UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Preliminary Proxy Statement
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CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Section 240.14a-12
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AMGEN INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
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Title of each class of securities to which transaction applies:
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Date Filed: |
Robert A. Bradway Chairman of the Board, Chief Executive Officer and President | ||
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Amgen Inc. One Amgen Center Drive Thousand Oaks, CA 91320-1799 |
April 7, 2020
Dear Fellow Stockholder:
You are invited to attend the 2020 Annual Meeting of Stockholders, or Annual Meeting, of Amgen Inc. to be held on Tuesday, May 19, 2020, at 11:00 A.M., Pacific Time.
Our Mission: We seek to develop innovative medicines that address important unmet medical needs in the fight against serious illness. This mission is the central underpinning of our strategy, inherently long-term, and in service of patients and their families.
Our Heritage: This month, we are celebrating our fortieth anniversary. Entrepreneurs started Amgen 40 years ago knowing that biotechnology could change lives. Today, our innovative medicines can be found in approximately 100 countries. We are proud of what Amgen has accomplished in the past four decades, and excited for what the future holds.
Execution of Our Strategy: In 2019, we advanced key facets of our long-term growth strategy in a year of transition. We have reshaped our portfolio of innovative medicines in recent years, focusing on products that can grow primarily through volume increases, rather than price increases, including Repatha®, Aimovig®, Prolia®, EVENITY® and, most recently, Otezla®. Leveraging our industry-leading biologics manufacturing skills, we have delivered our first biosimilars to the U.S. market, MVASI® (biosimilar bevacizumab (Avastin®)) and KANJINTI® (biosimilar trastuzumab (Herceptin®)), in 2019 (adding to our two successful biosimilar launches outside of the U.S. last year). We progressed our early oncology programs, including AMG 510, our KRASG12C small molecule inhibitor, that has enrolled a potentially pivotal Phase 2 monotherapy study in advanced non-small cell lung cancer, began enrollment of colorectal cancer patients in a Phase 2 monotherapy study, and is also being investigated as a treatment for a variety of other solid tumors. Outside of oncology, we have also advanced our pipeline in our other therapeutic areas and await data from tezepelumab for allergic and non-allergic asthma, omecamtiv mecarbil for heart failure, and Otezla for mild to moderate psoriasis. And we are increasingly well-positioned to take advantage of the growing demand for innovative healthcare globally, with our expanding presence in markets around the world, including China, where we have entered into a strategic oncology collaboration with BeiGene Ltd., and Japan. In 2019, we also continued to work on the construction of our second next-generation manufacturing facility in Rhode Island, building on the success we have had with our first next-generation facility in Singapore; delivering the same output as a traditional plant, but with a much smaller environmental footprint. We continue to maintain a disciplined approach to capital allocation through which we invest in our future while also returning capital to stockholders. In the Compensation Discussion and Analysis section of this proxy, we further discuss our progress against our strategy in 2019.
Our Commitment to Society: As we strive to bring to market first-in-class or best-in-class medicines to treat serious illness and deliver a large effect size, we believe that we are bringing the type of innovation that can address the challenges of our increasingly older and more urban global population. How we achieve this aspiration is equally important since making a positive difference in the world is at the heart of what we do. As part of our mission to serve patients, we take our responsibilities seriously with respect to the areas of environmental sustainability, social responsibility, and corporate governance (ESG). In addition to a commitment to ethical business practices, our ESG efforts include integrating environmentally sustainable practices throughout our business, improving patient access to our medicines, supporting science education for the next generation of innovators, and enhancing the diversity and inclusiveness of our workforce.
Stockholder Engagement: We are also guided by the perspectives of our stockholders as expressed through their direct engagement with us throughout the year and at our Annual Meeting. Since our 2019 annual meeting of stockholders, in addition to outreach by our executives and Investor Relations department to investors owning approximately 58% of our outstanding shares, we have engaged in governance-focused outreach activities and discussions with the governance teams for stockholders comprising approximately 51% of our outstanding shares. Topics discussed included our business performance, our ESG programs, and executive compensation (including its direct link to our strategy). Feedback received during these meetings is shared with the full Board of Directors and informs Board and committee decisions. We are eager to continue this valuable dialogue with our investors in the coming year.
We are grateful to our former Executive Vice President and Chief Financial Officer, David W. Meline, who retired as CFO at the end of 2019 for his significant and lasting contributions to Amgen. Peter H. Griffith joined us as our new CFO this year and his extensive financial and operational experience will benefit Amgen as we continue our efforts to serve more patients and drive long-term growth and stockholder value.
I look forward to sharing more about our Company at the Annual Meeting. In addition to the business to be transacted and described in the accompanying Notice of Annual Meeting of Stockholders, I will discuss recent developments during the past year, the substantial progress we made on our strategic priorities for 2019, and respond to comments and questions.
On behalf of our Board of Directors, I thank you for your participation and investment in Amgen. We look forward to the Annual Meeting on May 19. As a final note, and also on behalf of our Board of Directors, I would like to thank Rebecca M. Henderson, who is not standing for re-election this year, for her decade of wise counsel to and guidance of Amgen.
Sincerely,
Robert A. Bradway
Chairman of the Board,
Chief Executive Officer and President
Amgen Inc. One Amgen Center Drive Thousand Oaks, California 91320-1799 |
Notice of Annual Meeting of Stockholders
To be Held on May 19, 2020
To the Stockholders of Amgen Inc.:
Date and Time: | Tuesday, May 19, 2020, at 11:00 A.M., Pacific Time | |||
Location: | After careful consideration, in light of the on-going developments related to the COVID-19 pandemic and governmental decrees that in-person gatherings be postponed or canceled, and in the best interests of public health and the health and safety of our stockholders, Board of Directors, and employees, our 2020 Annual Meeting of Stockholders, or Annual Meeting, will be held solely by remote communication via the internet at www.virtualshareholdermeeting.com/AMGN2020. You will not be able to attend the Annual Meeting in person.
Stockholders or their proxyholders may participate, vote, and examine our list of stockholders at our Annual Meeting via the Internet at www.virtualshareholdermeeting.com/AMGN2020 and using your control number. | |||
Record Date: | March 20, 2020. Amgen stockholders of record at the close of business on the record date are entitled to receive notice of, and vote at, the Annual Meeting and any continuation, postponement, or adjournment thereof. | |||
Mail Date: | We intend to mail the Notice Regarding the Availability of Proxy Materials, or the proxy statement and proxy card, as applicable, on or about April 7, 2020, to our stockholders of record on the record date. | |||
Items of Business: | ||||
1. | To elect 11 directors to the Board of Directors of Amgen for a term of office expiring at the 2021 annual meeting of stockholders. The nominees for election to the Board of Directors are Dr. Wanda M. Austin, Mr. Robert A. Bradway, Dr. Brian J. Druker, Mr. Robert A. Eckert, Mr. Greg C. Garland, Mr. Fred Hassan, Mr. Charles M. Holley, Jr., Dr. Tyler Jacks, Ms. Ellen J. Kullman, Dr. Ronald D. Sugar, and Dr. R. Sanders Williams; | |||
2. | To hold an advisory vote to approve our executive compensation; | |||
3. | To ratify the selection of Ernst & Young LLP as our independent registered public accountants for the fiscal year ending December 31, 2020; | |||
4. | To consider one stockholder proposal, if properly presented at the Annual Meeting; and | |||
5. | To transact such other business as may properly come before the Annual Meeting or any continuation, postponement, or adjournment thereof. | |||
Attendance: The live audio webcast of the Annual Meeting will begin promptly at 11:00 A.M., Pacific Time. To participate in the virtual meeting, you will need the control number included on your Notice, proxy card, or voting instruction form. We encourage you to access the meeting prior to the start time. Please read INFORMATION CONCERNING VOTING AND SOLICITATIONAttendance at the Annual Meeting in the accompanying proxy statement. |
Voting: Your vote is important, regardless of the number of shares that you own. Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented and voted. Please read the Notice of Annual Meeting of Stockholders and proxy statement with care and follow the voting instructions to ensure that your shares are represented. By submitting your proxy promptly, you will save the Company the expense of further proxy solicitation. We encourage you to submit your proxy as soon as possible by Internet, by telephone, or by signing, dating, and returning all proxy cards or instruction forms provided to you.
By Order of the Board of Directors
Jonathan P. Graham
Secretary
Thousand Oaks, California
April 7, 2020
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Proxy Statement Summary
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This summary contains highlights about our Company and the upcoming 2020 Annual Meeting of Stockholders, or Annual Meeting. This summary does not contain all of the information that you should consider in advance of the meeting and we encourage you to read the entire proxy statement before voting.
2020 Annual Meeting of Stockholders
Date and Time: |
Tuesday, May 19, 2020, at 11:00 A.M., Pacific Time | |
Location: |
After careful consideration, in light of the on-going developments related to the COVID-19 pandemic and governmental decrees that in-person gatherings be postponed or canceled, and in the best interests of public health and the health and safety of our stockholders, Board of Directors, and employees, our 2020 Annual Meeting of Stockholders will be held solely by remote communication via the internet at www.virtualshareholdermeeting.com/AMGN2020. You will not be able to attend the Annual Meeting in person.
Stockholders or their proxyholders may participate, vote, and examine our list of stockholders at our Annual Meeting via the Internet at www.virtualshareholdermeeting.com/AMGN2020 and using your control number. | |
Record Date: |
March 20, 2020 | |
Mail Date: |
We intend to mail the Notice Regarding the Availability of Proxy Materials, or the proxy statement and proxy card, as applicable, on or about April 7, 2020, to our stockholders. |
Voting Matters and Board Recommendations
Matter |
Our Board Vote Recommendation | |||
Management Proposals:
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Item 1:
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Election of the 11 Nominees to the Board of Directors Named in This Proxy Statement (page 9)
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FOR each Director Nominee
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Item 2:
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Advisory Vote to Approve Our Executive Compensation (page 34)
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FOR
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Item 3:
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Ratification of Selection of Independent Registered Public Accountants (page 90)
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FOR
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Stockholder Proposal:
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Item 4:
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Stockholder Proposal to Require an Independent Board Chair, if properly presented (page 93)
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AGAINST
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ï 2020 Proxy Statement 1
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Proxy Statement Summary
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How to Vote
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By Internet: You may submit a proxy over the Internet by following the instructions on the website referred to in the Notice, proxy card, or voting instruction form mailed to you. You will need the control number that appears on your Notice, proxy card, or voting instruction form. | |
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By Telephone: You may submit a proxy by telephone by following the instructions on the website referred to in the Notice, proxy card, or voting instruction form mailed to you. You will need the control number that appears on your Notice, proxy card, or voting instruction form. | |
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By Mail: If you received a full paper set of materials, date and sign your proxy card or voting instruction form and mail it in the enclosed, postage-paid envelope. If you received a Notice, you may request a proxy card by following the instructions on your Notice. You do not need to mail the proxy card if you are submitting your proxy by Internet or telephone. | |
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At the Meeting: To vote at the Annual Meeting, visit www.virtualshareholdermeeting.com/AMGN2020. You will need the control number that appears on your Notice, proxy card, or voting instruction form. Please note that if your shares are held of record by a broker, bank, trust, or other nominee, and you decide to attend and vote at the Annual Meeting, your vote in person at the Annual Meeting will not be effective unless you provide a legal proxy, issued in your name from the record holder (your broker, bank, trust, or other nominee). Please read INFORMATION CONCERNING VOTING AND SOLICITATIONAttendance at the Annual Meeting. Even if you intend to attend the Annual Meeting, we encourage you to submit your proxy in advance of the Annual Meeting. |
2 2020 Proxy Statement
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Proxy Statement Summary
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Item 1: Election of 11 Nominees to the Board of Directors (Page 9)
Nominee |
Independent | Age | |
Director Since |
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Audit |
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Governance and Nominating |
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Executive |
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Compensation and Management Development |
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Equity Award |
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Corporate Responsibility and Compliance |
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Wanda M. Austin
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✓
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65
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2017
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M
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M
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Robert A. Bradway
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57
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2011
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C
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M
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Brian J. Druker
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✓
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64
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2018
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M
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M
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Robert A. Eckert
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✓
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65
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2012
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M
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M
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C
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Greg C. Garland
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✓
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62
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2013
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C
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M
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M
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Fred Hassan
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✓
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74
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2015
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M
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M
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Charles M. Holley, Jr.
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✓
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63
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2017
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C
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M
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M
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Tyler Jacks
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✓
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59
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2012
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M
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M
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Ellen J. Kullman
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✓
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64
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2016
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M
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M
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Ronald D. Sugar
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✓
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71
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2010
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M
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M
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C
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R. Sanders Williams
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✓
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71
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2014
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M
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M
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C | indicates Chair of the committee. |
M | indicates member of the committee. |
Director* and Corporate Governance Highlights
* | For our director nominees. |
ï 2020 Proxy Statement 3
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Proxy Statement Summary
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We Have Implemented Governance Best Practices
We continuously monitor developments and best practices in corporate governance and consider stockholder feedback when enhancing our governance structures. Below are highlights of our key governance practices:
Effective Board Leadership and Independent Oversight |
✓ Highly Independent Board 10 of our 11 director nominees (page 25)
✓ Strong Refreshment Practices With 5 New Directors Since 2015 Average Board tenure of approximately 5.5 years for our director nominees (pages 10 and 17)
✓ Annual Anonymous Board and Committee Evaluation Process (pages 17 and 24)
✓ All Directors Meet Our Board of Directors Guidelines for Director Qualifications and Evaluations (Appendix A)
✓ Robust Lead Independent Director Role (pages 18-19)
✓ Corporate Responsibility and Compliance Committee (page 27)
✓ Enterprise Risk Management Program and Annual Detailed Compensation Risk Analysis overseen by Board and Compensation and Management Development Committee, respectively (pages 20 and 29-30)
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Focus on Stockholder Rights |
✓ Proxy Access (pages 18 and 101) up to 20 eligible stockholders that own 3% of shares for 3 years who meet the requirements set forth in our Bylaws may have their director nominees constituting up to the greater of 20% of the total directors or two nominees included in our proxy materials
✓ Majority Voting Standard for Director Elections (pages 17 and 99)
✓ Stockholders* May Act By Written Consent (page 18)
✓ Stockholders* Have a Right to Call Special Meetings (15% threshold requirement) (page 18)
✓ No Supermajority Vote Provisions in Certificate of Incorporation or Bylaws (page 18)
✓ No Poison Pill (page 18)
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History of Transparency and Accountability |
✓ Significant Stock Ownership Requirements for Officers and Directors (pages 61-62 and 83)
✓ Regular Engagement With Stockholders to Seek Feedback (page 46)
✓ We Continue to Seek Mechanisms to Lower the Cost Burden on Society of Serious Diseases
✓ We Have Demonstrated our Commitment to Environmentally Responsible Operations, Improving Patient Access to Medicines, Science Education, and our Community (pages 31-33)
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE 11 NAMED NOMINEES.
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* | Who meet the requirements set forth in our Restated Certificate of Incorporation or our Amended and Restated Bylaws, as applicable. |
4 ï 2020 Proxy Statement
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Proxy Statement Summary
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Item 2: Advisory Vote to Approve Our Executive
Compensation (Page 34)
We Have Implemented Compensation Best Practices
NEO Compensation is Dependent on Our Performance
A significant amount of each Named Executive Officers, or NEOs, compensation is at-risk and dependent on our performance and execution of our strategic priorities.
We use median values as the reference point for each element of compensation at all levels, including our NEOs. We consider performance, job scope, and contribution in our final pay decisions. |
2019 Total Target Direct Compensation Mix
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ï 2020 Proxy Statement 5
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Proxy Statement Summary
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2019 Annual and Long-Term Awards Reflect Performance Against Pre-Established Goals and Measures
2019 Annual Cash Incentive Program
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2017-2019 Long-Term Incentive Performance Award Payout
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Our annual cash incentive program is designed to focus our staff on delivering financial and operational objectives to drive annual performance, advance strategic priorities, and position us for long-term success.
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80% of our annual long-term incentive, or LTI, equity award grants are performance-based, aligning compensation with long-term value creation for our stockholders. Three-year performance units comprise 50% of our LTI equity award grants, with the goal design and all measurement targets established at the beginning of the three-year performance period. | |||||||
Goal
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Weighting
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% of Target Earned
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Financial Performance
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Revenues
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30%
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177%
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Non-GAAP Net Income(1)
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30%
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168%
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Progress Innovative Pipeline
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Advance Early Pipeline
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10%
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100%
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Execute Key Clinical Studies and Regulatory Filings
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20%
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80%
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Deliver Annual Priorities
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Execute Critical Launches and Long-Term Commercial Objectives
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5%
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77%
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Achieve Productivity Objectives
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5%
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107%
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Final Score
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Achieved 138.9%
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(1) | Non-GAAP net income for purposes of the 2019 Company performance goals of our annual cash incentive award program is reported and reconciled in Appendix B. |
(2) | The operating measures of the 2017-2019 performance goals were based on non-GAAP financial results for 2017, 2018, and 2019 as reported and reconciled in Appendix B, except that operating measures were further adjusted for the impacts of Hurricane Maria as prescribed by the terms of the 2017-2019 performance goals document as follows: operating expense was reduced by $147 million ($0.16 in EPS) for 2017, increased by $21 million ($0.03 in EPS) for 2018, and increased by $49 million ($0.07 in EPS) for 2019. |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE ADVISORY RESOLUTION INDICATING THE APPROVAL OF THE COMPENSATION OF THE COMPANYS NAMED EXECUTIVE OFFICERS.
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6 ï 2020 Proxy Statement
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Proxy Statement Summary
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Item 3: Ratification of Selection of Independent Registered
Public Accountants (Page 90)
| The Audit Committee of the Board has selected Ernst & Young LLP, or EY, as our independent registered public accountants for the fiscal year ending December 31, 2020. |
| EY has served as our independent registered public accounting firm since the Companys inception in 1980. |
| Each year, the Audit Committee evaluates the qualifications and performance of the Companys independent registered public accountants and determines whether to re-engage the current independent registered public accountants. |
| Based on this evaluation, the Audit Committee believes that the continued retention of EY is in the best interests of the Company and its stockholders. |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS.
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Item 4: Stockholder Proposal (Page 93)
Stockholder proposal to require an independent Board Chair, if properly presented.
| Independent Oversight. Our Company has numerous mechanisms that ensure independent oversight of the Companys affairs and that facilitate communication with, and independent evaluation of, senior management, including: |
- | An active lead independent director elected annually by and from the independent directors with a robust set of duties and authority outlined below; |
- | Strong Board and committee involvement to provide sound and robust oversight of management; |
- | Regular communication between the lead independent director, the independent directors, and Robert A. Bradway, keeping Mr. Bradway apprised of any concerns, issues, or determinations made during the independent sessions, and consulting with Mr. Bradway on other matters pertinent to the Company and the Board; |
- | Diverse, experienced, and skilled directors, with ten of our eleven director nominees independent as defined by The NASDAQ Stock Market listing standards and the requirements of the Securities and Exchange Commission; |
- | All members of the Boards key committees are independent; and |
- | A meeting of the independent directors is scheduled at every regular Board meeting and the independent directors meet in executive session without Mr. Bradway to review Company performance, management effectiveness, proposed programs and transactions, and the Board meeting agenda items. |
| Leadership Structure. Our governance documents give the Board discretion in determining whether to separate or combine the roles of the Chairman and Chief Executive Officer. This flexibility permits the Board to choose a leadership structure that can be tailored to the strengths of the Companys officers and directors and to best address our evolving and highly complex business. |
ï 2020 Proxy Statement 7
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Proxy Statement Summary
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| Annual Evaluation of Leadership Structure. The Board conducts annual evaluations of the Companys leadership structure and determined that the Company and its stockholders are best served at this time by having Mr. Bradway serve as both Chairman and Chief Executive Officer, coupled by a separate active lead independent director, currently served by Robert A. Eckert. |
Our Lead Independent Director Responsibilities
The lead independent directors responsibilities outlined in the Amgen Board of Directors Corporate Governance Principles include:
- Approving meeting agendas for the Board;
- Assuring that there is sufficient time for discussion of all meeting agenda items;
- Previewing the information to be provided to the Board;
- Having the authority to call meetings of the independent directors;
- Organizing and leading the Boards evaluation of the CEO;
- Serving as a liaison between the Chairman and the independent directors;
- Leading the Boards annual self-assessment;
- Ensuring that he/she is available for consultation and direct communication, if requested by major stockholders; and
- Presiding at meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors.
In addition to the responsibilities outlined above, the lead independent director:
- Meets with the Chairman prior to each regular meeting of the Board and its committees to discuss, provide input on, and approve the agendas;
- With the Chairman, determines presenters for attendance at Board meetings;
- Has one-on-one discussions with each independent director, including as part of the Boards annual evaluation process;
- Attends all committee meetings, including those committees for which he is not a member (at his discretion) and is provided with access to all committee materials;
- Has the authority to engage independent consultants;
- Is regularly apprised of inquiries from stockholders;
- Interviews Board candidates; and
- Has an increased role in crisis management, as appropriate.
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Please see Leadership Structure in the Corporate Governance section for a full discussion of our current leadership structure and lead independent director responsibilities.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE STOCKHOLDER PROPOSAL.
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8 ï 2020 Proxy Statement
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Item 1 Election of Directors
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Election of Directors
Nominees to the Board
Nominee |
Independent | Age | |
Director Since |
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Audit |
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Governance and Nominating |
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Executive |
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Compensation and Management Development |
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Equity Award |
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Corporate Responsibility and Compliance |
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Wanda M. Austin
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✓
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65
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2017
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M
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M
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Robert A. Bradway
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57
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2011
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C
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M
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Brian J. Druker
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✓
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64
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2018
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M
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M
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Robert A. Eckert
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✓
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65
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2012
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M
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M
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C
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Greg C. Garland
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✓
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62
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2013
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C
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M
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M
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Fred Hassan
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✓
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74
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2015
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M
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M
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Charles M. Holley, Jr.
