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We know what we do matters, and that fuels our success. Our more than 100,000 colleagues are inspired to bring their best every day to enable our customers to make the world healthier, cleaner, and safer. | |||||
Date & Time | Location | Record Date | |||||||||||||||||||||
Wednesday, May 18, 2022 1:00 p.m. (Eastern Time) | http://www.virtualshareholdermeeting.com/TMO2022 | March 25, 2022 |
Proposals | Board Recommendation | For Further Details | ||||||||||||
Proposal 1: Elect as directors the 12 nominees named in our proxy statement | FOR each nominee | Page 11 | ||||||||||||
Proposal 2: Vote on an advisory resolution to approve executive compensation | FOR | Page 40 | ||||||||||||
Proposal 3: Ratify the selection of PricewaterhouseCoopers LLP as the Company’s independent auditors for 2022 | FOR | Page 70 | ||||||||||||
Shareholders will also consider any other business properly brought before the meeting. | ||||||||||||||
Via the Internet Visit the website listed on your Notice of Internet Availability, proxy card or voting instruction form | By Telephone Call the telephone number on your proxy card or voting instruction form | By Mail Sign, date and return your proxy card or voting instruction form in the enclosed envelope | ||||||||||||
Please refer to the enclosed proxy materials or the information forwarded by your bank, broker, trustee or other intermediary to see which voting methods are available to you. | ||||||||||||||
2021 performance | |||||||||||
Submitting 2023 proposals | |||||||||||
Date & Time | Location | Record Date | |||||||||||||||||||||
Wednesday, May 18, 2022 1:00 p.m. (Eastern Time) | http://www.virtualshareholdermeeting.com/TMO2022 | March 25, 2022 |
2022 Proxy Statement | 1 |
2 | 2022 Proxy Statement |
In 2021, we delivered another exceptional year. Outstanding operational performance by our global team enabled us to capture the many opportunities in our end markets and further strengthen our industry leadership: •Revenue grew 22% to $39.21 billion •GAAP diluted EPS increased 22% to $19.46 and adjusted EPS* increased 28% to $25.13 •GAAP operating income grew by 29% to $10.03 billion and adjusted operating income* grew by 27% to $12.14 billion •And we generated free cash flow* of $6.81 billion | We also continued to effectively deploy our capital in 2021 to create significant shareholder value by: •Returning capital of $2.4 billion through $2.0 billion of stock buybacks and $395 million of dividends •Committing $2.5 billion in capital expenditures to support near- and long-term growth opportunities across our businesses •Investing $24 billion in strategic acquisitions, including the addition of PPD, Inc., a leading provider of clinical research services for the biopharma industry | |||||||
All of these achievements are designed to make Thermo Fisher Scientific a stronger partner for our customers. And when we help them achieve their goals, society benefits. Here are some recent examples: •For a healthier world, our cell analysis and next-generation sequencing instruments are being used to develop more targeted diagnostics and therapies for better patient outcomes •For a cleaner world, our electron microscopes are being used to develop more energy-efficient automotive batteries •To protect consumers, we’re providing food and beverage companies with instruments and equipment for quality and safety assurance. | ||
2022 Proxy Statement | 3 |
4 | 2022 Proxy Statement |
Deliberate, Assess, and Prepare •Our Board assesses and monitors: –investor sentiment –shareholder voting results –trends in governance, executive compensation, human capital management, regulatory, environmental, social, and other matters •Our Board identifies and prioritizes potential topics for shareholder engagement | Outreach and Engagement •Management regularly meets with shareholders to actively solicit input on a range of issues, and report shareholder views to our Board •Management routinely engages with investors individually, as well as at conferences and other forums | |||||||
Respond •Our Board responds, as appropriate, with enhancements to policy, practices, and disclosure •For more information on governance enhancements informed by shareholder input, please see page 38 | Evaluate •Shareholder input informs our Board’s ongoing process of continually improving governance and other practices •Our Board and management review shareholder input to identify consistent themes, and research and evaluate any identified issues and concerns | |||||||
2022 Proxy Statement | 5 |
Proposal 1 | |||||||||||||||||
Election of directors | |||||||||||||||||
We are asking our shareholders to elect each of the 12 director nominees identified below to serve until the 2023 Annual Meeting of shareholders. | |||||||||||||||||
The Board recommends a vote FOR each director nominee. | See page 11 | ||||||||||||||||
Director Since | Committee Membership | |||||||||||||||||||||||||
Director Nominee | Age | AC | CC | NCGC | SFC | STC | ||||||||||||||||||||
Marc N. Casper Chairman, President and Chief Executive Officer, Thermo Fisher Scientific | 54 | 2009 | ¡ | ¡ | ||||||||||||||||||||||
Nelson J. Chai Independent Chief Financial Officer, Uber Technologies Inc. | 56 | 2010 | l | ¡ | ||||||||||||||||||||||
Ruby R. Chandy Independent Former President, Pall Industrial, Pall Corporation | 60 | 2022 | ¡ | |||||||||||||||||||||||
C. Martin Harris Independent Associate Vice President of the Health Enterprise, Chief Business Officer, and Professor, Department of Internal Medicine, Dell Medical School at the University of Texas at Austin | 65 | 2012 | ¡ | ¡ | ||||||||||||||||||||||
Tyler Jacks President of Break Through Cancer and David H. Koch Professor of Biology at the Massachusetts Institute of Technology | 61 | 2009 | ¡ | l | ||||||||||||||||||||||
R. Alexandra Keith Independent (1) Chief Executive Officer, P&G Beauty and Executive Sponsor, Corporate Sustainability | 54 | 2020 | ¡ | |||||||||||||||||||||||
Jim P. Manzi Independent Chairman, Stonegate Capital | 70 | 2000 | ¡ | |||||||||||||||||||||||
James C. Mullen Chairman, President and Chief Executive Officer of Editas Medicine, Inc. | 63 | 2018 | ¡ | |||||||||||||||||||||||
Lars R. Sørensen Independent Former President and Chief Executive Officer, Novo Nordisk A/S | 67 | 2016 | l | ¡ | ||||||||||||||||||||||
Debora L. Spar Independent (2) Professor and Senior Associate Dean, Business and Global Society, Harvard Business School | 58 | 2019 | ¡ | ¡ | ||||||||||||||||||||||
Scott M. Sperling Independent (2) (3) Co-CEO, Thomas H. Lee Partners, LP | 64 | 2006 | ¡ | |||||||||||||||||||||||
Dion J. Weisler Independent Former President and Chief Executive Officer, HP Inc. | 54 | 2017 | ¡ | l |
AC Audit CC Compensation NCGC Nominating and Corporate Governance | ||||||||||||||
SFC Strategy and Finance STC Science and Technology | l | Chair | ¡ | Member | ||||||||||
(1) Ms. Keith will join the Compensation Committee, effective immediately following the 2022 Annual Meeting. (2) Mr. Sperling will continue to serve as Chair of the Strategy and Finance Committee until the 2022 Annual Meeting. Dr. Spar will become the Strategy and Finance Committee Chair, effective immediately following the 2022 Annual Meeting. (3) Mr. Lynch will continue to serve as Lead Director until the 2022 Annual Meeting. Mr. Sperling will become Lead Director, effective immediately following the 2022 Annual Meeting. |
6 | 2022 Proxy Statement |
2022 Proxy Statement | 7 |
Proposal 2 | |||||||||||||||||
Approval of an advisory vote on executive compensation | |||||||||||||||||
We are asking our shareholders to cast a non-binding, advisory vote on the compensation of the executive officers named in the Summary Compensation Table. In evaluating this year’s “say on pay” proposal, we recommend that you review our Compensation Discussion and Analysis, which explains how and why the Compensation Committee of our Board arrived at its executive compensation actions and decisions for 2021. | |||||||||||||||||
The Board recommends a vote FOR this proposal. | See page 40 | ||||||||||||||||
8 | 2022 Proxy Statement |
What We Do | What We Don’t Do | |||||||
ü Benchmark compensation levels against appropriate companies in related industries, of a similar size and business complexity ü Reference the market median when reviewing compensation for our Named Executive Officers ü Clawback policy for the recoupment of compensation in certain situations ü Regular shareholder engagement related to compensation ü Maximums for our performance-based incentive plans ü Robust stock ownership requirements ü Two year holding requirement on 50% of net stock vesting under the CEO’s time- and performance-based restricted stock units ü Engage an independent compensation consultant ü Deliver the majority of compensation in the form of at-risk, variable pay ü Align pay with performance and Company strategy ü Double-trigger change in control provisions | û No tax gross ups û No plans that encourage excessive risk û No guaranteed pay increases û No guaranteed bonuses or equity awards û No dividends paid on equity awards prior to vesting û No hedging or pledging of Company stock û No excessive perquisites û No pension or SERPs (with the exception of legacy accumulated benefits from acquired companies) | |||||||
2022 Proxy Statement | 9 |
Proposal 3 | |||||||||||||||||
Ratification of the selection of the independent auditors | |||||||||||||||||
We are asking our shareholders to ratify our Audit Committee’s selection of PricewaterhouseCoopers LLP (“PwC”) to act as the independent auditors for Thermo Fisher for 2022. Although our shareholders are not required to approve the selection of PwC, our Board believes that it is advisable to give our shareholders an opportunity to ratify this selection. | |||||||||||||||||
The Board recommends a vote FOR this proposal. | See page 70 | ||||||||||||||||
10 | 2022 Proxy Statement |
Proposal 1 | |||||||||||
Election of directors | |||||||||||
We are asking our shareholders to elect each of the 12 director nominees identified below to serve until the 2023 Annual Meeting of shareholders. | |||||||||||
The Board recommends a vote FOR each director nominee. | |||||||||||
2022 Proxy Statement | 11 |
12 | 2022 Proxy Statement |
Casper | Chai | Chandy | Harris | Jacks | Keith | Manzi | Mullen | Sørensen | Spar | Sperling | Weisler | |||||||||||||||||||||||||||||||||
Strategic Leadership Experience driving strategic direction and growth of an organization | l | l | l | l | l | l | l | l | l | l | l | l | ||||||||||||||||||||||||||||||||
CEO Leadership Experience serving as the Chief Executive Officer of a major organization | l | l | l | l | l | l | l | l | l | |||||||||||||||||||||||||||||||||||
Industry Background Knowledge of or experience in the Company’s specific industry | l | l | l | l | l | l | l | l | ||||||||||||||||||||||||||||||||||||
Public Company Board Service Experience as a board member of another publicly-traded company | l | l | l | l | l | l | l | l | l | l | ||||||||||||||||||||||||||||||||||
