxy” in order to be able to attend, participate in, or vote at the Annual Meeting. Access to the meeting platform will begin at 8:45 a.m. (Eastern Daylight Time).
The questionGuests may also access the Annual Meeting but may do so solely in listen-only mode. No control number is required for guests.
| 89 | 2024 Proxy Statement |
| ||||||
Why is the Annual Meeting a virtual, online meeting?
We are pleased to host the meeting using a virtual format, which we believe will facilitate shareholder attendance and answer session will includeparticipation at our Annual Meeting by enabling shareholders to safely and fully participate from any location around the world, without the cost of travel. We designed the virtual Annual Meeting to provide the same rights and opportunities to participate as shareholders have at an in-person meeting, including the right to vote and ask questions through the virtual meeting platform. For example, we have allotted time on the agenda to respond to questions submitted in advance of, andto shareholders. For additional information, see “How do I ask questions submitted live during,or participate in the Annual Meeting. Meeting?” below.
How do I ask questions or participate in the Annual Meeting?
You will have multiple opportunities to submit questions for the Annual Meeting:
| • | Shareholders may submit appropriate questions in advance of the meeting by visiting www.proxyvote.com, entering their 16-digit control number, and selecting the “Submit a Question” option. We encourage you to submit questions in advance of the meeting to help facilitate thoughtful responses from management and the Board. |
| • | Shareholders may submit appropriate questions in real-time during the meeting by entering a question in the “Enter a Question” field and clicking the “Submit” on the Ask a Question section of the website www.virtualshareholdermeeting.com/OGN2024. |
We will endeavor to answer as many questions submitted by shareholders as time permits. We reserve the right to edit profanity or other inappropriate language and to exclude questions regarding topics that are not pertinent to meeting matters or company business. If we receive substantially similarrelated questions, we may group themsuch questions together and provide a single response to avoid repetition. Guests
If we are unable to respond during the meeting, we may also accessrespond directly to a particular shareholder using the contact information provided. Questions regarding topics that are not pertinent to meeting matters or company business will not be answered.
Whether or not you plan to attend the Annual Meeting, butwe urge you to vote and submit your proxy in advance by one of the advance voting methods described in “How do I vote?” below.
Guests without a 16-digit control number may do so solelyattend the meeting in listen-only mode. No control number is required for guests.
Asking questions:
Youmode but will not have multiple opportunitiesthe option to submitvote their shares, ask questions foror otherwise participate in the Annual Meeting.
To submit a question before the Annual Meeting, visit www.proxyvote.com with your 16-digit control number and select the “Submit a Question” option.
You can also submit a question via the online platform live during the Annual Meeting.
|
| ||||||
|
If you encounter any technical difficulties with the meeting platform on the date of the Annual Meeting, technical support will be available during this time and will remain available until the virtual Annual Meeting has ended. See “How do I access technical support at the Annual Meeting?” below.
How do I vote?
If you are a shareholder of record, you may vote using any of the following methods:
| • | Proxy card. If you received paper copies of the Proxy Materials, complete, sign, and date the card and return it in the prepaid envelope. |
Proxy card. If you received paper copies of the Proxy Materials, complete, sign, and date the card and return it in the prepaid envelope.
| • | Via the Internet. You may vote online at www.proxyvote.com. You will need the 16-digit control number on the proxy card or the Notice of Internet Availability of Proxy Materials. The Internet voting will close at 11:59 p.m. Eastern Daylight Time on June 3, 2024. |
| • | By telephone. You may vote by calling 1-800-690-6903 (toll free). The telephone voting facilities will close at 11:59 p.m. Eastern Daylight Time on June 3, 2024. |
| • | By QR code. You may vote by scanning the QR code in the Notice of Annual Meeting with your mobile device (may require free app). |
| • | During the Annual Meeting. All shareholders may vote during the Annual Meeting. Please see “How do I attend the Annual Meeting?” on page 89. |
Via the Internet. You may vote online at www.proxyvote.com. You will need the 16-digit control number on the proxy card or the Notice of Internet Availability of Proxy Materials. The Internet voting will close at 11:59 p.m. Eastern Daylight Time on June 6, 2022.
| | 90 |
By telephone. You may vote by calling 1-800-690-6903 (toll free). The telephone voting facilities will close at 11:59 p.m. Eastern Daylight Time on June 6, 2022.
By QR code. You may vote by scanning the QR code in the Notice of Annual Meeting with your mobile device (may require free app).
| Questions and Answers About the Annual Meeting and Voting | ||||||
| ||||||
During the Annual Meeting. All shareholders may vote during the Annual Meeting. Please see “How do I attend the Annual Meeting?” on page 74.
If you are a beneficial owner of shares, you may vote by following the voting instructions provided by your broker, bank, or nominee. You may also vote during the Annual Meeting.
How do I access technical support at the Annual Meeting?
Online access to the virtual meeting webcast will be open prior to the start of the Annual Meeting to allow you to log in. The virtual meeting platform is fully supported across browsers (MS Edge, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most up-to-date version of applicable software and plug-ins. Internet Explorer is not a supported browser. Participants should ensure that they have a strong Wi-Fi connection wherever they intend to participate in the meeting.
Beginning 15 minutes prior to the start of and during the virtual annual meeting, we will have a support team ready to assist shareholders with any technical difficulties they may have accessing or hearing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual shareholder meeting log-in page.
What can I do if I change my mind after I vote my shares?
If you are a shareholder of record, you may revoke your proxy at any time before it is voted at the Annual Meeting by:
sending written notice of revocation to the Corporate Secretary of Organon at the company’s headquarters located at 30 Hudson Street, Floor 33, Jersey City, New Jersey 07302;
| • | sending written notice of revocation to the Corporate Secretary of Organon at the company’s headquarters located at 30 Hudson Street, Floor 33, Jersey City, New Jersey 07302; |
submitting a revised proxy by telephone, Internet, or paper ballot after the date of the revoked proxy; or
| • | submitting a revised proxy by telephone, Internet, or paper ballot after the date of the revoked proxy; or |
attending the Annual Meeting and voting.
| • | attending the Annual Meeting and voting. |
If you are a beneficial owner of shares, you may submit new voting instructions by contacting your broker, bank, or nominee. You may also vote during the Annual Meeting.
Will my votes be confidential?
Yes. Only the personal information necessary to enable proxy execution, such as control number or shareholder signature, is collected on the paper or online proxy cards.
All shareholder proxies and ballots that identify individual shareholders are kept confidential and are not disclosed except as required by law.
Who will count the vote?
Representatives of Broadridge Financial Services, Inc. will tabulate the votes and act as inspectors of election.
| ||||||
What if I return my proxy card but do not provide voting instructions?
If you are a shareholder of record and you return your signed proxy card but do not indicate your voting preferences, the individuals named in the proxy card will vote on your behalf as follows:
| • | FOR the election as directors of each of the five Class III director nominees; |
FOR the election as directors of each of the four Class I director nominees;
| • | FOR the approval of the compensation of our named executive officers (Say-on-Pay); and |
| • | FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2024. |
FOR the approval of the compensation of our Named Executive Officers (Say-on-Pay);
| 91 | 2024 Proxy Statement |
for ONE YEAR as the frequency of future Say-on-Pay votes; and
| ||||||
FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2022.
How do I vote my shares if I participate in one of the Merck plans that holds Organon stock?
If you hold shares in an account under the MSD Employee Stock Purchase and Savings Plan, the Merck US Savings Plan or the MSD Puerto Rico Savings & Security Plan (each a “Plan,” and collectively, the “Plans”), a Notice of Internet Availability of Proxy Materials or the Proxy Materials including a proxy card was or were sent to you. You may direct the trustee of the Plan on how to vote your Plan shares by directing the voting of your Plan shares by Internet, telephone or mail pursuant to the instructions included on the Notice of Internet Availability of Proxy Materials or the proxy card included in the Proxy Materials. Please note that, in order to permit the trustee for the Plans to tally and vote all of the shares held in the Plans, your instructions, whether by Internet, telephone or proxy card, must be completed and received prior to 11:59 p.m., Eastern Daylight Time on June 2, 2022. You may not change your vote related to such Plan shares after this deadline.
What is “householding” and how does it affect me?