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✓
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63
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2017
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C
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M
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M
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Tyler Jacks
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✓
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|
59
|
|
|
2012
|
|
|
M
|
|
|
M
|
| |||||||||||||||||||||||
Ellen J. Kullman
|
|
✓
|
|
|
64
|
|
|
2016
|
|
|
M
|
|
|
M
|
|
|||||||||||||||||||||||
Ronald D. Sugar
|
|
✓
|
|
|
71
|
|
|
2010
|
|
|
M
|
|
|
M
|
|
|
C
|
| ||||||||||||||||||||
R. Sanders Williams
|
|
✓
|
|
|
71
|
|
|
2014
|
|
|
M
|
|
|
M
|
|
C | indicates Chair of the committee. |
M | indicates member of the committee. |
ï 2020 Proxy Statement 9
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Item 1 Election of Directors
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Summary of Director Nominee Core Experiences and Skills
Our Board possesses a deep and broad set of skills and experiences that facilitate strong oversight and strategic direction for a leading global innovator in biotechnology. The following chart summarizes the competencies of each director nominee to be represented on our Board. The details of each directors competencies are included in each directors profile.
Experience / Skills Austin Bradway Druker Eckert Garland Hassan Henderson Holley Jacks Kullman Sugar Williams Healthcare Industry, Providers and Payers Science/Technology Public Company CEO/COO/CFO Regulatory Compliance Financial/Accounting Government/Public Policy International
The lack of a ✓ for a particular item does not mean that the director does not possess that qualification, characteristic, skill, or experience. Each of our Board members have experience and/or skills in the enumerated areas, however, the ✓ is designed to indicate that a director has particular strength in that area.
* | For our director nominees. |
10 ï 2020 Proxy Statement
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Item 1 Election of Directors
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NAMED NOMINEES. PROXIES WILL BE VOTED FOR THE ELECTION OF THE NOMINEES UNLESS OTHERWISE SPECIFIED.
Set forth below is biographical information for each nominee and a summary of the specific qualifications, attributes, skills, and experiences which led our Board to conclude that each nominee should serve on the Board at this time. All of our directors meet the qualifications and skills of our Amgen Inc. Board of Directors Guidelines for Director Qualifications and Evaluations included in this proxy statement as Appendix A. There are no family relationships among any of our directors or among any of our directors and our executive officers.
Wanda M. Austin
Director since: 2017
Age: 65
Committees: Audit Compensation and Management Development
Other Public Company Boards: Chevron Corporation Virgin Galactic Holdings, Inc.
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Wanda M. Austin is the retired President and Chief Executive Officer of The Aerospace Corporation, a leading architect of the United States national security space programs, where she served from 2008 until her retirement in 2016. From 2004 to 2007, Dr. Austin was Senior Vice President, National Systems Group of The Aerospace Corporation. Dr. Austin joined The Aerospace Corporation in 1979 and served in various positions from 1979 until 2004.
Dr. Austin served as Interim President of the University of Southern California from August 2018 until June 2019. She has served as an Adjunct Research Professor at the University of Southern Californias Viterbi School of Engineering since 2007. She is the co-founder of MakingSpace, Inc., where she serves as a motivational speaker on STEM education. Dr. Austin has been a director of Chevron Corporation, a petroleum, exploration, production and refining company, since 2016, serving on its Board Nominating and Governance Committee and chairing its Public Policy Committee. Dr. Austin has been a director of Virgin Galactic Holdings, Inc., a commercial space flight company, since October 2019 and is a member of its Audit Committee and Safety Committee, and chair of its Compensation Committee. Dr. Austin is a trustee of the University of Southern California and previously served on the boards of directors of the National Geographic Society and the Space Foundation. Dr. Austin received an undergraduate degree from Franklin & Marshall College, a masters degree from the University of Pittsburgh, and a doctorate from the University of Southern California. She is a member of the National Academy of Engineering.
Qualifications
The Board concluded that Dr. Austin should serve on the Board based on her leadership and management experience as a chief executive officer, her extensive background in science, technology, and government affairs in a highly regulated industry, and her public board experience. |
Robert A. Bradway
Director since: 2011
Age: 57
Committees: Equity Award Executive (Chair)
Other Public Company Boards: The Boeing Company
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Robert A. Bradway has served as our director since 2011 and Chairman of the Board since 2013. Mr. Bradway has been our President since 2010 and Chief Executive Officer since 2012. From 2010 to 2012, Mr. Bradway served as our Chief Operating Officer. Mr. Bradway joined Amgen in 2006 as Vice President, Operations Strategy and served as Executive Vice President and Chief Financial Officer from 2007 to 2010. Prior to joining Amgen, he was a Managing Director at Morgan Stanley in London where, beginning in 2001, he had responsibility for the firms banking department and corporate finance activities in Europe.
Mr. Bradway has been a director of The Boeing Company, an aerospace company and manufacturer of commercial airplanes, defense, space and securities systems, since 2016, serving on its Audit and Finance Committees. From 2011 to 2017, Mr. Bradway was a director of Norfolk Southern Corporation, a transportation company. He has served on the board of trustees of the University of Southern California since 2014 and on the advisory board of the Leonard D. Schaeffer Center for Health Policy and Economics at that university since 2012. Mr. Bradway holds a bachelors degree in biology from Amherst College and a masters degree in business administration from Harvard Business School.
Qualifications
The Board concluded that Mr. Bradway should serve on the Board based on his thorough knowledge of all aspects of our business, combined with his leadership and management skills having previously served as our President and Chief Operating Officer and as our Chief Financial Officer.
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ï 2020 Proxy Statement 11
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Item 1 Election of Directors
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Brian J. Druker
Director since: 2018
Age: 64
Committees: Compensation and Management Development Corporate Responsibility and Compliance
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Brian J. Druker joined Oregon Health & Science University, or OHSU, in 1993 and is currently a physician-scientist and professor of medicine. Dr. Druker has served as the director of the OHSU Knight Cancer Institute since 2007, associate dean for oncology of the OHSU School of Medicine since 2010, and the JELD-WEN chair of leukemia research at OHSU since 2001. He was an investigator with the Howard Hughes Medical Institute, a nonprofit medical research organization, from 2002 to 2019.
Dr. Druker has served on the scientific advisory board of Aptose Biosciences Inc., a biotechnology company, since 2013. Dr. Druker was on the scientific advisory board of Grail, Inc., a biotechnology company, from 2016 to 2019. In 2011, he founded Blueprint Medicines Corporation, a biopharmaceutical company, and remains as a scientific advisor to this company. In 2006, he founded MolecularMD, a privately-held molecular diagnostics company that was acquired by ICON plc in 2019.
Dr. Druker has received numerous awards, including the Lasker-DeBakey Clinical Research Award in 2009, the Japan Prize in Healthcare and Medical Technology in 2012, the Albany Medical Center Prize in 2013, and the Sjöberg Prize in 2019, for influential work in the development of STI571 (Gleevec®) for the treatment of chronic myeloid leukemia. He was elected to the National Academy of Sciences in 2012 as well as the National Academy of Medicine in 2007. Dr. Druker received both an undergraduate degree and his doctorate from the University of California, San Diego. |
Qualifications
The Board concluded that Dr. Druker should serve on the Board based on his extensive scientific research and expertise leading an important academic institution, conducting highly significant research in the area of oncology, and directly managing the care of cancer patients.
Robert A. Eckert
Lead Independent Director
Director since: 2012
Age: 65
Committees: Compensation and Management Development (Chair) Executive Governance and Nominating
Other Public Company Boards: Levi Strauss & Co. McDonalds Corporation Uber Technologies, Inc.
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Robert A. Eckert is our lead independent director. Mr. Eckert has been an Operating Partner at Friedman Fleischer & Lowe, a private equity firm, since 2014. Mr. Eckert was the Chief Executive Officer of Mattel, Inc., a toy design, manufacture and marketing company, having held this position from 2000 through 2011, and its Chairman of the Board from 2000 through 2012. He was President and Chief Executive Officer of Kraft Foods Inc., a consumer packaged food and beverage company, from 1997 to 2000, Group Vice President from 1995 to 1997, President of the Oscar Mayer Foods Division from 1993 to 1995 and held various other senior executive and other positions from 1977 to 1992.
Mr. Eckert has been a director of McDonalds Corporation, a company which franchises and operates McDonalds restaurants in the global restaurant industry, since 2003, serving as the Chair of the Public Policy and Strategy Committee and a member of the Executive and Governance Committees. Mr. Eckert also has served as a director of Levi Strauss & Co., a jeans and casual wear manufacturer, since 2010, serving as Chair of the Compensation Committee and a member of the Nominating, Governance and Corporate Citizenship Committee. Levi Strauss & Co. was a privately-held company until March 2019 when it became publicly traded. In March 2020, Mr. Eckert was appointed a director of Uber Technologies, Inc., a personal mobility, meal delivery and logistics technology platform, serving on its Compensation and Nominating and Governance Committees. Mr. Eckert was a director of Smart & Final Stores, Inc., a warehouse store, from 2013 until 2014 prior to it becoming a publicly-traded company. He was appointed director of Eyemart Express Holdings LLC, a privately-held eyewear retailer and portfolio company of Friedman Fleischer & Lowe, in 2015. Mr. Eckert is on the Global Advisory Board of the Kellogg School of Management at Northwestern University and serves on the Eller College National Board of Advisors at the University of Arizona. Mr. Eckert received an undergraduate degree from the University of Arizona and a masters degree in business administration from the Kellogg School of Management at Northwestern University.
Qualifications
The Board concluded that Mr. Eckert should serve on our Board because of Mr. Eckerts long-tenured experience as a chief executive officer and director of large public companies, his broad international experience in marketing and business development, and his valuable leadership experience.
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12 ï 2020 Proxy Statement
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Item 1 Election of Directors
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Greg C. Garland
Director since: 2013
Age: 62
Committees: Compensation and Management Development Executive Governance and Nominating (Chair)
Other Public Company Boards: Phillips 66(1)
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Greg C. Garland is the Chairman and Chief Executive Officer of Phillips 66, a diversified energy manufacturing and logistics company created through the repositioning of ConocoPhillips, having held this position since 2012. Mr. Garland chairs the Executive Committee of Phillips 66.1 Prior to Phillips 66, Mr. Garland served as Senior Vice President, Exploration and Production, Americas of ConocoPhillips from 2010 to 2012. He was President and Chief Executive Officer of Chevron Phillips Chemical Company (now a joint venture between Phillips 66 and Chevron) from 2008 to 2010 and Senior Vice President, Planning and Specialty Chemicals from 2000 to 2008. Mr. Garland served in various positions at Phillips Petroleum Company from 1980 to 2000. Mr. Garland is a member of the Engineering Advisory Council for Texas A&M University. Mr. Garland received an undergraduate degree from Texas A&M University.
Qualifications
The Board concluded that Mr. Garland should serve on our Board because of Mr. Garlands experience as a chief executive officer and his over 30 years of international experience in a highly regulated industry.
|
(1) | Mr. Garland also serves as Chairman and Chief Executive Officer of Phillips 66 Partners LP, a master limited partnership and wholly-owned subsidiary of Phillips 66 without any employees. |
Fred Hassan
Director since: 2015
Age: 74
Committees: Audit Compensation and Management Development
Other Public Company Boards: Intrexon Corporation
Audit Committee financial expert
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Fred Hassan is Director at Warburg Pincus LLC, a global private equity investment institution, since 2018. Mr. Hassan was Special Limited Partner at Warburg Pincus LLC from 2017 to 2018 and Partner and Managing Director from 2011 to 2017 and, prior to that, served as Senior Advisor from 2009 to 2010. Mr. Hassan was Chairman of the Board and Chief Executive Officer of Schering-Plough Corporation from 2003 to 2009. Prior to this, Mr. Hassan was Chairman, President and Chief Executive Officer of Pharmacia Corporation, from 2001 to 2003. Before assuming these roles, he had served as President and Chief Executive Officer of Pharmacia Corporation from its creation in 2000 as a result of the merger of Pharmacia & Upjohn, Inc. with Monsanto Company. He was President and Chief Executive Officer of Pharmacia & Upjohn, Inc. beginning in 1997. Mr. Hassan previously held senior positions with Wyeth (formerly known as American Home Products), including that of Executive Vice President with responsibility for its pharmaceutical and medical products businesses, and served as a member of the board from 1995 to 1997. Prior to that, Mr. Hassan held various roles at Sandoz Pharmaceuticals and headed its U.S. pharmaceuticals businesses.
Mr. Hassan has been a director of Intrexon Corporation, a synthetic biology company, since 2016, serving on its Compensation Committee. Mr. Hassan was a director of Time Warner Inc., a media company, from 2009 until its acquisition by AT&T Inc., a provider of communications and digital entertainment services, in 2018. Mr. Hassan was a director of Avon Products, Inc., a manufacturer and marketer of beauty and related products, from 1999 until 2013 and served on its Compensation and Management Development, Nominating and Corporate Governance and Audit Committees, as lead independent director from 2009 to 2012, and Chairman of the Board between January and April 2013. Mr. Hassan was Chairman of the Board of Bausch & Lomb, from 2010 until its acquisition by Valeant Pharmaceuticals International, Inc., a pharmaceutical company, in 2013. Mr. Hassan served on the board of directors and the Compensation and Audit Committees of Valeant Pharmaceuticals International, Inc. from 2013 to 2014. Mr. Hassan received an undergraduate degree from Imperial College of Science and Technology, University of London and a masters degree in business administration from Harvard Business School.
Qualifications
The Board concluded that Mr. Hassan should serve on the Board based on his global experience as a public company chief executive officer, his particular knowledge and experience in the healthcare and pharmaceutical industries, including overseeing businesses with significant research and development operations, his diversified financial and business expertise, as well as prior public company board experience. Given his financial and leadership experience, Mr. Hassan has been determined to be an Audit Committee financial expert by our Board.
ï 2020 Proxy Statement 13
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Item 1 Election of Directors
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Charles M. Holley, Jr.
Director since: 2017
Age: 63
Committees: Audit (Chair) Executive Governance and Nominating
Other Public Company Boards: Carrier Global Corporation Phillips 66
Audit Committee financial expert
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Charles M. Holley, Jr. is the former Executive Vice President and Chief Financial Officer for Wal-Mart Stores, Inc., or Walmart, where he served from 2010 to 2015 and as Executive Vice President in January 2016. Prior to this, Mr. Holley served as Executive Vice President, Finance and Treasurer of Walmart from 2007 to 2010. From 2005 to 2006, he served as Senior Vice President. Prior to that, Mr. Holley was Senior Vice President and Controller from 2003 to 2005. Mr. Holley served various roles in Wal-Mart International from 1994 through 2002. Prior to this, Mr. Holley served in various roles at Tandy Corporation. He spent more than ten years with Ernst & Young LLP. Mr. Holley was an Independent Senior Advisor, U.S. CFO Program, at Deloitte LLP, a privately-held provider of audit, consulting, tax, and advisory services, from 2016 to 2019.
Mr. Holley has been a director of Phillips 66, an energy manufacturing and logistics company, since October 2019 and serves on the Audit and Finance, and Public Policy Committees. In connection with the 2020 spin-off from United Technologies Corporation of Carrier Global Corporation, a provider of heating, ventilating, air conditioning (HVAC), refrigeration, fire, and security solutions, Mr. Holley has been appointed as a director of Carrier. He serves on the Advisory Council for the McCombs School of Business at the University of Texas at Austin and the University of Texas Presidents Development.
Qualifications
The Board concluded that Mr. Holley should serve on the Board based on his experience as a chief financial officer of a global public company, his financial acumen, and his management and leadership skills. Given his financial and leadership experience, Mr. Holley has been determined to be an Audit Committee financial expert by our Board. |
Tyler Jacks
Director since: 2012
Age: 59
Committees: Compensation and Management Development Corporate Responsibility and Compliance
Other Public Company Boards: Thermo Fisher Scientific, Inc.
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Tyler Jacks joined the faculty of Massachusetts Institute of Technology, or MIT, in 1992 and is currently the David H. Koch Professor of Biology and director of the David H. Koch Institute for Integrative Cancer Research, which brings together biologists and engineers to improve detection, diagnosis and treatment of cancer, a position he has held since 2007. Dr. Jacks has been an investigator with the Howard Hughes Medical Institute, a nonprofit medical research organization, since 1994.
Dr. Jacks has been a director of Thermo Fisher Scientific, Inc., a life sciences supply company, since 2009, serving on its Strategy and Finance Committee and scientific advisory board and chairing its Science and Technology Committee. In 2006, he co-founded T2 Biosystems, Inc., a biotechnology company, and served on its scientific advisory board until 2013. Dr. Jacks has served on the scientific advisory board of SQZ Biotech, a privately-held biotechnology company, since 2015. Dr. Jacks served on the scientific advisory board of Aveo Pharmaceuticals Inc., a biopharmaceutical company, from 2001 until 2013. In 2015, Dr. Jacks founded Dragonfly Therapeutics, Inc., a privately-held biopharmaceutical company, and serves as Chair of its scientific advisory board. He was appointed to the National Cancer Advisory Board, which advises and assists the Director of the National Cancer Institute with respect to the National Cancer Program, in 2011 and served as Chair until 2016. In 2016, Dr. Jacks was named to a blue ribbon panel of scientists and advisors established as a working group of the National Cancer Advisory Board and served as co-Chair advising the Cancer MoonshotSM Task Force. Dr. Jacks was a director of MITs Center for Cancer Research from 2001 to 2007 and received numerous awards including the Paul Marks Prize for Cancer Research and the American Association for Cancer Research Award for Outstanding Achievement. He was elected to the National Academy of Sciences as well as the National Academy of Medicine in 2009 and received the MIT Killian Faculty Achievement Award in 2015. Dr. Jacks received an undergraduate degree from Harvard University and his doctorate from the University of California, San Francisco. |
Qualifications
The Board concluded that Dr. Jacks should serve on the Board based on his extensive scientific expertise relevant to our industry, including his broad experience as a cancer researcher, pioneering uses of technology to study cancer-associated genes, and service on several scientific advisory boards and membership in the National Cancer Advisory Board.
14 ï 2020 Proxy Statement
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Item 1 Election of Directors
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Ellen J. Kullman
Director since: 2016
Age: 64
Committees: Audit Governance and Nominating
Other Public Company Boards: Dell Technologies Inc. Goldman Sachs Group, Inc.
Audit Committee financial expert
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Ellen J. Kullman was appointed President and Chief Executive Officer of Carbon, Inc., or Carbon, a privately-held 3D printing company, in November 2019, and has served as a director of Carbon since 2016. She is the former President, Chair and Chief Executive Officer of E.I. du Pont de Nemours and Company, or DuPont, a science and technology-based company, where she served from 2009 to 2015. Prior to this, Ms. Kullman served as President of DuPont from 2008 to 2009. From 2006 through 2008, she served as Executive Vice President of DuPont. Prior to that, Ms. Kullman was Group Vice President, DuPont Safety and Protection. Ms. Kullman has been a director of Goldman Sachs Group, Inc., an investment banking firm, since 2016, serving on its Compensation, Corporate Governance and Nominating, and Risk Committees. Ms. Kullman has been a director of Dell Technologies, a technology company, since 2016, serving on its Audit and Capital Stock Committees. Ms. Kullman served as a director of United Technologies Corporation, a technology products and services company, from 2011 (and as lead director from 2018) until April 2020, serving on its Compensation, Finance and Executive Committees. Ms. Kullman served as a director of General Motors, from 2004 to 2008, serving on its Audit Committee.
Ms. Kullman has served on the Board of Trustees of Northwestern University since 2016 and on the Board of Overseers of Tufts University School of Engineering since 2006. She served as Chair of the US-China Business Council from 2013 to 2015. In 2016, Ms. Kullman joined the Temasek Americas Advisory Panel of Temasek Holdings (Private) Limited, a privately-held investment company based in Singapore. Ms. Kullman received a bachelor of science in mechanical engineering degree from Tufts University and a masters degree from the Kellogg School of Management at Northwestern University. |
Qualifications
The Board concluded that Ms. Kullman should serve on the Board based on her lengthy global experience as chief executive officer and board chair at both public and private companies, her management and leadership skills, and her experience with scientific operations, all of which provide valuable insight into the operations of our Company. Given her leadership and financial experience, Ms. Kullman has been determined to be an Audit Committee financial expert by our Board.
Ronald D. Sugar
Director since: 2010
Age: 71
Committees: Corporate Responsibility and Compliance (Chair) Executive Governance and Nominating
Other Public Company Boards: Air Lease Corporation (will not be standing for re-election) Apple Inc. Chevron Corporation Uber Technologies, Inc.
|
Ronald D. Sugar is the retired Chairman of the Board and Chief Executive Officer of Northrop Grumman Corporation, a global aerospace and defense company, having held these posts from 2003 through 2009.
Dr. Sugar has been a director of Chevron Corporation, a petroleum, exploration, production and refining company, since 2005, serving as the lead director and on the Management Compensation Committee and chairing the Board Nominating and Governance Committee. Dr. Sugar has been a director of Apple Inc., a manufacturer and seller of, among other things, personal computers, mobile communication and media devices, since 2010, chairing the Audit and Finance Committee. Dr. Sugar has been a director of Air Lease Corporation, an aircraft leasing company, since 2010, chairing the Compensation Committee and serving on the Nominating and Corporate Governance Committee, and will not be standing for election to the board of Air Lease Corporation at the next annual meeting of stockholders expected to occur in May 2020. Dr. Sugar has been a director of Uber Technologies, Inc., a personal mobility, meal delivery and logistics technology platform, since 2018, serving as the Chair of the board of directors and chairing the Nominating and Governance Committee and serving on the Compensation Committee. Since 2010, he has been a senior advisor to Ares Management LLC, a privately-held asset manager and registered investment advisor. In 2014, Dr. Sugar joined the Temasek Americas Advisory Panel of Temasek Holdings (Private) Limited, a privately-held investment company based in Singapore. Dr. Sugar is a member of the National Academy of Engineering, trustee of the University of Southern California, member of the UCLA Anderson School of Management Board of Advisors, and director of the Los Angeles Philharmonic Association.