Financial Acumen and Expertise Experience or expertise in financial accounting and reporting or the financial management of a major organization | l | l | l | l | l | l | l | l | l | |||||||||||||||||||||||||||||||||||
International Experience Experience doing business internationally | l | l | l | l | l | l | l | l | l | l | l | |||||||||||||||||||||||||||||||||
Senior Management Leadership Experience serving in a senior leadership role of a major organization (e.g., Chief Financial Officer, General Counsel, President, or Division Head) | l | l | l | l | l | l | l | l | l | l | l | |||||||||||||||||||||||||||||||||
Corporate Finance and M&A Experience Experience in corporate lending or borrowing, capital market transactions, significant mergers or acquisitions, private equity, or investment banking | l | l | l | l | l | l | l | l | l |
2022 Proxy Statement | 13 |
Professional Highlights •Thermo Fisher Scientific Inc. –Chairman, President and CEO (2020 - Present) –President and CEO (2009 - 2020) –Executive VP and COO (2008 - 2009) –Executive VP (2006 - 2008) Other current directorships: None Previously held directorships: U.S. Bancorp | |||||
Marc N. Casper Chairman, President and CEO Age: 54 Director since: 2009 Committees: Strategy and Finance, Science and Technology | |||||
Director Qualifications As the only member of the Company’s management to serve on the Board, Mr. Casper contributes a deep and valuable understanding of Thermo Fisher history and day-to-day operations. This contribution is stemmed further from Mr. Casper’s 20-plus years in the life sciences and healthcare equipment industry, and his long-standing employment with the Company. Additionally, Mr. Casper’s experience as the Chief Executive Officer of the Company, and previously serving in various senior level management roles, enables him to provide strategic leadership skills and financial acumen and expertise that are invaluable to the Board. | |||||
Professional Highlights •CFO, Uber Technologies Inc. (2018 - Present) •President and CEO, The Warranty Group (2017 - 2018) •President, CIT Group (2011 - 2015) Other current directorships: None | |||||
Nelson J. Chai Independent Age: 56 Director since: 2010 Committees: Audit (Chair), Nominating and Corporate Governance | |||||
Director Qualifications Mr. Chai’s broad background and experience makes him a suitable and valued member of our Board. Mr. Chai has held executive management positions in a variety of industries and organizations, including his current role as Chief Financial Officer of Uber Technologies Inc., a ridesharing company, and prior roles as President and CEO of The Warranty Group, a provider of specialty insurance products, and President of CIT Group, a financial institution. As a result of his vast background, Mr. Chai brings valuable CEO and strategic leadership, financial acumen and expertise, and accounting experience to our Board. | |||||
14 | 2022 Proxy Statement |
Professional Highlights •President, Pall Industrial, Pall Corporation (2012 - 2015) Other current directorships: DuPont de Nemours Inc. and Flowserve Corporation Previously held directorships: Ametek, Inc. | |||||
Ruby R. Chandy Independent Age: 60 Director since: 2022 Committees: Audit | |||||
Director Qualifications Ms. Chandy’s broad background and experience makes her a valuable member of the Board. She is a proven executive with experience in global life sciences and multi-industrial companies, including her role as President of the Industrial Division of Pall Corporation, a leading supplier of filtration, separation, and purification technologies. She brings experience in executive management, marketing, strategy, international growth, innovation, and mergers and acquisitions. Ms. Chandy brings valuable board-level experience from her many years serving on public company boards, including her service on various committees, such as the Audit, Compensation, Corporate Governance/Nominating, Finance and Risk, and Environment, Health, Safety and Sustainability Committees. | |||||
Professional Highlights •University of Texas Austin, Dell Medical School (2016 - Present) –Associate Vice President of the Health Enterprise –Chief Business Officer –Professor, Department of Internal Medicine •Cleveland Clinic Hospital –Chief Strategy Officer, The Cleveland Clinic Foundation (2009 - 2016) –Chief Information Officer and Chairman, Information Technology Division (1996 - 2016) –Staff Physician, Foundation Department of General Internal Medicine (1996 -2016) Other current directorships: Invacare Corporation, Colgate-Palmolive Company and MultiPlan Corporation Previously held directorships: HealthStream Inc. | |||||
C. Martin Harris Independent Age: 65 Director since: 2012 Committees: Nominating and Corporate Governance, Science and Technology | |||||
Director Qualifications Dr. Harris provides valuable insight and perspective on the healthcare industry stemming from his current role as Chief Business Officer of Dell Medical School of the University of Texas, Austin, and his previous long-standing career as a physician and Chief Information Officer of Cleveland Clinic Hospital, and Chief Strategy Officer of the Cleveland Clinic Foundation. Dr. Harris has been a strategic leader in healthcare organizations, and also brings valuable board-level experience from his many years served on public company boards in the healthcare industry, including his service on various committees, including the Audit, Nominating and Corporate Governance, and Compensation Committees. | |||||
2022 Proxy Statement | 15 |
Professional Highlights •President, Break Through Cancer (2021 - Present) •Massachusetts Institute of Technology, Koch Institute –Professor, Department of Biology and Center for Cancer Research (1992 - Present) –Founding Director, Integrative Cancer Research (2001 - 2021) •Investigator, Howard Hughes Medical Institute (1994 - 2021) Other current directorships: Amgen, Inc. | |||||
Tyler Jacks Age: 61 Director since: 2009 Committees: Strategy and Finance, Science and Technology (Chair) | |||||
Director Qualifications Dr. Jacks brings to the Board the benefits of his significant experience of many years in the cancer research industry. He currently serves as President of Break Through Cancer, an organization focusing on collaborative approaches to cancer research, and has worked for over 29 years at Massachusetts Institute of Technology as a professor in the Department of Biology, and formerly as Founding Director of the Koch Institute, a cancer research center. Dr. Jacks brings valuable board-level and industry specific experience from his years serving on public company boards in the biotechnology industry and as a member of multiple scientific advisory boards of biotechnology companies, pharmaceutical companies and academic institutions, including his service on various committees, such as the Audit, Compensation and Management Development, Corporate Responsibility and Compliance, and Nominating and Corporate Governance Committees. | |||||
Professional Highlights •Procter & Gamble Company –Chief Executive Officer, P&G Beauty (2019 - Present), and Executive Sponsor, Corporate Sustainability (2021 - Present) –President, Global Hair Care and Beauty Sector (2017 - 2019) –President, Global Skin and Personal Care (2014 - 2017) Other current directorships: None | |||||
R. Alexandra Keith Independent Age: 54 Director since: 2020 Committees: Nominating and Corporate Governance(1) | |||||
Director Qualifications Ms. Keith’s 30-plus years at Procter & Gamble, a global consumer products company, enables her to bring a unique perspective to the Company’s board of directors, including valuable executive management and strategic leadership skills, financial expertise, and international experience. | |||||
Professional Highlights •Chairman, Stonegate Capital (1995 - Present) •Chairman, President and CEO, Lotus Development Corporation (1984 - 1995) Other current directorships: None | |||||
Jim P. Manzi Independent Age: 70 Director since: 2000 Committees: Compensation | |||||
Director Qualifications Mr. Manzi brings to the Board valuable strategic leadership skills, operational management expertise and overall business acumen, as a result of his senior-level management experience leading Lotus Development Corporation, as Chief Executive Officer, prior to its acquisition, and his current role as Chairman of Stonegate Capital, a private equity firm. Mr. Manzi also brings valuable knowledge of the Company due to his 20-plus years as a member of our Board, which we believe provides our Board with specific expertise and insight into our business. | |||||
16 | 2022 Proxy Statement |
Professional Highlights •Chairman, President and Chief Executive Officer, Editas Medicine, Inc. (2021 - Present) •Chief Executive Officer, Patheon N.V. (2011 - 2017) •Chief Executive Officer, Biogen Inc. (2000 - 2010) Other current directorships: Editas Medicine, Inc. Previously held directorships: Insulet Inc. and Patheon N.V. | |||||
James C. Mullen Age: 63 Director since: 2018 Committees: Strategy and Finance | |||||
Director Qualifications Mr. Mullen brings valuable industry knowledge to the Board, due to his 35 years of extensive management experience and his senior leadership background in the pharmaceutical and biotechnology industries. Mr. Mullen currently serves as Chairman, President and Chief Executive Officer of Editas Medicine, a clinical-stage biotechnology company and previously served as Chief Executive Officer of Patheon N.V., a contract development and manufacturing organization which was acquired by the Company in 2017, and as Chief Executive Officer of Biogen Inc. We believe this experience provides our Board with specific expertise and insight into our business. Mr. Mullen also brings valuable board-level experience from his service on the boards of public companies in the pharmaceutical industry, including his service on various committees, such as the Compensation and Nominating and Corporate Governance Committees. | |||||
Professional Highlights •President and CEO, Novo Nordisk A/S (2000 - 2016) Other current directorships: Essity Aktiebolag Previously held directorships: Carlsberg AS | |||||
Lars R. Sørensen Independent Age: 67 Director since: 2016 Previously served as a director: 2011 - 2015 Committees: Nominating and Corporate Governance (Chair), Strategy and Finance | |||||
Director Qualifications Mr. Sørensen brings to the Board valuable strategic leadership skills, financial expertise, industry background, and international experience as a result of his long-standing tenure as Chief Executive Officer at Novo Nordisk A/S, a global healthcare company. Mr. Sørensen also brings valuable board-level experience from his years of serving on public company boards in the life sciences industry, including his service on various committees, such as the Audit, Nominating, and Remuneration Committees. | |||||
2022 Proxy Statement | 17 |
Professional Highlights •Harvard Business School –Professor, Harvard Business School (2018 - Present) and Senior Associate Dean, Business and Global Society (2021 - Present) –Senior Associate Dean, Harvard Business School Online (2019 - 2021) •President and CEO, Lincoln Center for the Performing Arts (2017 - 2018) •President, Barnard College (2008 - 2017) Other current directorships: None Previously held directorships: Goldman Sachs and Northern Star Acquisition Corp. | |||||
Debora L. Spar Independent Age: 58 Director since: 2019 Committees: Audit, Strategy and Finance(2) | |||||
Director Qualifications Dr. Spar brings to the Board valuable executive management and strategic leadership skills, financial expertise, and a unique perspective on technology’s role in shaping society and the global economy. Dr. Spar also brings valuable experience serving on public company boards, including her service on various committees, such as the Audit, Compensation, Nominating and Corporate Governance, and Strategy Committees. | |||||
Professional Highlights •Co-Chief Executive Officer, Thomas H. Lee Partners, LP (1994 - Present) Other current directorships: Agiliti, Inc. Previously held directorships: iHeart Media, Inc. and The Madison Square Garden Company | |||||
Scott M. Sperling Independent(3) Age: 64 Director since: 2006 Committees: Compensation, Strategy and Finance (Chair)(2) | |||||
Director Qualifications Mr. Sperling brings to the Board valuable strategic leadership skills, and corporate finance and acquisition experience due to his current role serving as Co-Chief Executive Officer of Thomas H. Lee Partners LP, a private equity firm. Mr. Sperling also brings valuable board-level experience from serving on public company boards, including his service on the Nominating and Corporate Governance Committees. | |||||
Professional Highlights •President and CEO, HP Inc. (2015 - 2019) Other current directorships: BHP and Intel Corporation Previously held directorships: HP Inc. | |||||
Dion J. Weisler Independent Age: 54 Director since: 2017 Committee: Audit, Compensation (Chair) | |||||
Director Qualifications Mr. Weisler brings to the Board valuable strategic and senior management leadership skills, financial expertise, international experience, and M&A experience due to his former role serving as Chief Executive Officer at HP Inc., an information technology company. Mr. Weisler also brings valuable board-level experience from his service on HP Inc.’s board. | |||||
18 | 2022 Proxy Statement |
2022 Proxy Statement | 19 |
20 | 2022 Proxy Statement |
Thermo Fisher Transaction & 2021 Magnitude | ||||||||||||||
Director nominee | Organization | Relationship | Purchases from Thermo Fisher Less than the greater of 2% of the other company’s revenue and $1m | Sales to Thermo Fisher Less than the greater of 2% of the other company’s revenue and $1m | ||||||||||
Chai | Uber Technologies Inc. | Chief Financial Officer | N/A | |||||||||||
Harris | University of Texas | Associate Vice President, Chief Business Officer, and Professor, Department of Internal Medicine | N/A | |||||||||||
Jacks(1) | Massachusetts Institute of Technology | Professor and former Founding Director of David H. Koch Institute of Integrative Research | N/A | |||||||||||
Dragonfly Therapeutics, Inc. | Greater than 10% equity owner | û | N/A | |||||||||||
Keith | Procter & Gamble | Chief Executive Officer, P&G Beauty, and Executive Sponsor, Corporate Sustainability | ||||||||||||
Mullen(2) | Editas Medicine, Inc. | Chairman, President and Chief Executive Officer | û | N/A | ||||||||||
Spar | Harvard University | Professor |
2022 Proxy Statement | 21 |
Key responsibilities of the Board | ||||||||
Oversight of strategy | Oversight of risk | Succession planning | ||||||
•The Board oversees and monitors strategic planning •Business strategy is a key focus at the Board level and embedded in the work of Board committees | •The Board oversees risk management •Board committees, which meet regularly and report back to the full Board, play significant roles in carrying out the risk oversight function •Company management is charged with managing risk, through robust internal processes and effective internal controls | •The Board oversees succession planning and talent development for senior executive positions •The Compensation Committee, which meets regularly and reports back to the Board, has primary responsibility for developing succession plans for the CEO position •The CEO is charged with preparing, and reviewing with the Compensation Committee, talent development plans for senior executives and their potential successors | ||||||
The Board is committed to oversight of the Company’s business strategy and strategic planning, including work embedded in the Board committees, regular Board meetings and a dedicated meeting each year to focus on strategy. | This ongoing effort enables the Board to focus on Company performance over the short, intermediate and long term, as well as the quality of operations. In addition to financial and operational performance, non-financial measures are discussed regularly by the Board and Board committees. | |||||||
22 | 2022 Proxy Statement |
2022 Proxy Statement | 23 |
Audit Committee | |||||
Nelson J. Chai (Chair) Members Ruby R. Chandy Debora L. Spar Dion J. Weisler Meetings in 2021: 11 •All members are independent, financially literate. •Messrs. Chai and Weisler qualify as Audit Committee financial experts. | Principal Responsibilities The Audit Committee is responsible for: •assisting the Board in its oversight of the integrity of the Company’s financial statements; •overseeing the Company’s compliance with legal and regulatory requirements; •assessing the independent auditor’s qualifications and independence; •overseeing the performance of the Company’s internal audit function and independent auditors; •discussing with management the Company’s policies with respect to risk assessment and risk management, including guidelines and policies to govern the process by which the Company’s exposure to risk is handled; •discussing with management the Company’s major financial risk exposures and steps management has taken to monitor and control such exposures; •overseeing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and the confidential, anonymous submission by our colleagues of concerns regarding questionable accounting or auditing matters; and •reviewing cybersecurity and other risks relevant to the Company’s information system controls and security. Certain responsibilities of our Audit Committee and its activities during 2021 are described in the Report of the Audit Committee in this proxy statement under the heading “Audit Committee report.” 2021 Highlights •Received updates on calls received on the Company’s whistleblower hotline •Received updates on cybersecurity •Received updates on emerging markets •Received an update on outstanding litigation and environmental matters and reviewed the appropriateness of related accruals •Received updates on disclosures related to our acquisition of PPD, Inc. | ||||
Cybersecurity oversight The Board recognizes the importance of maintaining the trust and confidence of our customers and colleagues. To more effectively prevent, detect and respond to information security threats, the Company has a dedicated Chief Information Security Officer whose team is responsible for leading enterprise-wide information security strategy, policy, standards, architecture and processes. Both the Audit Committee and the full Board receive regular reports from the Chief Information Security Officer and the Chief Information Officer on, among other things, the Company’s cyber risks and threats, the status of projects to strengthen the Company’s information security systems, assessments of the Company’s security program and the emerging threat landscape. | |||||
24 | 2022 Proxy Statement |
Compensation Committee | |||||
Dion J. Weisler (Chair) Members(1) Thomas J. Lynch(2) Jim P. Manzi Scott M. Sperling Meetings in 2021: 7 •All members are independent. | Principal Responsibilities The Compensation Committee is responsible for: •reviewing and approving compensation matters with respect to the Company’s Chief Executive Officer and its other officers; •reviewing and recommending to the Board management succession plans; •administering equity-based plans; •overseeing the process for conducting annual risk assessments of the Company’s compensation policies, programs, and practices; and •producing an annual report on executive compensation. Certain responsibilities of our Compensation Committee and its activities during 2021 are described in this proxy statement under the heading “Compensation discussion and analysis.” The Compensation Committee also biennially reviews our director compensation, and makes recommendations on this topic to the Board as it deems appropriate, as described under the heading “Compensation of directors.” Role of Consultant The Compensation Committee has sole authority to retain and terminate a compensation consultant to assist in the evaluation of director, CEO or senior executive compensation. In 2021, the Committee in its sole discretion retained Pearl Meyer & Partners, LLC (“Pearl Meyer”) as its independent compensation consultant. Pearl Meyer does not provide any other services to the Company and the Compensation Committee has determined that Pearl Meyer’s work for the Compensation Committee does not raise any conflict of interest. The consultant compiles information regarding the amounts, components and mix (short-term/ long-term; fixed/variable; cash/equity) of the executive and director compensation programs of the Company and its peer group (see page 43 of this proxy statement for further detail regarding the peer group), analyzes the relative performance of the Company and the peer group with respect to the financial metrics used in the programs, and provides advice to the Compensation Committee regarding the Company’s programs. The consultant also provides information regarding emerging trends and best practices in executive compensation and director compensation and input on the Company’s proxy disclosures. The Committee considers this information when making decisions about compensation levels and design. The consultant retained by the Compensation Committee reports to the Compensation Committee Chair and has direct access to Committee members. The consultant periodically meets with members of the Committee either in person or virtually. In addition, the Committee has access to data from other outside firms, such as market surveys and analyses, to stay informed of developments in the design of compensation packages generally and to understand the executive officer compensation programs of companies with whom we compete for executive talent to ensure our compensation program is in line with current marketplace standards. 2021 Highlights •Reviewed compensation programs to ensure the design supports the talent needs of the Company by attracting the talent needed for both today and in the future •Participated in numerous shareholder engagements •Updated peer group to reflect the Company’s latest size and global operating complexity | ||||
2022 Proxy Statement | 25 |
Nominating and Corporate Governance Committee | |||||
Lars R. Sørensen (Chair) Members Nelson J. Chai C. Martin Harris R. Alexandra Keith Meetings in 2021: 5 •All members are independent. | Principal Responsibilities The Nominating and Corporate Governance Committee is responsible for: •identifying persons qualified to serve as members of the Board; •recommending to the Board persons to be nominated by the Board for election as directors at the annual meeting of shareholders; •recommending to the Board the directors to be appointed to each of its committees; •overseeing the Company’s corporate responsibility and sustainability efforts and associated risks; •developing and recommending to the Board a set of corporate governance guidelines; and •overseeing the annual self-evaluation of the Board. 2021 and Early 2022 Highlights •Evaluated potential candidates for future election to the Board and nominated Ruby R. Chandy for election •Recommended changes to Board committee composition and Lead Director role •Reviewed the Company’s corporate social responsibility progress, carbon reduction roadmap and key initiatives in depth during two of its meetings •Oversaw the evaluation process for the Board and its committees, which consisted of an in-depth interview of each director by Mr. Sørensen •Received an update on corporate governance trends and best practices •Recommended an amendment to the bylaws to give shareholders the right to call a special meeting | ||||
Strategy and Finance Committee | |||||
Scott M. Sperling (Chair)(1) Members Marc N. Casper Tyler Jacks James C. Mullen Lars Sørensen Debora L. Spar(1) | Principal Responsibilities The Strategy and Finance Committee is responsible for: •overseeing the development of an annual strategic plan for the Company; •reviewing significant strategic decisions; and •overseeing certain of the Company’s material financial matters, including investments and acquisitions and divestitures that are material to the Company’s business. 2021 Highlights •Approved an increase in the Company’s cash dividend to stockholders •Replenished the share repurchase program •Approved a new revolving credit facility | ||||
26 | 2022 Proxy Statement |
Science and Technology Committee | |||||
Tyler Jacks (Chair) Members Marc N. Casper C. Martin Harris | Principal Responsibilities The Science and Technology Committee is responsible for: •assisting the Board in staying abreast of new technologies, markets and applications for the Company’s products; •overseeing the Company’s Scientific Advisory Board; and •monitoring and evaluating trends in science and recommending to the Board emerging technologies for building the Company’s technological strength. 2021 Highlights •Reviewed the composition of the Scientific Advisory Board •Reviewed topics covered by the Scientific Advisory Board •Received an update on the Company Bioethics Committee and key subject areas covered by it | ||||
Evaluation survey Form is sent by the N&CG Committee Chair to each board member to request feedback on various topics | One-on-one director discussions Individual calls with the N&CG Committee Chair held with each director to obtain candid feedback | Group discussion Discussion of evaluation led by the N&CG Committee Chair and summary of assessment is provided to Board | Feedback communicated and acted upon Feedback is provided to management by the N&CG Committee Chair on areas for improvement and changes are implemented | |||||||||||||||||
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Board composition, performance, and materials | •Board and committee composition and performance, including mix of skills, experience, tenure, and background •Identification of knowledge, background, and skill-sets that would be useful additions to the Board •Board refreshment and succession planning •Board materials and management reporting, including the quality of materials and Board member interactions with management | |||||||
Structure and effectiveness | •Board and committee leadership, responsibilities, and effectiveness •Committee structure and functioning, responsibilities, communication, and reporting from committees to the Board •Effectiveness of meeting structure •Board’s ability to operate and conduct its business successfully and efficiently via virtual meetings | |||||||
Board responsibilities | •Knowledge of the Company •Strategic planning, including the process, format, and materials for the Board’s strategy review sessions •Talent management and succession planning for the CEO and other senior management, including diversity and inclusion •Candor of communications with the CEO | |||||||
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Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation ($)(2) | Total ($) | ||||||||||||||||||||
Nelson J. Chai | $150,000 | $200,144 | — | — | $490 | $350,634 | ||||||||||||||||||||
C. Martin Harris | $125,000 | $200,144 | — | — | $490 | $325,634 | ||||||||||||||||||||
Tyler Jacks | $143,132 | $200,144 | — | — | $490 | $343,766 | ||||||||||||||||||||
R. Alexandra Keith | $125,000 | (3) | $200,144 | — | — | $472 | (4) | $325,616 | ||||||||||||||||||
Judy C. Lewent(5) | $52,308 | $— | — | — | $919 | (6) | $53,227 | |||||||||||||||||||
Thomas J. Lynch | $165,000 | $200,144 | — | — | $15,490 | (7) | $380,634 | |||||||||||||||||||
Jim P. Manzi | $125,000 | $200,144 | — | — | $15,490 | (7) | $340,634 | |||||||||||||||||||
James C. Mullen | $125,000 | $200,144 | — | — | $490 | $325,634 | ||||||||||||||||||||
Lars R. Sørensen | $143,132 | $200,144 | — | — | $490 | $343,766 | ||||||||||||||||||||
Debora L. Spar | $125,000 | $200,144 | — | — | $5,490 | (8) | $330,634 | |||||||||||||||||||
Scott M. Sperling(9) | $137,527 | (10) | $200,144 | — | — | $32,245 | (11) | $369,916 | ||||||||||||||||||
Dion J. Weisler | $146,264 | $200,144 | — | — | $2,340 | (12) | $348,748 |
32 | 2022 Proxy Statement |
At Thermo Fisher, integrity is fundamental to all aspects of our business. We take measures to ensure strong global citizenship practices both internally and across our stakeholder relationships. We are committed to conducting our business ethically and in full compliance with our internal systems and the laws of the countries where we operate. And we do so with rigor around governance and ethics; quality management; environmental, health and safety regulations; and supply chain transparency. | ||||||||
$2 billion spend with diverse and/or small suppliers | ||||||||
2022 Proxy Statement | 33 |
At Thermo Fisher, having highly engaged colleagues is critical to fulfilling our Mission. Our collaborative culture embraces diverse backgrounds to help our colleagues reach their full potential as one global team. We value unique perspectives, empower our colleagues to improve our business and culture, and provide resources to allow our colleagues to reach their full potential. The employee experience is measured through our annual Employee Involvement Survey (“EIS”), which asks colleagues to provide feedback. | |||||
86% participation in EIS | |||||
We continue our efforts to advance racial equity and social justice. In 2021 we made a $25 million impact investment with minority-serving financial institutions that focus on Black communities and businesses. Supporting institutions that provide a bridge to empowering the historically disenfranchised, this investment is part of the Company’s broader commitment to addressing inequalities and strengthening communities through our business practices. | ||||||||
$25 million impact investment to advance racial equity | ||||||||
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As an industry leader, we are committed to helping young people discover science, ensuring a continued interest in science, technology, engineering and mathematics (“STEM”) subjects for future generations. Our signature STEM education programs connect students and colleagues through hands-on and team-based activities that highlight our technologies, foster curiosity in STEM careers and demonstrate how our Company influences the world. To amplify our STEM impact, we continue to invest in and leverage our Foundation for Science, partnering with organizations that enable us to support and engage with groups underrepresented in STEM fields. As the world leader in serving science, one of our greatest opportunities is to help build a life sciences sector that more fully represents our diverse society. | ||||||||
100,000+ STEM students impacted | ||||||||
Our Company is also uniquely positioned to play a role in advancing global health equity. Joining forces with customers and communities, we leverage our capabilities to help remove obstacles to healthcare in line with our Mission and our commitment to serving science and society. With harmonized and equitable pricing, we have supported over 100 low- and middle-income countries and global health partners that otherwise lacked access to affordable diagnostic testing at scale. | ||||||||
100+ low- and middle-income countries supported through our COVID-19 response | ||||||||
107,000+ colleague volunteer hours contributed through engagement with our communities worldwide | |||||||||||
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To better serve our customers and society overall, we continue to work toward reducing our carbon footprint. This includes making our facilities more energy efficient, increasing the use of renewable electricity and reducing waste in our operations. | ||||||||
By 2050, Net-zero emissions across Scopes 1, 2, & 3 | ||||||||
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What We Learned from our Meetings with Shareholders | ||
•Shareholders appreciated being engaged on governance in general and specifically on executive compensation policies and design, corporate governance issues and environmental and social issues. •A strong majority of the institutional shareholders we spoke with expressed support for our executive compensation program and generally commented that they viewed it as aligned with performance and shareholder interests. •Some stakeholders preferred we use a three-year performance metric in our long term incentive program, instead of the one-year performance metric we utilize, and have used in prior years. •Shareholders understand our Mission and the role that our ESG practices play in that. They acknowledged our strong ESG practices. •Shareholders were seeking additional information on our plans to increase diversity on our Board of Directors and on the organization’s diversity and inclusion initiatives overall. •In order to increase transparency, some shareholders encouraged us to begin publishing our EEO-1 report, which includes a breakdown of the racial and gender diversity of our workforce. •Some shareholders requested that we adopt a special meeting right for shareholders. | ||
38 | 2022 Proxy Statement |
Governance and Compensation Enhancements Informed by Shareholder Input | ||