Organon has adopted the process called “householding” for mailing the Proxy Materials and Notice of Internet Availability of Proxy Materials in order to reduce printing costs and postage fees. Householding means that shareholders who share the same last name and address will receive only one copy of the Proxy Materials or Notice of Internet Availability of Proxy Materials, as applicable, unless we receive contrary instructions from any shareholder at that address. If you received paper copies of the Proxy Materials, Organon will continue to mail a proxy card to each shareholder of record.
Can I access the Proxy Materials on the Internet instead of receiving paper copies?
The Proxy Materials are available on Organon’s website at www.organon.com/investor-relations/sec-filings. If you are a shareholder of record, you may choose to stop receiving paper copies of Proxy Materials in the mail by following the instructions given while you vote by telephone or through the Internet. If you choose to access future Proxy Materials on the Internet, you will receive an email message next year that will provide a link to those documents. Your choice will remain in effect until you advise us otherwise.
If you are a beneficial owner, please refer to the information provided by your broker, bank or nominee for instructions on how to elect to access future Proxy Materials electronically. Most beneficial owners who elect electronic access will receive an email message next year containing the URL for access to the Proxy Materials.
If you prefer to receive multiple copies of the Proxy Materials or Notice of Internet Availability of Proxy Materials, as applicable, at the same address for the Annual Meeting or for future annual meetings, additional copies will be provided promptly upon written or oral request. If you are a shareholder of record, you may contact us by writing to EQ Shareowner Services, P.O. Box 64856, St. Paul, Minnesota 55164-0856 or calling 1-833-914-2115. The request should include your account number. Eligible shareholders of record receiving multiple copies of the Proxy Materials or Notice of Internet Availability of Proxy Materials, as applicable, can request householding by contacting Organon in the same manner.
|
| ||||||
If you are a beneficial owner, you can request additional copies of the Proxy Materials or Notice of Internet Availability of Proxy Materials, as applicable, or you can request householding by notifying your broker, bank or nominee.
Where can I find the results of the Annual Meeting?
We intend to disclose the final voting results on Form 8-K within four business days of the Annual Meeting. The Form 8-K will be available on our website at www.organon.com/investor-relations/sec-filings.
Where can I find the 2021Organon’s Annual Report on Form 10-K?Report?
The 2021Our Annual Report on Form 10-K is available on our website at www.organon.com/investor-relations/sec-filings.
For shareholders receiving a Notice of Internet Availability, such Notice of Internet Availability will contain instructions on how to request a printed copy of our Annual Report. For shareholders receiving a printed copy of this proxy statement, a copy of our Annual Report has also been provided to you.
In addition, we will provide without charge a copy of the 2021our Annual Report on Form 10-K, including financial statements and schedules, upon the written request of any shareholder to the Office of Corporate Secretary, Organon & Co., 30 Hudson Street, Floor 33, Jersey City, New Jersey 07302.
How much did this proxy solicitation cost?
Organon retained Morrow Sodali LLC to assist in the distribution of the Proxy Materials and solicitation of votes for $15,000, plus reasonable out-of-pocket expenses. Employees, officers, and directors of Organon also may solicit proxies by telephone or in-person meetings. We will pay the solicitation costs and reimburse brokerage houses and other custodians, nominees, and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to shareholders.
| | 92 |
| Questions and Answers About the Annual Meeting and Voting | ||||||||
| ||||||||
Who can help answer my questions?
If you have questions, you may write or call Organon’s proxy solicitor:
Morrow Sodali LLC
333 Ludlow Street, 5th Floor, South Tower
Stamford CT 06902
Telephone: 800-662-5200
Email: OGN.info@investor.morrowsodali.com
| 93 | 2024 Proxy Statement |
Shareholder Proposals and Director
| ||||||
| ||||||
Deadline for receipt of shareholder proposals for inclusion in the proxy materials for the 20232025 annual meeting of shareholders
In order to be considered for inclusion in next year’s proxy statement in accordance with SEC Rule 14a-8, shareholder proposals must be submitted in writing to the address shown below and received by the close of business, Eastern Standard Time, on December 29, 2022.26, 2024. If we change the date of the 2025 annual meeting of shareholders by more than 30 days from the anniversary of this year’s meeting, shareholder proposals must be received a reasonable time before we begin to print and mail our proxy materials for the 2025 annual meeting of shareholders. Proposals must comply with the requirements of SEC Rule 14a-8.
Director nominees for inclusion in the proxy materials for the 20232025 annual meeting of shareholders (proxy access)
Our Amended and Restated Bylaws include provisions permitting, subject to certain terms and conditions, shareholders owning at least 3% of the outstanding shares of Organon common stock for at least three consecutive years to use our annual meeting proxy statement to nominate a number of director candidates not to exceed 20% of the number of directors in office, subject to reduction in certain circumstances. Because we will have beenIn order for an independent publicly traded company for less than three years,eligible shareholder or group of shareholders will not be able to nominate directorsdirector nominees for election using these proxy access procedures for the 2023at our 2025 annual meeting of shareholders.shareholders pursuant to the proxy access provision of our Amended and Restated Bylaws, the shareholder must submit notice of such nomination and other required information in writing not earlier than the close of business on November 26, 2024 nor later than the close of business on December 26, 2024. If, however, the 2025 annual meeting is held more than 30 days before or after the anniversary of the 2024 annual meeting, the shareholder must submit any such notice and other required information not earlier than the close of business on the 150th day and not later than the close of business on the 120th day prior to the 2025 annual meeting or 10 days following the date on which the date of the 2025 annual meeting is first publicly announced. The nomination and supporting materials must also comply with the requirements set forth in Article II, Section 2.11 of our Amended and Restated Bylaws.
Shareholder proposals, director nominations, and other business to be brought before the 20232025 annual meeting of shareholders
Any shareholder who wishes to present proposals, director nominations, or other business for consideration directly at the 20232025 annual meeting of shareholders but does not intend to have such proposals or nominations included in Organon’s Proxy Materials must submit the proposal or nomination in writing to the address shown below so that it is received between January 8, 20234, 2025 and February 7, 2023.4, 2025. However, in the event that the date of the 20232025 annual meeting of shareholders is more than 30 days earlier or later than the anniversary date of this year’s annual meeting, such notice must be so received not laterearlier than the close of business on the 150th day prior to such annual meeting and not later than the close of business on the later of the 120th day prior to such annual meeting or the 10th day following the day on which a public announcement of the date of the 20232025 annual meeting of shareholders is first made. Written notice of proposals, director nominations or other business for consideration must contain the information specified in Article II, SectionSections 2.9 and 2.10 of our Amended and Restated Bylaws.Bylaws (which also include information required under Rule 14a-19 under the Exchange Act). Our Amended and Restated Bylaws are available at organon.com/www.organon.com/about-organon/leadership/board-of-directorscorporate-governance/ or upon request to the Office of Corporate Secretary.
In addition, to comply with the universal proxy rules (once effective), shareholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 8, 2023.
This written notice requirement does not apply to shareholder proposals properly submitted for inclusion in our proxy statement in accordance with SEC Rule 14a-8 and shareholder recommendations of director candidates submitted as described under Shareholder Recommendations of Director Candidates on page 19.
ADDRESS TO CONTACT ORGANON
Any notice required to be sent to Organon as described above should be emailed to secretaryoffice@organon.com or mailed to the Office of Corporate Secretary, Organon & Co., 30 Hudson Street, Floor 33, Jersey City, New Jersey |
| | |
| Other Matters |
| ||||||
This proxy statement includes “forward-looking statements” withinThe Board does not intend to bring any other business before the meaningAnnual Meeting, and so far as is known to the Board, no matters are to be brought before the Annual Meeting except as specified in the notice of the safe harbor provisionsmeeting. As to any other business that may properly come before the Annual Meeting or any postponement or adjournment thereof, the proxyholders named in the proxies solicited by the Board will have the authority to vote all proxies received with respect to such matters in their discretion, and it is their intention to vote such proxies in accordance with the recommendation of the U.S. Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about management’s expectations about Organon’s future financial performance and prospects and statements about Organon’s ESG goals. Forward-looking statements may be identified by words such as “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “will” or words of similar meaning. All statements except for statements of historical fact are forward-looking statements. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.Board.
Risks and uncertainties include, but are not limited to, an inability to execute on our business development strategy or realize the benefits of our planned acquisitions; general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of the ongoing COVID-19 pandemic and emergence of variant strains; the impact of pharmaceutical industry regulation and healthcare legislation in the United States and internationally; global trends toward healthcare cost containment; technological advances; new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict its future financial results and performance; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; difficulties developing and sustaining relationships with commercial counterparties; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.Organon & Co.
The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s filings with the SEC, including its 2021 Annual Report on Form 10-K.April 25, 2024
| 95 | 2024 Proxy Statement |
| ||||||
| ||||||
Non-GAAP Financial Measures
This proxy contains “non-GAAP financial measures,” which are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Specifically, the company makes use of the non-GAAP financial measures Adjusted EBITDA, Adjusted Net Income, and Adjusted diluted EPS, which are not recognized terms under GAAP and are presented only as a supplement to the company’s GAAP financial statements. This proxy also provides certain measures that exclude the impact of foreign exchange. We calculate foreign exchange by converting our current-period local currency financial results using the prior period average currency rates and comparing these adjusted amounts to our current-period results. The company believes that these non-GAAP financial measures help to enhance an understanding of the company’s financial performance. However, the presentation of these measures has limitations as an analytical tool and should not be considered in isolation, or as a substitute for the company’s results as reported under GAAP. Because not all companies use identical calculations, the presentations of these non-GAAP measures may not be comparable to other similarly titled measures of other companies.
The company uses non-GAAP financial measures in its operational and financial decision making, and believes that it is useful to exclude certain items in order to focus on what it regards to be a more meaningful representation of the underlying operating performance of the business.
Revenues
| Year Ended December 31, | % Change | % Change Exchange | ||||||||||||||
($ in millions) | 2023 | 2022 | ||||||||||||||
Women’s Health | $ | 1,702 | $ | 1,673 | 2 | % | 3 | % | ||||||||
Biosimilars | 593 | 481 | 23 | % | 24 | % | ||||||||||
Established Brands | 3,847 | 3,874 | (1 | )% | 2 | % | ||||||||||
Other | 121 | 146 | (17 | )% | (19 | )% | ||||||||||
Revenue | $ | 6,263 | $ | 6,174 | 1 | % | 3 | % | ||||||||
Adjusted Revenue for AIP
($ in millions) | Year Ended December 31, 2023 | |||
Revenue | $ | 6,263 | ||
Effect of foreign exchange rates (1) | 40 | |||
Adjusted Revenue for AIP | $ | 6,303 | ||
| (1) | Represents the impact of currency exchange rates versus currency exchange rates budgeted in the annual operating plan. |
| A-1 | 2024 Proxy Statement |
| ||||||
The Board is not awareReconciliation of any other mattersGAAP Income from Continuing Operations Before Income Taxes to come before the meeting. However, if any other matters properly come before the meeting, it is the intentionAdjusted EBITDA
($ in millions) | Year Ended December 31, 2023 | |||
Income from continuing operations before income taxes | $ | 673 | ||
Depreciation | 118 | |||
Amortization | 116 | |||
Interest expense | 527 | |||
EBITDA | $ | 1,434 | ||
Restructuring costs | 62 | |||
One-time costs | 347 | |||
Stock-based compensation | 101 | |||
Adjusted EBITDA | $ | 1,944 | ||
Effect of foreign exchange rates (1) | 48 | |||
Acquired in-process research and development and milestones | 8 | |||
Adjusted EBITDA for AIP | $ | 2,000 | ||
| (1) | Represents the impact of currency exchange rates versus currency exchange rates budgeted in the annual operating plan. |
Reconciliation of the persons named in the enclosed proxyGAAP Income from Continuing Operations Before Income Taxes to vote said proxy in accordance with their judgment in such matters.Non-GAAP Adjusted Net Income
Organon & Co.
($ in millions, except per share amounts) | Year Ended December 31, 2023 | |||
Income from continuing operations before income taxes | $ | 673 | ||
Adjustments: |
|
|
| |
Amortization | 116 | |||
Restructuring costs | 62 | |||
One-time costs | 347 | |||
Stock-based compensation | 101 | |||
Total Adjustments | 626 | |||
Non-GAAP pre-tax income, continuing operations | $ | 1,299 | ||
Taxes on income as reported in accordance with GAAP | (350 | ) | ||
Tax benefit on adjustments | 588 | |||
Non-GAAP adjusted taxes on income | 238 | |||
Non-GAAP adjusted net income, continuing operations | $ | 1,061 | ||
Non-GAAP adjusted net income, continuing operations per diluted share | $ | 4.14 | ||
April 28, 2022
| | |
SCAN TO VIEW MATERIALS & VOTE w ORGANON & CO. VOTE BY INTERNET 30 HUDSON STREET Before The Meeting—Go to www.proxyvote.com or scan the QR Barcode above FLOOR 33 Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote JERSEY CITY, NJ 07302 by 11:59 P.M. Eastern Daylight Time on June 6, 2022.3, 2024. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. Voting instructions to the Trustees of the MSD Employee Stock Purchase and Savings Plan, the Merck US Savings Plan and the MSD Puerto Rico Savings & Security Plan must be received by 11:59 P.M. Eastern Daylight Time on June 2, 2022. During The Meeting—Go to www.virtualshareholdermeeting.com/OGN2022OGN2024 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. Eastern Daylight Time on June 6, 2022.3, 2024. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Proxies submitted by mail must be received prior to the meeting date. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D85188-P70374V35180-P04602 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY ORGANON & CO. The Board of Directors recommends you vote FOR each of the following Class IIII Director Nominees: 1. Election of Directors Nominees: For Against Abstain Nominees: 1a. Robert EssnerKevin Ali ! ! ! 1b. Shelly LazarusMartha E. McGarry ! ! ! 1c. Cynthia M. PattonPhilip Ozuah, M.D., Ph. D. ! ! ! 1d. Grace PumaShalini Sharp ! ! ! The Board of Directors recommends you vote FOR the following proposal:proposals: For Against Abstain 2. Approve, on a non-binding advisory basis, the compensation of Organon’s Named Executive Officers. ! ! ! The Board of Directors recommends you vote 1 YEAR on the following proposal: 1 Year 2 Years 3 Years Abstain 3. Approve, on a non-binding advisory basis, the frequency of future votes to approve the compensation of Organon’s Named Executive Officers. ! ! ! ! The Board of Directors recommends you vote FOR the following proposal: For Against Abstain 4. Ratify the appointment of PricewaterhouseCoopers LLP as Organon’s independent registered public accounting firm for 2022.2024. ! ! ! NOTE: The proxies are authorized to vote in their discretion upon such other business as may properly come before the meeting or any adjournment or postponement thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com D85189-P70374V35181-P04602 ORGANON & CO. Annual Meeting of Shareholders June 7, 20224, 2024 9:00 a.m. (Eastern Daylight Time) This proxy is solicited on behalf of the Board of Directors The undersigned hereby appoints Kevin Ali, Matthew Walsh and Deborah H. TelmanKirke Weaver as Proxies, each with the power to appoint his/her substitute, revoking all proxies previously given, and hereby authorizes them to represent and to vote all of the stock of Organon & Co. that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held via webcast at www.virtualshareholdermeeting.com/OGN2022OGN2024 at 9:00 a.m. Eastern Daylight Time on June 7, 2022,4, 2024, and at any adjournments or postponements thereof, upon the matters set forth on the reverse side, as designated, and upon such other matters as may properly come before the meeting. The shares represented by this proxy will be voted as directed by the shareholder and in accordance with the judgment of the Proxies upon any other matter that may properly come before the meeting and any adjournment or postponement thereof. If no specification is made, the shares will be voted FOR each nominee in Item 1 and FOR Items 2 and 4 and for 1 YEAR on Item 3. Employees/participants holding shares in MSD Employee Stock Purchase and Savings Plan, Merck US Savings Plan and MSD Puerto Rico Savings & Security Plan (the “Plans”): This card constitutes your voting instructions to the Trustee of the Plan. By signing on the reverse side, you are instructing the Trustee to vote the shares of Organon & Co. held in the Plan in which you participate with regard to the matters listed on the reverse side of this proxy card and to act in its discretion upon other matters as may properly come before the Annual Meeting of Shareholders and any adjournments or postponements thereof. Your voting instructions to the Trustee are confidential. If properly executed and timely received, this proxy card will constitute a direction to the Trustee to vote on the matters as directed. In its discretion, the Trustee is authorized to vote upon other business as may properly come before the Annual Meeting of Shareholders. If no choice is made or no timely direction is received, the Trustee will vote the shares in proportion to allocated shares in such Plan for which timely instructions are received, subject to applicable law. Continued and to be signed on reverse side