UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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AmerisourceBergen Corporation

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January 27, 2022

Dear Shareholder:

In a year of unprecedented and ongoing challenges, AmerisourceBergen remained guided by its purpose of being united in our responsibility to create healthier futures. The Company’s alignment around this purpose drove exceptional outcomes across its businesses, and AB ended fiscal year 2021 stronger as a result. AmerisourceBergen took meaningful action to protect its team members and ensure that crucial medications continued to efficiently, reliably, and securely reach their destinations worldwide, all while making progress on key strategic initiatives.

Delivering Financial Performance Through Responsible Operations

In an operating environment challenged by the COVID-19 pandemic, AmerisourceBergen delivered outstanding performance for its stakeholders. The Company exceeded its financial plan on all metrics and had a 1-year total stock return of 27.2%. This growth was driven by the excellence of the Company’s 42,000 team members in executing on AB’s pharmaceutical-centric strategy, which included: expanding its presence in Europe through the acquisition of Alliance Healthcare; furthering its position as a global leader in pharmaceutical innovation; extending and expanding its strategic partnership with Walgreens Boots Alliance, Inc.; and continuing its leadership in specialty pharmaceuticals.

AmerisourceBergen plays a critical part in the ongoing response to the COVID-19 pandemic. The Board receives regular updates from management on the Company’s efforts to protect the health of its team members and carry out its crucial role in the pharmaceutical supply chain in support of the global pandemic response. In addition to enhanced physical safety precautions, the Company continued to provide expanded benefits to protect the wellbeing of its team members, including additional paid time off for COVID-19 related leave. AmerisourceBergen team members whose lives were adversely impacted by the pandemic and other extenuating factors were also offered financial assistance through the AmerisourceBergen Associate Assistance Fund, a non-profit organization created by the Company and supported primarily by contributions from the Company’s team members. These measures helped sustain AB’s business continuity and enabled its team members to support the secure delivery of critical medications, including COVID-19 vaccines, across the United States and over 30 countries worldwide.

Working Towards a Global Settlement

As part of AmerisourceBergen’s commitment to healthy communities and secure pharmaceutical supply chains, the Board remains focused on oversight of the Company’s risks, including the distribution of opioid medications. AmerisourceBergen has a sophisticated diversion control program, and the Board and its Compliance & Risk Committee receive regular updates from senior management on its operation. In July 2021, the Company announced that it, along with other participating distributors, had negotiated a settlement that would resolve the substantial majority of opioid lawsuits filed by states and local subdivisions. The Board believes that the proposed settlement is in the best interests of AB’s shareholders, and will bring meaningful relief to affected communities while allowing the management team to focus on key strategic and operational initiatives.

Responding to Shareholders

The Board values feedback from shareholders, whose perspectives inform our decision-making process across a range of topics, including executive compensation. After historically strong shareholder support, AmerisourceBergen’s say-on-pay vote passed with a disappointing level of approval at the 2021 annual meeting. The new Chair of the Compensation & Succession Planning Committee and members of the management team engaged with a significant percentage of the Company’s shareholder base to better understand their views and concerns. Shareholders were largely supportive of the Company’s executive compensation program and the alignment of pay and performance. However, shareholders believed that the impact of the opioid litigation settlement should be considered in fiscal year 2021 executive compensation decisions.

 

The Board appreciated the feedback and, after an extensive and thoughtful deliberation process, the Compensation & Succession Planning Committee took decisive action to respond. Additional information on the Compensation & Succession Planning Committee’s considerations and responsive actions may be found beginning on page 41 in this proxy statement.

Overseeing a Global Company

AmerisourceBergen is committed to active refreshment of the Board and its committees. After welcoming a new director in fiscal year 2020, in fiscal year 2021 the Board rotated committee members and appointed new chairs of the Audit, Compensation & Succession Planning and Finance Committees. In addition, in fiscal year 2021 the Board formed an ad hoc Merger Integration Committee comprised of directors with significant international business experience to advise and counsel management on the integration and risk management of Alliance Healthcare. The Board evaluation process for fiscal year 2022 will also inform recommendations from the Governance, Sustainability & Corporate Responsibility Committee on a variety of important topics, including Board composition and refreshment.

Driving a Sustainable and Equitable Future

AmerisourceBergen is committed to advancing initiatives that create healthier futures around the world. The Board and its committees oversee the Company’s ESG initiatives, including through quarterly updates provided by the Company’s cross-functional ESG Council to the Board’s Governance, Sustainability & Corporate Responsibility Committee.

The Company realized significant achievements across an ambitious set of ESG initiatives. In fiscal year 2020, AB reduced Scope 1 and 2 emissions by 10.5% and, in fiscal year 2021, it committed to further reductions through the establishment of a science-based emissions target. The Company’s Global Diversity, Equity & Inclusion (DE&I) Council increased membership in its Employee Resource Groups and advanced programs focused on addressing social and economic considerations in promoting health equity. The Company became a member of the United Nations Global Compact and continued to provide transparent reporting of its ESG activities aligned with global standards. The Company further enhanced its transparency and DE&I strategy through the disclosure of EEO-1 data in December 2021. The AmerisourceBergen Foundation, a separate non-profit organization established by the Company, also continued grants to support communities, individuals and non-profits impacted by COVID-19, including through vaccine education and awareness.

Our 2022 Annual Meeting

The Board is grateful to all of the Company’s shareholders for their continued investment in AmerisourceBergen. Along with our shareholder engagement efforts, your vote is an important source of feedback as we guide the continued success of the Company in delivering growth and value to all stakeholders. We encourage you to read the information within both our proxy statement and annual report in its entirety, and we respectfully request your support for our voting recommendations at the Company’s 2022 annual meeting, to be held virtually on Thursday, March 10, 2022.

Sincerely,

Jane E. Henney, M.D.
Lead Independent Director

 

Table of Contents

 

2022 AmerisourceBergen Proxy | PROXY STATEMENT HIGHLIGHTS

PROXY STATEMENT HIGHLIGHTS

This summary provides highlights of selected information about AmerisourceBergen Corporation (the “Company,” “AmerisourceBergen,” “we,” “our” or “us”) from this proxy statement. Please review the entire document before voting.

All of our 2022 Annual Meeting materials are available at investor.amerisourcebergen.com. Website addresses referenced in this proxy statement are provided for convenience only, and the content on the referenced websites does not constitute a part of this proxy statement.

This document includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our environmental and social goals, commitments, and strategies. These statements involve risks and uncertainties. Actual results could differ materially from any future results expressed or implied by the forward-looking statements for a variety of reasons, including due to the risks and uncertainties that are discussed in our most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. We assume no obligation to update any forward-looking statements or information, which speak as of their respective dates.

 

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2022 AmerisourceBergen Proxy | PROXY STATEMENT HIGHLIGHTS

to self-quarantine or care for a family member, and access to mindfulness videos and other wellness resources. Additionally, team members whose household income was impacted, such as by a spouse experiencing job loss, were offered financial support through the AmerisourceBergen Associate Assistance Fund.

Positive Impact on Global Health

We work to maintain a safe and secure pharmaceutical supply chain to ensure the health of the people and communities we serve. Given AmerisourceBergen’s vital role in the supply chain, in addition to focusing on our normal supplier processes, our teams worked throughout the COVID-19 pandemic to ensure that critical medications were allocated to our customers fairly to facilitate optimal patient access. We employ real-time data and analytics to facilitate actionable channel solutions and awareness for commercial and government stakeholders. We continue to support equitable access to COVID-19 vaccines through our Good Neighbor Pharmacy partners, including our partnership with the Federal Retail Pharmacy program, to support vaccination efforts across the U.S. We also delivered COVID-19 vaccines to more than 30 countries around the world. Through the work of the AmerisourceBergen Foundation we are supporting underrepresented communities through non-profit partners to enhance equitable education and access to COVID-19 vaccines.

Through our long-term strategic ESG priorities, we seek to make a positive impact on the planet and communities we serve. This includes setting clear emissions targets to reduce our impact on the environment and developing Diversity, Equity and Inclusion (DE&I) strategies to promote healthcare equity and a diverse supplier base. Our ESG initiatives and their focus on creating healthier futures globally are discussed in more detail in the following section, beginning on page 4 of this proxy statement.

 

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Our ESG Priorities and Selected Activities & Accomplishments

At AmerisourceBergen, we are committed to advancing our ESG initiatives to create healthier futures around the world. We strive to foster a positive impact on the planet and people — centered on improving access and equity in healthcare. Our Global ESG Council serves as an internal steering committee focused on our long-term ESG strategy and disclosure approach. Our Governance, Sustainability and Corporate Responsibility Committee receives ESG updates on a quarterly basis, giving the Board explicit oversight of our ESG activities. In fiscal year 2021, our notable ESG highlights included:

 

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2022 AmerisourceBergen Proxy | PROXY STATEMENT HIGHLIGHTS

Oversight of Controlled Substances

AmerisourceBergen has a longstanding commitment to ensuring a safe and efficient pharmaceutical supply chain. Our wholesale pharmaceutical distribution business plays a key, but specific, role of providing safe access to thousands of important medications to enable healthcare providers to serve patients with a wide array of clinical needs across the healthcare spectrum. We have taken substantial steps to help prevent the diversion of controlled substances and are committed to joining other healthcare stakeholders, government entities, civic organizations, law enforcement agencies and individuals to help address the opioid epidemic.

Board Oversight of Risks

Our Board oversees risk management and considers specific risk topics on an ongoing basis, including risks associated with the Company’s distribution of opioid medications. Our Compliance and Risk Committee provides further oversight on these matters and expertise at the Board level. The Board (and/or the Compliance and Risk Committee) receive at least quarterly updates on our anti-diversion program, the status of pending litigation related to the distribution of opioids, legislative and regulatory developments related to controlled substances, and shareholder feedback. For additional information on the Board’s oversight of risks, see “Corporate Governance and Related Matters — Corporate Governance — Risk Oversight and Management” beginning on page 25 of this proxy statement.

Our Role in the Supply Chain

Our wholesale distribution business manages the secure transportation of Food and Drug Administration (FDA) approved medications, a small part of which includes opioids and other controlled substances, from manufacturers to neighborhood pharmacies and pharmacy chains as well as hospitals, nursing homes, hospices, and other clinical settings. Distributors do not manufacture or create supply or demand for opioids. The distribution of opioid medicines represents less than two percent of our annual revenue, and we do not offer our sales team members incentives based on opioid sales.

In fulfilling our Company’s purpose to create healthier futures, AmerisourceBergen is dedicated to providing efficient and safe access to all FDA-approved medications through our wholesale distribution business. Wholesale distribution serves as a physical link between manufacturers and the healthcare providers that ultimately serve patients.

 

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Internal Controls and Anti-Diversion Practices

Our report titled Safe and Secure Distribution of Controlled Substances describes in detail our role in the pharmaceutical supply chain, our Board’s oversight of management’s efforts to develop meaningful solutions to the opioid epidemic, our management team’s thoughtful approach to enterprise risk management, our commitment to operational integrity and diversion control, and our community and team member outreach efforts. A copy of this report can be found on our website at investor.amerisourcebergen.com.

 

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Shareholder Engagement and Responsive Actions

Shareholder Engagement Program

Maintaining regular dialogue with our shareholders is critically important to AmerisourceBergen’s Board and management team. As part of our ongoing engagement program, we meet with shareholders throughout the year to discuss a range of topics, including strategic priorities and performance, risk management practices, corporate governance and executive compensation practices, and ESG initiatives. Members of our Board and management team participate in these engagements and incorporate feedback from shareholders into their decision-making processes.

Board Responsiveness to Say-on-Pay Vote and Shareholder Feedback

Our say-on-pay proposal received approximately 52% support at our 2021 Annual Meeting. In response, during the fall of 2021, we expanded our engagement efforts:

Our new Compensation and Succession Planning Committee (the “Compensation Committee”) Chair, Kathleen Hyle, along with senior members of our management team, participated in these engagements to better understand the concerns that drove this result and how we could best respond. The broad scope of our outreach provided our Compensation Committee with feedback from shareholders who both supported and voted against the proposal. A range of topics of importance to both AmerisourceBergen and our shareholders were discussed during these engagements, including:

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Executive compensation and the 2021 say-on-pay vote

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Proposed opioid litigation settlement

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Board and Committee composition and refreshment

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Board oversight of ESG and risk management

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ESG initiatives, including DE&I, and governance oversight

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Human capital disclosure

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Shareholders were generally supportive of the overall structure of our executive compensation program. However, they believed the magnitude of the opioid litigation settlement accrual should be considered in the Compensation Committee’s fiscal year 2021 executive payout decisions, along with more detailed disclosure on our decision-making process.

 

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Our Compensation Committee undertook extensive and thoughtful deliberation in determining our compensation actions for fiscal year 2021 in response to shareholder feedback. The Compensation Committee carefully considered a range of factors, which can be found in full on page 41 of the Compensation, Discussion and Analysis (CD&A), and the Board took the following actions in response:

Additional information on the Compensation Committee’s considerations and actions taken can be found within the Compensation Discussion and Analysis, starting on page 37.

 

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2022 AmerisourceBergen Proxy | PROXY STATEMENT HIGHLIGHTS

Director Nominee Summary

Committee Key

X = Member

EO = Ex Officio Member

AC = Audit Committee; CSPC = Compensation and Succession Planning Committee; CRC = Compliance and Risk Committee; FC = Finance Committee; GSCRC = Governance, Sustainability and Corporate Responsibility Committee; MIC = Merger Integration Committee

* = Mr. Nally is also the sole member of the Company’s Special Litigation Committee. See page 31.

 

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Our Board’s Skills and Experience

Our director nominees are a diverse group of skilled leaders who bring relevant experience and qualifications that enable the Board to effectively provide oversight to our management team and our long-term strategy and execution.

 

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Sound Governance and Compensation Practices

 

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2022 AmerisourceBergen Proxy | Corporate Governance and Related Matters

Corporate Governance and Related Matters

 

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In addition, our Governance, Sustainability and Corporate Responsibility Committee has identified the following expertise, experience, attributes and skills that are particularly relevant to AmerisourceBergen:

We seek individuals with diverse backgrounds, skills and expertise to serve on our Board. We believe that diversity is essential to encourage fresh perspectives, enrich the Board’s deliberations and avoid the dominance of a particular individual or group over the Board’s decisions. In accordance with our corporate governance principles and the Governance, Sustainability and Corporate Responsibility Committee charter, the Governance, Sustainability and Corporate Responsibility Committee has formalized its diversity focus to include, and have any search firm that it engages include, women and ethnically and racially diverse candidates in the pool from which the committee selects new director candidates. The Governance, Sustainability and Corporate Responsibility Committee evaluates all potential director nominees using the same criteria, regardless of the source of the nominee. Accordingly, all potential director nominees, including shareholder nominees, are assessed using the criteria outlined above. The Governance, Sustainability and Corporate Responsibility Committee may consider and evaluate director nominees identified by our shareholders as described below in the section titled “Shareholder Engagement—Shareholder Recommendations for Director Nominees.”

Below are each nominee’s biography and an assessment of the above-mentioned expertise, experience, attributes and skills that the nominee possesses.

 

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Biographical information about our nominees

 

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Non-Employee Director Compensation at 2021 Fiscal Year End

Our director compensation program is designed to attract and retain qualified non-employee directors. Our program aligns director compensation with the compensation of our peers (our peer companies are identified on page 49). Our Governance, Sustainability and Corporate Responsibility Committee reviews non-employee director compensation regularly to confirm that it appropriately addresses time, effort, expertise, and accountability required of active board membership.

The following table summarizes the total compensation earned by directors who were not employees of AmerisourceBergen during fiscal year 2021. Ms. Barra waived her right to receive compensation as a non-employee director. Directors who are employees of AmerisourceBergen receive no compensation for their service as directors or as members of Board committees.

(1)

These amounts include amounts earned for service as Committee Chairs and amounts deferred into our deferred compensation plan. In fiscal year 2021, Mr. Durcan received 1,163 shares of Common Stock, in lieu of the retainer. Mr. Nally received 879 shares of Common Stock, in lieu of 50% of his retainer.

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(2)

As of September 30, 2021, each of the non-employee directors held the following shares of outstanding restricted stock units: Ms. Barra—0; Mr. Durcan—5,706 ; Mr. Gochnauer—7,066; Mr. Greenberg—9,823; Dr. Henney—6,522; Ms. Hyle—5,706; Mr. Long—5,706; Mr. McGee—7,046; and Mr. Nally—3,605.

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The amounts reported represent the grant date fair value for equity awards shown in accordance with Accounting Standards Codification 718, disregarding the estimate of forfeitures related to service-based vesting conditions. There were no forfeitures by the directors in fiscal year 2021. See Note 11 to the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021 for assumptions used to estimate the fair values of restricted stock units granted during fiscal 2021.

(3)

No stock options were granted to directors in fiscal year 2021.

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(4)

These amounts represent the dividends accrued and paid on restricted stock units that vested in fiscal year 2021.

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(5)

Ms. Barra waived her right to receive compensation as a non-employee director. Consequently, our Board has waived the stock ownership requirements for Ms. Barra.

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Director Fees.   Our director compensation program provides for an annual cash retainer plus an annual equity award of restricted stock units. Consistent with our overall compensation philosophy, the compensation program for non-employee directors provides total direct compensation (cash retainer and equity award) in the 50th percentile of our peer group. (See page 49 for a description of our peer group.)

Annual Retainers.   A director may elect to have the annual retainer paid in cash, Common Stock or restricted stock units, or credited to a deferred compensation account. Payment of annual retainers in cash will be made in equal quarterly installments.

Annual Equity Awards.   On March 11, 2021, each of the non-employee directors (other than Ms. Barra, who waived compensation) received an annual grant of restricted stock units. The vesting period for these awards is three years from the date of grant, subject to continued service on the Board or following retirement by a director (i) aged 62 with five years of continuous service on the Board or (ii) who, after reaching age 55, has an age plus years of continuous service with the Company that equals at least 70. These grants were made under the AmerisourceBergen Corporation Omnibus Incentive Plan, originally approved by shareholders at the 2014 annual meeting (the “Omnibus Incentive Plan”). A director may defer settlement of shares payable with respect to restricted stock units as described below.

Deferral and Other Arrangements.   Directors have the option to defer all or any part of the annual retainer and to credit the deferred amount to an account under the AmerisourceBergen Corporation Deferred Compensation Plan. Payment of deferred amounts will be made or begin on the first day of the month after the non-employee director ceases to serve as a director. A director may elect to receive the deferred benefit (i) over annual periods ranging from three to fifteen years and payable in quarterly installments or (ii) in a single distribution. We pay all costs and expenses incurred in the administration of the Deferred Compensation Plan. Directors also have the option to forgo 50% or more of their annual cash retainers and receive either Common Stock or restricted stock units covering shares having a fair market value on the quarterly grant date equal to the amount of the foregone compensation. In addition, directors may defer settlement of any shares payable with respect to any restricted stock units (and any dividend equivalents) received either in lieu of the annual retainer or as the annual equity award to a later date. We also provide our directors with a prescription drug benefit and reimburse them for the cost of education programs, transportation, food and lodging in connection with their service as directors.

Stock Ownership Guidelines.   We require our non-employee directors to own shares of our Common Stock to align their interests with those of the shareholders and to provide an incentive to foster our long-term success. From and after the fifth year following their Board election, non-employee directors must own stock equal in value to at least five times the annual cash retainer. We may take unusual market conditions into consideration when assessing compliance. We confirm compliance with guidelines annually at the end of each fiscal year and, as of September 30, 2021, all of our non-employee directors were in compliance with the stock ownership guidelines or had not yet completed their fifth year as a director.

 

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Corporate Governance and Related Matters | 2022 AmerisourceBergen Proxy

Corporate Governance

Board Structure

Our Board provides guidance and critical review of our governance, strategic initiatives, talent management and risk management processes. Our Board also ensures that we have an effective management team in place to run our business and serves to protect and advance the long-term interests of our shareholders. The role of our senior executives is to develop and implement a strategic business plan for AmerisourceBergen and to grow our business.

Our employees conduct our business under the direction of our Chairman, President and Chief Executive Officer and with the independent oversight of our Board, including our Lead Independent Director, Dr. Jane E. Henney. To enhance its oversight function, our Board is composed of directors who are not employed by us, with the exception of Mr. Collis.

Role of the Chairman and Lead Independent Chair

We believe that our current leadership structure is in the best interests of AmerisourceBergen and its shareholders and that it fosters innovative, responsive and strong leadership for the Company as a whole. Our Board has determined that the election of an executive Chairman must be accompanied by the election of a strong Lead Independent Director with a clearly defined and dynamic leadership role in the governance of the Board. In March 2021, the Board determined that re-appointing Steven H. Collis as Chairman of the Board and Dr. Jane E. Henney as Lead Independent Director would result in the governance structure best suited to enable our Board and management to carry out their responsibilities to our shareholders and promote the growth of AmerisourceBergen. We believe the structure promotes, through the clearly articulated roles and responsibilities of the Lead Independent Director and Board committees, the objective and effective oversight of management.

Serving as both Chairman and Chief Executive Officer enables Mr. Collis to effectively and efficiently execute our strategic initiatives. In fiscal year 2021, those initiatives included acquiring the majority of the Alliance Healthcare businesses from Walgreens Boots Alliance, Inc. (“WBA”), strengthening the ongoing strategic relationship with WBA, and ensuring business continuity throughout the COVID-19 pandemic. Mr. Collis is uniquely suited to serve in these two roles due to his knowledge of the Company and his experience in the industry. As Lead Independent Director, Dr. Henney provides assertive, independent leadership in the boardroom. In addition to her extensive knowledge of the healthcare industry and regulatory environment, Dr. Henney has substantial corporate governance experience and a strong working relationship with her fellow directors.

The Chairman’s primary responsibility is to set the agenda for the Board and to facilitate communications among our directors and between the Board and senior management. As Chairman, President and Chief Executive Officer, Mr. Collis ensures that the Board’s agenda and discussions address strategic planning as well as key business issues and risks that he encounters in daily operations.

Our governance structure establishes a dynamic leadership role for the Lead Independent Director, which, together with independent committee leadership, provides a meaningful counterbalance to the executive Chairman and maintains independent and effective oversight of management.

Key aspects of this structure include: if the Chairman is not an independent member of the Board, a majority of the independent directors shall elect a Lead Independent Director annually, subject to his or her continuing reelection and status as an independent director; the Lead Independent Director has clearly articulated and extensive authority and responsibilities in the Board’s governance and functions; our Audit Committee, the Compensation and Succession Planning Committee, the Governance, Sustainability and Corporate Responsibility Committee, and Merger Integration Committee are each chaired by and comprised solely of independent directors; a majority of the directors serving on our Compliance and Risk Committee and Finance Committee are independent directors; and our non-employee directors are encouraged to, and often do, have direct contact with our senior managers outside the presence of our executive officers.

The Lead Independent Director’s robust and comprehensive authority is as follows:

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presides at all meetings of the Board at which the Chairman is not present;

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calls, sets the agenda for and chairs executive sessions of the non-employee directors;

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has authority to call a Board meeting and/or a meeting of non-employee directors;

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approves Board meeting agendas and schedules to ensure that there is sufficient time for discussion of all agenda items;

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meets one-on-one with the Chairman after each regularly scheduled Board meeting;

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serves as a liaison between the Chairman and the non-employee directors;

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serves on the Executive Committee;

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advises the Chairs of the Board committees and assists them in the management of their workloads;

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with the Chair of the Compensation and Succession Planning Committee, takes a leading role in succession planning for the Chief Executive Officer;

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supports the Chair of the Governance, Sustainability and Corporate Responsibility Committee in overseeing the annual self-assessment process for the Board and each committee, interviewing and recommending candidates for the Board and recommending Board committee assignments;

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is available for communication and consultation with major shareholders upon request on appropriate topics; and

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performs such other functions and responsibilities as set forth in our corporate governance principles or as requested by the Board or the non-executive directors from time to time.

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Our Board conducts annual evaluations, under the oversight of our Governance, Sustainability and Corporate Responsibility Committee. The Compensation and Succession Planning Committee, in accordance with its charter and under the oversight of the Lead Independent Director, will annually review the performance of, and succession plan for, the Chief Executive Officer. These processes provide our Board with opportunities to examine and reassess the effectiveness of our leadership structure, including the performance of our Chairman and Lead Independent Director.

Succession Plan for Chairman of the Board

Our Board has always retained the flexibility to determine the optimal leadership structure for the Company and its shareholders because our shareholders benefit most when our Board has the freedom to make decisions that are in the best interests of the Company rather than pursuant to a predetermined policy. Mr. Collis has served as President and Chief Executive Officer since July 2011 and as Chairman since March 2016.

In November 2018, the Board determined that it was in the best interests of the Company to split the role of Chairman of the Board and Chief Executive Officer in the future, commencing with the Company’s next Chief Executive Officer. At that time, the Chairman role will be assumed by an independent director.

Board Corporate Governance

Our Board has adopted AmerisourceBergen’s corporate governance principles. Together with the charters of the Board committees, they provide the framework for the governance of AmerisourceBergen. Our corporate governance principles clearly delineate the authority and roles of the Chairman of the Board and the Lead Independent Director in the leadership of the Board, mandate the independence of the committee Chairs and all the members of our Audit Committee, Compensation and Succession Planning Committee and Governance, Sustainability and Corporate Responsibility Committee, and affirm non-employee directors’ access to managers and team members outside the presence of our executives. The corporate governance principles address a variety of governance issues in addition to the leadership structure, including those discussed under the headings “Information on Board Committees,” “Code of Ethics” and “Shareholder Engagement.” The Board reviews and updates the corporate governance principles and the committee charters from time to time to reflect leading corporate governance practices.

There are eight committees of the Board: the Audit Committee, the Compensation and Succession Planning Committee, the Compliance and Risk Committee, the Executive Committee, the Finance Committee, the Governance, Sustainability and Corporate Responsibility Committee, the Merger Integration Committee, and the Special Litigation Committee. The Merger Integration Committee was formed in March 2021 to advise and counsel management on the integration and risk management of Alliance Healthcare. In addition, a Special Litigation Committee was created in September 2020 to review and evaluate a derivative complaint related to Medical Initiatives, Inc., a subsidiary that ceased operations in 2014. Our Executive Committee, which is composed of our Chairman of the Board, the Lead Independent Director and the Chairs of the other committees

 

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(other than the Special Litigation Committee), has the authority to act between regularly scheduled meetings of the Board. The Chairman of the Board serves as the Chair of the Executive Committee. The Board believes that changing committee assignments from time to time strengthens our corporate governance practices and enhances each committee’s objective review of management.

Our corporate governance principles and the charters of the Audit Committee, the Compensation and Succession Planning Committee, the Compliance and Risk Committee, the Finance Committee and the Governance, Sustainability and Corporate Responsibility Committee have been posted on our website at investor.amerisourcebergen.com.

Board Independence

The Board has determined that, except for Ms. Barra and Mr. Collis, all of the directors are independent. Our corporate governance principles require us to maintain a minimum of 70% independent directors on our Board. If the ten director nominees are elected at the 2022 Annual Meeting of Shareholders, eight out of ten directors then serving will be independent.

The Board has adopted guidelines in our corporate governance principles to assist it in making independence determinations, which meet or exceed the independence requirements set forth in the NYSE listing standards. For a director to be considered independent, the Board must determine that the director does not have any direct or indirect material relationship with AmerisourceBergen.

With the assistance of legal counsel, our Board reviewed the applicable legal standards for director and Board committee member independence. In undertaking its review, the Board considered that some of our directors serve on the board of directors or as executive officers of companies for which we perform (or may seek to perform) drug distribution and other services in the ordinary course of business. As a result of this review, the Board has determined that each of the following current directors is independent: D. Mark Durcan, Richard W. Gochnauer, Lon R. Greenberg, Jane E. Henney, M.D., Kathleen W. Hyle, Michael J. Long, Henry W. McGee and Dennis M. Nally.

Our Board has also determined that each of the members of our Audit Committee, Compensation and Succession Planning Committee and Governance, Sustainability and Corporate Responsibility Committee are independent, in accordance with the independence requirements set forth in their charters and, as applicable, SEC rules and NYSE listing standards. None of the members of these committees receives any consulting or advisory fee from us other than compensation as non-employee directors.

 

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Risk Oversight and Management

The Board executes its oversight responsibility for risk management directly and through its committees, as follows:

▪

Our Board considers specific risk topics throughout the year, including risks associated with government regulation as well as with our strategic objectives, business plan, operations, distribution of controlled substances, information technology (including cybersecurity) and capital structure, among many others. Each quarter, our Chief Financial Officer reports to the Board on AmerisourceBergen’s financial performance and explains how actual performance compares to our business plan. Our corporate officers and the leaders of our principal business units report regularly to the Board about the risks and exposures related to their areas of responsibility. The Board is informed about and regularly discusses our risk profile, including legal, regulatory and operational risks to our business. The Board also oversees our compliance policies and practices, including our sophisticated diversion control program through which the Company provides daily reports directly to the Drug Enforcement Administration about the quantity, type, and receiving pharmacy of every order of controlled substances we distribute. Additionally, the Board periodically visits Company facilities, which provides the directors with an opportunity to observe the Company’s operations and to interact with employees outside of the boardroom.

​

▪

Each Board committee reports to the Board at every regular Board meeting on the topics discussed and actions taken at the most recent committee meeting. The Board discusses the risks and exposures, if any, involved in the matters or recommendations of the committees, as necessary.

​

▪

Our Compliance and Risk Committee assists the Board in its oversight of the Company’s (i) enterprise risk management program, (ii) compliance program, which includes the Office of Compliance led by the Company’s Chief Compliance Officer, (iii) legal and regulatory compliance, and (iv) Code of Ethics and Business Conduct.

​

 

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▪

Our Audit Committee has primary responsibility for monitoring our internal audit and financial risk assessment and overseeing our system of internal controls and financial reporting. At each regularly scheduled meeting, the Audit Committee receives reports from our (i) external auditor on the status of audit activities and findings; and (ii) chief audit executive (who reports directly to the Audit Committee) on the status of the internal audit plan, audit results and any corrective action taken in response to audit findings. The Audit Committee is also responsible for periodically reviewing cybersecurity issues and the Company’s business continuity and disaster recovery plans as they relate to IT security.

​

▪

The Board’s other committees oversee risks associated with their respective areas of responsibility. For example, the Governance, Sustainability and Corporate Responsibility Committee oversees our sustainability strategy and practices, including the Company’s ESG reporting and disclosure practices. The Governance, Sustainability and Corporate Responsibility Committee also oversees the Company’s Diversity, Equity & Inclusion practices. Additionally, the Compensation and Succession Planning Committee assesses risks associated with our compensation policies and programs for executives as well as employees generally. Our Finance Committee discusses risks relating to our capital structure, financing activities, dividend and tax policy and stock repurchase activities. Our Merger Integration Committee oversees risks associated with integrating the Alliance Healthcare business into our company.

​

▪

We have a Chief Compliance Officer who oversees our corporate compliance program, including our Office of Compliance, compliance audits, compliance training, and compliance with our Code of Ethics and Business Conduct and the Company’s reporting, investigation and corrective action program. We also have an internal Compliance Committee composed of senior executives that supports the Chief Compliance Officer in fulfilling her responsibilities and driving corporate adherence to our compliance program, Code of Ethics and Business Conduct and related policies and procedures. Our Chief Compliance Officer and Chief Legal Officer report to the Compliance and Risk Committee and to the full Board throughout the year on corporate compliance matters, the status of our compliance programs (including our diversion control program described above), calls to our hotline and any other material developments.

​

Oversight of Employee Compensation

We have conducted an internal risk assessment of our employee compensation policies and practices, including those relating to our executives. We have concluded that our compensation policies and practices do not promote behaviors that could put the organization at legal, financial or reputational risk. We have reviewed our risk analysis with the Compensation and Succession Planning Committee. The risk assessment process included, among other things, a review of all key incentive compensation plans to ensure that they are aligned with our pay-for-performance philosophy and include performance metrics that support corporate goals. The objective of the process was to identify any compensation plans and practices that may encourage employees to take unnecessary risks that could threaten the Company. No such plans or practices were identified. Moreover, various factors mitigate the risk profile of our compensation programs, including, among others:

▪

Performance targets under our cash incentive programs are tied to a number of different financial metrics so employees will not place undue emphasis on any particular metric at the expense of other aspects of our business;

​

▪

Maximum caps on payouts have been established for our annual cash incentive programs, including under our cash bonus plan used for senior management;

​

▪

Equity awards under our performance plan for senior executives have maximum caps and are forfeited entirely if the threshold performance metrics are not achieved;

​

▪

For fiscal year 2021, the performance plan ties 60% of an executive officer’s annual equity award to performance shares that are dependent on financial metrics achieved over a three-year period to ensure that our executive officers are accountable for long-term measures of success;

​

▪

The remaining 40% of an executive officer’s annual equity award is in restricted stock units and also vests over a multi-year period to encourage executive officers to focus on long-term growth and creating value for shareholders;

​

▪

Stock ownership requirements align the interests of our senior management with those of our shareholders;

​

 

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▪

We have effective management processes for developing annual business plans and a strong system of internal financial controls; and

​

▪

A broad-based group of functions, including human resources, finance and legal, oversees aspects of our cash and equity incentive programs.

​

We will continue to monitor our compensation policies and practices to determine whether our risk management objectives are being met with respect to incentivizing our employees.

Board Orientation and Education

We provide our directors with comprehensive orientation and continuing education, as needed, which is overseen by the Governance, Sustainability and Corporate Responsibility Committee. Director orientation familiarizes the directors with our business and strategic plans, significant financial, accounting and risk management issues, compliance programs and other controls, policies, principal officers and internal auditors, and our independent registered public accounting firm. The orientation also addresses Board procedures, our corporate governance principles and our Board committee charters. We offer continuing education programs and provide opportunities to attend commercial director education seminars to assist our directors in maintaining their expertise in areas related to the work of the Board and the directors’ committee assignments. Ongoing education includes two hours of annual compliance training for each director. We also provide our directors with full membership to the National Association of Corporate Directors to provide a forum for them to maintain their insight into leading governance practices and exchange ideas with peers. Dr. Henney in 2011 and 2012, Ms. Hyle in 2015 and Mr. McGee in 2018 were named to the “NACD Directorship 100,” an annual honor sponsored by the National Association of Corporate Directors to recognize influential directors and others who impact corporate governance.

Board Evaluations

We have a comprehensive annual evaluation policy and process in place for the Board and each of its committees, which is led by the Chair of our Governance, Sustainability and Corporate Responsibility Committee and our Lead Independent Director. As required by our corporate governance principles, the evaluation occurs annually. The evaluation process involves discussion and planning for both Board and committee refreshment, including with regard to the skills needed to continue to represent the long-term interests of shareholders.

Either the Chair of our Governance, Sustainability and Corporate Responsibility Committee, the Lead Independent Director, or an independent, third-party governance expert interviews each director to obtain his or her assessment of the effectiveness of the Board and the committees on which he or she serves, as well as director performance and Board dynamics. In fiscal 2021, the evaluation process was led by the Lead Independent Director. In advance of the interview, each member of a committee receives a questionnaire soliciting feedback regarding the committee’s performance. During the interview, each member is asked to provide an assessment of the Board’s and the relevant committee’s performance. We also solicit suggestions for improving the Board’s and the committee’s performance, dynamics, time-management, and functioning, as well as proposed topics of focus for the Board and the committee in the upcoming year. The results of the individual interviews and assessments are aggregated in a report, which the Lead Independent Director presents to the full Board for review, discussion and determination of action items.

The annual review by the Board of the corporate governance principles and by each committee of its charter is a further step in the evaluation process through which the directors consider leading corporate governance practices for the Board as a whole and identify new areas of focus for the different committees. The full Board reviews and discusses recommended revisions to the corporate governance principles and committee charters prior to voting on their approval.

Director Elections and Tenure Policy

Our bylaws and corporate governance principles provide for a majority vote standard for the election of directors. Under the majority vote standard, each director must be elected by a majority of the votes cast by the shares present in person or represented by proxy and entitled to vote. A “majority of the votes cast” means that the number of votes cast “for” a candidate for director must exceed the number of votes cast “against” that director. A plurality voting standard will apply instead of a majority voting standard if:

▪

A shareholder has provided us with notice of a nominee for director in accordance with our bylaws; and

​

 

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▪

That nomination has not been withdrawn on or prior to the day next preceding the date the Company first provides its notice of meeting for such meeting to shareholders.

​

Under Delaware law, if an incumbent nominee for director in an uncontested election does not receive the required votes for re-election, the director remains in office until a successor is elected and qualified. Our bylaws and corporate governance principles require each director nominee to tender an irrevocable resignation prior to the applicable meeting of shareholders and include post-election procedures in the event an incumbent director does not receive the required votes for re-election, as follows:

▪

The Governance, Sustainability and Corporate Responsibility Committee shall make a recommendation to the Board as to whether to accept the previously tendered resignation of the director;

​

▪

The Board will act on the Governance, Sustainability and Corporate Responsibility Committee’s recommendation; and

​

▪

The Board expects the director whose resignation is under consideration to abstain from participating in any decision regarding that resignation.

​

Additionally, pursuant to our governance principles, a director will offer to resign at the annual meeting of shareholders following his or her 75th birthday and a director will tender his or her resignation for consideration by the Governance, Sustainability and Corporate Responsibility Committee when his or her employment or principal business association changes materially. A director who is an employee will resign when he or she retires or is no longer employed by us. We also encourage our Board to rotate committee Chairs on a regular basis.

Information on Board Committees

Audit Committee

▪

Appoints, and has authority to terminate, our independent registered public accounting firm.

​

▪

Pre-approves all audits and permitted non-audit services provided by the Company’s independent registered public accounting firm, including the scope of the audit and audit procedures.

​

▪

Reviews and discusses the independence of our independent registered public accounting firm.

​

▪

Reviews and discusses with management and our independent registered public accounting firm the Company’s audited financial statements and interim quarterly financial statements as well as management’s discussion and analysis of the statements as set forth in Forms 10-K and 10-Q filed with the Securities and Exchange Commission (SEC).

​

▪

Prepares the audit committee report as required by SEC rules.

​

▪

Discusses with management and/or our independent registered public accounting firm significant financial reporting and accounting issues and the adequacy of our internal control over financial reporting.

​

▪

Inquires of management (including the internal audit function) and our independent registered public accounting firm about significant risks or exposures (whether financial, operational, or otherwise) and assesses the steps management has taken to control such risks or exposures, including policies implemented for such purposes.

​

▪

Reviews the internal audit function, internal audit plans, internal audit reports, and management’s response to such reports.

​

▪

Reviews the appointment, performance, and replacement of our chief audit executive.

​

▪

Assists the Board with oversight of the Company’s compliance with legal and regulatory requirements, including, as appropriate, participating in oversight of enterprise risk management.

​

▪

Discusses the Company’s guidelines, policies and practices with respect to the assessment, management and mitigation of risks.

​

▪

Reviews and approves all related persons transactions in accordance with our Related Persons Transactions Policy.

​

▪

Reviews our information technology security program and reviews and discusses the controls around cybersecurity, including the development of business continuity and disaster recovery plans.

​

 

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Compensation and Succession Planning Committee

▪

Reviews and approves our executive compensation strategy and the individual elements of total compensation for the President and Chief Executive Officer and executive management.

​

▪

Evaluates performance of management annually.

​

▪

Ensures that our executive compensation strategy supports shareholder interests.

​

▪

Considers and approves any compensation practices related to ESG, including diversity, equity and inclusion, and coordinates with the Governance, Sustainability and Corporate Responsibility Committee on these practices, as appropriate.

​

▪

Monitors and reviews the Company’s clawback policies and the clawback, recoupment and forfeiture provisions contained in the Company’s equity and cash incentive compensation programs.

​

▪

Reviews and discusses with management the Compensation Discussion and Analysis and other disclosures about executive compensation that are required to be included in our proxy statement and Annual Report on Form 10-K.

​

▪

Prepares a compensation committee report as required by SEC rules.

​

▪

Administers and makes awards under our incentive compensation plans, including equity incentive plans, with discretion to adjust compensation upward or downward.

​

▪

Has sole authority for retaining and terminating any consulting firm used to assist the committee in its evaluation of the compensation of the President and Chief Executive Officer or any other executive officer and for evaluating the independence of such consulting firm.

​

▪

Monitors the activities of our internal Benefits Committee, including the Benefits Committee’s oversight of the administration and investment performance of our retirement plans.

​

▪

Oversees the administration of our health and welfare plans.

​

▪

Reviews with management and makes recommendations relating to succession planning and talent development.

​

Compliance and Risk Committee

▪

Oversees the implementation by management of an enterprise risk management program that is designed to assist the Company with monitoring and mitigating compliance, legal, regulatory, and operational risks related to the business, including emerging risks.

​

▪

Assists the Board in its oversight of the Company’s compliance with legal and regulatory requirements and reviews all significant litigation and internal and government investigations, other than those matters reserved for the Audit Committee’s review and oversight, with the appropriate members of management.

​

▪

Provides review and oversight of the Company’s compliance program and meets regularly with the Company’s Chief Compliance Officer to discuss matters within the committee’s oversight responsibility.

​

▪

Reports to the Board regarding the Company’s compliance functions and related risks.

​

▪

Oversees compliance with our Code of Ethics and Business Conduct.

​

Executive Committee

▪

Exercises the authority of the Board of Directors between regularly scheduled meetings of our Board on matters that cannot be delayed, except as limited by Delaware law and our bylaws.

​

 

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Finance Committee

▪

Provides oversight of our capital structure and other issues of financial significance to AmerisourceBergen.

​

▪

Reviews the asset and liability structure of the Company and considers its funding and capital needs.

​

▪

Reviews proposed financing plans, credit facilities, and other financing transactions.

​

▪

Reviews our dividend policy.

​

▪

Reviews and proposes issuance or sale of our stock, stock repurchases, redemptions and splits.

​

▪

Reviews financial strategies developed by management to meet changing economic and market conditions.

​

▪

Reviews proposed major capital expenditures or commitments.

​

▪

Reviews proposed material acquisitions, divestitures, joint ventures, and other transactions involving AmerisourceBergen and periodically reviews performance and progress of completed acquisitions and capital spending projects.

​

Governance, Sustainability and Corporate Responsibility Committee

▪

Reviews and makes recommendations to the Board about corporate governance and the Company’s corporate governance principles.

​

▪

Identifies and discusses with management the risks, if any, relating to the Company’s corporate governance structure and practices.

​

▪

Oversees the Company’s sustainability and corporate responsibility strategy and practices, including the Company’s ESG reporting and disclosure practices.

​

▪

Oversees the Company’s diversity, equity and inclusion strategy and practices and the Company’s performance in the areas of diversity, equity and inclusion in the workforce, in communities and across the healthcare supply chain.

​

▪

Receives regular reports from the Company’s Global ESG Council and oversees the Company’s support for charitable, educational and business organizations, including the AmerisourceBergen Foundation and the AmerisourceBergen Associate Assistance Fund.

​

▪

Recommends selection and qualification criteria for directors and committee members and identifies and recommends qualified candidates to serve as directors of AmerisourceBergen, including those recommended by shareholders. The Committee includes, and has any search firm that it engages include, women and ethnically and racially diverse candidates in the pool from which the Committee selects director candidates.

​

▪

Reviews and makes recommendations relating to succession planning for our Board and Board committee leadership positions and prepares for Board vacancies.

​

▪

Oversees orientation of directors and continuing education of directors in areas related to the work of our Board and the directors’ committee assignments.

​

▪

Makes recommendations regarding the size and composition of our Board and the composition and responsibilities of Board committees.

​

▪

Oversees the evaluation of our Board and the Board committees and reviews the committee assignments.

​

▪

Reviews and makes recommendations to our Board regarding non-employee director compensation.

​

▪

Has sole authority for retaining and terminating any third-party firm used to assist in the annual Board and Board committee evaluation and with evaluation of the compensation of directors, and for evaluating the independence of such firm.

​

▪

Oversees the Company’s social strategy and practices, including with respect to diversity, equity and inclusion.

​

 

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Merger Integration Committee

▪

Provides advice and counsel to management and senior leadership on the integration of Alliance Healthcare.

​

▪

Monitors the performance of Alliance Healthcare and oversees management’s development of a structure that supports the realization of financial, operational and cultural synergies.

​

▪

Supports management in identifying and mitigating the risks associated with expansion and the operation of a global company.

​

▪

Reviews and discusses with management plans to develop and strengthen talent across the Company and Alliance Healthcare.

​

▪

Reviews and discusses with management the environmental, social and governance practices of Alliance Healthcare.

​

▪

Identifies acquisition and integration issues to be addressed by the appropriate committees of the Board.

​

Special Litigation Committee

▪

Established to review and evaluate a derivative complaint related to Medical Initiatives, Inc., a subsidiary that ceased operations in 2014.

​

▪

Filed its recommendations with the Delaware Court of Chancery in September 2021.

​

Director Attendance

Each director attended at least 75% of the aggregate of  (i) the total number of meetings of the Board of Directors held during fiscal 2021 and (ii) the total number of meetings held by each committee of the Board on which such person served during fiscal 2021. There were 11 meetings of the full Board of Directors during fiscal 2021 and the number of committee meetings held during fiscal 2021 is provided in the chart on page 9 of this proxy statement.

We currently expect all of our director nominees to be in attendance at the 2022 Annual Meeting of Shareholders and all directors are expected to attend our annual meetings pursuant to our governance principles. All of our directors attended the 2021 Annual Meeting of Shareholders.

Meetings of the Independent Directors

The independent directors meet prior to the commencement of each of the regularly scheduled Committee meetings. Additionally, the independent directors, together with our one additional non-management director, meet following each regularly scheduled meeting of the full Board of Directors. The Lead Independent Director presides at such meetings and, if the Lead Independent Director is not present, the committee Chairs preside on a rotating basis.

Communications with Non-Management Directors

Interested parties who wish to make any concerns known to the non-management directors may submit communications at any time in writing to: Kourosh Q. Pirouz, Vice President, Associate General Counsel and Secretary, AmerisourceBergen Corporation, 1 West First Avenue, Conshohocken, PA 19428. AmerisourceBergen’s Secretary will determine, in his good faith judgment, which communications will be relayed to the Lead Independent Director and other non-management directors.

Code of Ethics

The Board of Directors adopted our Code of Ethics and Business Conduct in May 2004. We review and revise the Code of Ethics and Business Conduct from time to time, most recently in August 2021. It applies to directors and employees, including officers, and is intended to comply with the requirements of Section 303A.10 of the NYSE Listed Company Manual. Any waivers of the application of the Code of Ethics and Business Conduct to directors or executive officers must be approved by either the Board of Directors or the Compliance and Risk Committee.

 

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We have also adopted our Code of Ethics for Designated Senior Officers in accordance with Item 406 of the SEC’s Regulation S-K. It applies to our President and Chief Executive Officer, our Executive Vice President and Chief Financial Officer and our Senior Vice President and Chief Accounting Officer.

Our Code of Ethics and Business Conduct and our Code of Ethics for Designated Senior Officers are posted on our website at investor.amerisourcebergen.com. Additionally, any waiver or amendment to either code will be disclosed promptly on our website at investor.amerisourcebergen.com.

Shareholder Engagement

We value open communications with our shareholders. The goal of our engagement and outreach efforts is to ensure that we work collaboratively to educate our investors about our business and governance practices as well as to identify issues of importance to our shareholders and our business. Our investor relations team regularly shares with our Board and senior executives the feedback that they have received from our shareholders.

On an ongoing basis, we proactively communicate with the investment community and shareholders about AmerisourceBergen’s financial performance, operations and strategic developments through the following:

▪

Quarterly earnings releases and quarterly earnings release conference calls, investor presentations and webcasts;

​

▪

Regular reports filed with the SEC, including annual and quarterly reports;

​

▪

Conference calls, presentations and webcasts related to specific developments;

​

▪

Participation in numerous healthcare investor conferences with webcasted presentations;

​

▪

In-person and telephonic meetings with investors and stakeholders;

​

▪

Proactive outreach to institutional investors, pension funds and governance professionals from our largest shareholders; and

​

▪

Our annual shareholders meeting.

​

Specifically, following a disappointing say-on-pay vote outcome at our 2021 Annual Meeting, we proactively engaged with a substantial portion of our investor base to better understand the views of our shareholders. This included an expanded outreach led by the Chair of our Compensation and Succession Planning Committee, who participated in dialogue with a broadly representative group of our shareholders along with members of our management team. These conversations helped inform and guide the Compensation and Succession Planning Committee’s decisions on executive compensation for this year and enhancements to the program going forward.

Our corporate governance principles, which were most recently revised in November 2021, describe the procedures through which shareholders may seek direct engagement with Board members. While management, through our President and Chief Executive Officer, our investor relations team, and our Corporate Secretary, ordinarily engages with shareholders, the Chairman of the Board, in consultation with the Lead Independent Director, will review and consider, on a case-by-case basis, shareholder requests for meetings with the Board of Directors related to key areas of Board oversight and determine whether such meetings would be appropriate and beneficial. Shareholders may communicate their views directly to the Board by writing to Kourosh Q. Pirouz, Vice President, Associate General Counsel and Secretary, AmerisourceBergen Corporation, 1 West First Avenue, Conshohocken, Pennsylvania 19428.

Shareholder Recommendations for Director Nominees

The advance notice provision for nomination of directors in our bylaws allows a shareholder to propose nominees for consideration by the Governance, Sustainability and Corporate Responsibility Committee by submitting specified information concerning itself and the proposed nominee, including the name, appropriate biographical information and qualifications of the proposed nominee. This and other information required under the advance notice provision must be provided to us in writing to: Kourosh Q. Pirouz, Vice President, Associate General Counsel and Secretary, AmerisourceBergen Corporation, 1 West First Avenue, Conshohocken, PA 19428, no earlier than November 9, 2022 and no later than December 9, 2022 to be considered for the 2023 Annual Meeting of Shareholders.

 

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The proxy access provision in our bylaws allows an eligible shareholder or group of no more than 20 eligible shareholders that has maintained continuous ownership of 3% or more of our Common Stock for at least three years to include in our proxy materials for an annual meeting of shareholders a number of director nominees up to the greater of two or 20% of the directors then in office. Loaned stock that can be recalled within three days may count towards an eligible shareholder’s 3% beneficial ownership requirement, which must be maintained at least until the annual meeting at which the proponent’s nominee will be considered. Proxy access nominees who do not receive at least a 25% vote in favor of election will be ineligible as a nominee for the following two years. Provisions in the Shareholders Agreement with Walgreens Boots Alliance would not permit Walgreens Boots Alliance to use proxy access. If any shareholder proposes a director nominee under our advance notice provision, we are not required to include any proxy access nominee in our proxy statement for the annual meeting. Information required under the proxy access provision must be provided to us in writing to: Kourosh Q. Pirouz, Vice President, Associate General Counsel and Secretary, AmerisourceBergen Corporation, 1 West First Avenue, Conshohocken, PA 19428, no earlier than August 31, 2022 and no later than September 30, 2022 to be considered for the 2023 Annual Meeting of Shareholders. In considering any nominee proposed by a shareholder in accordance with the requirements set forth in our bylaws, the Governance, Sustainability and Corporate Responsibility Committee will reach a conclusion based on the nominee evaluation criteria described under “Identification and Evaluation of Director Nominees and Overboarding Policy” beginning on page 13 of this proxy statement. After full consideration, the shareholder proponent will be notified of the decision of the committee.

 

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Audit Committee Matters

 

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Audit Committee Financial Experts

The Board of Directors has determined that each of Mr. Nally and Mr. Durcan is an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K. Mr. Nally serves as Chair of the Audit Committee. A description of the financial expertise of Mr. Nally and Mr. Durcan accompanies their biographies on pages 19 and 16, respectively.

Policy for Pre-Approval of Audit and Non-Audit Services

The Audit Committee’s policy is to pre-approve all audit services and all non-audit services that the Company’s independent registered public accounting firm is permitted to perform for the Company under applicable federal securities regulations. As permitted by the applicable regulations, the committee’s policy utilizes a combination of specific pre-approval on a case-by-case basis of individual engagements of the independent registered public accounting firm and general pre-approval of certain categories of engagements up to predetermined dollar thresholds that are reviewed annually by the committee. Specific pre-approval is mandatory for the annual financial statement audit engagement, among others.

Independent Registered Public Accounting Firm’s Fees

During the fiscal years ended September 30, 2021 and 2020, EY, AmerisourceBergen’s independent registered public accounting firm, billed the Company the fees set forth below in connection with services rendered by the independent registered public accounting firm to the Company:

Audit fees consisted of fees for the audit of AmerisourceBergen’s annual financial statements, consultation concerning financial accounting and reporting standards and consultation concerning matters relating to Section 404 of the Sarbanes-Oxley Act of 2002, reviews of quarterly financial statements as well as services normally provided in connection with statutory and regulatory filings or engagements, comfort letters, consents and assistance with and review of Company documents filed with the SEC. Audit fees also included fees for the audit of the effectiveness of the Company’s internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002.

Audit-related fees consisted of fees for assurance and related services, including employee benefit plan audits. Audit-related fees in both fiscal year 2020 and 2021 included due diligence fees related to the previously announced agreement to acquire the majority of the Alliance Healthcare businesses from Walgreens Boots Alliance and other corporate development activity.

Tax fees consisted of fees for services related to tax compliance, tax advice and tax planning services.

Other fees consisted of subscription fees for Internet-based professional literature.

Our Audit Committee reviewed and approved all fees charged by EY in accordance with the policy described above and monitored the relationship between audit and permissible non-audit services provided. The policy is intended to ensure that the fees earned by EY are consistent with the maintenance of the independent registered public accounting firm’s independence in the conduct of its auditing functions.

 

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2022 AmerisourceBergen Proxy | Executive Compensation and Related Matters

Executive Compensation and Related Matters

Letter from the Compensation and Succession Planning Committee

Dear AmerisourceBergen Shareholders,

As members of AmerisourceBergen’s Compensation and Succession Planning Committee (the “Compensation Committee”), we support a compensation philosophy for our named executive officers that:

▪

Aligns with the interests of our shareholders;

​

▪

Puts a significant portion of compensation at risk;

​

▪

Drives business goals and strategies that support our purpose to create healthier futures for all our stakeholders; and

​

▪

Attracts and retains talented and experienced senior executives.

​

Outstanding Performance in a Challenging Environment:   In making compensation decisions for fiscal year 2021, the Compensation Committee considered AmerisourceBergen’s strong financial performance and strategic accomplishments in an operating environment challenged by the ongoing and unprecedented effects of the COVID-19 pandemic. Against this backdrop, our management team executed on our differentiated strategy and exceeded the 2021 financial plan while also supporting, protecting and investing in our team members, including through financial incentives and enhanced time off benefits for frontline workers. The management team successfully completed the largest acquisition in AmerisourceBergen’s history and continued to drive growth as the leading distributor of specialty pharmaceuticals. True to its purpose, AmerisourceBergen played a critical role in the national response to the COVID-19 pandemic and delivered vaccines to more than 30 countries worldwide.

Proposed Opioid Litigation Settlement:   As discussed on page 5, the July 2021 proposed national settlement would resolve a substantial majority of opioid lawsuits currently filed and that could be filed by states, counties, municipalities, and other government entities. The decision to enter into this settlement involved significant consideration from AmerisourceBergen’s Board and leadership team. Ultimately, the Board determined that the proposed settlement is in the best interests of shareholders and will allow our management team to focus on the strategic and operational initiatives that drive long-term value. Importantly, AmerisourceBergen strongly disputes the allegations, but has been consistent in stating our desire to help address the enormity of the opioid challenge by bringing solutions to the table. The proposed settlement allows AmerisourceBergen, and its leadership, to focus on advancing its role as a global healthcare company, and will also bring meaningful financial relief to affected communities.

Shareholder Engagement and Feedback:   The Compensation Committee values the input of shareholders on our compensation program. Following a disappointing say-on-pay vote outcome at our 2021 Annual Meeting, we proactively engaged with a substantial portion of our investor base to better understand the views of our shareholders. This included an expanded outreach led by the new Chair of our Compensation Committee, Kathleen Hyle, who participated in dialogue with a broadly representative group of our shareholders along with members of our management team. These conversations helped inform and guide the Compensation Committee’s decisions on executive compensation for this year and enhancements to the program going forward.

Our conversations with shareholders focused on the use of non-GAAP metrics in our compensation program, the impact from the opioid litigation settlement accrual, and the need to align our compensation outcomes to the shareholder experience. Through this dialogue, we heard that shareholders were generally supportive of the overall structure of our executive compensation program; however, they believed the magnitude of the opioid litigation settlement accrual should be considered in the Compensation Committee’s fiscal year 2021 executive payout decisions, along with more detailed disclosure on our decision-making process. Separately, as we look ahead, we are committed to holding our management team accountable for events within their control.

Compensation Committee Actions:   The Compensation Committee took action to address the feedback raised by shareholders. We applied negative discretion to the short-term incentive payouts for fiscal year 2021 to reflect the shareholder experience related to the magnitude of the opioid litigation settlement accrual recorded in fiscal year 2020, and we approved several enhancements to create further alignment between our executives and shareholders. In summary, the Compensation Committee took the following actions in response to shareholder feedback:

 

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▪

Reduced by 45% the short-term incentive payout for our CEO to below target for fiscal year 2021; while the calculated payout based on financial performance was 177% of target, the Compensation Committee reduced CEO payout to 97% of target, representing a $1.8 million total reduction;

​

▪

Reduced by 10% the short-term incentive payouts for other NEOs for fiscal year 2021;

​

▪

Enhanced disclosure of Compensation Committee decision process, including application of discretion;

​

▪

Added a relative TSR modifier to the performance share component of our long-term incentive plan, effective for fiscal year 2022, with above median performance required for a target payout;

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▪

Implemented a two-year post-vesting holding requirement on 50% of earned performance shares for CEO, and one-year for other NEOs; and

​

▪

Enhanced incentive compensation clawback provision and disclosure.

​

Details on all of the actions taken, along with the key factors that the Compensation Committee considered in determining compensation for fiscal year 2021, are included within the Compensation Discussion and Analysis (CD&A), starting on page 39.

The Compensation Committee appreciates the opportunity to hear from our shareholders and looks forward to continued dialogue. We believe that the actions being taken are responsive to the feedback provided and enhance our commitment to our long-standing practice of aligning pay and performance.

Kathleen W. Hyle, Chair
Richard W. Gochnauer
Dennis M. Nally

 

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Executive Summary

Our Company

AmerisourceBergen fosters a positive impact on the health of people and communities around the world by advancing the development and delivery of pharmaceuticals and healthcare products. As a leading global healthcare company, with a foundation in pharmaceutical distribution and solutions for manufacturers, pharmacies and providers, we create unparalleled access, efficiency and reliability for human and animal health. Our 42,000 global team members power our purpose: We are united in our responsibility to create healthier futures.

Fiscal Year 2021 Business and Strategic Highlights

AmerisourceBergen delivered solid performance in fiscal year 2021. We had strong revenue and adjusted diluted earnings per share (“adjusted EPS”) growth driven by our acquisition of Alliance Healthcare, increased volume associated with growth of some of our largest customers, and continued robust specialty product sales, including COVID-19 therapies. The following fiscal year 2021 highlights include non-GAAP financial measures. Appendix A to this proxy statement presents reconciliations to the most comparable GAAP financial measures and information about the reasons such non-GAAP financial measures are disclosed.

1

See Appendix A for additional information regarding non-GAAP financial measures, including GAAP to non-GAAP reconciliations. For a comprehensive discussion of our GAAP financial results beyond those discussed in Appendix A, please refer to our Annual Report on Form 10-K for the fiscal year ended September 30, 2021.

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Throughout the COVID-19 pandemic, AmerisourceBergen has lived its purpose of being united in our responsibility to create healthier futures with our partners, customers, and team members. Commercially, we

 

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enabled the distribution of COVID-19 therapies to hospitals across the United States, and supported the distribution of more than 75 million vaccines to patients in over 30 countries through our expanded global footprint. AmerisourceBergen continued to apply measures to protect the welfare of our team members, invested in enhanced continuity pay for frontline workers as well as additional time off, allowed remote work, mandated vaccines, and enabled our businesses to continue to play a crucial role in supporting the sustainability of the pharmaceutical supply chain and enabling patient access (see page 2 of the Proxy Statement Highlights for more detail).

Shareholder Engagement and Our 2021 Say-on-Pay Vote

Regular shareholder outreach and engagement are critical inputs to our Board and management’s decision-making process. We engage with shareholders throughout the year to seek their feedback on our governance and executive compensation practices, in addition to other topics important to our long-term growth and value creation.

After multiple years of strong support, our say-on-pay proposal received approximately 52% support at our 2021 Annual Meeting. Our new Compensation Committee Chair Kathleen Hyle, along with senior members of our management team, conducted an expansive outreach effort to better understand the concerns that drove this result and how we could best respond to our shareholders moving forward. The broad scope of our outreach provided for feedback from shareholders who both supported and voted against the proposal.

Shareholder Feedback Themes and Responsive Actions

Our Compensation Committee closely evaluated the feedback received from shareholders on executive compensation and other topics. While shareholders voiced general support for the overall structure of our

 

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compensation program, many shareholders who voted against our say-on-pay proposal in 2021 indicated they did so because they felt that the Compensation Committee should have taken action to reflect the magnitude of the impact from the opioid litigation settlement accrual recorded in fiscal year 2020. Separately, they shared a view that management should be held accountable for events within its control and that compensation outcomes should more fully reflect the financial experience of shareholders.

The Compensation Committee took the following actions in response to the feedback from shareholders:

 

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Key Factors Considered by the Compensation Committee

Our Compensation Committee carefully considered the feedback it received from shareholders, in combination with Company-specific circumstances, to determine compensation actions for fiscal year 2021. The performance-based components of our executive compensation program are based on non-GAAP metrics, which we believe most effectively measure and reward operational performance and provide consistency and transparency between our financial reporting and compensation outcomes. However, the Compensation Committee also recognizes that certain events, such as the impact from the opioid litigation settlement accrual, should be reflected in final compensation decisions, and is committed to ensuring the financial outcomes of our business and shareholders remain in alignment.

As part of its decision-making process for fiscal year 2021, the Compensation Committee engaged in discussions and considered a range of factors, including:

 

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Fiscal Year 2021 Compensation Program Structure and Outcomes

We seek to pay our executive officers fairly and competitively and to link pay with performance. The main elements of our compensation program are base salary, a short-term incentive in the form of an annual cash bonus, and long-term equity incentive awards. We emphasize compensation opportunities that reward our executive officers when they deliver targeted financial results. A significant portion of our executive officers’ compensation is incentive-based. In fiscal year 2021, incentive compensation (annual cash bonus and equity incentive awards) accounted for approximately 90% of our CEO’s total direct compensation (base salary, annual cash bonus and equity incentive awards) and approximately 83% of the average total direct compensation of the other named executive officers.

 

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The following table provides a summary of the compensation program and performance outcomes for our named executive officers in fiscal 2021:

As noted above, the Compensation Committee determined to reduce fiscal year 2021 executive pay outcomes through the use of negative discretion in consideration of the shareholder experience related to the magnitude of the litigation accrual recorded in fiscal year 2020. Please refer to pages 42-44 of the Executive Summary for more information on payouts earned under plan performance metrics and actual payouts following the Compensation Committee’s application of negative discretion.

 

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Fiscal Year 2021 Compensation Practices and Policies

We believe our executive pay is reasonable and provides appropriate incentives to our executive officers to achieve our financial and strategic goals without encouraging them to take excessive risks in their business decisions. The Board and its committees regularly evaluate major risks to our business, including how risks taken by management could affect the value of executive compensation. To this end, our compensation program encompasses the following:

Compensation Details

The Compensation Committee seeks to design an executive compensation program that incentivizes our management team to meet and exceed rigorous objectives that drive long-term value for all our stakeholders while promoting talent retention. Our named executive officers’ total direct compensation consists of three components: base salary, short-term incentive, and long-term incentive. A substantial majority of this compensation is at-risk and tied to the performance of the Company and its share price. Base salary is the only fixed compensation. The Compensation Committee considers a multitude of factors in determining executive compensation objectives and targets for our named executive officers, which are described in detail in the following sections.

Compensation Philosophy

The Compensation Committee supports a compensation philosophy for our named executive officers that:

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Aligns with long-term shareholder interests:   A substantial majority of our named executive officer compensation is equity-based with a performance period covering three fiscal years. In combination with our executive stock ownership guidelines, this aligns our management team with the creation of sustainable long-term value for our shareholders. The Compensation Committee retains and will exercise discretion to ensure compensation outcomes reflect stakeholder interests and align with our values.

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Puts significant portion of compensation at-risk:   90% of CEO and over 80% of NEO total direct compensation is at-risk. Compensation outcomes are tied to the achievement of rigorous pre-set metrics which measure financial and operational performance.

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▪

Drives business goals and strategies that support long-term value and our purpose for all stakeholders:   We emphasize performance metrics which incentivize and reward business and strategic performance aligned with our purpose to create healthier futures for all our stakeholders.

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Attracts and retains senior executive talent:   Our executive compensation program design considers market and peer practice to attract top executives in a competitive talent marketplace. A significant portion of our compensation is tied to long-term equity incentives to reward our talent for performance and promote their retention.

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Fiscal Year 2021 Executive Compensation Objectives and Actions

The Compensation Committee reviews and determines executive officer compensation, including the amount of base salary, short-term incentive awards and long-term incentive awards made to our named executive officers. In making these decisions, the Compensation Committee takes into account our financial and business results, individual performance, market data, and shareholder feedback. In light of these considerations, the Compensation Committee made the following executive compensation decisions in fiscal year 2021:

​

(1)

See Appendix A for additional information regarding non-GAAP financial measures, including GAAP to non-GAAP reconciliations. For a comprehensive discussion of our GAAP financial results beyond those discussed in Appendix A, please refer to our Annual Report on Form 10-K for the fiscal year ended September 30, 2021.

​

(2)

See “Performance Share Awards — Payout of FY19-FY21 Performance Shares” below for more information about Average Annual Adjusted ROIC.

​

We believe that the fiscal year 2021 compensation of our executive officers was aligned with AmerisourceBergen’s fiscal year 2021 adjusted results and met our compensation objectives. Our compensation policies have enabled us to attract and retain talented and experienced executive officers. We believe that these policies have benefited AmerisourceBergen over time and will position us for growth in future years.

Setting Executive Compensation

Each year, the Compensation Committee, in consultation with its independent compensation consultant, evaluates a peer group of companies that will serve as a reference for comparing the pay of our named executive officers to the market. We assess companies that best reflect the complexity of our industry and competition for customers, shareholders and talent to determine whether our level of executive pay is appropriate when compared to industry and market standards. We also conduct a detailed market review of

 

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executive pay to evaluate each element of pay and benefit competitiveness, review pay practices and compare performance against our peer group.

Our peer group consists of companies with business models and operations comparable to our own, including our two largest direct competitors, and companies that we believe have a similar financial and operational profile. Metrics used to select our peer group include: revenue; market capitalization; number of employees; net income; operating income margin; and return on invested capital. We believe that the companies included in our peer group reflect the type and complexity of business risks managed by our named executive officers and are the companies that we compete with for executive talent.

In fiscal year 2021, the Compensation Committee, in consultation with its independent compensation consultant, evaluated our peer group to ensure that our peer group companies remained appropriate. Following its review, the Compensation Committee concluded that our current peers remained reasonable. As determined by the Compensation Committee, our peer group for fiscal year 2021 included:

Mylan N.V. was removed as a peer for fiscal year 2022 due to its merger with Upjohn, to form Viatris Inc.

The Compensation Committee reviews peer group proxy statement data in evaluating our named executive officers’ pay and published compensation survey data in evaluating our other executive officers’ pay. When assessing pay levels, the Compensation Committee also reviews our executive officers’ compensation in relation to each other. The Compensation Committee’s consultant concluded that our overall competitive posture for executive pay in fiscal 2021 remained aligned with our pay for performance compensation philosophy.

Components of the Executive Compensation Program