Our Board evaluates and reviews input from our shareholders in considering their independent oversight of management and our long-term strategy. As part of our commitment to constructive engagement with investors, we evaluate and respond to the views voiced by our shareholders. Our dialogue has led to enhancements in our corporate governance, ESG, and executive compensation activities, which our Board believes are in the best interest of the Company and our shareholders. For example, after considering input from shareholders and other stakeholders, we: •Continued to enhance our shareholder engagement efforts to include a greater number of discussions regarding corporate governance, executive compensation and environmental and social issues, by increasing the number and frequency of meetings among management from our investor relations, governance and compensation and corporate social responsibility teams and shareholders to gather feedback on the Company’s ESG efforts. •Elected Ruby R. Chandy to our Board of Directors. •Amended our Bylaws to allow shareholders holding 15% of our outstanding shares of Common Stock with the right to call a special meeting. •Beginning with our 2021 equity grants, included a 3-year performance period in our performance RSU program, in the form of a TSR modifier. •In 2021, following our report submission to the U.S. Equal Employment Opportunity Commission, we disclosed our EEO-1 report on our website to provide additional transparency to our U.S. workforce demographics, and we plan to continue to do so on an annual basis. •In early 2022, updated the mix of long-term incentive awards to increase the percentage of performance-based restricted stock unit awards to focus our executives on the long-term performance of the Company and further align their interests with the interests of shareholders. •In early 2022, we also revised our equity award program so that new stock option awards have a term of 8 years rather than our prior practice of 7 years. | ||
2022 Proxy Statement | 39 |
Proposal 2 | |||||||||||
Approval of an advisory vote on executive compensation | |||||||||||
Your board of directors recommends a vote FOR approving the compensation of our Named Executive Officers. | |||||||||||
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Named Executive Officer | Title | Date of Appointment to Current Role | Tenure | ||||||||
Marc N. Casper | Chairman, President and Chief Executive Officer | October 2009 | 20 years | ||||||||
Stephen Williamson | Senior Vice President and Chief Financial Officer | August 2015 | 20 years | ||||||||
Mark P. Stevenson (1) | Former Executive Vice President and Chief Operating Officer | January 2022 | 30 years | ||||||||
Michel Lagarde (2) | Executive Vice President and Chief Operating Officer | January 2022 | 6 years | ||||||||
Gianluca Pettiti (3) | Executive Vice President | December 2021 | 16 years |
2022 Proxy Statement | 41 |
Q1 •Review of executive bonus pool •Review Company and NEO performance and approve year-end compensation (annual bonus and equity programs) •Approve annual equity incentive program performance metric selection for current year •Approve officer cash compensation (base salary) and target bonus for current year •Proxy statement review •Conduct annual risk assessment on our global compensation programs and policies | Q2 •Review proxy advisory firms’ analyses of current proxy statement •Discuss investor outreach regarding executive compensation •Propose director equity grants for current year | |||||||
Q4 •Committee self-evaluation •Committee charter review •Equity program and pool review •Consider shareholder feedback from outreach discussions | Q3 •Management talent and succession plan review and discussion •Confirmation of compensation peer group •Engagement of independent compensation consultant •Review results of executive competitive assessment •Confirmation of executive compensation philosophy/review of potential changes | |||||||
42 | 2022 Proxy Statement |
2021 Peer Group (Prior to July 2021) | |||||||||||
•3M Company •Abbott Laboratories •AbbVie Inc. •Amgen Inc. •Becton Dickinson and Company | •Biogen Inc. •Bristol-Myers Squibb Company •Cigna Corporation •Danaher Corporation | •Eaton Corporation plc •Eli Lilly and Company •Gilead Sciences Inc. •Honeywell International Inc. | •Medtronic plc •Merck & Co., Inc. •Pfizer, Inc. •Texas Instruments Incorporated | ||||||||
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2022 Peer Group (as of July 2021) | |||||||||||
•3M Company •Abbott Laboratories •AbbVie Inc. •Amgen Inc. •Becton Dickinson and Company | •Bristol-Myers Squibb Company •Cigna Corporation •Cisco Systems, Inc. •Danaher Corporation •Eli Lilly and Company | •Gilead Sciences Inc. •Honeywell International Inc. •Johnson & Johnson •Medtronic plc •Merck & Co., Inc. | •NIKE, Inc. •Pfizer, Inc. •The Procter & Gamble Company •Texas Instruments Incorporated | ||||||||
Base Salary | median | ||||||||||
Target Total Cash(1) | median | ||||||||||
Target Direct Compensation(2) | median | ||||||||||
Target Compensation(3) | median |
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Support long-term view and sustainability of Company | •Equity compensation in the form of stock options and restricted stock units •Stock ownership requirement •Stock holding requirement on 50% of shares delivered upon vesting applied to all CEO time- and performance-based restricted stock units | |||||||
Ability to take action to affect current and recoup prior compensation | •Full Committee discretion to reduce awards and payouts under our annual incentive plan and stock incentive plans to zero for certain conduct detrimental to the Company •Clawback policy | |||||||
Committee Oversight | •Annual risk assessment •Assessment considers program design and payouts |
Measure | Why It Matters | ||||
Financial | |||||
Organic revenue | •Reflects top line financial performance, which is a strong indicator of our long-term ability to drive shareholder value •Allows comparison of financial results to both acquisitive and non-acquisitive peer companies •Prevalent, industry-relevant measure of growth | ||||
Adjusted net income | •Reflects achievement of our strategic goals by encouraging efficient operations and resource allocations, in order to maximize earnings relative to the revenue environment •Ensures all colleagues can contribute to profitability of the Company | ||||
Adjusted earnings per share (“adjusted EPS”) | •Prevalent, industry-relevant measure of delivery of shareholder value •Metric is closely followed by shareholders, analysts and investors | ||||
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Measure | Why It Matters | ||||
Free cash flow | •Reflects quality of earnings and cash flows that may be reinvested in our businesses, used to make acquisitions, or returned to shareholders in the form of dividends and/or share repurchases | ||||
Total Shareholder Return | •Offers clear alignment between the interests of management and shareholders •Summary indicator of long-term performance •Relative (as opposed to absolute) nature of goals accounts for macroeconomic factors impacting the broader market | ||||
Non-Financial | |||||
Customer allegiance | •Strong indicator of our long-term ability to drive shareholder value | ||||
Employer of choice/diversity | •Ensuring the Company remains focused on attracting and retaining high potential colleagues and enhancing workforce diversity is important to ensure our ability to execute our goals | ||||
Positioning for future revenue growth | •Strong indicator of our long-term ability to drive shareholder value by effectively meeting the needs of our customers in all of the end markets that we serve | ||||
Positioning for future margin expansion | •Drives strong future profitability | ||||
Effectively execute capital deployment strategy | •Properly managing the strategic use of capital through acquisitions, dividends, share repurchases and debt repayment is of paramount importance to the Company’s long-term financial health |
Performance Measure | Definition | ||||
Organic revenue | Reported revenue adjusted for the impact of acquisitions and divestitures and for foreign currency changes | ||||
Adjusted net income | Earnings before certain charges/credits to cost of revenues and selling, general and administrative expenses, principally associated with acquisition-related activities; restructuring and other costs/income including costs arising from facility consolidations such as severance and abandoned lease expense and gains and losses from the sale of real estate and product lines; amortization of acquisition-related intangible assets; other gains and losses that are either isolated or cannot be expected to occur again with any predictability; tax provisions/benefits related to the previous items and the impact of significant tax audits or events; and equity in earnings/losses of unconsolidated entities | ||||
Adjusted EPS | Adjusted net income per diluted share | ||||
Free cash flow | Operating cash flow less net capital expenditures |
46 | 2022 Proxy Statement |
Element | Purpose | Key Features | ||||||
Base salary | Provide competitive, fixed compensation to attract and retain the best possible executive talent | •Cash-based •Reviewed annually; changes generally effective March/April •Reference market median for all NEOs •Takes account of level of responsibility, time in role, individual performance and the ability to replace the individual | ||||||
Annual cash incentive bonus | Align executive compensation with our corporate strategies and business objectives; promote the achievement of key strategic and financial performance measures by linking annual cash incentives to the achievement of corporate performance goals | •Cash-based •Reference market median for all NEOs for target total cash (base salary plus target annual incentive) •Maximum opportunity 2-times target* •Based on performance goals tied to organic revenue growth, adjusted net income, free cash flow, and a selection of strategic measures | ||||||
Long-term incentives | Align executive compensation with our corporate strategies and business objectives; motivate the Company’s officers to create sustainable long-term value for our shareholders and achieve other business objectives; encourage stock ownership by the Company’s officers in order to align their financial interests with the long-term interests of our shareholders | •Equity-based •Granted in a combination of –Performance-based restricted stock units; –Time-based restricted stock units; and –Time-based stock options •Reference market median for all NEOs for target direct compensation (target total cash plus the grant date value of long-term incentives) •Based on performance goals tied to organic revenue growth, adjusted EPS, and TSR (performance-based restricted stock units) •Legacy award of performance-based stock options, subject to five-year relative TSR performance over three periods spanning 2017 - 2023 |
n Base Salary | n Bonus | n Equity |
2022 Proxy Statement | 47 |
n Base Salary | n Bonus | n Equity |
Named Executive Officer | 2020 Base Salary | 2021 Base Salary (Effective April 05, 2021) | Increase | ||||||||
Marc N. Casper | $1,550,000 | $1,650,000 | 6.5% | ||||||||
Stephen Williamson | $900,000 | $945,000 | 5.0% | ||||||||
Mark P. Stevenson | $1,090,000 | $1,145,000 | 5.0% | ||||||||
Michel Lagarde(1) | $925,000 | $971,000 | 5.0% | ||||||||
Gianluca Pettiti(2) | $566,500 | $625,000 | 10.3% |
48 | 2022 Proxy Statement |
Financial | •Organic revenue growth (35%) •Adjusted net income (30%) •Free cash flow (5%) | |||||||
Non-financial | Overall goal: Deliver on our commitments to all stakeholders and advance our position as the world leader in serving science •Customer allegiance •Positioning the Company for accelerated revenue growth and margin expansion •Employer of choice and workforce diversity •Capital deployment strategy |
2022 Proxy Statement | 49 |
Financial Performance Score: 193% | |||||
Organic Revenue Growth (35%) | |||||
•Given the economic climate that existed at the time the goals were set due to the potential recessionary and other financial impacts of the pandemic, the threshold level of performance required was 1.6%, below which no payout is earned •For each 1.0% of organic revenue growth above the threshold, the payout increased proportionately by 25 percentage points to 7.6% organic revenue growth •To reflect the additional investment and effort required, for exceptional growth between 7.6% and 8.6%, the payout increased proportionately by 25 percentage points for each 0.5% increase in organic revenue growth up to a maximum opportunity of 200% •Actual organic revenue growth for the year was 16.8%, resulting in an earned factor of 200% for this element | |||||
Adjusted Net Income (30%) * | |||||
•The threshold level of performance required was $7,531 million, below which no payout is earned •For each additional $194 million of adjusted net income above the threshold, the payout increased proportionately by 25 percentage points to adjusted net income of $8,309 million •For each additional $138 million of adjusted net income between $8,309 million and $8,586 million, the payout increased proportionately by 25 percentage points and for each $42 million of adjusted net income above $8,586 million, the payout increased proportionately by 25 percentage points up to a maximum opportunity of 200% •Actual adjusted net income for the year was $9,978 million, resulting in an earned factor of 200% for this element | |||||
Free Cash Flow (5%) * | |||||
•The threshold level of performance required was $6,250 million, below which no payout is earned •For free cash flow between $6,250 million and $7,000 million, a payout of 100% is achieved, with a maximum payout of 200% achieved for free cash flow at or above $7,000 million •Actual free cash flow for the year was $6,809 million, resulting in an earned factor of 100% for this element | |||||
Achievement Earned on Financial Performance Element | ||||||||
Based on the weighted average of the organic revenue, adjusted net income and free cash flow payouts noted above, the Committee concluded an overall achievement of 193% of target was earned for the financial performance element. | ||||||||
50 | 2022 Proxy Statement |
2022 Proxy Statement | 51 |
Achievement Earned on Non-Financial Performance | ||||||||
The Committee determined that as a result of the key achievements noted above, we meaningfully delivered on our commitments to all stakeholders and significantly advanced our position as the world leader in serving science, and therefore concluded an overall achievement of 200% of target was earned for the non-financial performance element. | ||||||||
Overall Achievement | ||||||||
After weighing the earned factors for the financial and non-financial performance described above, the Committee concluded that a calculated payout of 195% was earned. | ||||||||
Performance Measure | Weight | Payout | Weighted Average | ||||||||
Organic Revenue Growth | 35 | % | 200 | % | 70 | % | |||||
Adjusted Net Income | 30 | % | 200 | % | 60 | % | |||||
Free Cash Flow | 5 | % | 100 | % | 5 | % | |||||
Subtotal Financial | 70 | % | 193 | % | 135 | % | |||||
Non-financial | 30 | % | 200 | % | 60 | % | |||||
Total | 100 | % | 195 | % | |||||||
Performance score: 195% |
Named Executive Officer | 2021 Target(1) (% of Base Salary) | 2021 Target Award | 2021 Approved Award | 2021 Payout (% of Target) | ||||||||||
Marc N. Casper | 200 | % | $3,248,495 | $6,334,565 | 195 | % | ||||||||
Stephen Williamson | 110 | % | $1,026,753 | $2,002,168 | 195 | % | ||||||||
Mark P. Stevenson | 115 | % | $1,300,461 | $2,535,900 | 195 | % | ||||||||
Michel Lagarde(2) | 110 | % | $1,055,070 | $2,057,386 | 195 | % | ||||||||
Gianluca Pettiti(3) | 80 | % | $491,372 | $958,176 | 195 | % |
52 | 2022 Proxy Statement |
•Stock options incentivize long-term sustainable value creation •Time-based restricted stock units promote executive retention while aligning executives’ interests with those of our shareholders •Performance-based restricted stock units enable the Committee to reward executives for performance in areas of long-term strategic importance for the Company and our shareholders |
Stock Options | Time-Based Restricted Stock Units | Performance-Based Restricted Stock Units | ||||||
•Four year ratable vesting (one quarter per annum) •Exercise price equal to closing price on date grant approved | •Three-and-a-half year ratable vesting (15%, 25%, 30% and 30% after 6, 18, 30 and 42 months, respectively) •Dividends accrued (in form of dividend equivalents) and paid only on vested awards •CEO awards subject to a two-year holding requirement on 50% of shares delivered upon vesting | •Three-year ratable vesting (one third per annum) •Beginning in 2021, performance measured over one year, subject to a long-term, three-year performance adjustment based on relative TSR •No vesting if minimum performance not met •Dividends accrue (in form of dividend equivalents, only after performance conditions are met) and paid only on vested awards •CEO awards subject to a two-year holding requirement on 50% of shares delivered upon vesting |
Grant Date Accounting Value of 2021 Award | |||||||||||||||||
Named Executive Officer | Target 2021 LTI Award Value | Stock Options | Time-Based Restricted Stock Units | Performance-Based Restricted Stock Units | Total 2021 LTI Award Value | ||||||||||||
Marc N. Casper | $13,201,254 | $4,090,719 | $4,221,052 | $4,239,791 | $12,551,562 | ||||||||||||
Stephen Williamson | $4,000,117 | $1,226,715 | $1,284,668 | $1,290,375 | $3,801,758 | ||||||||||||
Mark P. Stevenson | $5,750,710 | $1,790,003 | $1,835,240 | $1,843,391 | $5,468,634 | ||||||||||||
Michel Lagarde(1) | $5,000,386 | $1,559,681 | $1,594,365 | $1,601,446 | $4,755,492 | ||||||||||||
Gianluca Pettiti(2) | $3,900,525 | $1,172,880 | $1,250,257 | $1,255,811 | $3,678,948 |
2022 Proxy Statement | 53 |
Organic Revenue Growth (50%)(1) | Adjusted Earnings Per Share (50%)(1) | |||||||
Threshold (0% payout on each measure) | Less than 2.6% | Less than $19.43 | ||||||
Baseline (50% payout on each measure) | 5.6 | % | $20.90 | |||||
Maximum (87.5% payout on each measure) | 8.1% and above | $21.70 and above | ||||||
Actual Results | 16.8 | % | $25.13 | |||||
Payout Factor | 175% |
Overall Achievement | ||||||||
Actual organic revenue growth for the year was 16.8% and actual adjusted EPS for the year was $25.13, resulting in a payout of 175%. | ||||||||
3-Year TSR Performance | Adjustment to 2024 Distribution | Impact on Total Earned Shares | ||||||
Top Quartile (75th percentile or greater) | +30% | +10% | ||||||
2nd Quartile (50th - 74th percentile) | +15% | +5% | ||||||
3rd Quartile (25th - 49th percentile) | -15% | -5% | ||||||
Bottom Quartile (24th percentile or below) | -30% | -10% |
54 | 2022 Proxy Statement |
•3M Company •Abbott Laboratories •AbbVie Inc. •Amgen Inc. •AstraZeneca plc •Automatic Data Processing, Inc. •Becton, Dickinson and Company •Biogen Inc. •Boston Scientific Corp. •Bristol-Myers Squibb Company | •Cigna Corporation •Cisco Systems, Inc. •CSX Corporation •Danaher Corporation •Eaton Corporation plc •Eli Lily and Company •Gilead Sciences Inc. •Honeywell International Inc. •Illinois Tool Works Inc. •Johnson & Johnson | •Medtronic, Inc. •Merck & Co., Inc. •Merck KGaA •NIKE, Inc. •Pfizer, Inc. •Stryker Corporation •Texas Instruments Incorporated •The Boeing Company •The PNC Financial Services Group, Inc. •Thermo Fisher Scientific Inc. | ||||||
Achievement To Date | ||
Based on performance to date, 33% of the 2020 TSR award has been earned and will vest in 2024. |
Benefit | Key Features | ||||
401(k) Plan | •Tax qualified retirement savings plan for U.S.-based colleagues •Contributions matched 1:1 up to the first 6% of compensation deferred •2021 cap on matching contributions of 6% of $290,000 •Contributions are fully vested on contribution •Matching contributions for colleagues vest after two years of employment | ||||
Deferred Compensation Plan | •Available to executive officers and certain other highly-compensated colleagues •Participants can defer receipt of up to 50% of annual salary and/or bonus until either employment ceases or a future date prior to termination •Contributions matched 1:1 on the first 6% of pay that is deferred over the 401(k) limit |
2022 Proxy Statement | 55 |
Benefit | Key Features | ||||
Perquisites | •Supplemental long-term disability insurance •Supplemental life insurance •Executive health services •Financial planning services (except for the CEO) •A $3 million term life insurance policy for the CEO •Limited non-business use of the corporate aircraft, up to an annual incremental cost to the Company of $150,000* (treated as taxable income in accordance with the IRS regulations) for the CEO and, in certain situations, to other pre-approved senior officers of the Company •Security services, including home security systems, monitoring and additional personal security services for the CEO •No tax gross-ups are provided on any perquisites | ||||
Severance and change in control benefits | •NEOs are entitled to specified benefits on termination in certain circumstances •‘Double trigger’ change in control agreements •No tax gross-ups |
56 | 2022 Proxy Statement |
By: | Dion J. Weisler (Chair) Thomas J. Lynch Jim P. Manzi Scott M. Sperling |
2022 Proxy Statement | 57 |
Name and Principal Position | Year | Salary ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | Total ($) | ||||||||||||||||||
Marc N. Casper Chairman, President and Chief Executive Officer | 2021 | $1,624,247 | $8,460,843 | $4,090,719 | $6,334,565 | $— | $723,984 | $21,234,358 | ||||||||||||||||||
2020 | $1,550,000 | $8,050,380 | $8,232,516 | $7,750,000 | $— | $807,177 | $26,390,073 | |||||||||||||||||||
2019 | $1,538,631 | $8,788,054 | $3,969,338 | $4,154,303 | $— | $572,819 | $19,023,145 | |||||||||||||||||||
Stephen Williamson Senior Vice President and Chief Financial Officer | 2021 | $933,411 | $2,575,043 | $1,226,715 | $2,002,168 | $— | $214,989 | $6,952,326 | ||||||||||||||||||
2020 | $855,191 | $2,616,374 | $2,879,280 | $2,475,000 | $— | $230,561 | $9,056,406 | |||||||||||||||||||
2019 | $690,723 | $2,362,108 | $1,094,702 | $932,476 | $— | $116,136 | $5,196,145 | |||||||||||||||||||
Mark P. Stevenson Former Executive Vice President and Chief Operating Officer | 2021 | $1,130,836 | $3,678,631 | $1,790,003 | $2,535,900 | $— | $263,986 | $9,399,356 | ||||||||||||||||||
2020 | $1,081,038 | $3,545,264 | $3,499,892 | $3,447,128 | $634,804 | $320,180 | $12,528,306 | |||||||||||||||||||
2019 | $1,041,814 | $3,962,244 | $1,778,542 | $1,547,093 | $889,054 | $190,609 | $9,409,356 | |||||||||||||||||||
Michel Lagarde Executive Vice President and Chief Operating Officer | 2021 | $959,153 | $3,195,811 | $3,541,191 | $2,057,386 | $— | $230,365 | $9,983,906 | ||||||||||||||||||
2020 | $908,197 | $2,740,226 | $3,199,592 | $2,543,750 | $— | $35,486 | $9,427,251 | |||||||||||||||||||
2019 | $782,329 | $2,423,534 | $1,297,706 | $1,375,000 | $— | $127,292 | $6,005,861 | |||||||||||||||||||
Gianluca Pettiti(7) Executive Vice President | 2021 | $611,647 | $2,506,068 | $2,493,936 | $958,176 | $— | $36,057 | $6,605,884 |
58 | 2022 Proxy Statement |
Name | Matching 401(k) Contributions | Long-term Disability Insurance Premiums | Matching Deferred Compensation Plan Contributions | Dividend Equivalents | Financial Planning Services | Term Life Insurance Policy | Personal Security Services | Personal Aircraft Usage | Other | Total All Other Compensation | ||||||||||||||||||||||
Marc N. Casper | $17,400 | $2,513 | $460,059 | $55,262 | $— | $11,875 | $8,443 | $168,432 | $— | $723,984 | ||||||||||||||||||||||
Stephen Williamson | $17,400 | $2,843 | $158,703 | $16,592 | $15,000 | $— | $— | $— | $4,451 | $214,989 | ||||||||||||||||||||||
Mark P. Stevenson | $17,400 | $4,037 | $202,565 | $24,528 | $15,000 | $— | $— | $— | $456 | $263,986 | ||||||||||||||||||||||
Michel Lagarde | $17,400 | $3,001 | $163,560 | $17,347 | $— | $— | $— | $28,601 | $456 | $230,365 | ||||||||||||||||||||||
Gianluca Pettiti | $17,400 | $2,724 | $— | $10,998 | $4,521 | $— | $— | $— | $414 | $36,057 |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units(4) | All Other Option Awards: Number of Securities Underlying Options(5) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(6) | |||||||||||||||||||||||||||||||||
Name | Grant Date(1) | Threshold ($) | Target ($)(2) | Maximum ($) | Threshold(3) | Target(3) | Maximum(3) | |||||||||||||||||||||||||||||||
Marc N. Casper | 2/23/2021 | — | $3,248,495 | $6,496,990 | ||||||||||||||||||||||||||||||||||
2/23/2021 | — | 9,200 | 16,100 | $4,239,791 | ||||||||||||||||||||||||||||||||||
2/23/2021 | 9,200 | $4,221,052 | ||||||||||||||||||||||||||||||||||||
2/23/2021 | 40,850 | $458.81 | $4,090,719 | |||||||||||||||||||||||||||||||||||
Stephen Williamson | 2/23/2021 | — | $1,026,753 | $2,053,506 | ||||||||||||||||||||||||||||||||||
2/23/2021 | — | 2,800 | 4,900 | $1,290,375 | ||||||||||||||||||||||||||||||||||
2/23/2021 | 2,800 | $1,284,668 | ||||||||||||||||||||||||||||||||||||
2/23/2021 | 12,250 | $458.81 | $1,226,715 | |||||||||||||||||||||||||||||||||||
Mark P. Stevenson | 2/23/2021 | — | $1,300,461 | $2,600,922 | ||||||||||||||||||||||||||||||||||
2/23/2021 | — | 4,000 | 7,000 | $1,843,391 | ||||||||||||||||||||||||||||||||||
2/23/2021 | 4,000 | $1,835,240 | ||||||||||||||||||||||||||||||||||||
2/23/2021 | 17,875 | $458.81 | $1,790,003 | |||||||||||||||||||||||||||||||||||
Michel Lagarde | 2/23/2021 | — | $1,055,070 | $2,110,140 | ||||||||||||||||||||||||||||||||||
2/23/2021 | — | 3,475 | 6,081 | $1,601,446 | ||||||||||||||||||||||||||||||||||
2/23/2021 | 3,475 | $1,594,365 | ||||||||||||||||||||||||||||||||||||
2/23/2021 | 15,575 | $458.81 | $1,559,681 | |||||||||||||||||||||||||||||||||||
11/1/2021 | 13,366 | $635.10 | $1,981,510 | |||||||||||||||||||||||||||||||||||
Gianluca Pettiti | 2/23/2021 | — | $491,372 | $982,744 | ||||||||||||||||||||||||||||||||||
2/23/2021 | — | 2,725 | 4,769 | $1,255,811 | ||||||||||||||||||||||||||||||||||
2/23/2021 | 2,725 | $1,250,257 | ||||||||||||||||||||||||||||||||||||
2/23/2021 | 12,000 | $458.81 | $1,172,880 | |||||||||||||||||||||||||||||||||||
11/1/2021 | 8,911 | $635.10 | $1,321,056 |
2022 Proxy Statement | 59 |
Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($) @ $667.24* | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | ||||||||||||||||||||||||||||||||||||||
Marc N. Casper | 128,100 | — | — | $129.77 | 2/24/2023 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
126,400 | — | — | $157.68 | 2/28/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
116,300 | — | — | $190.59 | 9/7/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
64,387 | 21,463 | (2) | — | $210.68 | 2/27/2025 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
35,625 | 35,625 | (3) | — | $253.99 | 2/26/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
13,637 | 40,913 | (4) | — | $309.63 | 2/25/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | 53,730 | (5) | $418.32 | 9/9/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | 40,850 | (6) | — | $458.81 | 2/23/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 5,190 | (7) | $3,462,976 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 9,400 | (8) | $6,272,056 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 7,800 | (9) | $5,204,472 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 15,167 | (10) | $10,120,029 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 7,820 | (11) | $5,217,817 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 16,100 | (12) | $10,742,564 | (13) | |||||||||||||||||||||||||||||||||||||
Stephen Williamson | 27,300 | — | — | $157.68 | 2/28/2024 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
29,100 | — | — | $190.59 | 9/7/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
16,443 | 5,482 | (2) | — | $210.68 | 2/27/2025 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
9,825 | 9,825 | (3) | — | $253.99 | 2/26/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
4,325 | 12,975 | (4) | — | $309.63 | 2/25/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | 20,000 | (5) | $418.32 | 9/9/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | 12,250 | (6) | — | $458.81 | 2/23/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 1,396 | (7) | $931,467 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 2,526 | (8) | $1,685,448 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 2,536 | (9) | $1,692,121 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 4,930 | (10) | $3,289,493 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 2,380 | (11) | $1,588,031 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 4,900 | (12) | $3,269,476 | (13) |
60 | 2022 Proxy Statement |
Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($) @ $667.24* | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | ||||||||||||||||||||||||||||||||||||||
Mark P. Stevenson | 72,700 | — | — | $190.59 | 9/7/2024 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
29,175 | 9,725 | (2) | — | $210.68 | 2/27/2025 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
15,962 | 15,963 | (3) | — | $253.99 | 2/26/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
5,787 | 17,363 | (4) | — | $309.63 | 2/25/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | 22,870 | (5) | $418.32 | 9/9/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | 17,875 | (6) | — | $458.81 | 2/23/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 2,340 | (7) | $1,561,342 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 4,238 | (8) | $2,827,763 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 3,436 | (9) | $2,292,637 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 6,680 | (10) | $4,457,163 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 3,400 | (11) | $2,268,616 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 7,000 | (12) | $4,670,680 | (13) | |||||||||||||||||||||||||||||||||||||
Michel Lagarde | 142,637 | — | — | $105.17 | 7/20/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
22,046 | — | — | $132.66 | 3/23/2027 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
14,900 | — | — | $190.59 | 9/7/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
5,925 | 1,975 | (2) | — | $210.68 | 2/27/2025 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
9,275 | 9,275 | (3) | — | $253.99 | 2/26/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
2,250 | 2,250 | (14) | — | $294.02 | 9/5/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
4,568 | 13,707 | (4) | — | $309.63 | 2/25/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | 22,870 | (5) | $418.32 | 9/9/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | 15,575 | (6) | — | $458.81 | 2/23/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | 13,366 | (15) | — | $635.10 | 11/1/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 1,276 | (7) | $851,398 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 2,310 | (8) | $1,541,324 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 540 | (16) | $360,310 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 2,656 | (9) | $1,772,189 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 5,163 | (10) | $3,444,960 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 2,954 | (11) | $1,971,027 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 6,081 | (12) | $4,057,486 | (13) | |||||||||||||||||||||||||||||||||||||
Gianluca Pettiti | 2,100 | 2,875 | (2) | — | $210.68 | 2/27/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||||||
— | 3,725 | (3) | — | $253.99 | 2/26/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
1,125 | 1,125 | (14) | — | $294.02 | 9/5/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
2,800 | 8,400 | (4) | — | $309.63 | 2/25/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | 14,300 | (5) | $418.32 | 9/9/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
967 | 2,903 | (17) | — | $514.76 | 11/5/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | 12,000 | (6) | — | $458.81 | 2/23/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | 8,911 | (15) | — | $635.10 | 11/1/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 540 | (7) | $360,310 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 978 | (8) | $652,561 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 271 | (16) | $180,822 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 1,560 | (9) | $1,040,894 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 3,034 | (10) | $2,024,406 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 687 | (18) | $458,394 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 2,317 | (11) | $1,545,995 | — | — | ||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 4,769 | (12) | $3,182,068 | (13) |
2022 Proxy Statement | 61 |
62 | 2022 Proxy Statement |
Option Awards | Stock Awards | ||||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized On Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized On Vesting ($)(2) | |||||||||||||
Marc N. Casper | — | $— | 43,587 | $21,250,906 | |||||||||||||
Stephen Williamson | 22,550 | $11,462,706 | 12,279 | $5,989,004 | |||||||||||||
Mark P. Stevenson | 107,700 | $46,745,280 | 19,633 | $9,570,414 | |||||||||||||
Michel Lagarde | 50,700 | $14,122,744 | 12,092 | $5,818,251 | |||||||||||||
Gianluca Pettiti | 5,426 | $2,204,834 | 6,093 | $2,990,370 |
Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | ||||||||||||||||
Marc N. Casper | — | — | — | — | ||||||||||||||||
Stephen Williamson | — | — | — | — | ||||||||||||||||
Mark P. Stevenson | Applera Corporation Supplemental Executive Retirement Plan | 5 | (1) | $4,079,749 | (2) | — | ||||||||||||||
Michel Lagarde | — | — | — | — | ||||||||||||||||
Gianluca Pettiti | — | — | — | — |
2022 Proxy Statement | 63 |
Name | Executive Contributions in Last FY ($)(1) | Company Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | |||||||||||||||
Marc N. Casper | $544,985 | $544,985 | $1,565,270 | ($545,817) | $9,924,175 | (3) | ||||||||||||||
Stephen Williamson | $187,073 | $187,073 | $54,648 | $— | $1,943,725 | (4) | ||||||||||||||
Mark P. Stevenson | $257,239 | $257,239 | $2,704,011 | $— | $15,803,568 | (5) | ||||||||||||||
Michel Lagarde | $40,117 | $40,117 | $3,487 | $— | $268,825 | (6) | ||||||||||||||
Gianluca Pettiti | $— | $— | $— | $— | $— |
64 | 2022 Proxy Statement |
Name of Fund | Rate of Return(1) | Name of Fund | Rate of Return(1) | Name of Fund | Rate of Return(1) | ||||||||||||||||||
T. Rowe Price Retirement 2005 Fund | 8.12 | % | T. Rowe Price Retirement 2045 Fund | 17.35 | % | T. Rowe Price Growth Stock Trust | 19.38 | % | |||||||||||||||
T. Rowe Price Retirement 2010 Fund | 8.87 | % | T. Rowe Price Retirement 2050 Fund | 17.50 | % | Jennison Institutional US Small Cap Equity | 23.12 | % | |||||||||||||||
T. Rowe Price Retirement 2015 Fund | 9.63 | % | T. Rowe Price Retirement 2055 Fund | 17.47 | % | State Street S&P 500 Index Fund | 28.66 | % | |||||||||||||||
T. Rowe Price Retirement 2020 Fund | 10.49 | % | T. Rowe Price Retirement 2060 Fund | 17.52 | % | State Street Russell Sm/Mid Cap Index | 12.60 | % | |||||||||||||||
T. Rowe Price Retirement 2025 Fund | 11.88 | % | T. Rowe Price Retirement 2065 Fund | 18.33 | % | FIAM Core Plus Bond Fund | 0.38 | % | |||||||||||||||
T. Rowe Price Retirement 2030 Fund | 13.62 | % | American Funds Euro Pacific Growth Fund | 2.84 | % | Fidelity Inflation-Protected Bond Index | 5.93 | % | |||||||||||||||
T. Rowe Price Retirement 2035 Fund | 15.15 | % | Dodge & Cox Stock Fund | 31.73 | % | State Street US Bond Index | -1.63 | % | |||||||||||||||
T. Rowe Price Retirement 2040 Fund | 16.48 | % | Fidelity Total International Index | 8.47 | % | Fixed Interest Account | 2.49 | % |
2022 Proxy Statement | 65 |
66 | 2022 Proxy Statement |
2022 Proxy Statement | 67 |
Long-term Incentive Programs(1) | |||||||||||||||||||||||
Name | Termination Scenario | Total | Severance | Stock Options | Performance Stock Option | Restricted Stock Units | |||||||||||||||||
Marc N. Casper | Voluntary Resignation Without Good Reason | $3,248,495 | $3,248,495 | (2) | $— | $— | $— | ||||||||||||||||
Involuntary For Cause | $— | $— | $— | $— | $— | ||||||||||||||||||
Involuntary Without Cause or by Executive for Good Reason | $64,308,934 | $17,630,727 | (3) | $24,165,529 | $— | $22,512,678 | |||||||||||||||||
Involuntary Without Cause or by Executive for Good Reason (with CIC) | $117,639,297 | $15,578,470 | (4) | $47,666,442 | $13,374,472 | $41,019,913 | |||||||||||||||||
CIC Without Termination | $— | $— | $— | $— | $— | ||||||||||||||||||
Disability | $89,300,871 | $7,750,000 | (5) | $47,666,442 | $13,374,472 | $20,509,957 | |||||||||||||||||
Death | $89,300,871 | $7,750,000 | (5) | $47,666,442 | $13,374,472 | $20,509,957 | |||||||||||||||||
Stephen Williamson | Voluntary Resignation Without Good Reason | $1,026,753 | $1,026,753 | (2) | $— | $— | $— | ||||||||||||||||
Involuntary For Cause | $— | $— | $— | $— | $— | ||||||||||||||||||
Involuntary Without Cause | $4,035,893 | $4,035,893 | (3) | $— | $— | $— | |||||||||||||||||
Involuntary Without Cause or by Executive for Good Reason (with CIC) | $37,209,215 | $6,018,479 | (4) | $13,756,300 | $4,978,400 | $12,456,036 | |||||||||||||||||
CIC Without Termination | $— | $— | $— | $— | $— | ||||||||||||||||||
Disability | $32,217,489 | $1,026,753 | (2) | $13,756,300 | $4,978,400 | $12,456,036 | |||||||||||||||||
Death | $32,217,489 | $1,026,753 | (2) | $13,756,300 | $4,978,400 | $12,456,036 | |||||||||||||||||
Mark P. Stevenson | Voluntary Resignation Without Good Reason | $1,300,461 | $1,300,461 | (2) | $— | $— | $— | ||||||||||||||||
Involuntary For Cause | $— | $— | $— | $— | $— | ||||||||||||||||||
Involuntary Without Cause | $5,019,966 | $5,019,966 | (3) | $— | $— | $— | |||||||||||||||||
Involuntary Without Cause or by Executive for Good Reason (with CIC) | $52,218,817 | $7,476,192 | (4) | $20,971,624 | $5,692,800 | $18,078,201 | |||||||||||||||||
CIC Without Termination | $— | $— | $— | $— | $— | ||||||||||||||||||
Disability | $46,043,086 | $1,300,461 | (2) | $20,971,624 | $5,692,800 | $18,078,201 | |||||||||||||||||
Death | $46,043,086 | $1,300,461 | (2) | $20,971,624 | $5,692,800 | $18,078,201 |
68 | 2022 Proxy Statement |
Long-term Incentive Programs(1) | |||||||||||||||||||||||
Name | Termination Scenario | Total | Severance | Stock Options | Performance Stock Option | Restricted Stock Units | |||||||||||||||||
Michel Lagarde | Voluntary Resignation Without Good Reason | $1,055,070 | $1,055,070 | (2) | $— | $— | $— | ||||||||||||||||
Involuntary For Cause | $— | $— | $— | $— | $— | ||||||||||||||||||
Involuntary Without Cause | $4,144,611 | $4,144,611 | (3) | $— | $— | $— | |||||||||||||||||
Involuntary Without Cause or by Executive for Good Reason (with CIC) | $40,024,792 | $6,181,144 | (4) | $14,151,986 | $5,692,800 | $13,998,862 | |||||||||||||||||
CIC Without Termination | $— | $— | $— | $— | $— | ||||||||||||||||||
Disability | $34,898,718 | $1,055,070 | (2) | $14,151,986 | $5,692,800 | $13,998,862 | |||||||||||||||||
Death | $34,898,718 | $1,055,070 | (2) | $14,151,986 | $5,692,800 | $13,998,862 | |||||||||||||||||
Gianluca Pettiti | Voluntary Resignation Without Good Reason | $491,372 | $491,372 | (2) | $— | $— | $— | ||||||||||||||||
Involuntary For Cause | $— | $— | $— | $— | $— | ||||||||||||||||||
Involuntary Without Cause | $2,408,935 | $2,408,935 | (3) | $— | $— | $— | |||||||||||||||||
Involuntary Without Cause or by Executive for Good Reason (with CIC) | $26,171,951 | $3,661,140 | (4) | $9,505,972 | $3,559,556 | $9,445,283 | |||||||||||||||||
CIC Without Termination | $— | $— | $— | $— | $— | ||||||||||||||||||
Disability | $23,002,183 | $491,372 | (2) | $9,505,972 | $3,559,556 | $9,445,283 | |||||||||||||||||
Death | $23,002,183 | $491,372 | (2) | $9,505,972 | $3,559,556 | $9,445,283 |
2022 Proxy Statement | 69 |
Proposal 3 | |||||||||||
Ratification of the selection of the independent auditors | |||||||||||
Your board of directors recommends a vote FOR the ratification of the selection of PricewaterhouseCoopers LLP as the Company’s independent auditors for the fiscal year ending December 31, 2022. | |||||||||||
2021 | 2020 | |||||||||||||
Audit Fees | $28,460,102 | (1) | $25,873,549 | |||||||||||
Audit-Related Fees | 632,847 | 959,161 | ||||||||||||
Tax Fees | 13,757,426 | (2) | 12,323,792 | (2) | ||||||||||
All Other Fees | 15,975 | 6,300 | ||||||||||||
Total Fees | $42,866,350 | $39,162,802 |
70 | 2022 Proxy Statement |
2022 Proxy Statement | 71 |
By: | Nelson J. Chai (Chair) Debora L. Spar Dion J. Weisler |
72 | 2022 Proxy Statement |
Amount and Nature of Beneficial Ownership | ||||||||||||||||||||
Name and Address of Beneficial Owner(1) | Shares Owned Directly or Indirectly | Common Stock Subject to Options Exercisable on or Prior to April 29, 2022 | Restricted Stock Units which vest on or prior to April 29, 2022 | Total | Percent of Shares Beneficially Owned | |||||||||||||||
Vanguard Group Inc. | 31,103,788 | — | — | 31,103,788 | (2) | 7.95 | % | |||||||||||||
BlackRock, Inc. | 30,982,611 | — | — | 30,982,611 | (3) | 7.92 | % | |||||||||||||
Marc N. Casper | 235,669 | 547,574 | — | 783,243 | (4) | * | ||||||||||||||
Nelson J. Chai | 12,710 | — | — | 12,710 | * | |||||||||||||||
Ruby R. Chandy | 1,299 | — | — | 1,299 | * | |||||||||||||||
C. Martin Harris | 6,930 | — | — | 6,930 | * | |||||||||||||||
Tyler Jacks | 6,860 | — | — | 6,860 | * | |||||||||||||||
R. Alexandra Keith | 260 | — | — | 260 | (5) | * | ||||||||||||||
Michel Lagarde | 10 | 216,675 | 270 | 216,955 | * | |||||||||||||||
Thomas J. Lynch | 13,819 | — | — | 13,819 | * | |||||||||||||||
Jim P. Manzi | 15,814 | — | — | 15,814 | * | |||||||||||||||
James C. Mullen | 1,290 | — | — | 1,290 | * | |||||||||||||||
Gianluca Pettiti | 6,133 | 17,529 | 135 | 23,797 | * | |||||||||||||||
Lars R. Sørensen | 8,395 | — | — | 8,395 | * | |||||||||||||||
Debora L. Spar | 572 | — | — | 572 | * | |||||||||||||||
Scott M. Sperling | 87,525 | — | — | 87,525 | (6) | * | ||||||||||||||
Mark P. Stevenson | 113,453 | 171,143 | 9,117 | 293,713 | (7) | * | ||||||||||||||
Dion J. Weisler | 4,902 | — | — | 4,902 | (8) | * | ||||||||||||||
Stephen Williamson | 30,419 | 118,337 | 6,398 | 155,154 | (9) | * | ||||||||||||||
All current directors and executive officers as a group (19 individuals) | 554,311 | 1,110,243 | 15,920 | 1,680,474 | * | |||||||||||||||
2022 Proxy Statement | 73 |
Plan Category | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | (b) Weighted average exercise price of outstanding options, warrants and rights | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))(1) | ||||||||
Equity Compensation Plans Approved By Security Holders(2)(3)(4)(5)(6) | 6,460,925 | $321.63 | 10,865,661 | ||||||||
Equity Compensation Plans Not Approved By Security Holders(7)(8) | 503,602 | $289.68 | 5,345,813 | ||||||||
Total | 6,964,527 | $319.95 | 16,211,474 |
74 | 2022 Proxy Statement |
2022 Proxy Statement | 75 |
76 | 2022 Proxy Statement |
2022 Proxy Statement | 77 |
Voting Item | Board Recommendation | Voting Standard | Treatment of Abstentions & Broker Non-Votes | |||||||||||
Election of directors | For all nominees | Majority of Votes Cast | Not counted as votes cast and therefore no effect | |||||||||||
Say on Pay | For | |||||||||||||
Auditor ratification | For | |||||||||||||
78 | 2022 Proxy Statement |
2022 Proxy Statement | 79 |
80 | 2022 Proxy Statement |
2022 Proxy Statement | 81 |
(Dollars in millions except per share amounts) | 2021 | 2020 | ||||||||||||
Reconciliation of adjusted earnings per share | ||||||||||||||
GAAP diluted earnings per share (EPS) attributable to Thermo Fisher Scientific Inc. | $19.46 | $15.96 | ||||||||||||
Cost of revenues charges(a) | 0.02 | 0.01 | ||||||||||||
Selling, general and administrative charges (credits)(b) | 0.36 | (0.02) | ||||||||||||
Restructuring and other costs(c) | 0.50 | 0.25 | ||||||||||||
Amortization of acquisition-related intangible assets | 4.43 | 4.17 | ||||||||||||
Other expense/income adjustments(d) | 1.84 | 0.30 | ||||||||||||
Benefit from income taxes(e) | (1.49) | (1.12) | ||||||||||||
Equity in losses of unconsolidated entities | 0.01 | 0.01 | ||||||||||||
Adjusted EPS (non-GAAP measure) | $25.13 | $19.56 | ||||||||||||
Reconciliation of Free Cash Flow | ||||||||||||||
GAAP net cash provided by operating activities | $9,312 | $8,289 | ||||||||||||
Purchases of property, plant and equipment | (2,523) | (1,474) | ||||||||||||
Proceeds from sale of property, plant and equipment | 20 | 8 | ||||||||||||
Free cash flow (non-GAAP measure) | $6,809 | $6,823 |
82 | 2022 Proxy Statement |
2022 Proxy Statement | 83 |