Qualifications
The Board concluded that Dr. Sugar should serve on our Board because Dr. Sugars board and senior executive-level expertise, including his experience as chief executive officer and board chair of a large, highly regulated, public company and his insight in the areas of operations, government affairs, science, technology and finance. |
ï 2020 Proxy Statement 15
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Item 1 Election of Directors
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R. Sanders Williams
Director since: 2014
Age: 71
Committees: Corporate Responsibility and Compliance Governance and Nominating
Other Public Company Boards: Laboratory Corporation of America Holdings
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R. Sanders Williams is the President Emeritus of Gladstone Institutes, a non-profit biomedical research enterprise, having served in this position since 2018, and was the Chief Executive Officer of Gladstone Foundation, a not-for-profit organization supporting the Gladstone Institutes during 2018. Dr. Williams has been a Professor of Medicine at the University of California, San Francisco since 2010, and Professor of Medicine at Duke University since 2018. Dr. Williams was both President of Gladstone Institutes and its Robert W. and Linda L. Mahley Distinguished Professor of Medicine, from 2010 to 2017. Prior to this, Dr. Williams served as Senior Vice Chancellor of the Duke University School of Medicine from 2008 to 2010 and Dean of the Duke University School of Medicine from 2001 to 2008. He was the founding Dean of the Duke-NUS Graduate Medical School, Singapore, from 2003 to 2008 and served on its Governing Board from 2003 to 2010. From 1990 to 2001, Dr. Williams was Chief of Cardiology and Director of the Ryburn Center for Molecular Cardiology at the University of Texas, Southwestern Medical Center.
Dr. Williams has been a director of the Laboratory Corporation of America Holdings, a diagnostic technologies company, since 2007, serving on the Audit and Compensation Committees and chairing the Quality and Compliance Committee. Dr. Williams was a director of Bristol-Myers Squibb Company, a pharmaceutical company, from 2006 until 2013. Dr. Williams has served on the board of directors of the Gladstone Foundation, a non-profit institution that is distinct from Gladstone Institutes, since 2012 and on the board of directors of Exploratorium, a non-profit science museum and learning center located in San Francisco, from 2011 until 2018. Dr. Williams was elected to the National Academy of Medicine in 2002. Dr. Williams received his undergraduate degree from Princeton University and his doctorate from Duke University. |
Qualifications
The Board concluded that Dr. Williams should serve on the Board because of his broad medical and scientific background, including his leadership roles in domestic and academic science settings, his deep experience in cardiology, oversight of governance of multi-hospital healthcare provider systems, leadership and development of international medical programs in Asia, and prior industry board experience.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE ABOVE 11 NAMED NOMINEES.
16 ï 2020 Proxy Statement
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Corporate Governance
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ï 2020 Proxy Statement 19
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Corporate Governance
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The Boards Role in Risk Oversight
Each Board Committee has primary risk oversight responsibility that is aligned with its areas of focus. At each regular meeting, or more frequently as needed, the Board receives and considers committee reports, which reports may provide additional detail on risk management issues and managements response.
Committee | Primary Risk Oversight Responsibility | |||
Governance and Nominating |
Oversees the assessment of each member of the Boards independence, as well as the compliance with our Corporate Governance Principles and Board of Directors Code of Conduct. Also oversees Board and committee evaluations and Board succession.
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Audit |
Oversees internal controls over financial reporting, and oversees internal audit and independent registered public accountants, as well as financial risk, such as capital risk, tax risk, and financial compliance risk.
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Compensation and Management Development |
Oversees human capital management, as well as executive talent management, development, and succession planning. Also oversees our compensation policies and practices and incentive program administration and design, including whether such policies, practices, and incentive programs balance risk-taking and rewards in an appropriate manner (as discussed further below), align with stockholders interests, and are consistent with emerging best practices.
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Corporate Responsibility and Compliance |
Oversees non-financial compliance risk, such as regulatory risks associated with the requirements of the Federal health care program, Food and Drug Administration, and risks associated with privacy, antitrust and competition, anti-corruption, information systems and security (including cybersecurity), pricing and access, government affairs, labor and employment (including diversity and inclusion), and our reputation. Also oversees staff member compliance with the Code of Conduct.
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20 ï 2020 Proxy Statement
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Corporate Governance
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Process for Selecting Directors, Director Qualifications, and Board Diversity
22 ï 2020 Proxy Statement
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Corporate Governance
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Continuous Board Refreshment
Our Board is committed to strong refreshment practices to continuously align the composition of the Board and its leadership structure with our long-term strategic needs. The Board, led by the Governance Committee, has an ongoing process for identifying, evaluating, and selecting directors, and these decisions are also informed by the annual Board and committee evaluation process described below. Our Governance Committee uses a variety of methods to help identify potential Board candidates and considers an assessment of current Board skills, background, diversity, independence, experience, tenure, and anticipated retirements to identify gaps that may need to be filled through the Board refreshment process.
ï 2020 Proxy Statement 23
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Corporate Governance
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Regular Board and Committee Evaluations
Board and committee evaluations play a critical role in supporting the effective functioning of our Board. Through evaluations, our directors review where they believe our Board functions effectively and, importantly, areas where our Board thinks there may be opportunities for improvement, including through Board refreshment.
Annual Governance Review. Our Governance Committee leads an annual evaluation process of the Board and its committees. Directors provide feedback regarding Board and committee composition and structure, role and effectiveness, fulfillment of fiduciary duties, meetings and materials, and interaction with management.
24 ï 2020 Proxy Statement
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Corporate Governance
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Governance Committee Processes and Procedures for Considering and Determining Director Compensation
Current Members: Charles M. Holley, Jr.* (Chair) Wanda M. Austin Fred Hassan* Ellen J. Kullman*
*Audit Committee financial expert
Others Who Served in 2019: Frank C. Herringer (until retirement at 2019 Annual Meeting) Brian J. Druker Rebecca M. Henderson Tyler Jacks
Number of Meetings Held in 2019: 10
Each member has been determined by the Board to be independent under The NASDAQ Stock Market listing standards and the requirements of the SEC, including the requirements regarding financial literacy and sophistication.
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Description and Key Responsibilities:
Oversees our accounting and financial reporting process and the audits of the financial statements, as required by NASDAQ.
Assists the Board in fulfilling its fiduciary responsibilities with respect to the oversight of our financial accounting and reporting, the underlying internal controls and procedures over financial reporting, and the audits of the financial statements.
Has sole authority for the appointment, compensation, and oversight of the work of the independent registered public accountants.
Reviews and discusses, prior to filing or issuance, with management and the independent registered public accountants (when appropriate) our audited consolidated financial statements to be included in our Annual Report on Form 10-K and earnings press releases.
Approves all related party transactions, as required by NASDAQ.
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Audit Committee Oversight of the Independent Registered Public Accountants Auditor Selection. Evaluates the qualifications and performance of our independent registered public accountants each year and appoints the independent registered public accountants annually. Audit Partner Selection. Participates directly in the selection of the lead engagement partner through an interview process. Audit Firm Evaluation. Considers the quality and efficiency of the services provided, the independent registered public accountants technical expertise and knowledge of our operations and industry. Audit Services. Pre-approves services.
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26 ï 2020 Proxy Statement
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Corporate Governance
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ï 2020 Proxy Statement 27
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Corporate Governance
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Compensation Committee Processes and Procedures for Considering and Determining Executive Compensation in 2019
28 ï 2020 Proxy Statement
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Corporate Governance
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(1) | Valued at wholesale acquisition cost. |
32 ï 2020 Proxy Statement
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Corporate Governance
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(1) | Reference to our website is not intended to function as a hyperlink and the information contained on our website is not intended to be part of this proxy statement. |
ï 2020 Proxy Statement 33
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Item 2 Advisory Vote to Approve Our Executive Compensation
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2019 Executive Compensation Was Aligned With Our Strategy and Performance
As discussed more fully in our Compensation Discussion and Analysis starting on page 38, a significant majority of each NEOs compensation is at-risk and dependent on our performance and execution of our strategic priorities.
LTI Equity Award Allocation | 2019 Total Target Direct Compensation Mix | |
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2019 Performance Against Pre-Established Goals and Measures
2019 Annual Cash Incentive Program
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2017-2019 Long-Term Incentive Performance Award Payout
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Goal
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Weighting
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% of Target Earned
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Financial Performance
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Revenues
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30%
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177%
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Non-GAAP Net Income(1)
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30%
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168%
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Progress Innovative Pipeline
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Advance Early Pipeline
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10%
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100%
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Execute Key Clinical Studies and Regulatory Filings
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20%
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80%
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Deliver Annual Priorities
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Execute Critical Launches and Long-Term Commercial Objectives
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5%
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77%
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Achieve Productivity Objectives
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5%
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107%
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Final Score
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Achieved 138.9%
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(1) | Non-GAAP net income for purposes of the 2019 Company performance goals of our annual cash incentive award program is reported and reconciled in Appendix B. |
(2) | The operating measures of the 2017-2019 performance goals were based on non-GAAP financial results for 2017, 2018, and 2019 as reported and reconciled in Appendix B, except that operating measures were further adjusted for the impacts of Hurricane Maria as prescribed by the terms of the 2017-2019 performance goals document. For this purpose, operating expense was reduced by $147 million ($0.16 in EPS) for 2017, increased by $21 million ($0.03 in EPS) for 2018, and increased by $49 million ($0.07 in EPS) for 2019. |
ï 2020 Proxy Statement 35
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Item 2 Advisory Vote to Approve Our Executive Compensation
|
|
2019 Alignment of Pay with Performance
Our strategy includes a series of integrated activities to strengthen our long-term competitive position in the industry. Key 2019 activities that align our NEO pay with performance and support the execution of our strategic priorities are summarized below.
Our financial performance was strong in a year of transition.
| We delivered a one-year total shareholder return, or TSR, of 28%. We outperformed our peer group average for the one-, three-, and five-year TSRs and significantly outperformed the Standard & Poors 500 Index for the three-year period. |
| In March 2019, when we established our 2019 performance goals, we expected to drive volume growth in our newer products, but we also anticipated substantial competition against our legacy products due to patent expiries that would more than offset newer product sales growth. Our early 2019 investor guidance also reflected this anticipated competitive intensity. |
| In 2019, we grew product volumes by 3% globally. And, despite the anticipated competitive headwinds, we outperformed our budgeted financial targets and exceeded our original guidance as we retained more of our legacy product sales than expected, drove our newer product volume growth, and added Otezla® to our product portfolio. |
| Our strong cash flows and balance sheet allowed continued investment for long-term growth in 2019 through internal research and development, capital expenditures, and external business development transactions. |
| Our quarterly 2019 dividend of $1.45 per share represented a 10% increase from the quarterly dividend for 2018. |
| In 2019, we returned $11.2 billion to our stockholders in the form of repurchases of our Common Stock ($7.7 billion) and dividends paid ($3.5 billion). |
We progressed our pipeline.
We develop innovative and biosimilar medicines that address unmet medical needs to treat serious illnesses.
| In 2019, we launched EVENITY®(1), an innovative product for the treatment of osteoporosis in postmenopausal women at high risk of fracture, and two oncology biosimilars, MVASI®(2) (biosimilar bevacizumab (Avastin®)) and KANJINTI®(2) (biosimilar trastuzumab (Herceptin®)) in the U.S. |
| We advanced our early pipeline and executed key clinical studies and regulatory filings. |
We delivered on our annual priorities.
| We executed critical launches and long-term commercial objectives. Our revenues benefited from volume-driven growth from a number of innovative medicines, including Prolia®, Aimovig®(3), and Repatha®. |
| We achieved our productivity objectives. We realized gross savings of approximately $286 million as a result of our focus on productivity to support continued reinvestment opportunities (such as our early pipeline). |
We continued to deliver on our other strategic priorities.
| We launched our first product in China and made significant progress in expanding our presence in China and Japan, the second and third largest pharmaceutical markets, respectively. |
| We successfully operated our next-generation manufacturing facility in Singapore and continued to work on the construction of our U.S facility in Rhode Island. |
Positive 2019 Say on Pay Vote Outcome and Engagement With Our Stockholders
(1) | Jointly developed in collaboration with UCB. Developed in Japan by Amgen Astellas BioPharma K.K., our joint venture with Astellas Pharma Inc. |
(2) | Jointly developed in collaboration with Allergan plc. |
(3) | Jointly developed in collaboration with Novartis AG. |
36 ï 2020 Proxy Statement
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Item 2 Advisory Vote to Approve Our Executive Compensation
|
|
Board Recommends a Vote FOR Our Executive Compensation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADVISORY RESOLUTION TO APPROVE THE COMPENSATION OF THE COMPANYS NAMED EXECUTIVE OFFICERS.
ï 2020 Proxy Statement 37
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Compensation Discussion and Analysis
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|
Compensation Discussion and Analysis
Table of Contents
This Compensation Discussion and Analysis describes our compensation strategy, philosophy, policies, programs, and practices for our Named Executive Officers, or NEOs, and the positions they held in 2019 below.
Name | Title | |
Robert A. Bradway |
Chairman of the Board, Chief Executive Officer and President | |
Murdo Gordon |
Executive Vice President, Global Commercial Operations | |
David W. Meline |
Executive Vice President and Chief Financial Officer(1) | |
David M. Reese |
Executive Vice President, Research and Development | |
Jonathan P. Graham |
Executive Vice President, General Counsel and Secretary |
(1) | Mr. Meline retired as Chief Financial Officer on December 31, 2019. Peter H. Griffith became Executive Vice President and Chief Financial Officer effective January 1, 2020. As he was not an executive officer in 2019, Mr. Griffith is not considered a Named Executive Officer in this proxy statement. |
38 ï 2020 Proxy Statement
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Compensation Discussion and Analysis
|
|
Our strategy includes a series of integrated activities to strengthen our long-term competitive position in the industry. Select 2019 activity that supports the execution of our strategic priorities and delivery of performance are summarized below and discussed further in the following pages.
Strategic Priorities
Innovative Medicines |
Branded Biosimilars |
Transforming Amgen for the Future
| ||||||
Capital Allocation and Investing for Long-Term Growth
|
Global Geographic Reach |
Next-Generation Biomanufacturing
|
Description | Selected 2019 Activity | |||||||
Innovative Medicines |
Innovation is at the core of our strategy. Our focus on developing innovative, breakaway medicines to address important unmet needs guides how we allocate resources across internal and external program possibilities. This results in a productive balance of internal development and external programs and collaborations reflected in our current product portfolio and pipeline.
|
Launched EVENITY®(1) (osteoporosis) Acquired Otezla® (apremilast) Progressed innovative pipeline: 8 product teams formed(2) 7 first-in-human studies initiated
4 programs advanced through early-to-late stage portal(3) | ||||||
Branded Biosimilars |
We believe our deep experience in biologics development and biotechnology manufacturing position us for leadership in the emerging biosimilars market. Our branded biosimilar medicines have the potential to expand access to important medicines for patients while delivering volume-based sales growth in our therapeutic areas. |
Launched our first biosimilars in the U.S.: MVASI®(4) (biosimilar bevacizumab (Avastin®)) KANJINTI®(4) (biosimilar trastuzumab (Herceptin®)) AVSOLA (biosimilar infliximab (Remicade®)) approved in U.S. ABP 798(4) (biosimilar rituximab (Rituxan®)) Biologics License Application submitted to U.S. Food and Drug Administration | ||||||
Transforming Amgen for the Future |
In 2019, we began realizing the benefit of productivity initiatives embedded in our business. The savings from the productivity initiatives have contributed, and we expect will continue to contribute, to funding strategic growth investments, such as investment in research and development. |
Realized gross productivity savings which we reinvested in our business, including in our early oncology research and development programs | ||||||
Capital Allocation and Investing for Long-Term Growth |
Our strong cash flows and balance sheet also allows us to make substantial investments for long-term growth. We also recognize that stockholders who support investment in developing innovative medicines require an appropriate return on the capital they commit to Amgen. |
Invested $16B for long-term growth: Acquired Otezla and Nuevolution AB 20.5% equity stake in BeiGene Ltd.(5) Returned capital to stockholders: $7.7B in stock repurchases $3.5B of dividends paid ◾ $1.45 per share per quarter, a 10% per share dividend increase over 2018 | ||||||
Global Geographic Reach |
We are leveraging our global presence to deliver the potential of our products to patients globally. Amgen medicines are now available to patients in approximately 100 countries worldwide (up from 50 in 2011). |
Launched Repatha® in China Launched EVENITY in Japan Expanded oncology presence in China through strategic collaboration with BeiGene Ltd. | ||||||
Next-Generation Biomanufacturing | Next-generation biomanufacturing plants have a smaller manufacturing footprint and reduce environmental impact, including reducing consumption of water and energy and lower levels of carbon emissions. Next-generation biomanufacturing plants can be built in less time than traditional plants and have lower operating costs. |
Singapore next-generation biomanufacturing facility operating and delivering cost and environmental efficiencies Continued work on the construction of our first U.S. next-generation biomanufacturing plant |
(1) | Jointly developed in collaboration with UCB. Developed in Japan by Amgen Astellas BioPhrama K.K., our joint venture with Astellas Pharma Inc. |
(2) | Formed when a molecule has been judged to have the potential to be safe and effective in humans. |
(3) | The period covering Phase 2 through Phase 3. |
(4) | Jointly developed in collaboration with Allergan plc. |
(5) | Entered into strategic collaboration with BeiGene Ltd. in October 2019; closed in January 2020. |
ï 2020 Proxy Statement 39
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Compensation Discussion and Analysis
|
|
(1) | Non-Generally Accepted Accounting Principles, or non-GAAP, net income for purposes of the 2019 Company performance goals of our annual cash incentive award program is reported and reconciled in Appendix B. |
(2) | Jointly developed in collaboration with Novartis AG. |
(3) | For complete information regarding our significant pipeline advancements, please refer to our Form 10-K for the year ended December 31, 2019. |
(4) | EVENITY is also approved in Japan and South Korea for men at high risk for fracture and in Australia as a treatment to increase bone mass in men with osteoporosis at high risk of fracture. |
42 ï 2020 Proxy Statement
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Compensation Discussion and Analysis
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|
(1) | Carfilzomib, Daratumumab and Dexamethasone for Patients With Relapsed and/or Refractory Multiple Myeloma. |
(2) | Jointly developed in collaboration with AstraZeneca plc. |
ï 2020 Proxy Statement 43
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Compensation Discussion and Analysis
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|
44 ï 2020 Proxy Statement
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Compensation Discussion and Analysis
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2017-2019 Performance Period Goal Design and Award Calculation
All operating measures and goals were established at the
beginning of the three-year performance period
2019 Operating Measures and Performance
Non-GAAP(1) Operating Measures |
Minimum (50%) |
Target (100%) |
Intermediate (125%) |
Maximum (150%) |
2019 Performance | |||||||||||||||||||||||
|
EPS Growth ($) |
136.8% $14.75 | ||||||||||||||||||||||||||
£$11.60 |
$12.75 |
$14.35 |
³$15.20 |
|||||||||||||||||||||||||
Operating Margin (%) |
75.3% 50.0% | |||||||||||||||||||||||||||
£48% |
52% |
54% |
³58% |
|||||||||||||||||||||||||
ROIC (%) |
66.6% 30.7% | |||||||||||||||||||||||||||
£30% |
32% |
|
³36% |
|||||||||||||||||||||||||
|
92.9%
| |||||||||||||||||||||||||||
(1) | The operating measures of the 2017-2019 performance units were based on Non-GAAP financial results for 2017, 2018, and 2019 as reported and reconciled in Appendix B, except that operating measures were further adjusted for the impacts of Hurricane Maria as prescribed by the terms of the 2017-2019 performance goals document. For this purpose, operating expense was reduced by $147 million ($0.16 in EPS) for 2017 and increased by $21 million ($0.03 in EPS) for 2018, and increased by $49 million ($0.07 in EPS) for 2019. |
(2) | Our targets for our 2017 and 2018 performance were disclosed under the 2017-2019 performance goals in our 2018 and 2019 proxy statement, respectively, filed with the Securities and Exchange Commission on April 11, 2018 and April 8, 2019, respectively. |
(3) | TSR Measurement Points = Average daily closing price of stock for the first 20 trading days beginning on the grant date (May 1, 2017) and the last 20 trading days of the performance period (December 31, 2019). |
ï 2020 Proxy Statement 45
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Compensation Discussion and Analysis
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How Compensation Decisions Are Made For Our Named Executive Officers
Roles and Responsibilities
Compensation Committee Composed solely of independent directors and reports to the Board
|
Evaluates the performance of our CEO within the context of the financial and operational performance of the Company. Determines and approves compensation packages for our CEO, other NEOs, Executive Vice Presidents, Senior Vice Presidents, and Section 16 officers (collectively, Senior Management).
Reviews and approves all compensation programs in which our NEOs participate.
Oversees the development and effective succession planning of our CEO and other members of Senior Management annually. Exercises the sole authority to select, retain, replace, and/or obtain advice from compensation consultants, legal counsel, and other outside advisors and assesses the independence of each such advisor, taking into consideration the factors set forth in the Securities and Exchange Commission, or SEC, rules and The NASDAQ Stock Market listing standards.
Oversees the Boards relationship with and response to stockholders on executive compensation matters and the Compensation Discussion and Analysis.
|
Consultant to the Compensation Committee Frederic W. Cook & Co., Inc., Independent consultant retained directly by the Compensation Committee
|
Regularly attends Compensation Committee meetings, including meeting in executive session with the Compensation Committee. Provides advice and studies on the appropriateness and competitiveness of our compensation program relative to market practice for our NEO compensation.
Provides advice and studies on our equity programs.
Provides advice on the selection of our peer group.
Consults on executive compensation trends and developments. Consults and makes recommendations, when requested, on various compensation matters and compensation program designs and practices to support our business strategy and objectives.
Coordinates and reviews the appropriateness of market data compiled by management.
Works with management to assess the potential risks arising from our compensation policies and practices. |
CEO Assisted by the Executive Vice President, Human Resources and other Company staff members |
Conducts performance reviews of the other NEOs and makes recommendations to the Compensation Committee with respect to compensation of Senior Management other than himself.
Provides recommendations on the development of and succession planning for the members of Senior Management other than himself. |
Annual performance reviews for each staff member (including NEOs) include an assessment of delivery of performance in alignment with our Amgen Values, a set of principles established in 1996 that guide the way we conduct business:
| ||||||
Amgen Values: | ||||||
Be science-based; |
Trust and respect each other; |
|||||
Compete intensely and win; |
Ensure quality; |
|||||
Create value for patients, staff, and stockholders; |
Work in teams; and |
|||||
Be ethical; |
Collaborate, communicate, and be accountable. |
|||||
48 ï 2020 Proxy Statement
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Compensation Discussion and Analysis
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ï 2020 Proxy Statement 49
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Compensation Discussion and Analysis
|
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How We Establish Our Peer Group
2019 Peer Group Companies Biotechnology and pharmaceutical companies with which we compete for executive talent.
| ||||
Objective Criteria Considered
|
2019 Peer Group (Companies in blue also list Amgen as a peer)
| |||
GICS codes of biotechnology (352010) and pharmaceuticals (352020);
12-month average market capitalization between 0.25 and 4.0x that of Amgens average market capitalization for the same period(1);
Trailing four-quarter revenues between 0.25 and 4.0x that of Amgens revenues(1);
Non-U.S. peers limited to those commonly identified as a peer of peers;
Competitors for executive talent;
Companies of comparable scope and complexity;
Competitors for equity investor capital;
Companies that identify us as their direct peer; and
Companies with similar pay practices. |
AbbVie Inc.
Allergan plc
AstraZeneca plc
Biogen Inc.
Bristol-Myers Squibb Company
Celgene Corporation
Eli Lilly and Company
Gilead Sciences, Inc. GlaxoSmithKline plc
Johnson & Johnson
Merck & Co., Inc.
Novartis AG
Pfizer Inc.
Regeneron Pharmaceuticals, Inc.
Roche Holding AG
Sanofi S.A.
|
(1) | For purposes of the 2019 peer group analyses: |
Market Capitalization(a) |
Revenues(b) |
|||||
Amgen |
$122 billion |
|
$24 billion |
| ||
Relative Peer Group Position |
3rd Quartile (above median) |
|
2nd Quartile |
|
(a) | Represents the 12-month average market capitalization as of May 31, 2019. |
(b) | Represents revenues for the trailing four quarters ended March 31, 2019. Revenues for GlaxoSmithKline plc, Roche Holding AG, and Sanofi S.A. were converted into U.S. dollars using Standard & Poors Capital IQ. |
The Market Median is determined for our CEO and our other NEOs based on the prior years compensation and is reviewed by the Compensation Committee to inform compensation decisions made in March of each year as follows:
Market Median
|
| |||||
CEO (compiled by FW Cook)
|
Other NEOs
|
|||||
50th percentile of each compensation element paid to CEOs in our peer group in the previous year from proxy statements. |
Average of the 50th percentile of each compensation element of our peer group from the PHRA Survey and proxy statements in the previous year (with base pay data aged forward to the current year) except for the Executive Vice President, Global Commercial Operations role as described above. |
50 ï 2020 Proxy Statement
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Compensation Discussion and Analysis
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Value of 2019 Annual Long-Term Incentive Equity Awards
Based on a review of Company and executive performance and market data, the Compensation Committee determined to grant the following annual LTI equity award grant values to our CEO and the other NEOs in March 2019, with an effective grant date of May 3, 2019, the third business day after the announcement of our first quarter 2019 earnings results. (For more information regarding the determination of the Market Median, see How Compensation Decisions Are Made For Our Named Executive OfficersPeer Group Data Sources previously discussed.)
Named Executive Officer |
Performance Units(1) ($) |
Stock Options ($) |
Restricted Stock Units ($) |
Total Equity Value Granted ($) |
2018 Market Median ($) |
Difference vs. Market Median Over/ (Under) (%) |
||||||||||||||||||
Robert A. Bradway |
7,000,000 | 4,200,000 | 2,800,000 | 14,000,000 | 11,209,000 | 24.9 | ||||||||||||||||||
Murdo Gordon |
2,000,000 | 1,200,000 | 800,000 | 4,000,000 | 3,918,612 | 2.1 | ||||||||||||||||||
David W. Meline |
2,000,000 | 1,200,000 | 800,000 | 4,000,000 | 3,399,988 | 17.6 | ||||||||||||||||||
David M. Reese |
2,000,000 | 1,200,000 | 800,000 | 4,000,000 | 4,010,465 | (0.3) | ||||||||||||||||||
Jonathan P. Graham(2)
|
|
1,400,000
|
|
|
840,000
|
|
|
560,000
|
|
|
2,800,000
|
|
|
2,594,725
|
|
|
7.9
|
|
(1) | The 2019-2021 performance period runs from January 1, 2019 through December 31, 2021. |
(2) | Mr. Graham was promoted to Executive Vice President, General Counsel and Secretary, effective October 22, 2019. Prior to that date, and at the time that the 2019 annual LTI equity awards were granted, Mr. Graham served as Senior Vice President, General Counsel and Secretary and the grant amounts reflect his role prior to his promotion, and does not give effect to his promotion grant. |
52 ï 2020 Proxy Statement
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Compensation Discussion and Analysis
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Performance Award Program 2017-2019 Performance Period Performance Units Earned
At the end of the 2017-2019 performance period, our performance for each of the three annual non-GAAP operating measures was averaged, resulting in 137.8% earned for EPS growth, 98.8% earned for operating margin, and 74.5% earned for operating expense and ROIC over the three-year period. These three non-GAAP operating measure percentages were then averaged for a total operating measures score of 103.7% for the three-year performance period. Based on our strong TSR ranking of 77.8th percentile relative to the TSRs of the companies in the S&P 500, the total operating measures score of 103.7% was increased by the maximum TSR adjustment of 50 percentage points to 153.7%. This actual earned performance of 153.7% for the 2017-2019 performance period resulted in the following number of shares of Common Stock being earned. Each earned performance unit converted to one share of Common Stock upon the payout date of March 20, 2020. See the detailed description of the 2017-2019 performance period previously discussed.
Named Executive Officer |
Performance Units Value Granted (Target) ($) |
Number of Performance Units Granted (#) |
Number of Shares of our Common (#) |
|||||||||
Robert A. Bradway |
6,000,000 | 33,543 | 56,106 | |||||||||
Murdo Gordon(2) |
n/a | n/a | n/a | |||||||||
David W. Meline |
1,750,000 | 9,783 | 16,363 | |||||||||
David M. Reese |
400,000 | 2,236 | 3,740 | |||||||||
Jonathan P. Graham
|
|
1,250,000
|
|
|
6,988
|
|
|
11,688
|
|
(1) | Includes dividend equivalents earned on these amounts rounded down to the nearest whole number of shares (excluding fractional shares paid in cash). |
(2) | Mr. Gordon commenced employment with the Company in 2018 after the participants for the 2017-2019 performance period had been determined and did not receive any performance units for such performance period. For a description of the new-hire LTI equity awards granted to Mr. Gordon in connection with the commencement of his employment, see the subsection Non-Direct Compensation and Payouts in Certain CircumstancesChange of Control Benefits and Offer Letter with Limited Severance BenefitsOffer Letter Mr. Gordon below. |
ï 2020 Proxy Statement 53
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Compensation Discussion and Analysis
|
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2018-2020 Performance Period Goal Design and Award Calculation
All operating measures and goals were established at the
beginning of the three-year performance period
Based on review and deliberation in December 2017 and March 2018, the Compensation Committee with input from management and FW Cook constructed the 2018-2020 performance period (January 1, 2018 to December 31, 2020) design to be similar to that of the 2017-2019 performance period design. All operating measures and goals were established at the beginning of the 2018-2020 performance period. For 2018, the three annual non-GAAP operating measures established for 2018 under the 2017-2019 performance period were employed. For 2019 and 2020, non-GAAP EPS growth and ROIC, two measures included among the three operating measures established for 2019 under the 2017-2019 performance period, are the operating measures under the 2018-2020 performance period. The TSR modifier was rebalanced for the 2018-2020 performance period from 50 to 30 percentage points to shift the weighting of the TSR modifier to be in greater alignment with the value of each of the operating measures. For our 2019 operating performance measures (after weighting), we performed at 110.6%.
2019 Operating Measures and Performance
Non-GAAP(1) Operating Measures |
Minimum (30%) |
Low (65%) |
Target (100%) |
High (135%) |
Maximum (170%) |
2019 Performance | ||||||||||||||||||||||||||||
|
EPS Growth ($) |
131.8% ($14.82) | ||||||||||||||||||||||||||||||||
£$9.05 |
$10.05
|
$12.55 |
$15.05 |
³$16.05 |
||||||||||||||||||||||||||||||
ROIC (%) |
89.5% (30.8%) | |||||||||||||||||||||||||||||||||
£26% |
28%
|
32% |
36% |
³38% |
||||||||||||||||||||||||||||||
|
110.6%
| |||||||||||||||||||||||||||||||||
Final 2018-2020 Performance Period Calculation 2018-2020 Non-GAAP(1) Operating Measures 2018 2019/2020 EPS Growth EPS Growth Operating Margin ROIC Operating Expense 2018-2020 Relative TSR Performance Final Payout Multiplier (0-200%) of target)
(1) | The 2018 non-GAAP operating measures (EPS growth, operating margin, and operating expense) and the 2019 non-GAAP operating measures (EPS growth and ROIC) with respect to the 2018-2020 performance period are as reported and reconciled in Appendix B. |
(2) | Our targets for our 2018 performance were disclosed under the 2018-2020 performance goals in our 2019 proxy statement filed with the Securities and Exchange Commission on April 8, 2019. |
(3) | 2020 targets are pre-established, but are not being disclosed at this time as they are competitively sensitive. |
(4) | TSR Measurement Points = Average daily closing price of stock for the first 20 trading days beginning on the grant date and the last 20 trading days of the performance period. |
54 ï 2020 Proxy Statement
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Compensation Discussion and Analysis
|
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2019-2021 Performance Period Goal Design and Award Calculation
All operating measures and goals were established at the
beginning of the three-year performance period
The Compensation Committee constructed the 2019-2021 performance period (January 1, 2019 to December 31, 2021) design with two non-GAAP operating measures of EPS growth and ROIC weighted equally in each year (one-half per measure). See the detailed description of the 2019-2021 performance period previously discussed.
2019 Operating Measures and Performance
Non-GAAP(1) Operating Measures |
Minimum (30%) |
Low (90%) |
Target (100%) |
High (110%) |
Maximum (170%) |
2019 Performance | ||||||||||||||||||||||||||||
|
EPS Growth ($) |
108.8% ($14.82) | ||||||||||||||||||||||||||||||||
£$10.00 |
$12.00
|
$13.45 |
$15.00 |
³$17.00 |
||||||||||||||||||||||||||||||
ROIC (%) |
92.2% (30.8%) | |||||||||||||||||||||||||||||||||
£25% |
29%
|
37% |
45% |
³49% |
||||||||||||||||||||||||||||||
|
100.5%
| |||||||||||||||||||||||||||||||||
(1) | The 2019 non-GAAP operating measures (EPS growth, and ROIC) with respect to the 2019-2021 performance period are as reported and reconciled in Appendix B. |
(2) | 2020 and 2021 targets are pre-established, but are not being disclosed at this time as they are competitively sensitive. |
(3) | TSR Measurement Points = Average daily closing price of stock for the first 20 trading days beginning on the grant date and the last 20 trading days of the performance period. |
ï 2020 Proxy Statement 55
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Compensation Discussion and Analysis
|
|
(1) | Non-GAAP net income for purposes of the EIP is as reported and reconciled in Appendix B. |
56 ï 2020 Proxy Statement
|
Compensation Discussion and Analysis
|
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(1) | Non-GAAP net income for purposes of the EIP is as reported and reconciled in Appendix B. |
ï 2020 Proxy Statement 57
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Compensation Discussion and Analysis
|
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2019 Company Performance Goals and Results
The table below illustrates the goals established, the weighting of each goal, and our actual performance for 2019. Payouts can range from 0% to a maximum of 225% of target annual cash incentive award opportunity for each metric and the final company performance goals score cannot exceed 225%. For additional discussion regarding our performance, please see Aligning Pay With Performance and Execution of Our Strategic Priorities.
Deliver Results (60% weighting) |
|
|
Weighted Score Achieved 103.7% |
| ||||||||||||||||
($ In Millions)
Equally focused on top- and bottom-line growth and assigned the largest percentage, consistent with the fundamental importance of financial performance to us and our stockholders in both the near- and long-term. No amounts can be earned for below-threshold performance for our financial metrics.
|
| |||||||||||||||||||
Goals |
|
Weighting |
|
|
Threshold |
|
|
Target |
|
|
Maximum |
|
|
Achieved |
| |||||
Revenues |
|
30% |
|
|
$20,453 |
|
$ |
22,100 |
|
|
$23,747 |
|
|
$23,362 177.3% |
| |||||
Non-GAAP Net Income(1) |
30% | $7,084 | $8,213 | $9,342 | |
$9,028 168.3% |
|
Certain measurements of performance for the non-financial metrics are subjective in nature and could result in a very small payout percentage (less than 1% of an annual cash incentive award).
Progress Innovative Pipeline (30% weighting) |
Weighted Score Achieved 26.0% |
|||||||||
Measures progress on both early- and later-stage product candidates to focus us on executing key clinical studies and delivering a robust product pipeline at all stages of the development continuum, which we believe is critical to our continued success over both the near- and long-term.
|
| |||||||||
Goals |
Weighting |
Results |
Achieved |
|||||||
Advance Early Pipeline |
|
10% |
|
We generated a total of eight product teams (formed when a molecule has been judged to have the potential to be safe and effective in humans). |
|
100.0% |
| |||
We initiated seven first-in-human studies, including with product candidates for prostate and other solid tumor cancers, multiple myeloma, cardiovascular disease, and respiratory diseases. |
||||||||||
We advanced four programs through the early-to-late stage portal (the period entering Phase 2 through Phase 3). |
||||||||||
Execute Key Clinical Studies and Regulatory Filings |
20% | We achieved key clinical study milestones for Omecamtiv Mecarbil, KYPROLIS, Nplate, and ABP 798 (biosimilar rituximab (Rituxan®)). |
80.0% | |||||||
We completed regulatory filings for EVENITY, Prolia, KYPROLIS, AVSOLA (biosimilar infliximab (Remicade®)), and ABP 215 (biosimilar bevacizumab).
|
||||||||||
Deliver Annual Priorities (10% weighting) |
Weighted Score Achieved 9.2% |
|||||||||
Goals |
Weighting |
Results |
Achieved |
|||||||
Execute Critical Launches and Long-Term Commercial Objectives Focuses on executing on our key product launches. |
|
5% |
|
We set aspirational internal goals to focus our entire Company on delivering on the promise of three important medicines Repatha, Prolia, and Aimovig. While all three products delivered significant volume-driven growth, we did not meet our aspirational goals for Repatha and Aimovig. |
|
77.2% |
| |||
Achieve Productivity Objectives Focuses on productivity to support continued reinvestment in opportunities (such as the early pipeline). |
5% | We established a target $280 million of gross operating expense savings. We realized approximately $286 million of gross savings that we reinvested in the business. |
106.8% |
2019 Company Performance Goals Final Score
|
|
Achieved 138.9%
|
|
(1) | Non-GAAP net income for purposes of the 2019 Company performance goals of our annual cash incentive award program is reported and reconciled in Appendix B. |
58 ï 2020 Proxy Statement
|
Compensation Discussion and Analysis
|
|
2019 Annual Cash Incentive Awards
As shown in the table above, our performance against the 2019 Company performance goals yielded a composite final score of 138.9% and the Compensation Committee awarded actual annual cash incentive awards under the EIP to our NEOs based on this composite final score. No further discretion was employed.
Named Executive Officer | Target Opportunity (% of Base Salary) |
Target 2019 Award($) |
Actual 2019 Award($)(1) | |||||||||
Robert A. Bradway |
|
150 |
|
|
2,390,769 |
|
|
3,321,000 |
| |||
Murdo Gordon |
|
100 |
|
|
1,021,154 |
|
|
1,418,000 |
| |||
David W. Meline |
|
100 |
|
|
994,646 |
|
|
1,382,000 |
| |||
David M. Reese |
|
100 |
|
|
970,139 |
|
|
1,348,000 |
| |||
Jonathan P. Graham |
|
92 |
(2) |
|
878,494 |
|
|
1,220,000 |
|
(1) | Calculated in accordance with the 2019 Company performance goals composite final score based on actual 2019 earned base salary. |
(2) | Mr. Grahams target annual cash incentive award opportunity was increased from 90% to 100% of base salary in connection with his promotion to Executive Vice President, General Counsel and Secretary, effective as of October 22, 2019. The target opportunity is a pro-rated bonus target based on the number of days at each target level before and after the effective date of his promotion. |
ï 2020 Proxy Statement 59
|
Compensation Discussion and Analysis
|
|
2019 Base Salary Market Position
The 2019 base salaries as in effect at the end of 2019 and the Market Median position as reviewed by the Compensation Committee in March 2019 are shown in the table below:
Named Executive Officer |
2018 Base Salary ($) |
Increase (%) |
2019 Base Salary ($) |
2018 Market Median ($) |
Difference vs. Market Median Over/(Under) (%) |
|||||||||||||||
Robert A. Bradway |
|
1,560,000 |
|
|
2.6 |
|
|
1,600,000 |
|
|
1,586,000 |
|
|
0.9 |
| |||||
Murdo Gordon |
|
1,000,000 |
|
|
2.5 |
|
|
1,025,000 |
|
|
1,033,452 |
|
|
(0.8 |
) | |||||
David W. Meline |
|
974,000 |
|
|
2.5 |
|
|
998,400 |
|
|
1,033,767 |
|
|
(3.4 |
) | |||||
David M. Reese |
|
950,000 |
|
|
2.5 |
|
|
973,800 |
|
|
1,098,716 |
|
|
(11.4 |
) | |||||
Jonathan P. Graham |
|
935,000 |
|
|
2.5 |
|
|
958,500 |
|
|
953,708 |
|
|
0.5 |
|
Total Target Annual Cash Compensation
Total target annual cash compensation reviewed by the Compensation Committee in March 2019 prior to the compensation changes being made are shown in the table below:
Named Executive Officer |
2019 Amgen Target Total Annual Cash ($) |
2018 Market Median ($) |
Difference vs. Market Median Over/(Under) (%) |
|||||||||
Robert A. Bradway |
|
4,000,000 |
|
|
3,966,000 |
|
|
0.9 |
| |||
Murdo Gordon |
|
2,050,000 |
|
|
2,083,471 |
|
|
(1.6 |
) | |||
David W. Meline |
|
1,996,800 |
|
|
2,026,322 |
|
|
(1.5 |
) | |||
David M. Reese |
|
1,947,600 |
|
|
2,221,552 |
|
|
(12.3 |
) | |||
Jonathan P. Graham |
|
1,821,150 |
|
|
1,659,523 |
|
|
9.7 |
|
60 ï 2020 Proxy Statement
|
Compensation Discussion and Analysis
|
|
Stock Ownership Guidelines Requirements
The stock ownership guidelines for 2019 were:
Position |
Stock Ownership Requirement |
Compliance | ||
Chief Executive Officer(1) |
6x base salary |
✓ | ||
Executive Vice President |
3x base salary |
✓ | ||
Senior Vice President |
2x base salary |
✓ | ||
Vice President |
1x base salary |
✓ |
(1) | Mr. Bradway exceeded his ownership requirement and holds approximately 53 times his base salary, or 9 times his stock ownership requirement as of October 18, 2019, the effective date of certifications. |
62 ï 2020 Proxy Statement
|
Compensation Discussion and Analysis
|
|
64 ï 2020 Proxy Statement
|
Executive Compensation Tables
|
|
Summary Compensation Table
The following table sets forth summary information concerning the compensation awarded to, paid to, or earned by each of our Named Executive Officers, or NEOs.
Name and Principal Position | Year | |
Salary ($) |
(1) |
|
Bonus ($) |
|
|
Stock Awards ($) |
(2) |
|
Option Awards ($) |
(3) |
|
Non-Equity
Incentive Plan Compensation ($) |
(4) |
|
All Other Compensation ($) |
(5) |
|
Total ($) |
| ||||||||||
Performance Units and Restricted Stock Units |
Stock Options |
EIP | ||||||||||||||||||||||||||||||
Robert A. Bradway Chief Executive Officer and President
|
|
2019 2018 2017 |
|
|
1,600,923 1,566,000 1,555,962 |
|
|
0 0 0 |
|
|
9,799,716 8,749,818 8,399,812 |
|
|
4,199,985 3,749,994 3,599,974 |
|
|
3,321,000 3,898,000 2,683,000 |
|
|
691,169 591,454 661,041 |
|
|
19,612,793 18,555,266 16,899,789 |
| ||||||||
Murdo Gordon Executive Vice President, Global Commercial Operations
|
|
2019 2018 |
|
|
1,025,673 330,769 |
|
|
0 2,000,000 |
|
|
2,799,711 9,899,861 |
|
|
1,199,970 0 |
|
|
1,418,000 513,000 |
|
|
212,482 1,336,604 |
|
|
6,655,836 14,080,234 |
| ||||||||
David W. Meline Executive Vice President and Chief Financial Officer
|
|
2019 2018 2017 |
|
|
999,049 977,746 970,769 |
|
|
0 0 0 |
|
|
2,799,711 2,799,925 2,449,878 |
|
|
1,199,970 1,199,995 1,049,990 |
|
|
1,382,000 1,623,000 1,116,000 |
|
|
292,840 260,102 271,651 |
|
|
6,673,570 6,860,768 5,858,288 |
| ||||||||
David M. Reese Executive Vice President, Research and Development
|
|
2019 2018 |
|
|
974,433 697,500 |
|
|
0 300,000 |
|
|
2,799,711 3,029,787 |
|
|
1,199,970 269,966 |
|
|
1,348,000 913,000 |
|
|
215,811 129,019 |
|
|
6,537,925 5,339,272 |
| ||||||||
Jonathan P. Graham Executive Vice President, General Counsel and Secretary
|
|
2019 2018 2017 |
|
|
959,113 938,596 932,577 |
|
|
0 0 0 |
|
|
3,959,666 1,959,878 1,749,939 |
|
|
839,997 839,983 749,997 |
|
|
1,220,000 1,402,000 858,000 |
|
|
261,194 204,901 231,695 |
|
|
7,239,970 5,345,358 4,522,208 |
|
(1) | Reflects base salary earned in each bi-weekly pay period (or portion thereof) during each fiscal year before pre-tax contributions and, therefore, includes compensation deferred under our qualified deferred compensation plan and nonqualified deferred compensation plan, or NDCP. Under payroll practices for salaried staff members of our U.S. entities, including our NEOs, base salary earned in a pay period is computed by dividing the annual base salary then in effect by 26, which is the number of full bi-weekly pay periods in a year. |
(2) | For 2019, reflects the grant date fair values of performance units for the 2019-2021 performance period and restricted stock units, or RSUs, granted during 2019 determined in accordance with Accounting Standards Codification, or ASC, Topic 718 (see footnotes 6 and 7 to the Grants of Plan-Based Awards table for information on how these amounts were determined). |
66 ï 2020 Proxy Statement
|
Executive Compensation Tables
|
|
The number of units to be earned for the performance units granted during 2019 is based on the average of our performance against annual operating performance measures established at the commencement of the three year performance period, with the payout on such measures modified up or down by our total shareholder return, or TSR, relative to the TSRs of the companies in the Standard & Poors 500 Index, or S&P 500, all computed over the performance period. These operating performance measures are performance conditions, as defined under ASC 718. The values shown in this table and the Grants of Plan-Based Awards table are based on probable outcomes of these performance conditions. The table below shows the grant date fair values of these performance unit awards: (1) if the maximum is achieved with regard to all of the operating performance measures which would result in an earnout of 170% based on the operating performance measures with the TSR market condition at target, with no increase or decrease based on the market condition; and (2) if the maximum is achieved with regard to all of the operating performance measures and maximum performance occurs under the TSR market condition which results in an additional 30% earnout, for total earned payout of 200% of performance units granted. |
Fair Value of Performance Units for the 2019-2021 Performance Period | ||||||||
Name | Based on the Maximum Performance Regarding the 2019-2021 Operating Performance Measures |
Based on the Maximum Performance Regarding the Operating Performance Measures and Maximum Payout for the TSR Modifier |
||||||
Robert A. Bradway |
|
$11,899,532 |
|
|
$13,999,627 |
| ||
Murdo Gordon |
|
$3,399,678 |
|
|
$3,999,732 |
| ||
David W. Meline |
|
$3,399,678 |
|
|
$3,999,732 |
| ||
David M. Reese |
|
$3,399,678 |
|
|
$3,999,732 |
| ||
Jonathan P. Graham |
|
$2,379,680 |
|
|
$2,799,624 |
|
(3) | For 2019, reflects the grant date fair values of non-qualified stock options granted during 2019 determined in accordance with ASC 718 (see footnote 8 to the Grants of Plan-Based Awards table for information on how these amounts were determined). |
(4) | Reflects amounts that were earned under our Executive Incentive Plan, or EIP, for 2019 performance which were determined and paid in March 2020. For a description of our EIP, see Elements of Compensation and Specific Compensation DecisionsAnnual Cash Incentive Awards in our Compensation Discussion and Analysis. |
(5) | See the subsection All Other CompensationPerquisites and Other Compensation immediately following these footnotes. |
All Other CompensationPerquisites and Other Compensation
Perquisites. The amounts reported reflect the aggregate incremental cost of perquisites and other personal benefits provided to our NEOs and are included in the All Other Compensation column of the Summary Compensation Table. The following table sets forth the perquisites provided to our NEOs in 2019.
Personal Use of Company Aircraft(1) |
Personal Use of Company Car and Driver(2) |
Personal Financial Planning Services |
Moving and
Relocation Expenses(3) |
Other(4) | ||||||||||||||||||||||||
Name | Aggregate Incremental Cost($) |
Aggregate Incremental Cost($) |
Aggregate Incremental Cost($) |
Aggregate Incremental Cost($) |
Tax Gross- Up($) |
Aggregate Incremental Cost($) |
Total($) | |||||||||||||||||||||
Robert A. Bradway |
|
106,505 |
|
|
4,306 |
|
|
15,000 |
|
|
0 |
|
|
0 |
|
|
16,173 |
|
|
141,984 |
| |||||||
Murdo Gordon |
|
209 |
|
|
47 |
|
|
15,000 |
|
|
4,347 |
|
|
34,879 |
|
|
10,354 |
|
|
64,836 |
| |||||||
David W. Meline |
|
204 |
|
|
3,113 |
|
|
15,000 |
|
|
0 |
|
|
0 |
|
|
12,758 |
|
|
31,075 |
| |||||||
David M. Reese |
|
0 |
|
|
0 |
|
|
15,000 |
|
|
0 |
|
|
0 |
|
|
12,497 |
|
|
27,497 |
| |||||||
Jonathan P. Graham |
|
209 |
|
|
76 |
|
|
15,000 |
|
|
0 |
|
|
0 |
|
|
10,221 |
|
|
25,506 |
|
(1) | The aggregate incremental cost of use of our aircraft for personal travel by our NEOs is allocated entirely to the highest ranking NEO present on the flight (except for on-board catering costs which are allocated to each NEO present). If each NEO present on the flight is the same level, the aggregate incremental costs of use of our aircraft for personal travel is allocated to each NEO present. The aggregate incremental cost for personal use of our aircraft is calculated based on our variable operating costs, which include crew travel expenses, on-board catering, landing fees, trip-related hangar/parking costs, fuel, trip-related maintenance, and other smaller variable costs. In determining the incremental cost relating to fuel and trip-related maintenance, we applied an estimate derived from our average costs. We believe that the use of this methodology for 2019 is a reasonably accurate method for calculating fuel and trip-related maintenance costs. Because our aircraft are used primarily for business travel, we do not include the fixed costs that do not change based on usage, such as pilots salaries, our aircraft purchase costs, and the cost of maintenance not related to trips. |
(2) | The aggregate incremental cost for personal use of the car and driver provided by us is determined as the sum of the cost of fuel, driver overtime costs allocable to personal usage, and maintenance costs for the total number of personal miles driven. Personal miles include travel to and from work from home. As the cars are used primarily for business travel, fixed costs that would be incurred by us to operate the company cars for business use such as car lease or rental costs and driver salaries are not included. |
ï 2020 Proxy Statement 67
|
Executive Compensation Tables
|
|
(3) | Mr. Gordon agreed to relocate from New Jersey to Thousand Oaks, California to serve as Executive Vice President, Global Commercial Operations commencing in September 2018. The incremental cost of certain relocation benefits that were provided to Mr. Gordon in 2019 in connection with his relocation in accordance with our relocation policies, include: |
(a) | $4,347 for reimbursed relocation-related travel expenses and miscellaneous other relocation expenses; and |
(b) | $34,879 for tax gross-up payments on moving and relocation benefits provided. |
(4) | Other expenses also include: |
(a) | Company contributions to non-profit charities designated by the executive in the amount of $9,984 for Mr. Bradway and $10,000 for Messrs. Gordon, Meline and Graham and Dr. Reese; and |
(b) | Executive physicals, expenses related to guests accompanying the NEOs on business travel, gifts, and other expenses. |
Other Compensation. The following table sets forth compensation for our NEOs in 2019 incurred in connection with our 401(k) Retirement and Savings Plan, or 401(k) Plan, our NDCP, and our Supplemental Retirement Plan, or SRP. These amounts, along with the perquisites and other compensation discussed above, are included in the All Other Compensation column of the Summary Compensation Table. See Nonqualified Deferred Compensation below for a description of these plans.
Name | Company Contributions to 401(k) Retirement and Savings Plan($) |
Company Credits to Non-Qualified |
Company Credits to Supplemental Retirement Plan($) |
Total($) | ||||||||||||
Robert A. Bradway |
|
28,000 |
|
|
0 |
|
|
521,185 |
|
|
549,185 |
| ||||
Murdo Gordon |
|
22,231 |
|
|
0 |
|
|
125,415 |
|
|
147,646 |
| ||||
David W. Meline |
|
28,000 |
|
|
0 |
|
|
233,765 |
|
|
261,765 |
| ||||
David M. Reese |
|
28,000 |
|
|
0 |
|
|
160,314 |
|
|
188,314 |
| ||||
Jonathan P. Graham |
|
28,000 |
|
|
0 |
|
|
207,688 |
|
|
235,688 |
|
68 ï 2020 Proxy Statement
|
Executive Compensation Tables
|
|
Grants of Plan-Based Awards
The following table sets forth summary information regarding all grants of plan-based awards made to our NEOs for the year ended December 31, 2019. All of our equity based awards were granted under the Amgen Inc. 2009 Equity Incentive Plan, as amended.
Estimated Future Payouts |
Estimated Future Payouts |
All
Other |
All
Other (#)(5) |
Exercise ($/Sh) |
Grant Date
|
|||||||||||||||||||||||||||||||||||||||||||||||
Name |
Grant Date |
Approval Date(1) |
Threshold | Target | Maximum | Threshold | Target | Maximum | ||||||||||||||||||||||||||||||||||||||||||||
EIP/GMIP | Performance Units | RSUs | Stock Options | |||||||||||||||||||||||||||||||||||||||||||||||||
Robert A. Bradway |
3/6/19 | 3/6/19 | (2) | (2) | 11,285,000 | |||||||||||||||||||||||||||||||||||||||||||||||
5/3/19 | 3/6/19 | (3) | 37,154 | 74,308 | 6,999,814 | (6) | ||||||||||||||||||||||||||||||||||||||||||||||
5/3/19 | 3/6/19 | 15,791 | 2,799,902 | (7) | ||||||||||||||||||||||||||||||||||||||||||||||||
|
5/3/19
|
|
|
3/6/19
|
|
|
137,840
|
|
|
177.31
|
|
4,199,985 | (8) | |||||||||||||||||||||||||||||||||||||||
Murdo Gordon |
3/6/19 | 3/6/19 | (2) | (2) | 6,771,000 | |||||||||||||||||||||||||||||||||||||||||||||||
5/3/19 | 3/6/19 | (3) | 10,615 | 21,230 | 1,999,866 | (6) | ||||||||||||||||||||||||||||||||||||||||||||||
5/3/19 | 3/6/19 | 4,511 | 799,845 | (7) | ||||||||||||||||||||||||||||||||||||||||||||||||
|
5/3/19
|
|
|
3/6/19
|
|
|
39,382
|
|
|
177.31
|
|
1,199,970 | (8) | |||||||||||||||||||||||||||||||||||||||
David W. Meline |
3/6/19 | 3/6/19 | (2) | (2) | 6,771,000 | |||||||||||||||||||||||||||||||||||||||||||||||
5/3/19 | 3/6/19 | (3) | 10,615 | 21,230 | 1,999,866 | (6) | ||||||||||||||||||||||||||||||||||||||||||||||
5/3/19 | 3/6/19 | 4,511 | 799,845 | (7) | ||||||||||||||||||||||||||||||||||||||||||||||||
|
5/3/19
|
|
|
3/6/19
|
|
|
39,382
|
|
|
177.31
|
|
1,199,970 | (8) | |||||||||||||||||||||||||||||||||||||||
David M. Reese |
3/6/19 | 3/6/19 | (2) | (2) | 6,771,000 | |||||||||||||||||||||||||||||||||||||||||||||||
5/3/19 | 3/6/19 | (3) | 10,615 | 21,230 | 1,999,866 | (6) | ||||||||||||||||||||||||||||||||||||||||||||||
5/3/19 | 3/6/19 | 4,511 | 799,845 | (7) | ||||||||||||||||||||||||||||||||||||||||||||||||
|
5/3/19
|
|
|
3/6/19
|
|
|
39,382
|
|
|
177.31
|
|
1,199,970 | (8) | |||||||||||||||||||||||||||||||||||||||
Jonathan P. Graham |
3/6/19 | 3/6/19 | (2) | (2) | 4,514,000 | |||||||||||||||||||||||||||||||||||||||||||||||
5/3/19 | 3/6/19 | (3) | 7,430 | 14,860 | 1,399,812 | (6) | ||||||||||||||||||||||||||||||||||||||||||||||
5/3/19 | 3/6/19 | 3,158 | 559,945 | (7) | ||||||||||||||||||||||||||||||||||||||||||||||||
11/1/19 | 10/21/19 | 9,176 | 1,999,909 | (7) | ||||||||||||||||||||||||||||||||||||||||||||||||
|
5/3/19
|
|
|
3/6/19
|
|
|
27,568
|
|
|
177.31
|
|
839,997 | (8) |
(1) | Reflects the date on which the grants were approved by the Compensation Committee. |
(2) | Represents awards to our NEOs made under our EIP. For our EIP participants, the maximum amounts shown in the table above reflect the largest possible payments under our EIP for the 2019 performance period, based on non-Generally Accepted Accounting Principles, or non-GAAP, net income, as defined for the EIP and reported and reconciled in Appendix B. There are no thresholds or targets under the EIP. The EIP provides that the Compensation Committee may use negative discretion to award any amount that does not exceed the maximum. Consistent with its practice since the EIP was approved by our stockholders, the Compensation Committee employed the pre-established Company performance goals under our Global Management Incentive Plan, or GMIP, as illustrated in the table below, in determining the actual amounts awarded under the EIP in 2019. |
ï 2020 Proxy Statement 69
|
Executive Compensation Tables
|
|
Our 2019 Company performance goals under the GMIP were financial and operating performance goals weighted as follows: (1) Deliver Results (60%)30% Revenues and 30% Non-GAAP Net Income (as reported and reconciled in Appendix B); (2) Progress Innovative Pipeline (30%); and (3) Deliver Annual Priorities (10%). There are no payouts for below-threshold performance on any of our Company financial performance goals. Threshold performance on our Progress Innovative Pipeline goals results in 50% earned for those metrics. Certain measurements of performance for the non-financial metrics are more subjective in nature and could result in a very small payout percentage (less than 1% of an annual cash incentive award) and, as such, no threshold amounts are shown in the table. The 2019 Company performance goals derived target and maximum payout levels, which are based on a multiple of salary, are shown in the table below. Maximum performance under all of the performance metrics results in 225% of target being earned. The actual amounts awarded under our Company performance goals are based on achievement of 138.9% performance against target and are reported as Non-Equity Incentive Plan Compensation in our Summary Compensation Table and are shown in the table below. For a description of our pre-established Company performance goals and the use of the GMIP in the Compensation Committees exercise of negative discretion see Elements of Compensation and Specific Compensation DecisionsAnnual Cash Incentive Awards in our Compensation Discussion and Analysis. |
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards($) |
Non-Equity Compensation($) |
|||||||||||||||||
Name | Threshold | Target | Maximum | Actual | ||||||||||||||
Robert A. Bradway |
|
|
|
|
2,390,769 |
|
|
5,379,230 |
|
|
3,321,000 |
|||||||
Murdo Gordon |
|
|
|
|
1,021,154 |
|
|
2,297,597 |
|
|
1,418,000 |
|||||||
David W. Meline |
|
|
|
|
994,646 |
|
|
2,237,954 |
|
|
1,382,000 |
|||||||
David M. Reese |
|
|
|
|
970,139 |
|
|
2,182,813 |
|
|
1,348,000 |
|||||||
Jonathan P. Graham |
|
|
|
|
878,494 |
|
|
1,976,612 |
|
|
1,220,000 |
(3) | Reflects estimated payouts regarding performance units granted during 2019 for the 2019-2021 performance period for NEOs. The number of units granted (which equals the target number of units of the award) will be multiplied by a payout percentage, which can range from 0% to 200%, to determine the number of units earned by the participant at the end of the performance period. Shares of our Common Stock will be issued on a one-for-one basis for each performance unit earned. |
For all the NEOs, the payout percentage for the 2019-2021 performance period is earned based on two operating measures, with the total of such operating measures ranging from 30% to 170%, which is then modified up or down by up to 30 percentage points based on our relative TSR performance ranking. The non-GAAP operating measures are: (1) annual earnings per share for 2019, 2020 and 2021; and (2) annual return on invested capital, or ROIC, for 2019, 2020 and 2021. Each of the operating measures are measured against pre-established goals for every year in the 2019-2021 performance period, which runs from January 1, 2019 through December 31, 2021. All goals are set at the commencement of the three-year performance period. Each applicable operating measure is weighted equally (one-half per measure) to determine the total operating measure percentage for that year. At the end of the performance period, the final annual operating performance percentages for each of the three years are averaged to determine the score for the three-year performance period. The TSR modifier is based on how the TSR of our Common Stock ranks relative to the TSRs of the companies that are listed in the S&P 500, as defined (the Reference Group), over the period from the date of grant through the end of the performance period. If the rank of the TSR of our Common Stock equals or exceeds the 75th percentile or equals or is less than the 25th percentile, the TSR modifier increases or decreases the payout by 30 percentage points, respectively. If the TSR of our Common Stock is at the 50th percentile, the TSR modifier is zero. Linear interpolation is used to determine the TSR modifier if the rank of the TSR of our Common Stock falls between these percentiles. If our absolute TSR over the performance period is less than 0, then the modifier cannot be greater than 0. |
All performance units accrue dividend equivalents deemed reinvested in shares and that are payable in shares only to the extent and when the underlying performance units are earned. For more information, see Elements of Compensation and Specific Compensation DecisionsLong-Term Incentive Equity Awards in our Compensation Discussion and Analysis. All 2019 operating measures with respect to the 2019-2021 performance period discussed above are reported and reconciled in Appendix B. |
(4) | Reflects the RSUs granted during 2019, including the annual grant of RSUs to our NEOs and a grant to Mr. Graham in connection with his promotion to Executive Vice President, General Counsel and Secretary. RSUs accrue dividend equivalents that are deemed reinvested in shares and payable only to the extent and when the underlying RSUs vest and are issued to the recipient. |
(5) | Reflects the 2019 annual grant of non-qualified stock options to our NEOs. |
(6) | Reflects the grant date fair values of performance units granted to our NEOs for the 2019-2021 performance period determined in accordance with ASC 718, based on the number of performance units granted multiplied by: (i) 100% which is the operating measure percentage earnout based on the probable outcomes of financial performance measures over the three-year performance period as of the grant date; and (ii) the grant date fair value per unit of $188.40, which reflects the impact of the TSR modifier of $11.09 per share, which is a market condition. The grant date fair value per unit was calculated using a payout simulation model with the following key assumptions: risk-free interest rate of 2.3%; volatility of the price of our Common Stock of 22.1%; the closing price of our Common Stock on the grant date of $177.31 per share; volatilities of the prices of the stocks of the Reference Group; and the correlations of returns of our Common Stock and the stocks of the Reference Group to simulate TSRs and their resulting impact on the payout percentages based on the contractual terms of the performance units. |
(7) | Reflects the grant date fair values of RSUs granted during 2019 determined in accordance with ASC 718 based on the number of RSUs granted multiplied by the grant date fair values per unit of $177.31 and $217.95 on May 3 and November 1, respectively. Because these RSUs accrue dividend equivalents during the vesting period, the grant date fair value per unit equals the closing price of our Common Stock on the grant date. |
(8) | Reflects the grant date fair values of stock options granted during 2019 determined in accordance with ASC 718 based on the number of options granted multiplied by the grant date fair value per option of $30.47. The grant date fair value of an option was determined using a Black-Scholes option valuation model with the following key assumptions: risk-free interest rate of 2.4%; expected life of 5.8 years; expected volatility of the price of our Common Stock of 23.5%; expected dividend yield of 3.1%; and the exercise price of $177.31. |
70 ï 2020 Proxy Statement
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Executive Compensation Tables
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|
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth summary information regarding the outstanding equity awards at December 31, 2019 granted to each of our NEOs.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Name |
Number of Securities Underlying Unexercised Options Exercisable (#) |
Number of Securities Underlying Unexercised Options Unexercisable (#) |
Option Exercise Price ($/Option) |
Option Expiration Date(1) |
Number of Shares or Units of Stock That Have Not Vested (#)(2) |
Market Value of Shares or Units of Stock That Have Not Vested ($)(3) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) |
||||||||||||||||||||||||
Stock Options(1)
|
Restricted Stock Units and Dividend Equivalents
|
Performance Units and Dividend Equivalents
|
||||||||||||||||||||||||||||||
Robert A. Bradway |
|
0 |
|
|
137,840 |
|
|
177.31 |
|
|
5/3/29 |
|
|
46,925 |
|
|
11,312,210 |
|
|
75,912 |
(4) |
|
18,300,106 |
| ||||||||
0 | 108,444 | 177.46 | 4/27/28 | 69,613 | (5) | 16,781,606 | ||||||||||||||||||||||||||
43,136 | 87,582 | 162.60 | 5/1/27 | 55,683 | (6) | 13,423,501 | ||||||||||||||||||||||||||
79,056 | 40,726 | 156.35 | 5/3/26 | |||||||||||||||||||||||||||||
73,500 | 0 | 54.69 | 4/25/21 | |||||||||||||||||||||||||||||
127,000 | 0 | 58.43 | 4/26/20 | |||||||||||||||||||||||||||||
Murdo Gordon |
0 | 39,382 | 177.31 | 5/3/29 | 27,684 | 6,673,782 | 21,688 | (4) | 5,228,326 | |||||||||||||||||||||||
36,703 | (5) | 8,847,992 | ||||||||||||||||||||||||||||||
David W. Meline |
0 | 39,382 | 177.31 | 5/3/29 | 14,149 | 3,410,899 | 21,688 | (4) | 5,228,326 | |||||||||||||||||||||||
0 | 34,702 | 177.46 | 4/27/28 | 22,275 | (5) | 5,369,834 | ||||||||||||||||||||||||||
12,581 | 25,545 | 162.60 | 5/1/27 | 16,240 | (6) | 3,914,977 | ||||||||||||||||||||||||||
25,153 | 12,959 | 156.35 | 5/3/26 | |||||||||||||||||||||||||||||
David M. Reese |
0 | 39,382 | 177.31 | 5/3/29 | 23,637 | 5,698,172 | 21,688 | (4) | 5,228,326 | |||||||||||||||||||||||
0 | 7,807 | 177.46 | 4/27/28 | 5,010 | (5) | 1,207,761 | ||||||||||||||||||||||||||
2,875 | 5,839 | 162.60 | 5/1/27 | 3,711 | (6) | 894,611 | ||||||||||||||||||||||||||
5,749 | 2,962 | 156.35 | 5/3/26 | |||||||||||||||||||||||||||||
2,300 | 0 | 54.69 | 4/25/21 | |||||||||||||||||||||||||||||
1,480 | 0 | 58.43 | 4/26/20 | |||||||||||||||||||||||||||||
Jonathan P. Graham |
0 | 27,568 | 177.31 | 5/3/29 | 19,109 | 4,606,607 | 15,180 | (4) | 3,659,443 | |||||||||||||||||||||||
0 | 24,291 | 177.46 | 4/27/28 | 15,593 | (5) | 3,759,005 | ||||||||||||||||||||||||||
8,986 | 18,247 | 162.60 | 5/1/27 | 11,600 | (6) | 2,796,412 | ||||||||||||||||||||||||||
16,529 | 8,516 | 156.35 | 5/3/26 | |||||||||||||||||||||||||||||
(1) | In general, stock options expire on the tenth anniversary of their grant date. If a retirement-eligible staff member retires, their stock options continue to vest and expire on the earlier of: (i) the fifth anniversary of their retirement date; or (ii) the end of the grant term. No stock options were granted to NEOs during 2012 through 2015. |
(2) | The following table shows the vesting of RSUs and related accrued dividend equivalents (rounded down to the nearest whole number of units) outstanding as of December 31, 2019. RSUs accrue dividends that are deemed reinvested in shares and payable only when and to the extent the underlying RSUs vest and are issued to the participant. |
Granted on | ||||||||||||||||||||||||
Name |
November 1, 2019(a) |
May 3, 2019(a) |
November 2, 2018(b) |
April 27, 2018(a) |
May 1, 2017(c) |
May 3, 2016(d) |
||||||||||||||||||
Robert A. Bradway |
|
0 |
|
|
16,132 |
|
|
0 |
|
|
14,810 |
|
|
10,681 |
|
|
5,302 |
| ||||||
Murdo Gordon |
|
0 |
|
|
4,608 |
|
|
23,076 |
|
|
0 |
|
|
0 |
|
|
0 |
| ||||||
David W. Meline |
|
0 |
|
|
4,608 |
|
|
0 |
|
|
4,739 |
|
|
3,115 |
|
|
1,687 |
| ||||||
David M. Reese |
|
0 |
|
|
4,608 |
|
|
13,303 |
|
|
1,066 |
|
|
4,274 |
|
|
386 |
| ||||||
Jonathan P. Graham |
|
9,232 |
|
|
3,226 |
|
|
0 |
|
|
3,316 |
|
|
2,226 |
|
|
1,109 |
|
(a) | Scheduled to vest at a rate of approximately 33%, 33%, and 34% on the second, third, and fourth anniversaries of the grant date, respectively. |
(b) | For Mr. Gordon, scheduled to vest at a rate of approximately 54% and 46% on the second and third anniversaries of the grant date, respectively; and for Dr. Reese, scheduled to vest at a rate of approximately 33%, 33%, and 34% on the second, third, and fourth anniversaries of the grant date, respectively. |
(c) | Scheduled to vest in approximately equal installments on each of the third and fourth anniversaries of the grant date. |
(d) | Scheduled to vest on the fourth anniversary of the grant date. |
(3) | The market values of RSUs and performance units (and related dividend equivalents) were calculated by multiplying the number of RSUs outstanding or the number of performance units as determined in accordance with Securities and Exchange Commission, or SEC, rules and footnotes 4 through 6 below, as applicable, by the closing price of our Common Stock on December 31, 2019 ($241.07). |
ï 2020 Proxy Statement 71
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Executive Compensation Tables
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|
(4) | Reflects the sum of the number of performance units granted for the 20192021 performance period (January 1, 2019 to December 31, 2021) and the related dividend equivalents accrued through December 31, 2019, multiplied by the maximum payout percentage of 200%. As required by SEC rules, the maximum payout percentage is disclosed in the table because the estimated payout percentage as of December 31, 2019 exceeds the target payout of 100% of the performance units granted (based on the sum of: (1) the estimated outcomes of our operating measures to be achieved; and (2) the TSR modifier based on our TSR percentile rank relative to the TSRs of the companies in the Reference Group for the period from the May 3, 2019 grant date to December 31, 2019). The number of dividend equivalents multiplied by the 200% payout percentage (rounded down to the nearest whole number of units) included in the table above are as follows: 1,604 units for Mr. Bradway; 458 units for Messrs. Gordon and Meline and Dr. Reese; and 320 units for Mr. Graham. Dividend equivalents are only paid when and to the extent the underlying performance units are earned. |
(5) | Reflects the sum of the number of performance units granted for the 20182020 performance period (January 1, 2018 to December 31, 2020) and the related dividend equivalents accrued through December 31, 2019, multiplied by the maximum payout percentage of 200%. As required by SEC rules, the maximum payout percentage is disclosed in the table because the estimated payout percentage as of December 31, 2019 is greater than the target payout of 100% of the performance units granted (based on the sum of: (1) the estimated outcomes of our operating measures to be achieved; and (2) the TSR modifier based on our TSR percentile rank relative to the TSRs of the companies in the Reference Group for the period from the April 27, 2018 grant date (or the November 2, 2018 grant date with respect to Mr. Gordon) to December 31, 2019). The number of dividend equivalents multiplied by the 200% payout percentage (rounded down to the nearest whole number of units) included in the table above are as follows: 3,399 units for Mr. Bradway; 1,305 units for Mr. Gordon; 1,087 units for Mr. Meline; 244 units for Dr. Reese; and 761 units for Mr. Graham. Dividend equivalents are only paid when and to the extent the underlying performance units are earned. |
(6) | Reflects the number of performance units granted for the 2017-2019 performance period (January 1, 2017 to December 31, 2019) and related dividend equivalents accrued through December 31, 2019, multiplied by the payout percentage of 153.7%, which is based on our actual performance under our operating measures of 103.7% plus the relative TSR percentage modifier of +50 percentage points based on our actual TSR percentile rank relative to the TSRs of the companies in the Reference Group for the period from the May 1, 2017 grant date to December 31, 2019. The number of dividend equivalents multiplied by the 153.7% payout percentage noted above (rounded down to the nearest whole number of units) included in the table above are as follows: 4,127 units for Mr. Bradway; 1,203 units for Mr. Meline; 275 units for Dr. Reese; and 859 units for Mr. Graham. Since these performance units were paid in 2020, they will be reflected in the Option Exercises and Stock Vested table as vested shares in next years proxy statement. |
The estimated payouts of the performance units described above are disclosed in the limited context of our executive compensation program and should not be understood to be statements of our expectations of our stock price or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.
Option Exercises and Stock Vested
The following table summarizes the exercise of options, the vesting of RSUs, and the payment of performance units earned for the 2016-2018 performance period (and related dividend equivalents, as applicable) for each of our NEOs during the year ended December 31, 2019. The RSUs and performance units vested and converted to one share of our Common Stock for each vested RSU and performance unit. The 2016-2018 performance units had a performance period from January 1, 2016 through December 31, 2018 and became payable as shares upon certification by our Compensation Committee in March 2019.
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Securities Acquired on Exercise (#) |
Value Realized on Exercise ($)(1) |
Number of Shares Acquired on Vesting (#) |
Value Realized on Vesting ($)(2) |
||||||||||||
Robert A. Bradway |
|
0 |
|
|
0 |
|
|
66,183 |
|
|
12,559,278 |
| ||||
Murdo Gordon |
|
0 |
|
|
0 |
|
|
12,322 |
|
|
2,685,656 |
| ||||
David W. Meline |
|
0 |
|
|
0 |
|
|
20,799 |
|
|
3,948,170 |
| ||||
David M. Reese |
|
0 |
|
|
0 |
|
|
6,475 |
|
|
1,211,364 |
| ||||
Jonathan P. Graham |
|
0 |
|
|
0 |
|
|
26,460 |
|
|
4,984,294 |
|
(1) | No stock options were exercised by NEOs in 2019. |
(2) | The value shown is the closing price of a share of our Common Stock on the business days immediately prior to the vesting dates of RSUs and to the payment date for the performance units, as applicable, multiplied by the number of units vested/paid, including cash received in lieu of fractional dividend equivalents. |
72 ï 2020 Proxy Statement
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Executive Compensation Tables
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|
Nonqualified Deferred Compensation
The following table sets forth summary information regarding aggregate contributions to and account balances under our SRP and NDCP for, and as of, the year ended December 31, 2019. There were no withdrawals by any of the NEOs in 2019.
Name |
2019 Employee Contributions ($)(1) |
2019 Company Contributions ($)(2) |
2019 Earnings ($)(3) |
Balance as of 12/31/19 ($)(4) |
||||||||||||
Robert A. Bradway |
|
584,700 |
|
|
521,185 |
|
|
2,079,103 |
|
|
16,086,924 |
| ||||
Murdo Gordon |
|
98,269 |
|
|
125,415 |
|
|
195,032 |
|
|
1,358,945 |
| ||||
David W. Meline |
|
0 |
|
|
233,765 |
|
|
508,944 |
|
|
6,485,612 |
| ||||
David M. Reese |
|
0 |
|
|
160,314 |
|
|
218,901 |
|
|
1,221,722 |
| ||||
Jonathan P. Graham |
|
291,892 |
|
|
207,688 |
|
|
720,472 |
|
|
4,107,089 |
|
(1) | Reflects the portions of the annual cash incentive awards deferred and contributed to the NDCP in the amount of $584,700 and $200,000 by Messrs. Bradway, and Graham, respectively, that were included in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table in 2018, the year they were earned. Also reflects a portion of salaries deferred and contributed to the NDCP in the amount of $98,269 and $91,892 by Messrs. Gordon and Graham, that were included in the Salary column of the Summary Compensation Table in 2019, the year they were earned. |
(2) | Reflects credits to the SRP. With respect to Mr. Gordon, the SRP vests on the third anniversary of his hire date. |
(3) | Reflects earnings in the NDCP and SRP for 2019. |
(4) | Reflects balances in the NDCP and SRP on December 31, 2019. All amounts are vested, except amounts with respect to: $747,606, $708,954, and $562,280 for Messrs. Gordon, Meline, and Graham, respectively, related to Company contributions in their NDCP accounts and related earnings and losses and $128,221 for Mr. Gordon related to Company contributions and related gains and losses to his SRP account. These balances include the following aggregate amounts that are reported as compensation in this proxy statement in the Summary Compensation Table in 2019, 2018, and 2017: $2,398,673 for Mr. Bradway; $1,226,954 for Mr. Gordon; $840,573 for Mr. Meline; $236,333 for Dr. Reese; and $924,008 for Mr. Graham. |
ï 2020 Proxy Statement 73
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Executive Compensation Tables
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General Provisions of the Supplemental Retirement Plan and Nonqualified Deferred Compensation Plan
Retirement and Savings Plan and Supplemental Retirement Plan
74 ï 2020 Proxy Statement
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Executive Compensation Tables
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|
Nonqualified Deferred Compensation Plan
ï 2020 Proxy Statement 75
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Executive Compensation Tables
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Investment Options Under the Supplemental Retirement Plan and Nonqualified Deferred Compensation Plan
Name of Investment Option |
Rate of Return for 2019 |
|
Name of Investment Option |
Rate of Return for 2019 |
||||||||||
Amgen Target Retirement Portfolio Income |
|
17.28% |
|
Large Cap Value |
|
33.95% |
| |||||||
Amgen Target Retirement Portfolio 2020 |
|
18.29% |
|
Large Cap Index |
|
31.49% |
| |||||||
Amgen Target Retirement Portfolio 2030 |
|
20.92% |
|
Large Cap Growth |
|
32.52% |
| |||||||
Amgen Target Retirement Portfolio 2040 |
|
25.36% |
|
Small-Mid Cap Value |
|
21.53% |
| |||||||
Amgen Target Retirement Portfolio 2050 |
|
26.88% |
|
Small-Mid Cap Index |
|
27.86% |
| |||||||
Amgen Target Retirement Portfolio 2060 |
|
26.62% |
|
Small-Mid Cap Growth |
|
33.35% |
| |||||||
Capital Preservation |
|
2.57% |
|
International Value |
|
21.95% |
| |||||||
Fixed Income Index |
|
8.69% |
|
International Index |
|
21.66% |
| |||||||
Fixed Income |
|
8.96% |
|
International Growth |
|
27.70% |
| |||||||
High Yield |
|
14.46% |
|
Emerging Markets |
|
20.38% |
| |||||||
Inflation-Protection |
|
8.42% |
|
Real Estate Index |
|
28.55% |
|
Potential Payments Upon Termination or Change of Control
Change of Control Severance Plan
76 ï 2020 Proxy Statement
|
Executive Compensation Tables
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ï 2020 Proxy Statement 77
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Executive Compensation Tables
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78 ï 2020 Proxy Statement
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Executive Compensation Tables
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Estimated Payments to Robert A. Bradway
Triggering Event | ||||||||||||||||||||
Estimated Potential Payment or Benefit | Change in Control($) |
|
Change in Control and Termination($) |
Retirement($) | Death or Disability($) |
|||||||||||||||
Lump sum cash severance payment |
0 |
|
|
|
8,000,000 | 0 | 0 | |||||||||||||
Intrinsic value of accelerated unvested stock options |
0 |
|
|
|
26,009,668 | 26,009,668 | 26,009,668 | |||||||||||||
Intrinsic value of accelerated unvested RSUs |
0 |
|
|
|
11,312,210 | 11,312,210 | 11,312,210 | |||||||||||||
Value of 2019-2021 performance units |
11,895,117 | (1) |
|
|
|
11,895,117 | (1) | 11,629,699 | (2) | 11,629,699 | (2) | |||||||||
Value of 2018-2020 performance units |
8,684,306 | (1) |
|
|
|
8,684,306 | (1) | 10,068,771 | (2) | 10,068,771 | (2) | |||||||||
Continuing health care benefits for 18 months(3) |
0 |
|
|
|
37,801 | 0 | 0 | |||||||||||||
Continuing retirement plan contributions for two years(4) |
0 |
|
|
|
805,000 | 0 | 0 | |||||||||||||
Total |
20,579,423 |
|
|
|
66,744,102 | 59,020,348 | 59,020,348 |
ï 2020 Proxy Statement 79
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Executive Compensation Tables
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|
Estimated Payments to Murdo Gordon
Triggering Event | ||||||||||||||||
Estimated Potential Payment or Benefit | Change in Control($) |
Change in Control and Termination($) |
Termination Without Cause($)(5) |
Death or Disability($) |
||||||||||||
Lump sum cash severance payment |
0 | 2,617,383 | (6) | 4,100,000 | 0 | |||||||||||
Intrinsic value of accelerated unvested stock options |
0 | 2,510,996 | 0 | 2,510,996 | ||||||||||||
Intrinsic value of accelerated unvested RSUs |
0 | 6,673,782 | 0 | 6,673,782 | ||||||||||||
Value of 2019-2021 performance units |
3,398,364 | (1) | 3,398,364 | (1) | 0 | 3,322,668 | (2) | |||||||||
Value of 2018-2020 performance units |
3,800,227 | (1) | 3,800,227 | (1) | 0 | 5,007,988 | (2) | |||||||||
Continuing health care benefits for 18 months(3) |
0 | 37,801 | 37,801 | 0 | ||||||||||||
Continuing retirement plan contributions for two years(4) |
0 | 415,000 | 0 | 0 | ||||||||||||
Acceleration of unvested balance of SRP account |
0 | 128,221 | 0 | 128,221 | ||||||||||||
Acceleration of unvested balance of DCP account |
747,606 | 747,606 | 747,606 | 747,606 | ||||||||||||
Total |
7,946,197 | 20,329,380 | 4,885,407 | 18,391,261 |
Estimated Payments to David W. Meline
Triggering Event | ||||||||||||||||
Estimated Potential Payment or Benefit | Change in Control($) |
Change in Control and Termination($) |
Retirement($)(7) | Death or Disability($) |
||||||||||||
Lump sum cash severance payment |
0 | 3,993,600 | 0 | 0 | ||||||||||||
Intrinsic value of accelerated unvested stock options |
0 | 7,820,793 | 2,510,996 | 7,820,793 | ||||||||||||
Intrinsic value of accelerated unvested RSUs |
0 | 3,410,899 | 1,110,953 | 3,410,899 | ||||||||||||
Value of 2019-2021 performance units |
3,398,364 | (1) | 3,398,364 | (1) | 3,322,668 | 3,322,668 | (2) | |||||||||
Value of 2018-2020 performance units |
2,778,814 | (1) | 2,778,814 | (1) | 0 | 3,221,901 | (2) | |||||||||
Continuing health care benefits for 18 months(3) |
0 | 37,801 | 0 | 0 | ||||||||||||
Continuing retirement plan contributions for two years(4) |
0 | 404,360 | 0 | 0 | ||||||||||||
Acceleration of unvested balance of DCP account |
708,954 | (5) | 708,954 | (5) | 0 | 0 | ||||||||||
Total |
6,886,132 | 22,553,585 | 6,944,617 | 17,776,261 |
Estimated Payments to David M. Reese
Triggering Event | ||||||||||||||||
Estimated Potential Payment or Benefit | Change in Control($) |
Change in Control and Termination($) |
Retirement($) | Death or Disability($) |
||||||||||||
Lump sum cash severance payment |
0 | 1,849,912 | (6) | 0 | 0 | |||||||||||
Intrinsic value of accelerated unvested stock options |
0 | 3,716,727 | 3,716,727 | 3,716,727 | ||||||||||||
Intrinsic value of accelerated unvested RSUs |
0 | 5,698,172 | 1,632,940 | (8) | 5,698,172 | |||||||||||
Value of 2019-2021 performance units |
3,398,364 | (1) | 3,398,364 | (1) | 3,322,668 | (2) | 3,322,668 | (2) | ||||||||
Value of 2018-2021 performance units |
625,095 | (1) | 625,095 | (1) | 724,656 | (2) | 724,656 | (2) | ||||||||
Continuing health care benefits for 18 months(3) |
0 | 37,801 | 0 | 0 | ||||||||||||
Continuing retirement plan contributions for two years(4) |
0 | 394,520 | 0 | 0 | ||||||||||||
Total |
4,023,459 | 15,720,591 | 9,396,991 | 13,462,223 |
80 ï 2020 Proxy Statement
|
Executive Compensation Tables
|
|
Estimated Payments to Jonathan P. Graham
Triggering Event | ||||||||||||
Estimated Potential Payment or Benefit | Change in Control($) |
Change in Control and Termination($) |
Death or Disability($) |
|||||||||
Lump sum cash severance payment |
0 | 3,834,000 | 0 | |||||||||
Intrinsic value of accelerated unvested stock options |
0 | 5,456,204 | 5,456,204 | |||||||||
Intrinsic value of accelerated unvested RSUs |
0 | 4,606,607 | 4,606,607 | |||||||||
Value of 2019-2021 performance units |
2,378,638 | (1) | 2,378,638 | (1) | 2,325,602 | (2) | ||||||
Value of 2018-2020 performance units |
1,945,194 | (1) | 1,945,194 | (1) | 2,255,451 | (2) | ||||||
Continuing health care benefits for 18 months(3) |
0 | 37,801 | 0 | |||||||||
Continuing retirement plan contributions for two years(4) |
0 | 388,400 | 0 | |||||||||
Acceleration of unvested balance of DCP account |
562,280 | 562,280 | 562,280 | |||||||||
Total |
4,886,112 | 19,209,124 | 15,206,144 |
(1) | In the event of a change of control occurring after the first six months of the 2019-2021 performance period, the number of performance units that would have been earned is the sum of the number of performance units granted and related dividend equivalents accrued through December 31, 2019, multiplied by a payout percentage of 130%, which employs the plan dictated target level of performance for the operating performance measures of 100% modified up by 30 percentage points by the TSR modifier which is based on our TSR percentile rank relative to the TSRs of the companies in the Reference Group for the period from the May 3, 2019 grant date through September 30, 2019, the last business day of the last fiscal quarter before the change in control. |
In the event of a change of control occurring during the second year of the 2018-2020 performance period, the number of performance units that would have been earned, except for Mr. Gordon, is the sum of the number of performance units granted and related dividend equivalents accrued through December 31, 2019, multiplied by a payout percentage of 103.5%, which is the percentage based on the estimated outcomes of our operating performance measures achieved during the first year of the performance period of 89.4%, increased by the TSR modifier by 14.1 percentage points based on our TSR percentile rank relative to the TSRs of the companies in the Reference Group for the period from the April 27, 2018 grant date to September 30, 2019, the last business day of the last fiscal quarter before the change in control. With respect to Mr. Gordon, because of his late start date in 2018, the number of performance units that would have been earned for the first full fiscal year of the 2018-2020 performance period of 85.9% is based on a target level of performance for the operating measures of 100%, decreased by the TSR modifier by 14.1% percentage points based on our TSR percentile rank relative to the TSRs of the companies in the Reference Group for the period from the November 2, 2018 grant date to September 30, 2019, the last business day of the last fiscal quarter before the change in control. |
Our TSRs for purposes of determining the payout percentages of these awards would be based on the higher of: (i) the average closing price of our Common Stock for the last 20 trading days of the shortened performance period ended on September 30, 2019; and (ii) the value of consideration the acquirer paid for a share of our Common Stock in the change of control. For purposes of the payout values shown in the tables, the TSRs for our Common Stock were based on the respective actual TSRs over the respective averaging periods ending September 30, 2019, the last business day of the last fiscal quarter before the change in control. The resulting number of units that would have been so earned was multiplied by $241.07, the closing price of our Common Stock on December 31, 2019. |
For information on the actual number of units to be earned for these performance unit grants, see Elements of Compensation and Specific Compensation DecisionsLong-Term Incentive Equity Awards in our Compensation Discussion and Analysis. |
(2) | In the event death or disability occurs, the participant is entitled to the number of performance units that would have been earned by the NEO if he had remained employed for the entire performance period. For purposes of the payout values shown in the tables, the number of units that would have been earned was multiplied by $241.07, the closing price of our Common Stock on December 31, 2019. |
For the 2019-2021 performance period, the number of performance units that would have been earned is the sum of the number of performance units granted and related dividend equivalents accrued through December 31, 2019, multiplied by the payout percentage of 127.1%. The payout percentage is based on the estimated outcomes as of December 31, 2019, of our operating performance measures to be achieved during the performance period of 97.1%, which was increased by the TSR modifier by 30 percentage points based on our TSR percentile rank relative to the TSRs of the companies in the Reference Group for the period from the May 3, 2019 grant date to December 31, 2019. |
For the 2018-2020 performance period, the number of performance units that would have been earned, except for Mr. Gordon, is the sum of the number of performance units granted and related dividend equivalents accrued through December 31, 2019, multiplied by the payout percentage of 120.0%. The payout percentage is based on the estimated outcomes as of December 31, 2019, of our operating performance measures to be achieved during the performance period of 90.0%, which was increased by the TSR modifier by 30 percentage points based on our TSR percentile rank relative to the TSRs of the companies in the Reference Group for the period from the April 27, 2018 grant date to December 31, 2019. With respect to Mr. Gordons grant of performance units for the 2018-2020 performance period, the number of performance units that would have been earned in the sum of the number of performance units granted and related dividend equivalents accrued through December 31, 2019, multiplied by the payout percentage of 113.2%. The payout percentage is based on estimated outcomes as of December 31, 2019, of our operating measures to be achieved during the performance period of 90.3% which was increased by the TSR modifier by 22.9 percentage points from the November 2, 2018 grate date to December 31, 2019. |
In the event of actual death or disability, payout of shares in satisfaction of amounts earned for grants for the 2019-2021 and 2018-2020 performance periods would not occur until after the end of the performance periods. For more information, see Elements of Compensation and Specific Compensation DecisionsLong-Term Incentive Equity Awards in our Compensation Discussion and Analysis. |
As Mr. Bradway and Dr. Reese were retirement-eligible as of December 31, 2019, the retirement payout amounts for performance units for the 2019-2021 and 2018-2020 performance periods were calculated in the same manner as the respective death and disability amounts. |
ï 2020 Proxy Statement 81
|
Executive Compensation Tables
|
|
(3) | Reflects the estimated cost of medical, dental, and vision insurance coverage based on rates charged to our staff members for post-employment coverage provided in accordance with COBRA for the first 18 months following termination adjusted for the last six months of this period by an 5% inflation factor for medical coverage and a 6% inflation factor for dental coverage. |
(4) | Reflects the value of retirement plan contributions for two years calculated as two times the sum of: (i) $2,500; and (ii) the product of: (a) 10%; and (b) the sum of the NEOs annual base salary as of December 31, 2019, and the NEOs targeted annual cash incentive award for 2019 (which equals the NEOs annual base salary as of December 31, 2019, multiplied by the NEOs target annual cash incentive award percentage for 2019). |
(5) | Reflects amounts that would be paid to Mr. Gordon pursuant to his offer letter in the event Mr. Gordon was terminated without cause, including two years of annual salary and annual target incentive bonus, as defined, and the cost of providing continuing medical and dental insurance coverage for 18 months in accordance with COBRA calculated in the same manner as described in footnote 3 above. The terms of Mr. Gordons offer letter relating to these benefits expire at the end of the third year of his employment on September 3, 2021. |
(6) | Reflects the cash severance payment pursuant to our Change of Control Severance Plan described above. The payment to Mr. Gordon and Dr. Reese were reduced by $1,482,617 and $2,045,288, respectively, from the amounts otherwise due to them to avoid excise tax they would be liable for if all benefits pursuant to the Change of Control Severance Plan were paid to Mr. Gordon and Dr. Reese. For purposes of determining whether the cash severance payment reduction should be made, we applied the highest applicable federal and state income tax rates to the benefits subject to income taxes that would be payable to Mr. Gordon and Dr. Reese pursuant to the Change of Control Severance Plan in the tables above. |
(7) | Reflects the value of stock options, RSUs and performance units for the 2019-2021 performance period granted to Mr. Meline in 2019 in which retirement eligibility was met at age 62. The retirement payout amount for performance units for the 2019-2021 performance period was calculated in the same manner as the death and disability amount. |
(8) | Excludes the value of unvested RSUs (including related accrued dividend equivalents rounded down to the nearest whole number of units) granted to Dr. Reese on May 1, 2017 and November 2, 2018, totaling 16,864 units which do not provide for continued vesting after retirement. |
82 ï 2020 Proxy Statement
|
Director Compensation
|
|
Director Compensation Table
The following table shows compensation of the non-employee members of our Board for 2019. Robert A. Bradway, our Chairman of the Board, Chief Executive Officer and President is not included in the table as he is an employee and thus receives no compensation for his service as a director.
Non-Employee Director |
Fees Earned or |
Stock Awards($)(5)(6) |
All Other Compensation($)(7) |
Total($) |
||||||||||||
Wanda M. Austin |
|
127,000 |
|
|
199,828 |
|
|
20,702 |
|
|
347,350 |
| ||||
Brian J. Druker |
|
125,000 |
|
|
199,828 |
|
|
20,327 |
|
|
345,155 |
| ||||
Robert A. Eckert |
|
176,000 |
|
|
199,828 |
|
|
20,702 |
|
|
396,530 |
| ||||
Greg C. Garland |
|
141,000 |
|
|
199,828 |
|
|
20,286 |
|
|
361,114 |
| ||||
Fred Hassan |
|
126,000 |
|
|
199,828 |
|
|
17,786 |
|
|
343,614 |
| ||||
Rebecca M. Henderson |
|
118,000 |
|
|
199,828 |
|
|
32,135 |
|
|
349,963 |
| ||||
Frank C. Herringer(1)(2) |
|
61,000 |
|
|
199,828 |
|
|
98,095 |
|
|
358,923 |
| ||||
Charles M. Holley, Jr.(3) |
|
72,691 |
|
|
271,377 |
|
|
12,753 |
|
|
356,821 |
| ||||
Tyler Jacks |
|
119,000 |
|
|
199,828 |
|
|
20,286 |
|
|
339,114 |
| ||||
Ellen J. Kullman(3) |
|
700 |
|
|
317,520 |
|
|
20,299 |
|
|
338,519 |
| ||||
Ronald D. Sugar |
|
138,000 |
|
|
199,828 |
|
|
20,286 |
|
|
358,114 |
| ||||
R. Sanders Williams |
|
118,000 |
|
|
199,828 |
|
|
21,888 |
|
|
339,716 |
|
(1) | Mr. Herringer retired from our Board in May 2019. Accordingly, fees earned by Mr. Herringer in 2019 consist of a pro-rata amount of the annual retainer fee (pro-rated on a monthly basis) and fees for committee meetings attended in 2019. |
(2) | All cash fees for Mr. Herringer were deferred under our NDCP. |
(3) | Mr. Holley and Ms. Kullman elected to receive 50% and 100%, respectively, of their annual retainer and committee meeting fees in the form of deferred vested RSUs, the value of which are reflected in the stock awards column in accordance with Accounting Standards Codification Topic 718. |
(4) | Reflects all fees earned by members of our Board for participation in regular, telephonic, and special meetings of Board committees and annual retainers, as applicable. This column includes cash paid in lieu of issuing fractional shares of deferred RSUs. |
(5) | Reflects the grant date fair values of RSUs determined in accordance with Accounting Standards Codification Topic 718 consisting of 1,127 RSUs granted on May 3, 2019, to each director named above. The grant date fair values of all of the annual awards are based on the closing price of our Common Stock on the grant date of $177.31, multiplied by the number of RSUs granted. Such grants occur on the third business day after release of our annual or quarterly earnings, as applicable. Directors that elect to defer receipt of the shares accrue dividend equivalents on the vested RSUs during the deferral period. All of the RSUs granted to directors were fully vested upon grant. |
In addition to the annual grants discussed above, Mr. Holley and Ms. Kullman were granted RSUs in lieu of cash fees for 50% and 100%, respectively, of their annual retainer and committee meeting fees as follows:
Granted on |
||||||||||||||||
Non-Employee Director |
May 3, 2019 |
August 2, 2019 |
November 1, 2019 |
February 4, 2020 |
||||||||||||
Charles M. Holley, Jr. |
|
101 |
|
|
93 |
|
|
153 |
|
|
13 |
| ||||
Ellen J. Kullman |
|
174 |
|
|
160 |
|
|
261 |
|
|
N/A |
|
The grant date fair values per unit for these awards were $177.31, $187.22, $217.95 and $221.81 for May 3, 2019, August 2, 2019, November 1, 2019, and February 4, 2020, respectively. |
84 ï 2020 Proxy Statement
|
Director Compensation
|
|
(6) | The table below shows the aggregate number of deferred stock awards (deferred RSUs and dividend equivalents) and stock option awards outstanding for each non-employee director as of December 31, 2019. Deferred stock awards consist of vested RSUs for which receipt of the underlying shares of our Common Stock has been deferred (vested/deferred RSUs) and dividends on vested/deferred RSUs deemed automatically reinvested to acquire additional vested/deferred RSUs (rounded down to the nearest whole number of units). Directors may elect to defer issuance of shares until a later date, which would result in a deferral of taxable income to the director until the stock issuance date. Upon the passage of any applicable deferral period, the vested/deferred RSUs are paid in shares of our Common Stock on a one-for-one basis. Stock option awards consist of fully exercisable stock options. |
Non-Employee Director | Deferred Restricted Stock Units and Dividend Equivalents as of December 31, 2019(a) |
Stock Option Awards Outstanding as of December 31, 2019(b) |
||||||
Wanda M. Austin |
|
0 |
|
|
0 |
| ||
Brian J. Druker |
|
1,859 |
|
|
0 |
| ||
Robert A. Eckert |
|
10,669 |
|
|
20,000 |
| ||
Greg C. Garland |
|
0 |
|
|
0 |
| ||
Fred Hassan |
|
0 |
|
|
0 |
| ||
Rebecca M. Henderson |
|
13,750 |
|
|
5,000 |
| ||
Frank C. Herringer |
|
25,491 |
|
|
10,000 |
| ||
Charles M. Holley, Jr. |
|
3,092 |
|
|
0 |
| ||
Tyler Jacks |
|
8,501 |
|
|
0 |
| ||
Ellen J. Kullman |
|
4,955 |
|
|
0 |
| ||
Ronald D. Sugar |
|
14,526 |
|
|
10,000 |
| ||
R. Sanders Williams |
|
0 |
|
|
0 |
|
(a) | Restricted stock units and related dividend equivalents are all vested, but receipt has been deferred. |
(b) | All stock options are vested. |
ï 2020 Proxy Statement 85
|
Director Compensation
|
|
(7) | The table below provides a summary of amounts paid by the Company for perquisites and other special benefits. |
Non-Employee Director
|
Matching of Charitable Contributions ($)(a)
|
Personal Use of Company Aircraft(b)
|
Expenses in
|
Other(d)
|
Dividends
|
Total($)
|
||||||||||||||||||||||||||||||
Aggregate Incremental Amounts($)
|
Tax Gross- Up($)
|
Aggregate Incremental Amounts($)
|
Tax Gross- Up($)
|
Aggregate Incremental Amounts($)
|
Tax Gross- Up($)
|
|||||||||||||||||||||||||||||||
Wanda M. Austin |
|
20,000 |
|
|
0 |
|
|
0 |
|
|
297 |
|
|
119 |
|
|
286 |
|
|
0 |
|
|
0 |
|
|
20,702 |
| |||||||||
Brian J. Druker |
|
20,000 |
|
|
0 |
|
|
41 |
|
|
0 |
|
|
0 |
|
|
286 |
|
|
0 |
|
|
0 |
|
|
20,327 |
| |||||||||
Robert A. Eckert |
|
20,000 |
|
|
0 |
|
|
0 |
|
|
297 |
|
|
119 |
|
|
286 |
|
|
0 |
|
|
0 |
|
|
20,702 |
| |||||||||
Greg C. Garland |
|
20,000 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
286 |
|
|
0 |
|
|
0 |
|
|
20,286 |
| |||||||||
Fred Hassan |
|
17,500 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
286 |
|
|
0 |
|
|
0 |
|
|
17,786 |
| |||||||||
Rebecca M. Henderson |
|
20,000 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
286 |
|
|
0 |
|
|
11,849 |
|
|
32,135 |
| |||||||||
Frank C. Herringer |
|
20,000 |
|
|
217 |
|
|
129 |
|
|
1,122 |
|
|
449 |
|
|
10,069 |
|
|
3,803 |
|
|
62,306 |
|
|
98,095 |
| |||||||||
Charles M. Holley, Jr. |
|
10,000 |
|
|
345 |
|
|
604 |
|
|
1,184 |
|
|
334 |
|
|
286 |
|
|
0 |
|
|
0 |
|
|
12,753 |
| |||||||||
Tyler Jacks |
|
20,000 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
286 |
|
|
0 |
|
|
0 |
|
|
20,286 |
| |||||||||
Ellen J. Kullman |
|
20,000 |
|
|
0 |
|
|
13 |
|
|
0 |
|
|
0 |
|
|
286 |
|
|
0 |
|
|
0 |
|
|
20,299 |
| |||||||||
Ronald D. Sugar |
|
20,000 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
286 |
|
|
0 |
|
|
0 |
|
|
20,286 |
| |||||||||
R. Sanders Williams |
|
20,000 |
|
|
1,031 |
|
|
0 |
|
|
242 |
|
|
329 |
|
|
286 |
|
|
0 |
|
|
0 |
|
|
21,888 |
|
(a) | These are charitable contributions of The Amgen Foundation, Inc. that matched the directors charitable contributions made in 2019. |
(b) | Where we have guests accompany directors on our aircraft or where the director, for non-business purposes, accompanies executives using our aircraft for business purposes, we typically incur de minimis incremental cost for transporting that person, but we are required to impute income to the director for his or her income tax purposes. We reimburse the director for the additional income taxes imposed on the director in these circumstances. The aggregate incremental cost of use of our aircraft is calculated based on our variable operating costs, which include crew travel expenses, on-board catering, landing fees, trip-related hangar/parking costs, fuel, maintenance, and other smaller variable costs. In determining the incremental cost relating to fuel and trip-related maintenance, we applied an estimate derived from our average costs. We believe that the use of this methodology is a reasonably accurate method for calculating fuel and trip-related maintenance costs. Because our aircraft are used primarily for business travel, we do not include the fixed costs that do not change based on usage, such as pilots salaries, our aircraft purchase costs, and the cost of maintenance not related to trips. |
(c) | These amounts reflect the incremental costs of personal expenses of directors incurred while on business travel and related imputed income to the director for his or her income tax purposes. We reimburse the director for the additional income taxes imposed on the director in these circumstances. With respect to Messrs. Herringer and Holley, amounts also reflect incremental costs incurred in connection with guests accompanying directors on business travel and related imputed income to the director for their income tax purposes. We reimburse the director for the additional income taxes imposed on the director in these circumstances. |
(d) | Amounts reflect the costs of gifts given to the directors, including, with respect to Mr. Herringer, costs and related tax gross-up for gifts given to him related to his retirement from our Board. |
(e) | Amounts reflect dividends accrued on vested/deferred RSUs granted prior to 2011 as the impact of dividends was not considered in determining the grant date fair values of these awards for purposes of reporting compensation in the Stock Awards column in the Director Compensation Table in the Companys proxy statements in prior years because we did not pay dividends at the time of grant. |
86 ï 2020 Proxy Statement
|
Security Ownership of Directors and Executive Officers
|
|
Security Ownership of Directors and Executive Officers
The following table sets forth certain information regarding the beneficial ownership of our Common Stock as of March 20, 2020 by: (i) each current director and nominee; (ii) our Named Executive Officers, or NEOs (as specified on page 38); and (iii) all of our current directors and executive officers as a group. There were 587,762,539 shares of our Common Stock outstanding as of March 20, 2020. None of our directors, nominees, NEOs, or executive officers, individually or as a group, beneficially owns greater than 1% of our outstanding shares of Common Stock.
Amgen Inc.
|
||||||||||||
Beneficial Owner
|
Total Common Stock Beneficially Owned
|
Shares Acquirable Within 60 Days
|
Percent of Total
|
|||||||||
Non-Employee Directors and Nominees |
||||||||||||
Wanda M. Austin |
|
2,348 |
|
|
0 |
|
|
* |
||||
Brian J. Druker |
|
0 |
|
|
0 |
|
|
* |
||||
Robert A. Eckert |
|
20,435 |
|
|
20,000 |
|
|
* |
||||
Greg C. Garland |
|
8,178 |
|
|
0 |
|
|
* |
||||
Fred Hassan |
|
8,345 |
|
|
0 |
|
|
* |
||||
Rebecca M. Henderson |
|
8,150 |
|
|
5,000 |
|
|
* |
||||
Charles M. Holley, Jr.(3) |
|
1,260 |
|
|
0 |
|
|
* |
||||
Tyler Jacks |
|
1,890 |
|
|
0 |
|
|
* |
||||
Ellen J. Kullman |
|
410 |
|
|
0 |
|
|
* |
||||
Ronald D. Sugar |
|
20,000 |
|
|
20,000 |
|
|
* |
||||
R. Sanders Williams |
|
4,988 |
|
|
0 |
|
|
* |
||||
|
||||||||||||
|
||||||||||||
Named Executive Officers |
||||||||||||
Robert A. Bradway |
|
907,651 |
|
|
457,906 |
|
|
* |
||||
Murdo Gordon |
|
6,510 |
|
|
0 |
|
|
* |
||||
David W. Meline |
|
116,977 |
|
|
79,547 |
|
|
* |
||||
David M. Reese |
|
37,721 |
|
|
22,200 |
|
|
* |
||||
Jonathan P. Graham |
|
84,109 |
|
|
54,357 |
|
|
* |
||||
All current directors, NEOs and executive officers as a group (21 individuals)(4)
|
|
1,400,434
|
|
|
725,193
|
|
|
*
|
|
* | Less than 1%. |
(1) | Information in this table is based on our records and information provided by directors, NEOs, executive officers, and in public filings. Unless otherwise indicated in the footnotes and subject to community property laws, where applicable, each of the directors and nominees, NEOs, and executive officers has sole voting and/or investment power with respect to such shares, including shares held in trust. |
ï 2020 Proxy Statement 87
|
Security Ownership of Directors and Executive Officers
|
|
(2) | Includes shares which the individuals shown have the right to acquire (a) upon vesting of restricted stock units, or RSUs, and related dividend equivalents (excluding fractional shares), where the shares are issuable as of March 20, 2020, or within 60 days thereafter, and (b) upon exercise of stock options that are vested as of March 20, 2020, or within 60 days thereafter, as set forth in the table below. Such shares are deemed to be outstanding in calculating the percentage ownership of such individual (and the group), but are not deemed to be outstanding as to any other person. Excludes vested RSUs, and related dividend equivalents, for which receipt has been deferred by certain of the non-employee directors to a date later than 60 days after March 20, 2020. Dividend equivalents credited on RSUs are deemed reinvested and are paid out with the vested RSUs in shares of our Common Stock. |
Name |
RSUs and Dividend Equivalents Included |
Stock Options Included |
RSUs and Dividend Equivalents Excluded Because of Deferrals(5) |
|||||||||
Wanda M. Austin |
0 | 0 | 0 | |||||||||
Brian J. Druker |
0 | 0 | 1,873 | |||||||||
Robert A. Eckert |
0 | 20,000 | 10,750 | |||||||||
Greg C. Garland |
0 | 0 | 0 | |||||||||
Fred Hassan |
0 | 0 | 0 | |||||||||
Rebecca M. Henderson |
0 | 5,000 | 13,855 | |||||||||
Charles M. Holley, Jr. |
0 | 0 | 3,128 | |||||||||
Tyler Jacks |
0 | 0 | 8,566 | |||||||||
Ellen J. Kullman |
0 | 0 | 4,993 | |||||||||
Ronald D. Sugar |
0 | 20,000 | 14,636 | |||||||||
R. Sanders Williams |
0 | 0 | 0 | |||||||||
Robert A. Bradway |
15,565 | 442,341 | 0 | |||||||||
Murdo Gordon |
0 | 0 | 0 | |||||||||
David W. Meline |
4,821 | 74,726 | 0 | |||||||||
David M. Reese |
2,862 | 19,338 | 0 | |||||||||
Jonathan P. Graham |
3,323 | 51,034 | 0 |
(3) | Shares held through the Holley Family Trust. |
(4) | Includes 181,462 shares (excluding fractional shares) held by the five executive officers who are not NEOs and who have a right to acquire such shares upon the vesting of RSUs that have not been deferred to a date later than 60 days after March 20, 2020, or upon exercise of vested stock options as of March 20, 2020, or within 60 days thereafter. All current directors, NEOs, and executive officers as a group have the right to acquire a total of 32,843 shares upon vesting of RSUs, and related dividend equivalents, where the shares are issuable as of March 20, 2020, or within 60 days thereafter and 692,350 shares upon exercise of stock options that are vested as of March 20, 2020, or within 60 days thereafter. |
(5) | Excludes fractional shares which are paid out in cash on the applicable payout date. |
88 ï 2020 Proxy Statement
|
Security Ownership of Certain Beneficial Owners
|
|
Security Ownership of Certain Beneficial Owners
The following table shows the number of shares of our Common Stock owned by each person or entity known to the Company to be the beneficial owners of more than 5% of our Common Stock as of March 20, 2020, based on a review of publicly available statements of beneficial ownership filed with the Securities and Exchange Commission, or SEC, on Schedules 13D and 13G through March 20, 2020.
Common Stock Beneficially Owned |
||||||||
Name and Address of Beneficial Owner | Number of Shares | Percent of Total(1) | ||||||
The Vanguard Group(2) 100 Vanguard Blvd. Malvern, PA 19355 |
48,471,525 | 8.2% | ||||||
BlackRock, Inc.(3) 55 East 52nd Street New York, NY 10055 |
46,256,497 | 7.9% | ||||||
Capital Research Global Investors(4) 333 South Hope Street Los Angeles, CA 90071 |
35,337,639 | 6.0% |
(1) | The Percent of Total reported in this column has been calculated based upon the numbers of shares of Common Stock outstanding as of March 20, 2020, and may differ from the Percent of Class reported in statements of beneficial ownership filed with the SEC. |
(2) | The amounts shown and the following information was provided by The Vanguard Group pursuant to a Schedule 13G/A filed with the SEC on February 12, 2020. The Vanguard Group reports that it has sole voting power over 919,963 of these shares and sole dispositive power over 47,432,941 shares. |
(3) | The amounts shown and the following information was provided by BlackRock, Inc. pursuant to a Schedule 13G/A filed with the SEC on February 5, 2020. BlackRock, Inc. reports that it has sole voting power over 40,231,168 of these shares and sole dispositive power over 46,256,497 shares. |
(4) | The amounts shown and the following information was provided by Capital Research Global Investors pursuant to a Schedule 13G/A filed with the SEC on February 14, 2020. Capital Research Global Investors reports that it has sole voting power over 35,337,206 of these shares , and sole dispositive power over all 35,337,639 shares. |
ï 2020 Proxy Statement 89
|
Audit Matters
|
|
Audit Committee Report
Audit Committee of the Board of Directors
Charles M. Holley, Jr., Chairman
Wanda M. Austin
Fred Hassan
Ellen J. Kullman
Independent Registered Public Accountants
The following table presents fees for professional services provided or to be provided by EY for audits of the years ended December 31, 2019 and December 31, 2018, and fees for other services rendered by EY during these periods.
|
2019 | 2018 | ||||||
Audit |
$ | 8,049,000 | $ | 7,995,000 | ||||
Audit-Related |
410,000 | 765,000 | ||||||
Tax |
50,000 | 0 | ||||||
All Other Fees |
0 | 0 | ||||||
Total Fees |
$ | 8,509,000 | $ | 8,760,000 |
ï 2020 Proxy Statement 91
Item 4 Stockholder Proposal to Require an Independent Board Chair
|
Stockholder Proposal to Require an Independent Board Chair
1 |
https://www.washingtonpost.com/business/economy/drugmakers-alleged-scare-tactics-may-hold-back-competition/2019/01/09/612ac994-046d-IIe9-9I22- 82e98f9Iee6f_story.html |
ï 2020 Proxy Statement 93
Item 4 Stockholder Proposal to Require an Independent Board Chair
|
Board Response to Item 4: Stockholder Proposal to Require an Independent Board Chair
94 ï 2020 Proxy Statement
Item 4 Stockholder Proposal to Require an Independent Board Chair
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE STOCKHOLDER PROPOSAL TO REQUIRE AN INDEPENDENT BOARD CHAIR.
ï 2020 Proxy Statement 95
|
Information Concerning Voting and Solicitation
|
|
(1) | Stockholders who submit a proxy through the Internet or telephone should be aware that they may incur costs to access the Internet or telephone, such as usage charges from telephone companies or Internet service providers and that these costs must be borne by the stockholder. |
98 ï 2020 Proxy Statement
|
Information Concerning Voting and Solicitation
|
|
ï 2020 Proxy Statement 99
|
Information Concerning Voting and Solicitation
|
|
100 ï 2020 Proxy Statement
|
Other Matters
|
|
No Incorporation by Reference
Disclaimer
Forward-Looking Statements
102 ï 2020 Proxy Statement
|
Other Matters
|
|
Other Matters
The Board knows of no matters other than those listed in the attached Notice of Annual Meeting of Stockholders that are likely to be brought before the Annual Meeting. However, if any other matter properly comes before the Annual Meeting, the persons named on the enclosed proxy card will vote the proxy in accordance with their best judgment on such matter.
By Order of the Board of Directors
Jonathan P. Graham
Secretary
April 7, 2020
ï 2020 Proxy Statement 103
|
Appendix A
|
|
Amgen Inc. Board of Directors
Guidelines for Director Qualifications and Evaluations
These guidelines set forth (1) the minimum qualifications that the Governance and Nominating Committee of the Board of Directors (the Committee) of Amgen Inc. (Amgen) believes are important for directors to possess, and (2) a description of the Committees process for identifying and evaluating nominees for director, including nominees recommended by stockholders. These guidelines are only guidelines and may be waived and/or changed by the Committee and/or the Board of Directors as appropriate.
1. Candidate Qualifications
In seeking individuals to join the Board of Directors or to fill director vacancies on the Board of Directors, the Committee considers the following to be minimum qualifications that a candidate must possess:
| Demonstrated breadth and depth of management and leadership experience, preferably in a senior leadership role in a large or recognized organization; |
| Financial and/or business acumen or relevant industry or scientific experience; |
| Integrity and high ethical standards; |
| Sufficient time to devote to Amgens business as a member of the Board; |
| Ability to oversee, as a director, Amgens business and affairs for the benefit of Amgens stockholders; |
| Ability to comply with the Boards Code of Conduct; and |
| Demonstrated ability to think independently and work collaboratively. |
In addition, the Committee may consider the following where necessary and appropriate:
| A candidates independence, as defined by The NASDAQ Stock Market, Inc.; |
| A candidates ability to satisfy the composition requirements for the Audit Committee and the Compensation and Management Development Committee; |
| Maintaining a Board that reflects diversity; and |
| The Boards overall size, structure and composition. |
2. Candidate Identification and Evaluation Process
(a) For purposes of identifying nominees for the Board of Directors, the Committee relies on professional and personal contacts of the Committee, other members of the Board of Directors and senior management, as well as candidates recommended by independent search firms retained by the Committee from time to time. The Committee also will consider candidates recommended by stockholders. Any director nominations submitted by stockholders will be evaluated in the same manner that nominees suggested by Board members, management or other parties are evaluated.
(b) In evaluating potential candidates, the Committee will determine whether the candidate is qualified for service on the Board of Directors by evaluating the candidate under the guidelines set forth above and by determining if any individual candidate suits the Committees and the Board of Directors overall objectives at the time the candidate is being evaluated.
ï 2020 Proxy Statement A-1
|
Appendix B
|
|
Reconciliations of GAAP to Non-GAAP Measures
Amgen Inc.
GAAP to Non-GAAP Reconciliations
(Dollars in millions)
(Unaudited)
Years ended December 31, | ||||||||||||
|
||||||||||||
2019 | 2018 | 2017 | ||||||||||
GAAP cost of sales |
$ | 4,356 | $ | 4,101 | $ | 4,069 | ||||||
Adjustments to cost of sales: |
||||||||||||
Acquisition-related expenses (a) |
(1,291) | $ | (1,099) | $ | (1,126) | |||||||
Certain net charges pursuant to our restructuring initiatives |
| $ | (1) | $ | | |||||||
|
|
|
|
|
|
|||||||
Total adjustments to cost of sales |
(1,291) | (1,100) | (1,126) | |||||||||
|
|
|
|
|
|
|||||||
Non-GAAP cost of sales |
$ | 3,065 | $ | 3,001 | $ | 2,943 | ||||||
|
|
|
|
|
|
|||||||
GAAP cost of sales as a percentage of product sales |
19.6% | 18.2% | 18.7% | |||||||||
Acquisition-related expenses (a) |
-5.8 | -4.9 | -5.2 | |||||||||
Certain net charges pursuant to our restructuring initiatives |
0.0 | 0.0 | 0.0 | |||||||||
|
|
|
|
|
|
|||||||
Non-GAAP cost of sales as a percentage of product sales |
13.8% | 13.3% | 13.5% | |||||||||
|
|
|
|
|
|
|||||||
GAAP research and development expenses |
$ | 4,116 | $ | 3,737 | $ | 3,562 | ||||||
Adjustments to research and development expenses: |
||||||||||||
Acquisition-related expenses (a) |
(87) | (78) | (77) | |||||||||
Certain net charges pursuant to our restructuring initiatives |
(2) | (2) | (3) | |||||||||
|
|
|
|
|
|
|||||||
Total adjustments to research and development expenses |
(89) | (80) | (80) | |||||||||
|
|
|
|
|
|
|||||||
Non-GAAP research and development expenses |
$ | 4,027 | $ | 3,657 | $ | 3,482 | ||||||
|
|
|
|
|
|
|||||||
GAAP research and development expenses as a percentage of product sales |
18.5% | 16.6% | 16.3% | |||||||||
Acquisition-related expenses (a) |
-0.4 | -0.4 | -0.3 | |||||||||
Certain net charges pursuant to our restructuring initiatives |
0.0 | 0.0 | 0.0 | |||||||||
|
|
|
|
|
|
|||||||
Non-GAAP research and development expenses as a percentage of product sales |
18.1% | 16.2% | 16.0% | |||||||||
|
|
|
|
|
|
|||||||
GAAP selling, general and administrative expenses |
$ | 5,150 | $ | 5,332 | $ | 4,870 | ||||||
Adjustments to selling, general and administrative expenses: |
||||||||||||
Acquisition-related expenses (a) |
(38) | (84) | (99) | |||||||||
Certain net charges pursuant to our restructuring initiatives |
1 | (16) | (2) | |||||||||
Other |
| | (3) | |||||||||
|
|
|
|
|
|
|||||||
Total adjustments to selling, general and administrative expenses |
(37) | (100) | (104) | |||||||||
|
|
|
|
|
|
|||||||
Non-GAAP selling, general and administrative expenses |
$ | 5,113 | $ | 5,232 | $ | 4,766 | ||||||
|
|
|
|
|
|
|||||||
GAAP selling, general and administrative expenses as a percentage of product sales |
23.2% | 23.7% | 22.3% | |||||||||
Acquisition-related expenses (a) |
-0.2 | -0.4 | -0.4 | |||||||||
Certain net charges pursuant to our restructuring initiatives |
0.0 | -0.1 | 0.0 | |||||||||
Other |
0.0 | 0.0 | 0.0 | |||||||||
|
|
|
|
|
|
|||||||
Non-GAAP selling, general and administrative expenses as a percentage of product sales |
23.0% | 23.2% | 21.9% | |||||||||
|
|
|
|
|
|
See footnotes on page B-3.
ï 2020 Proxy Statement B-1
|
Appendix B
|
|
Years ended December 31, | ||||||||||||
|
||||||||||||
2019 | 2018 | 2017 | ||||||||||
GAAP operating expenses |
$ | 13,688 | $ | 13,484 | $ | 12,876 | ||||||
Adjustments to operating expenses: |
||||||||||||
Adjustments to cost of sales |
(1,291) | (1,100) | (1,126) | |||||||||
Adjustments to research and development expenses |
(89) | (80) | (80) | |||||||||
Adjustments to selling, general and administrative expenses |
(37) | (100) | (104) | |||||||||
Certain net charges pursuant to our restructuring initiatives (b) |
(44) | 7 | (83) | |||||||||
Certain other expenses |
| (25) | | |||||||||
Acquisition-related adjustments (c) |
(22) | (296) | (292) | |||||||||
|
|
|
|
|
|
|||||||
Total adjustments to operating expenses |
(1,483) | (1,594) | (1,685) | |||||||||
|
|
|
|
|
|
|||||||
Non-GAAP operating expenses |
$ | 12,205 | $ | 11,890 | $ | 11,191 | ||||||
|
|
|
|
|
|
|||||||
GAAP operating income |
$ | 9,674 | $ | 10,263 | $ | 9,973 | ||||||
Adjustments to operating expenses |
1,483 | 1,594 | 1,685 | |||||||||
|
|
|
|
|
|
|||||||
Non-GAAP operating income |
$ | 11,157 | $ | 11,857 | $ | 11,658 | ||||||
|
|
|
|
|
|
|||||||
GAAP operating income as a percentage of product sales |
43.6% | 45.5% | 45.8% | |||||||||
Adjustments to cost of sales |
5.8 | 4.9 | 5.2 | |||||||||
Adjustments to research and development expenses |
0.4 | 0.4 | 0.3 | |||||||||
Adjustments to selling, general and administrative expenses |
0.2 | 0.5 | 0.4 | |||||||||
Certain net charges pursuant to our restructuring initiatives |
0.2 | 0.0 | 0.4 | |||||||||
Certain other expenses |
0.0 | 0.0 | 0.0 | |||||||||
Acquisition-related adjustments (c) |
0.0 | 1.3 | 1.4 | |||||||||
|
|
|
|
|
|
|||||||
Non-GAAP operating income as a percentage of product sales |
50.2% | 52.6% | 53.5% | |||||||||
|
|
|
|
|
|
|||||||
GAAP interest and other income, net |
$ | 753 | $ | 674 | $ | 928 | ||||||
Adjustments to other income (d) |
| (68) | | |||||||||
|
|
|
|
|
|
|||||||
Non-GAAP interest and other income, net |
$ | 753 | $ | 606 | $ | 928 | ||||||
|
|
|
|
|
|
|||||||
GAAP income before income taxes |
$ | 9,138 | $ | 9,545 | $ | 9,597 | ||||||
Adjustments to operating expenses |
1,483 | 1,594 | 1,685 | |||||||||
Adjustments to other income (d) |
| (68) | | |||||||||
|
|
|
|
|
|
|||||||
Non-GAAP income before income taxes |
$ | 10,621 | $ | 11,071 | $ | 11,282 | ||||||
|
|
|
|
|
|
|||||||
GAAP provision for income taxes |
$ | 1,296 | $ | 1,151 | $ | 7,618 | ||||||
Adjustments to provision for income taxes: |
||||||||||||
Income tax effect of the above adjustments (e) |
329 | 362 | 538 | |||||||||
Other income tax adjustments (f) |
(32) | (15) | (6,120) | |||||||||
|
|
|
|
|
|
|||||||
Total adjustments to provision for income taxes |
297 | 347 | (5,582) | |||||||||
|
|
|
|
|
|
|||||||
Non-GAAP provision for income taxes |
$ | 1,593 | $ | 1,498 | $ | 2,036 | ||||||
|
|
|
|
|
|
|||||||
GAAP tax as a percentage of income before taxes |
14.2% | 12.1% | 79.4% | |||||||||
Adjustments to provision for income taxes: |
||||||||||||
Income tax effect of the above adjustments (e) |
1.1 | 1.6 | -7.1 | |||||||||
Other income tax adjustments (f) |
-0.3 | -0.2 | -54.3 | |||||||||
|
|
|
|
|
|
|||||||
Total adjustments to provision for income taxes |
0.8 | 1.4 | -61.4 | |||||||||
|
|
|
|
|
|
|||||||
Non-GAAP tax as a percentage of income before taxes |
15.0% | 13.5% | 18.0% | |||||||||
|
|
|
|
|
|
|||||||
GAAP net income |
$ | 7,842 | $ | 8,394 | $ | 1,979 | ||||||
Adjustments to net income: |
||||||||||||
Adjustments to income before income taxes, net of the income tax effect |
1,154 | 1,164 | 1,147 | |||||||||
Other income tax adjustments (f) |
32 | 15 | 6,120 | |||||||||
|
|
|
|
|
|
|||||||
Total adjustments to net income |
1,186 | 1,179 | 7,267 | |||||||||
|
|
|
|
|
|
|||||||
Non-GAAP net income |
$ | 9,028 | $ | 9,573 | $ | 9,246 | ||||||
|
|
|
|
|
|
See footnotes on page B-3.
B-2 ï 2020 Proxy Statement
|
Appendix B
|
|
Amgen Inc.
GAAP to Non-GAAP Reconciliations
(In millions, except per-share data)
(Unaudited)
The following table presents the computations for GAAP and non-GAAP diluted earnings per share.
Years ended December 31, | ||||||||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | GAAP | Non-GAAP | |||||||||||||||||||
Net income |
$ | 7,842 | $ | 9,028 | $ | 8,394 | $ | 9,573 | $ | 1,979 | $ | 9,246 | ||||||||||||
Shares |
||||||||||||||||||||||||
Weighted-average shares for basic EPS |
605 | 605 | 661 | 661 | 731 | 731 | ||||||||||||||||||
Effect of dilutive securities |
4 | 4 | 4 | 4 | 4 | 4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Weighted-average shares for diluted EPS |
609 | 609 | 665 | 665 | 735 | 735 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Diluted earnings per share |
$ | 12.88 | $ | 14.82 | $ | 12.62 | $ | 14.40 | $ | 2.69 | $ | 12.58 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents the computations Invested capital and Return on Invested capital.
At December 31, | ||||||||||||
2019 | 2018 | 2019 Average | ||||||||||
Total assets |
$ | 59,707 | $ | 66,416 | $ | 63,062 | ||||||
less Cash, cash equivalents and marketable securities |
(8,911 | ) | (29,304 | ) | (19,108) | |||||||
less Total current liabilities |
(12,835 | ) | (13,488 | ) | (13,162) | |||||||
|
|
|
|
|
|
|||||||
Invested capital |
$ | 37,961 | $ | 23,624 | $ | 30,792.5 | ||||||
|
|
|
|
|
|
|||||||
2019 Non-GAAP Operating Income (per above) |
$ | 11,157 | ||||||||||
2019 After-tax factor (100% less Non-GAAP tax rate per above) |
|
85.0% | ||||||||||
|
|
|||||||||||
2019 Non-GAAP Net Operating income after tax |
|
$ | 9,483 | |||||||||
|
|
|||||||||||
2019 Return on Invested capital (Net Operating Income after tax divided by Average Invested capital) |
|
30.8% | ||||||||||
|
|
(a) | The adjustments related primarily to noncash amortization of intangible assets acquired in business combinations. |
(b) | For the years ended December 31, 2019 and 2017, the adjustments related primarily to severance expenses associated with our restructuring activities. |
(c) | For the years ended December 31, 2018 and 2017, the adjustments related primarily to impairment of intangible assets acquired in business combinations. |
(d) | For the year ended December 31, 2018, the adjustment related to the net gain associated with the Kirin-Amgen, Inc. acquisition. |
(e) | The tax effect of the adjustments between our GAAP and non-GAAP results takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). Generally, this results in a tax impact at the U.S. marginal tax rate for certain adjustments, including the majority of amortization of intangible assets, whereas the tax impact of other adjustments, including restructuring initiatives, depends on whether the amounts are deductible in the respective tax jurisdictions and the applicable tax rate(s) in those jurisdictions. Due to these factors, the effective tax rates for the adjustments to our GAAP income before income taxes, for year ended December 31, 2019, was 22.2% compared 23.7% and 31.9% for 2018 and 2017, respectively. |
(f) | For the year ended December 31, 2017, the adjustment related primarily to the impact of U.S. Corporate tax reform, including the repatriation tax on accumulated foreign earnings and the remeasurement of certain net deferred and other tax liabilities. |
ï 2020 Proxy Statement B-3
SAMPLE
AMGEN INC. ONE AMGEN CENTER DRIVE
|
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on May 18, 2020 for shares held directly and by 11:59 p.m. Eastern Time on May 14, 2020 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/AMGN2020
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 18, 2020 for shares held directly and by 11:59 p.m. Eastern Time on May 14, 2020 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
D08475-Z76923 |
KEEP THIS PORTION FOR YOUR RECORDS |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
DETACH AND RETURN THIS PORTION ONLY |
AMGEN INC. | |||||||||||||
The Board of Directors recommends you vote “FOR” each listed nominee in item #1. | |||||||||||||
1. |
To elect eleven directors to the Board of Directors of Amgen Inc. for a term of office expiring at the 2021 annual meeting of stockholders. The nominees for election to the Board of Directors are: |
For |
Against |
Abstain |
|||||||||
1a. | Dr. Wanda M. Austin | ☐ | ☐ | ☐ | For | