Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.    )

Dear BMS shareholders,

Our hearts go out to those who have been personally impacted by the ongoing COVID-19 pandemic and everyone managing through this difficult time. Thanks to an unprecedented collaboration in the biopharma industry and decades of investment in R&D, a number of vaccines and therapeutics were developed in record time and are being deployed globally to help stop the ongoing COVID-19 pandemic. As conscientious global citizens, we continue to take steps to protect the health and safety of the public and our global workforce, support relief efforts in communities deeply affected by the virus, and carry out our mission to discover, develop and deliver life-saving medicines for the patients who depend on us.

Throughout 2020, we continued to execute very well despite the challenges of the pandemic, delivering strong commercial performance, achieving significant pipeline milestones, and maintaining an uninterrupted supply of our medicines, while integrating our businesses following the closing of the Celgene transaction in November 2019 and building a new company. In our first full year as a new combined company, we achieved:

We have shaped our company on our values: passion, innovation, urgency, accountability, integrity and inclusion. This was reflected in our response to the global COVID-19 pandemic. As the pandemic started, we rapidly implemented a comprehensive plan to protect the health and safety of our people, many of whom are considered essential workers. We provided key compounds from our discovery library to external researchers to further the research and response efforts for COVID-19, and rapidly initiated trials with two of our medicines, Orencia and Eliquis. In partnership with the Bristol Myers Squibb Foundation (“BMS Foundation”), we provided BMS medicines for free, and other forms of support to patients in the U.S. who have lost their job and health insurance due to the pandemic. We adapted to a remote working environment, which has in many ways helped to unify teams and form stronger connections across our company while strengthening our company culture and engagement. By embracing novel communication tools we maintained a collaborative local environment and facilitated engagement across our various sites. In recognition of the challenges that we all face both personally and professionally, during this difficult time, I want to thank our workforce for all their hard work that has enabled us to make great progress in achieving our objectives and helping more patients. For further discussion on our ongoing response to COVID-19, please see discussion under “Company Response to COVID-19” beginning on page 37.

Now more than ever, we recognize our role in creating the change needed to address the health disparities and racial inequality present in our rapidly changing communities. The death of George Floyd and the global COVID-19 pandemic further exposed persistent inequalities in our society that affect underrepresented groups. We have spent time listening, learning and debating, and have developed a thoughtful and long-term sustainable approach to addressing these inequalities that reflects broad input, represents our key priorities and is consistent with our values. In August 2020, we announced a joint commitment with the BMS Foundation to invest $150 million each over the next five years to accelerate health equity and build an even more diverse and inclusive organization, including achieving gender parity at the executive level globally and doubling executive representation of Black/African American and Hispanic/Latino employees in the U.S. by the end of 2022. It is only through the diverse experiences and perspectives of our employees that we elicit the best ideas, drive innovation, and achieve transformative business results. For further discussion on these commitments, please see discussion under “Commitment to Diversity & Inclusion” beginning on page 38.

We have established a strong foundation for Bristol Myers Squibb (“BMS”) as a new company, a biopharma leader with a bright future ahead. Looking to 2021 and beyond, we have incredible potential for continued growth as we drive leading science, advance our medicines and continue to build a robust patient-centric culture.

Lastly, we want to thank Dr. Vicki Sato, Mr. Robert Bertolini, Mr. Matthew Emmens and Mr. Dinesh Paliwal for their many years of dedicated service to the BMS Board of Directors and our shareholders. The Board is extremely grateful to Dr. Sato, Mr. Bertolini, Mr. Emmens and Mr. Paliwal for their contributions. Dr. Sato, Mr. Bertolini, Mr. Emmens and Mr. Paliwal will retire from the Board of Directors effective after this Annual Meeting.

We ask for your support for our directors and other items described in this proxy statement. We also invite your participation in our annual meeting. Thank you for your continued support of our Mission. We hope you and your loved ones continue to stay safe and healthy.

Sincerely,

 

Giovanni Caforio, M.D.

Board Chair and Chief Executive Officer

Dear Fellow shareholders and stakeholders,

In the letter from our Board Chair and CEO Giovanni Caforio, you read about how this has been a year like no other, and despite the challenges of a global pandemic and widespread social unrest across the U.S. and globally, among other things, we never wavered in our commitment to deliver life-changing medicines to patients while successfully delivering strong operational performance and making steady progress against our integration priorities.

As BMS’s Lead Independent Director, I am so incredibly proud of our workforce who overcame personal challenges and found new ways of working to help make our 2020 successful by advancing our pipeline and delivering an uninterrupted supply of medicines to patients. I also want to thank my fellow directors for being actively involved in overseeing the company’s response to the COVID-19 pandemic, providing critical insights and guidance to management on strategy and refining operating plans to implement the strategy. For further discussion on our ongoing response to COVID-19, please see discussion under “Company Response to COVID-19” beginning on page 37.

Since the death of George Floyd, we have been reminded about the racial inequality that continues to persist in our communities and the importance of diversity and inclusion. Now more than ever, we realize the critical importance of lifting our voices and truly living our values of integrity and ethics, embracing a diverse workforce and promoting an inclusive culture. Our Board believes that there is no better place than the Board to set the right tone for diversity and inclusion.

Our Board has long recognized the importance of diversity on the Board. Currently, half of our Board is diverse by gender, race or ethnicity (four of whom are diverse by race/ethnicity and five by gender). Together these members represent the diverse skills and experiences most relevant to our future. We are excited about our newest directors Ms. Paula Price and Mr. Derica Rice, who further enhance our board’s composition with deep financial expertise, strategic leadership, and proven industry knowledge. The Board remains committed to oversight of the company’s strategy, including our integration priorities.

Over the last few years, shareholder input has enabled the Board to more thoroughly evaluate and improve our governance practices and disclosures in a variety of areas, including for example, our approach to sustainability. In particular, the Board has worked alongside management to clearly define our governance model and disclosure framework to ensure that our environmental, social and governance (“ESG”) strategy is fully aligned to our corporate strategy and appropriately focuses on our critical risks and opportunities. Our environmental and social programs include targets to accelerate innovation, enhance patient access to medicines, be an employer of choice, and reduce our environmental footprint. In response to valuable feedback from our shareholders on governance, we have included a proposal at the Annual Meeting this year to reduce the ownership threshold for shareholders to request a special meeting. For 2021 and beyond, continued shareholder engagement remains a top priority. Our Board will continue to provide critical oversight of our management team as they execute our strategy to create long-term shareholder value and support the pursuit of our Mission.

Finally, it has been an honor to serve as your Lead Independent Director and as a member of your Board in pursuit of our vision to transform patients’ lives through science. It has been a pleasure to have done so with such a dedicated and talented group of individuals, including Theodore Samuels, who will succeed me as Lead Independent Director.

 

 

Our Board of Directors (the “Board”) has nominated 10 current directors, Peter J. Arduini, Michael W. Bonney, Giovanni Caforio, M.D., Julia A. Haller, M.D., Paula A. Price, Derica W. Rice, Theodore R. Samuels, Gerald L. Storch, Karen H. Vousden, Ph.D., and Phyllis R. Yale, to serve as directors of Bristol Myers Squibb. The directors will hold office from election until the 2022 Annual Meeting or until their successors are duly elected. We believe that tone is set at the top, so we open this section on our Board by introducing you to who we are. We follow that with sections on how we are selected and elected, how we govern and are governed, how we are organized, how you can communicate with us and how we are paid. We ask in Item 1 for your voting support so we can continue our important work and build on our significant successes in 2021.

 

All Director Nominees Possess:

 

Our executives and employees put a great deal of thought into talent recruitment and retention, and we at the Board level are similarly committed to identifying and attracting the best directors for our company. In the subsections that follow we describe our standards, policies and processes to achieving this goal.

A majority of the votes cast is required to elect directors. Any current director who does not receive a majority of votes cast must tender their resignation as a director within 10 business days after the certification of the shareholder vote. The Committee on Directors and Corporate Governance, without participation by any director tendering their resignation, will consider the resignation offer and recommend to the Board whether to accept it. The Board, without participation by any director tendering their resignation, will act on the Committee’s recommendation at its next regularly scheduled meeting to be held within 60 days after the certification of the shareholder vote. We will promptly disclose the Board’s decision and the reasons for that decision in a broadly disseminated press release that will also be furnished to the U.S. Securities and Exchange Commission (SEC) on Form 8-K. If any nominee is unable to serve, proxies will be voted in favor of the remainder of those nominated and may be voted for substitute nominees, unless our Board of Directors provides for a lesser number of directors.

As specified in our Corporate Governance Guidelines, members of our Board should be persons with broad experience in areas important to the operation and long-term success of our company. These include areas such as business, science, medicine, finance/accounting, law, business strategy, crisis management, corporate governance, education or government. Board members should possess qualities reflecting integrity, independence, leadership, good business judgment, wisdom, an inquiring mind, vision, a proven record of accomplishment and an ability to work well with others. The Corporate Governance Guidelines also express the Board’s belief that its membership should continue to reflect a diversity of gender, race, ethnicity, age, sexual orientation and gender identity.

Our Corporate Governance Guidelines provide that a substantial majority of Board members be independent from management, and the Board has adopted independence standards that meet the listing standards of the New York Stock Exchange. Our Board has determined that, except for Giovanni Caforio, M.D., who is our Chief Executive Officer, each of our directors and each director nominee for election at this Annual Meeting is independent of Bristol Myers Squibb and its management.

In accordance with our Corporate Governance Guidelines, our Board undertakes an annual review of director independence. In February 2021, the Board considered all commercial and charitable relationships of our independent directors and director nominees, including the following relationships, which were deemed immaterial under our categorical standards (see Exhibit A):

The Board determined that none of these relationships impair the independence of these directors under the New York Stock Exchange’s independence standards or otherwise.

The Committee on Directors and Corporate Governance regularly assesses the appropriate size and composition of our Board. This assessment incorporates the results of the Board’s annual evaluation process, which are described more fully under “Annual Evaluation Process” beginning on page 13. The Committee also considers succession planning for its directors.

In connection with the Board’s ongoing director identification process, the Committee on Directors and Corporate Governance, in consultation with the Board Chair, conducts an initial evaluation of prospective nominees against the established Board membership criteria discussed above. The Committee also reviews the skills of the current directors and compares them to the particular skills of potential candidates, keeping in mind the Board’s commitment to maintain members of diverse experience and background. In particular, the Board is committed to identifying and evaluating highly qualified women and underrepresented ethnic group candidates as well as candidates with other diverse

directors, as applicable. After completing this evaluation and interview process, the Committee on Directors and Corporate Governance makes a recommendation to the full Board as to the persons who should be nominated by our Board, and the full Board determines the nominees after considering the recommendation and any additional information it may deem appropriate. Following a robust process that began in 2019, Ms. Price and Mr. Rice were elected to join the Board, effective September 1, 2020. They were identified as potential candidates for election to our Board by a third-party search firm retained by the Committee on Directors and Corporate Governance and were interviewed by members of the Board.

The Committee on Directors and Corporate Governance considers and evaluates shareholder recommendations of nominees for election to our Board of Directors in the same manner as other director nominees. Shareholder recommendations must be accompanied by disclosure, including written information about the recommended nominee’s business experience and background with consent in writing signed by the recommended nominee that he or she is willing to be considered as a nominee and, if nominated and elected, he or she will serve as a director. Shareholders should send their written recommendations of nominees accompanied by the required documents to: Bristol-Myers Squibb Company, 430 East 29^th Street—14^th Floor, New York, New York 10016, Attention: Corporate Secretary.

The Board is very focused on Board composition and refreshment to ensure that your Board has the best mix of skill sets, proficiencies and perspectives to deal with the ever-changing business dynamics of the company and external environment. The Board is also committed to increasing diversity and inclusion, both at the Board level and across the company. In particular, the Board is committed to identifying and evaluating highly qualified women and under-represented ethnic group candidates as well as candidates with other diverse backgrounds, industry experience and other unique characteristics. Finally, the Board will continue to rely on our robust board assessment process to review and evaluate the performance and contributions of directors, which improves the overall effectiveness of the Board.

Following extensive engagement with our shareholders, our Board determined to adopt proxy access in 2016, permitting a shareholder or group of up to 20 shareholders holding at least 3% of our outstanding shares of common stock for at least three years to nominate a number of directors constituting the greater of two directors or 20% of the number of directors on our Board, as set forth in detail in our Bylaws. If you wish to propose any action pursuant to our proxy access bylaw provision, you must deliver a notice to BMS containing certain information set forth in our Bylaws, not less than 120 but not more than 150 days before the anniversary of the prior year’s filing of the proxy materials. For our 2022 Annual Meeting, we must receive this notice between October 26, 2021 and November 25, 2021. Shareholders should send their notices to: Bristol-Myers Squibb Company, 430 East 29th Street—14^th Floor, New York, New York 10016, Attention: Corporate Secretary.

Our Board recognizes the critical role Board and Committee evaluations play in ensuring the effective functioning of our Board. It also believes in the importance of continuously improving the functioning of our Board and committees. Under the leadership and guidance of our Lead Independent Director, the Committee on Directors and Corporate Governance continuously assesses the Board evaluation process. For the last few years, the Board has included a written questionnaire to enhance its evaluation. In 2020, the Committees added written questionnaires for their assessments. In addition to the Board and Committee questionnaires, the Board also formalized the existing process for individual director assessment by including a written list of questions the Board Chair and Chief Executive Officer and Lead Independent Director can use as part of their one-on-one discussions with each director. The Lead Independent Director actively conveys directors’ feedback on an ongoing basis to our Board Chair and Chief Executive Officer and has regular one-on-one discussions with the other members of the Board. The formal 2020 Board and Committee evaluation processes were as follows:

In response to feedback received from the 2019 annual evaluation process, the Board formalized the existing process for individual director assessment, added new directors with necessary skills that enhance the composition of our Board and updated the Board’s review and approval processes for capital projects and business development transactions.

Director education is an ongoing, year-round process, which begins when a director joins our Board. Upon joining our Board, new directors are provided with a comprehensive orientation to our company, including our business, strategy and governance. New directors participate in an orientation program with senior business and functional leaders from all areas of the company, where strategic priorities and key risks and opportunities are discussed. Directors attend site visits to one or more of our locations. On an ongoing basis, directors receive presentations on a variety of topics related to their work on the Board and within the biopharmaceutical industry, both from senior management and from experts outside of the company. We also encourage directors to enroll in continuing education programs sponsored by third parties at our expense.

Our business is managed under the direction of our Board of Directors pursuant to the Delaware General Corporation Law and our Bylaws. The Board has responsibility for establishing broad corporate policies and for the overall performance of our company. The Board keeps itself informed of company business through regular written reports and analyses, and regular discussions with the Chief Executive Officer and other company officers; by reviewing materials provided to Board members by management and by outside advisors; and by participating in Board and Board Committee meetings.

The Committee on Directors and Corporate Governance continually reviews corporate governance issues and is responsible for identifying and recommending the adoption of corporate governance initiatives. In addition, our Compensation and Management Development Committee regularly reviews compensation issues and recommends adoption of policies and procedures that strengthen our compensation practices. The “Compensation Discussion and Analysis” section beginning on page 34 discusses many of these policies and procedures.

The Board of Directors has adopted Corporate Governance Guidelines that govern its operation and that of its Committees. Our Board annually reviews the Corporate Governance Guidelines and, from time to time revises them in response to changing regulatory requirements, evolving best practices and feedback from our shareholders and other constituents. Our Corporate Governance Guidelines may be viewed on our website at www.bms.com/ourcompany/governance.

Our Board meets regularly to discuss our company’s strategic direction and the issues and opportunities facing our company in light of trends and developments in the biopharmaceutical industry and broader business environment. Our Board has been instrumental in determining our short-term and long-term company strategy.

The Board plays a critical role in the determination of the types and appropriate levels of risk undertaken by the company. Some of the key risks the Board is focused on relate to: (i) the change in administration in the U.S. and potential legislative or other regulatory actions impacting the pharmaceutical industry, including drug pricing and access; (ii) intellectual property protection and upcoming losses of exclusivity; (iii) competition; (iv) key environmental, social and governance risks, inclusive of human capital management and our commitment to diversity and inclusion; and (v) cyber security, among others.

For further discussion on how our Board administers its strategic planning and risk oversight function as a whole and through its Board Committees, please see the discussion under the header “How We Are Organized” beginning on page 21.

The Compensation and Management Development Committee annually conducts a worldwide review of our material compensation policies and practices. Based on this review, the Committee concluded that our material compensation policies and practices are not reasonably likely to have a material adverse effect on the company. On a global basis, our compensation programs contain many design features that mitigate the likelihood of inducing excessive or inappropriate risk-taking behavior. These features include:

Our Board meets on a regularly scheduled basis during the year to review significant developments affecting Bristol Myers Squibb and to act on matters requiring Board approval. It also holds special meetings when important matters require Board action between scheduled meetings. Members of senior management regularly attend Board meetings to report on and discuss their areas of responsibility. The Board of Directors has been active during the pandemic, adapting like our global workforce, holding virtual board meetings and receiving regular updates from management as we navigated the many challenges presented by the pandemic. In 2020, the Board met 13 times. The average aggregate attendance of directors at Board and committee meetings was over 98%. No director attended fewer than 96% of the aggregate number of Board and committee meetings during the period he or she served. In addition, our independent directors met 8 times during 2020 to discuss such topics as our independent directors determined, including the company’s response to the COVID-19 pandemic and the evaluation of the performance of our current Chief Executive Officer. The Board and Board Committees held numerous information sessions throughout 2020, which supplemented the regularly scheduled Board and Committee meetings. These information sessions were especially important during 2020 and allowed the Board to provide effective oversight and support to our management team during the ongoing pandemic.

It is the expectation of the Board that each director has sufficient time to prepare for and attendance and participation at Board and committee meetings. Our Committee on Directors and Corporate Governance periodically reviews the outside board service of our directors and has adopted internal procedures to address when a director’s outside public board service exceeds the limit included in the company’s Corporate Governance Guidelines.

Directors are strongly encouraged, but not required, to attend the Annual Meeting of Shareholders. All of the 2020 nominees for director who were directors as of the 2020 Annual Meeting attended our virtual 2020 Annual Meeting of Shareholders.

The Principles of Integrity adopted by our Board of Directors set forth important company policies and procedures in conducting our business in a legal, ethical and responsible manner. These standards are applicable to all of our employees, including the Chief Executive Officer, the Chief Financial Officer and the Controller.

In addition, the Audit Committee has adopted the Code of Ethics for Senior Financial Officers that supplements the Principles of Integrity by providing more specific requirements and guidance on certain topics. The Code of Ethics for Senior Financial Officers applies to the Chief Executive Officer, the Chief Financial Officer, the Controller, the Treasurer and the heads of major operating units.

Our Board has also adopted the Code of Business Conduct and Ethics for Directors that applies to all directors and sets forth guidance with respect to recognizing and handling areas of ethical issues.

The Principles of Integrity, the Code of Ethics for Senior Financial Officers and the Code of Business Conduct and Ethics for Directors are available on our website at www.bms.com/ourcompany/governance. We will post any substantive amendments to, or waivers from, applicable provisions of our Principles, our Code of Ethics for Senior Financial Officers, and our Code of Business Conduct and Ethics for Directors on our website at www.bms.com/ourcompany/governance within two days following the date of such amendment or waiver.

Employees are required to report any conduct they believe in good faith to be an actual or apparent violation of our Codes of Conduct. In addition, as required under the Sarbanes-Oxley Act of 2002, the Audit Committee has established procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by company employees of concerns regarding questionable accounting or auditing matters.

The Board has adopted a written policy and procedures for the review and approval of transactions involving the company and related parties, such as directors, executive officers and their immediate family members. The policy and procedures cover any transaction or series of transactions (an “interested transaction”) in which the amount involved exceeds $120,000, the company is a participant, and a related party has a direct or indirect material interest (other than solely as a result of being a director or less than 10% beneficial owner of another entity). All interested transactions are subject to approval or ratification in accordance with the following policy and procedures:

BlackRock, Inc. (BlackRock) and The Vanguard Group (Vanguard) are each considered a “Related Party” under our related party transaction policy because they each beneficially own more than 5% of our outstanding common stock. The Governance Committee ratified and approved the following related party transactions in accordance with our related party policy and procedures and Bylaws:

The Governance Committee ratified the above relationships on the basis that these entities’ ownership of our stock plays no role in the business relationship between us and them, and that the engagement of each entity was on terms no more favorable to them than terms that would be available to unaffiliated third parties under the same or similar circumstances.

We provide semi-annual disclosure on our website at the link below of all political contributions to political committees, parties or candidates on both state and federal levels that are made by our employee political action committee, as well as annual disclosure of the portion of our dues or other payments made to trade associations to which we give $50,000 or more that can be attributed to lobbying expenditures. Please see the company's website at: https://www.bms.com/about-us/sustainability/economic-responsibility/political-contributions.html under “Political Contributions.”

Patients are at the center of everything we do. Our work is focused on the discovery and development of medicines that transform patients’ lives in a way that incorporates good corporate citizenship, environmental stewardship and social responsibility. Our strong governance profile includes direct oversight by our Committee on Directors and Corporate Governance of environmental, social and governance (“ESG”) risks, assessment and disclosure, which is intended to ensure our ability to operate with the highest levels of quality, integrity and ethics. Our ESG strategy is fully aligned with our corporate strategy and was defined based on a formal assessment of priority issues drawn from senior executives and a broad group of stakeholders with board oversight. This year, we celebrate our 11^th year as a member of the UN Global Compact and more than 20 years of setting global Sustainability Goals. These commitments reflect our comprehensive approach to protecting human and natural resources, now and in the future. For us, Sustainability is much more than meeting targets—it is integrated into our culture and is part of our daily thought process. This includes ensuring our clinical trials reflect real world patient populations and incorporating innovative technologies to drive our R&D and manufacturing operations. We continue to bring hope to patients with serious disease by building capacity and strengthening community services to ensure no patient is left behind. We met or exceeded the targets for all five of our Sustainability 2020 Goals:

While we are pleased with the progress we have made to date, we know there is still much more work to do to ensure the health of the planet and its people. Through active engagement with our shareholders and other key stakeholders on our ESG performance relative to our financial results, we completed the development of our next generation commitments to environmental responsibility for the integrated company. By 2030, we intend to purchase 100% of the electricity we use from renewable sources, and by 2040, we will be carbon neutral in our Scope 1 (direct) and Scope 2 (indirect) emissions and reach the targets of equitable water use, zero waste to landfill and 100% electric vehicles in our commercial fleet. In addition, we commit to set approved science-based emissions reductions targets in alignment with the Science Based Target Initiative as a key step in the roadmap to delivering these environmental commitments. And as part of our enhanced focus on transparency, we will expand our reporting to include additional validated ESG frameworks such as SASB and TCFD and will publish ESG updates annually beginning this year. Our Board remains actively engaged on these issues with direct oversight by our Committee on Directors and Corporate Governance. For more information and to provide feedback, please see the company’s website at https://www.bms.com/about-us/sustainability.html under “Sustainability.”

We firmly believe that prescription medicines are such a vital part of human healthcare that everyone who needs them should have access to them. We have been, and remain committed to facilitating access to our medicines, and to furthering our Mission to help patients prevail over serious diseases. We price our medicines based on a number of factors, including, among others, the value of scientific innovation for patients and society in the context of overall healthcare spend; economic factors impacting the healthcare systems’ capacity to provide appropriate, rapid and sustainable access to patients; and the necessity to sustain our R&D investment in innovative, high-quality medicines that address the unmet medical needs of patients with serious diseases and improve their life needs.

At Bristol Myers Squibb, we believe in the value our medicines bring to patients and society and our role in transforming care to help patients live longer, healthier and more productive lives. We focus on medicines that meaningfully change patient outcomes and improve quality of life, and over the last 30 years, we have made significant contributions in areas such as HIV, hepatitis, cardiovascular disease and, most recently, immuno-oncology. After our acquisition of Celgene, we are now moving to the next generation of treatment options, such as CAR-T. We are pursuing medicines with transformational potential in diseases such as cancer, hematology, heart failure, fibrosis, multiple sclerosis, psoriasis and neuroscience. Many of our medicines are breakthroughs in innovation, truly differentiated medicines that have changed the standard of care and help patients live longer and healthier lives. For example, in melanoma, prior to the availability

of immuno-oncology treatment options, 25% of patients diagnosed with metastatic melanoma survived one (1) year. This increased to 74% with immuno-oncology therapies. Through Revlimid and Pomalyst, we transformed the treatment of multiple myeloma. Advances like these have transformed the treatment of certain cancers and changed survival expectations for patients. Collectively, we have delivered five (5) new products in the past four (4) years, including 26 major market approvals in 2020. These breakthrough medicines are possible because of our sustained investment in research and development. We have emerged as an industry leader in R&D investment, investing approximately, $6 billion, $6 billion and $11 billion annually for 2018, 2019 and 2020, respectively or approximately 26% of our revenue in 2020. Our goal is to ensure access to our currently approved medicines while continuing to fuel the development of medicines for the future.

We take a thoughtful approach to pricing our products and have internal processes and controls in place to ensure that pricing decisions are thoroughly and appropriately vetted with the highest levels of management prior to implementation. This process includes routine presentations to the Board on drug pricing strategies. In addition, on balance, over the last few years, our revenue growth has been primarily attributable to increased volume arising from increased demand for our products rather than price increases. We have and continue to disclose the average net selling price increase for our U.S. products in our annual report on Form 10-K and our quarterly reports on Form 10-Q. Our average net selling price increase for 2016, 2017, 2018, 2019 for our legacy BMS products was approximately, 5%, 2%, 0% and 0%, respectively and for 2020 for our combined company products (including Celgene) was approximately 1%. We believe we have the appropriate governance mechanisms and internal controls and processes in place to ensure that pricing decisions are made in line with our values and commitment.

Increases in list prices for 2021 generally align with or are below the latest projected rate of increase for U.S. national healthcare expenditures, and only apply to BMS medicines with ongoing clinical research. The list price of a BMS medicine does not reflect discounts and rebates provided to payers and pharmacy benefit managers, and the price patients pay for medicines varies according to their insurance coverage. Any patient having issues obtaining or affording a BMS medicine should visit our patient support website hub at https://www.bmsaccesssupport.bmscustomerconnect.com/patient.

In addition, the Compensation Management and Development Committee annually completes a thoughtful and rigorous evaluation of our executive compensation program to ensure that the program is aligned with our Mission and delivers shareholder value, while not encouraging excessive or inappropriate risk taking by our executives. When setting incentive plan targets each year, the Compensation Management and Development Committee is aware of the risks associated with drug pricing, among other things, and ensures our plans do not incentivize risky behavior in order to meet targets.

We remain committed to working with policymakers, thought leaders, patient advocates and other stakeholders to shape a comprehensive system that provides accessible and affordable health care with the goal of achieving universal coverage and quality patient care, while continuing to fuel innovation. We support efforts to make medicines more affordable, from access assistance to innovative ways to address costs more directly. Individuals who cannot afford our medicines and have no other means of coverage, public or private, may be eligible to be provided with our medicines, at no charge, through a number of programs, including product donations to various independent charitable organizations, such as the Bristol-Myers Squibb Patient Assistance Program Foundation, Inc., an independent 501(c)(3) charitable organization and other company sponsored patient assistance programs. We estimate that in 2020, we donated more than $1.5 billion worth of medicines to assist more than 116,000 patients in the U.S. at no cost to these patients.

We promote health equity globally and strive to increase access to life-saving medicines for populations disproportionately affected by serious diseases and conditions, giving new hope and help to some of the world’s most vulnerable people. Indeed, increasing access to patients was one of our 2020 Sustainability Goals. In addition to our patient support programs in the U.S. and outside of the U.S., we have dedicated patient support programs, rebates and co-pay assistance programs in each country. In instances of disproportionate disease impact, we support the use of tiered pricing between distinct groups of countries. For example, for over a decade, Bristol Myers Squibb has maintained a policy of tiered pricing and voluntary licensing for our HIV and HCV medicines in an attempt to reduce barriers that delay broad and accelerated access to treatment for patients around the world. In addition, as part of our commitment to helping patients prevail over serious diseases, we also drive and support a number of programs designed to build capacity, raise

patient awareness, including prevention and diagnosis and access to treatment and care. Through donations to the Bristol Myers Squibb Foundation, an independent 501(c)(3) charitable organization, we support community-based programs that promote cancer awareness, screening, care and support among high-risk populations in the United States, as well as China, Brazil and sub-Saharan Africa. Examples are the SECURE THE FUTURE and Delivering Hope programs.

Providing patients with access to our medicines has been especially important during the COVID-19 pandemic. In 2020, we expanded our patient support programs to help eligible unemployed patients in the U.S., made over $11 million in COVID-19 related cash donations and grants to organizations in 38 countries and donated over $1 million in personal protective equipment (PPE) to organizations in the U.S. The Bristol Myers Squibb Foundation similarly donated over $21 million in aid in 42 countries.

As a company, we have made remarkable improvements in delivering life-saving medicines to patients and offering creative solutions for access; however, we understand concerns that our healthcare system as a whole is too expensive, and we are interested in finding ways to improve our system. Therefore, we re-assert our commitment to proactively work with governments, payers, health care providers and other stakeholders around the world to develop sustainable solutions that will better assist patients in need.

The company’s governance documents provide the Board with flexibility to select the appropriate leadership structure for the company. They establish well defined responsibilities with respect to the Board Chair and Lead Independent Director roles, including the requirement that the Board have a Lead Independent Director if the Board Chair is not an independent director. This information is set forth in more detail on our website at www.bms.com/ourcompany/governance.

Our Board has dedicated significant consideration to our leadership structure, particularly in connection with the election of Dr. Caforio as the Board Chair at the 2017 Annual Meeting. The Board evaluates our leadership structure annually. The Board’s most recent analysis of our leadership structure took into account many factors, including the specific needs of the Board and the company, the strong role of our Lead Independent Director, our Corporate Governance Guidelines (including our governance practices that provide for independent oversight of management), the integration of Celgene businesses into our company, the challenges specific to our company, and the best interests of our shareholders. After thoughtful and rigorous consideration, the Board determined that combining the Board Chair and Chief Executive Officer positions and electing Dr. Caforio as the Board Chair continues to be in the best interest of the company and our shareholders and is the best leadership for the company and its shareholders at this time. Specifically, our Board believes having Dr. Caforio serve in the combined role of Board Chair and Chief Executive Officer confers distinct advantages at this time, including:

The Board recognizes the importance of appointing a strong Lead Independent Director to maintain a counterbalancing structure to ensure that the Board functions in an appropriately independent manner. The Lead Independent Director is selected annually by the independent directors. Dr. Sato currently serves as Lead Independent Director and the independent directors of the Board have elected Mr. Samuels to serve in that position effective as of the 2021 Annual Meeting of Shareholders.

The Lead Independent Director’s responsibilities include, among others:

The Board’s culture is open and promotes transparent dialogue and rigorous discussion. The Board deliberates on all major decisions with and without management present and effectively utilizes executive sessions with the leadership of the Lead Independent director to drive board alignment.

The Board believes this structure provides an effective, high-functioning Board, as well as appropriate safeguards and oversight. Our Board will continue to evaluate its leadership structure in light of changing circumstances and will do so on at least an annual basis and make changes at such times as it deems appropriate.

Our Board administers its strategic planning and risk oversight function as a whole and through its Board Committees. The following are examples of how our Board Committees are involved in this process:

Our Bylaws specifically provide for an Audit Committee, Compensation and Management Development Committee, and Committee on Directors and Corporate Governance, all of which are composed entirely of independent directors. Our Bylaws also authorize the establishment of additional committees of the Board and, under this authorization, our Board of Directors established the Science and Technology Committee. Our Board has appointed individuals from among its members to serve on these four standing committees and each committee operates under a written charter adopted by the Board, as amended from time to time. These charters are published on our website at http://bms.com/ourcompany/governance/Pages/board_committees_charters.aspx. Each of these Board Committees has the necessary resources and authority to discharge its responsibilities, including the authority to retain consultants or experts to advise the committee.

The table below indicates the current members of our standing Board Committees and the Integration Committee and the number of meetings held in 2020:

The following descriptions reflect each standing Board Committee’s membership and Chair effective as of May 4, 2021.

In addition, in 2020, the Board also had an Integration Committee, which oversaw the overall integration of the respective businesses and operations of BMS and Celgene, including providing regular reports to the Board on the progress of the integration and serving as an advisory committee to company management to provide input in connection with the integration. The members of the Integration Committee were Dinesh Paliwal, who chaired the Committee, Peter Arduini, Giovanni Caforio, M.D., Matthew Emmens, Julia Haller, M.D. and Karen Vousden, Ph.D. The Integration Committee met five times during 2020. The Integration Committee will dissolve effective as of this 2021 Annual Meeting of Shareholders. The board also established an ad hoc Securities Issuance Committee to determine and approve the terms and provisions of securities issued by the company. The members of the Securities Issuance Committee were Giovanni Caforio, M.D., Robert Bertolini and Gerald L. Storch. The Securities Issuance Committee met once during 2020.

We, members of the Board of Directors, know that we must actively seek information from a wide variety of sources—and not just from individuals and entities that work for us—to do our jobs optimally. We therefore create multiple means to hear from shareholders, employees at all levels, patients, medical professionals, policy experts and others to inform our work.

You can communicate with us via many of these means. You can provide us comments on your proxy when you are voting. You can attend our annual meeting and ask questions. You can accept our invitations to engage or ask us for a meeting

when that is of value to you. You can participate in our various Investor Relations functions which we listen to both directly and indirectly. You can write to us via mail or use any of our reporting functions such as so-called Whistle Blower hotlines. And, of course, we pay close attention to your voting and investment decisions as well.

Our Board has created a process for anyone to communicate directly with our Board, any committee of the Board, the non-employee directors of the Board collectively or any individual director, including our Board Chair and Lead Independent Director. Any interested party wishing to contact our Board may do so in writing by sending a letter to Bristol-Myers Squibb Company, 430 East 29th Street—14th Floor, New York, New York 10016, Attention: Corporate Secretary.

Any matter relating to our financial statements, accounting practices or internal controls should be addressed to the Chair of the Audit Committee. All other matters should be addressed to the Chair of the Governance Committee.

Our Corporate Secretary or her designee reviews all correspondence and forwards to the addressee all correspondence determined to be appropriate for delivery. Our Corporate Secretary periodically forwards to the Governance Committee a summary of all correspondence received. Directors may at any time review a log of the correspondence we receive that is addressed to members of the Board as well as copies of any such correspondence. Our process for handling communications to our Board has been approved by the independent directors.

We continued to place a high priority on our proactive engagement with our shareholders in 2020, reaching out to over 50 of our top shareholders, representing nearly 49% of our shares outstanding. In 2020, management and members of the Board, including our Lead Independent Director, met with many of our shareholders and had a productive dialogue on a number of topics, including the company’s response to COVID-19, board composition, company strategy and execution, diversity and inclusion, sustainability and risk oversight, as well as executive compensation.

The feedback received was generally positive and was shared with the entire Board and members of senior management. In addition, we continued to engage with shareholders, seeking active feedback and offering additional insights on current topics of interest, such as diversity and inclusion, the response to COVID-19 and our ESG strategy, as well as executive compensation and corporate governance topics, including the shareholder proposals included in our 2020 Proxy Statement.

We encourage our registered shareholders to use the space provided on the proxy card to let us know your thoughts about BMS or to bring a particular matter to our attention. If you hold your shares through an intermediary or received the proxy materials electronically, please feel free to write directly to us.

On February 1, 2020, all non-employee directors serving on the Board at that time received an annual award of deferred share units valued at $190,000 under the 1987 Deferred Compensation Plan for Non-Employee Directors. These deferred share units are non-forfeitable at grant and are settleable solely in shares of our common stock. A new member of the Board who is eligible to participate in the Plan receives, on the date the director joins the Board, a pro-rata number of deferred share units based on the number of share units payable to participants as of the prior February 1.

Our Lead Independent Director received an additional annual retainer of $50,000. Our Board has determined to award this retainer in light of the increased duties and responsibilities demanded by this role, which duties and responsibilities are described in further detail on page 22.

All non-employee directors are required to acquire a minimum of shares and/or units of company stock valued at not less than five times their annual cash retainer within five years of joining the Board and to maintain this ownership level throughout their service as a Director. We require that at least 25% of the annual retainer be deferred and credited to a deferred compensation account, the value of which is determined by the value of our common stock, until a non-management director has attained our share retention requirements.

A non-management director may elect to defer payment of all or part of the cash compensation received as a director under our company’s 1987 Deferred Compensation Plan for Non-Employee Directors. The election to defer is made in the year preceding the calendar year in which the compensation is earned. Deferred funds for compensation received in connection with service as a director in 2020 were credited to one or more of the following funds: a U.S. total bond index, a short-term fund, a total market index fund or a fund based on the return on our common stock. Deferred portions are payable in a lump sum or in a maximum of 10 annual installments. Payments under the Plan begin when a participant ceases to be a director or at a future date previously specified by the director.

Each director who joined the Board prior to December 2009 participates in our Directors’ Charitable Contribution Program. Upon the death of a director, we will donate up to an aggregate of $500,000 to up to five qualifying charitable organizations designated by the director. Individual directors derive no financial or tax benefit from this program since the tax benefit of all charitable deductions relating to the contributions accrues solely to the company. In December 2009, the Board eliminated the Charitable Contributions Program for all new directors.

In addition, each director was able to participate in our company-wide matching gift program in 2020. We matched dollar for dollar a director’s contribution to qualified charitable and educational organizations up to $30,000. This benefit was also available to all company employees. In 2020 as part of our overall diversity and inclusion commitments, we committed to matching on a 2-to-1 basis through the Bristol Myers Squibb Foundation all employee and director donations to organizations that fight disparities and discrimination. In 2020, all of our directors participated in our matching gift programs as indicated in the Director Compensation Table below.

I am very proud of the resilience exhibited by our team across the globe in 2020. We all were faced with unprecedented challenges from the COVID-19 pandemic. Through personal sacrifices, flexibility and ingenuity, our team rose to the occasion. They demonstrated their commitment to our Mission and provided uninterrupted supply of medicines to our patients, while providing for the health and welfare of our workforce. 2020 also provided us with unique opportunities to strengthen our long-standing commitment to diversity and inclusion. We are confident these actions position us well for future success for our shareholders, patients, and employees.

The Compensation and Management Development Committee (when used in this Compensation Discussion & Analysis (“CD&A”), the “Committee” or “CMDC”) has been deeply involved in ensuring that the executive compensation programs align, support and reinforce the company’s business and people strategy. For our Named Executive Officers (or “NEOs”), our goal each year is to create an executive compensation framework that provides clear lines-of-sight into the key value drivers that we believe will create long-term value for our shareholders and patients.

From an executive compensation perspective, we had four distinct focus areas over the past year and these will continue to guide us in our work in 2021. As you read our CD&A, you will see these distinct focus areas reflected throughout. They are:

Our Committee also focuses on the development mandate outlined in our charter. In this regard, the Committee continued its longstanding practice of reviewing with the CEO the performance, potential and development opportunities for the senior executives who make up the leadership team, with a view toward prudent succession planning. As part of this effort, members of the Committee were involved in the interviews and onboarding of key external candidates who joined the BMS leadership team.

During 2020, we engaged with a large number of our shareholders on a variety of topics, including executive compensation, the impact of the COVID-19 pandemic on our executive compensation programs, and our human capital management. To date, the Committee continues to evaluate the impact of COVID-19 on our financial and operational performance and has not made any changes to our 2020 compensation program, including with respect to the targets set at the beginning of the year. In addition, the Committee is keenly focused on the topic of human capital management, particularly during the continued integration of Celgene and during this unprecedented time of a global pandemic. This is a topic that is regularly discussed at our Committee and Board meetings and is largely driven by our People Strategy: inspired individuals and engaged teams working together for our patients and our communities, which helps us determine where and how to invest in our people. Looking ahead, we hope to make excellent progress against our recently announced commitment to achieve gender parity at the executive level globally and double executive representation of both Black/African American and Hispanic/Latino employees in the U.S. by the end of 2022.

We will continue to engage with shareholders and give full consideration to their feedback. We welcome your input.

 

Gerald L. Storch, Chair.

2020 was a challenging year for our company and employees, as it was for almost all companies. The COVID-19 pandemic forced us to change the way we work while maintaining our focus on the safety and well-being of our workforce and achieving our mission to develop and deliver innovative new medicines to improve patients’ lives. Despite the challenges faced due to the COVID-19 pandemic, we delivered strong financial results, executed on critical launches, achieved key integration milestones and progressed our pipeline.

Critical to our performance in 2020, and the future of our new company, was our continued successful integration of Celgene, which we acquired in November 2019. In addition to achieving our 2020 financial goals of deal-related synergy capture, we achieved a number of important integration milestones: continuing to embed the culture of our new company, finalizing our new organization design and placement of talent, continued harmonization of our systems and policies, employee leveling structure and deploying broad-based incentive compensation program design. In addition to our work to address the needs of our current employees, we also strengthened our talent base by recruiting over 4,500 new employees to our company.

Our integration achievements have established a strong foundation for Bristol Myers Squibb as a new company, a biopharma leader with a bright future ahead. We have a stronger portfolio of marketed medicines, a broader and deeper pipeline, and significant free cash flow generation potential, which will further increase our financial flexibility. As a combined company, our pipeline is considerably broader, with platforms and technologies that provide significant opportunities for new approaches to the treatment of serious diseases. We have established leadership positions across oncology, hematology, cardiovascular, and immunology. In each of these businesses, we have leading in-line medicines, significant short-term launch opportunities and a rich pipeline.

Looking ahead, we are very excited about the breadth and depth of our early pipeline, our ability to continue to drive innovation and further strengthen our scientific leadership. Business development is a top priority and this was evident in 2020. We acquired MyoKardia, Inc. in November 2020, which brings another promising asset to the company with multi-billion dollar potential.

Most notably, we value diversity and inclusion at the company and we made remarkable strides in 2020 to strengthen our inclusive company culture. In August 2020, the company and the Bristol Myers Squibb Foundation announced each would invest $150 million as part of a series of commitments around health equity, diversity and inclusion. For further discussion on these commitments, please see discussion under “Commitment to Diversity & Inclusion” beginning on page 38.

For 2020, we compensated all of our Named Executive Officers (or “NEOs”) under a common framework. Following the completion of the Celgene transaction in November 2019, we started the work to harmonize and align our pay and benefits programs. Most importantly from a pay perspective, for the 2020 performance year, the Committee took the initial step to ensure all eligible employees, including our NEOs, had similar performance goals in our annual bonus program and 2020 long-term incentive awards to reflect a holistic assessment of the company's and management's overall performance. For the annual bonus program, this included Key Integration Metrics for our executives, including our NEOs.

Throughout 2020, the Committee oversaw the implementation of further harmonization of pay programs for employees other than our executive officers. This included alignment on individual targets for our new broad-based annual bonus program and long-term incentive program targets globally, effective January 2021. While we reviewed the pay levels and incentive target levels for our NEOs in 2019, at the close of the transaction, due to our commitments in the transaction agreement, we were unable to make broader incentive program and pay changes for legacy Celgene employees until the first anniversary of the transaction closing, November 2020. As a result, 2021 marks the beginning of fully aligned enterprise-level compensation programs - namely our annual bonus and long-term incentive program - for all of our eligible employees.

However, this does not mark the end of the multi-year integration journey. For 2021, and in some countries into 2022, we will continue to implement unified benefits and work life programs. Over the next few years, we anticipate that you will continue to see the evolution of our executive compensation and benefits programs.

This Compensation Discussion and Analysis describes these actions taken by the Committee in more detail. In particular, the unified compensation program was designed to provide the Committee with the tools and flexibility to appropriately incentivize, reward and retain our executives and reflect company performance.

This CD&A is intended to explain how our executive compensation program is designed and how it operates for our Named Executive Officers. The table below lists our 2020 NEOs.

2020 was a year of strong execution for the company. We made great progress against the execution of our strategy, delivering strong operational and financial performance in key areas, including continued growth across our in-line portfolio, successful execution of new launches, and achieving significant pipeline milestones. We accomplished this while progressing our integration of the Celgene businesses and facing the challenges of a global pandemic.

As a company, we are building on a firm foundation in diversity and inclusion. We are accelerating the progress we have made through this journey to better serve our patients. In August 2020, the company and the Bristol Myers Squibb Foundation announced each would invest $150 million over the next five years as part of a series of commitments around health equity, diversity and inclusion currently focused on five key priorities: 1) addressing health disparities, 2) increasing clinical trial diversity, 3) expanding our supplier diversity program, 4) expanding our U.S. & Puerto Rico Employee Giving Program and 5) increasing our workforce diversity at the executive levels.

 

We believe that our 30,000 employees represent the best and the brightest people in the industry. They are the foundation of our success and our competitive advantage. They work together to bring our Mission to life to help patients prevail over serious disease.

Our people are the heart and soul of our globally unified culture. Our People Strategy—inspired individuals and engaged teams working together for our patients and our communities—helps us determine where and how to invest in our people.

The Committee has been and will continue to be very focused on the topic of human capital management, particularly during the continued integration of Celgene and during this unprecedented time of a global pandemic. This is a topic that is regularly discussed at our Committee and Board meetings.

We are working together to build a diverse and inclusive organization. We are committed to the advancement of women in leadership positions. We have taken significant steps inside our organization toward transforming our inclusive culture — efforts that have already made measurable change across our workforce include reaching gender parity in 2015. Building on our existing focus, by year-end 2022, we aim to achieve gender parity at the executive level globally.

Our eight People and Business Resource Groups (PBRGs) represent a key strategy we use to support the business objectives, career advancement and development needs of our employees. Each PBRG is focused on a specific element of diversity. Our more than 15,000 PBRG members have applied their perspectives and experiences to drive our patient-focused mission within BMS and in the communities where we live and work.

Our PBRGs are sponsored by members of our leadership team and are led by a full-time dedicated leader who reports directly to a member of our leadership team. Our PBRGs include the Black Organization for Leadership and Development, the Bristol Myers Squibb Network of Women, the Cultivating Leadership and Innovation for Millennials and Beyond, the Differently-Abled Workplace Network, the PRIDE Alliance, the Organization for Latino Achievement, the Pan Asian Network and the Veterans Community Network.

We also routinely conduct confidential employee engagement surveys of our global workforce, which provide feedback on employee satisfaction and engagement and cover a variety of topics such as company culture and values, execution of our strategy, diversity and inclusion and individual development, among other topics. Survey results are reviewed by our executive officers and Board of Directors, who analyze areas of progress or opportunities both at a company/business unit level as well as at a function level. Individual managers use survey results to implement actions that impact the engagement and well-being of our employees. We believe that our employee engagement initiatives, competitive pay and benefit programs and career growth and development opportunities help increase employee satisfaction and tenure and reduce voluntary turnover. The average global tenure of our employees is approximately eight years.

We provide highly competitive benefits, compensation and work life offerings that reflect a total rewards strategy to enable and empower the energy and talent of our workforce to deliver on our business strategy and transform patients’ lives through science. Our benefits plans and programs (which necessarily vary by country) include in the U.S. choices for health coverage, including medical, pharmacy, dental, vision, pretax savings and spending accounts; financial protections through life insurance, supplemental health insurance and personal coverage and protections; and financial savings and wellbeing through a highly competitive 401(k) savings plan and financial-wellbeing resource. Similarly, our U.S. work life offerings encourage growth, wellbeing and recognition through tuition reimbursement, our “Living Life Better” wellbeing platform, our “Bravo” global recognition program aligned to our values, onsite fitness centers in select locations and employee assistance program; provide support for welcoming and nurturing family members through paid parental leave to care for a new child, bridge back parent leave to ease transition of new parents back into work, adoption/surrogacy reimbursement, fertility/infertility benefits, support for traveling mothers and paid family care leave; assist employees in

managing life during the workday and beyond through child, elder and pet care resources, and commuter accounts; and provide our employees with opportunities to recharge and give back to our communities through vacation, holidays and annual paid volunteer days, paid bereavement leave, paid military leave and paid military family care leave.

 

In 2020, we reached out to more than 50 of our top shareholders, representing nearly 49% of our total shares outstanding. As in previous years, we engaged on many important topics related to our executive compensation and corporate governance programs, including board composition, tenure, board assessment, risk oversight, and board and company-wide diversity and other sustainability and social responsibility topics. We also engaged on our response to the COVID-19 pandemic. The feedback we received from shareholders was generally positive and supportive of our governance practices and our compensation program. Our 2020 say-on-pay proposal was approved by 92% of our shareholders, confirming continued support for our executive compensation program.

We used the feedback from these engagement conversations as vital input into Committee discussions. The Committee remains committed to ongoing shareholder engagement, and they actively consider shareholder feedback as they evaluate and adjust our executive compensation program.

At Bristol Myers Squibb, the cornerstone of our compensation philosophy and program structure is aligning pay to the achievement of both our short-term and long-term goals, engagement of our employees, the achievement of our Mission and the delivery of value to our shareholders.

Each year, when evaluating company and senior management performance and making its pay decisions, the Committee considers our compensation philosophy and program structure, which underscores competitive compensation and pay for performance, with the goal of striking the appropriate balance among (i) directly aligning executives’ compensation with the fulfillment of our Mission and the delivery of shareholder value, (ii) making a substantial portion of our executives’ compensation variable and at risk based on operational, financial, strategic and share price performance, and (iii) attracting, retaining and engaging executives who are capable of leading our business in a highly competitive, complex, and dynamic business environment.

After reviewing our financial and operational performance, our share price performance, and the individual performance of our executives, the Committee determined that the compensation of our executives under the program design continues to be appropriate.

Based on this philosophy, our compensation program is designed with the following principles in mind:

In general, our executive compensation program seeks to provide total direct compensation at the median of our primary peer group (as defined below) when targeted levels of performance are achieved. In any given year, however, total direct compensation for a particular executive may be above or below the median of our primary peer group due to multiple factors. These factors include competencies, qualifications, experience, responsibilities, contribution, individual performance, role criticality and/or potential as well as attracting and retaining talent within the highly competitive biopharmaceutical industry marketplace. We define total direct compensation as base salary plus target annual incentive award plus the grant date fair value of annual long-term equity incentive awards.

Paying at competitive levels when targeted levels of performance are achieved allows us to attract and retain the talent we need to continue driving performance, while enabling us to maintain a competitive cost base with respect to compensation expense.

The Committee's independent compensation consultant, Compensation Advisory Partners, LLC (“CAP”) annually conducts and shares with the Committee a review of compensation for our Named Executive Officers, including compensation information compiled from publicly filed disclosures of our primary and extended peer groups. Pay levels of our peers, among other factors, are used as a reference point when determining individual pay decisions (i.e., base salary levels, the size of salary adjustments, if any, target annual incentive levels and long-term equity incentive award size).

We regularly monitor the composition of our peer groups and make changes when appropriate. The Committee, with the help of CAP, reviewed our peer groups for 2020 and determined that all of the peer companies continued to be appropriate and that we would not make any changes to the peer groups. Our peer groups in 2020 consisted of the following companies: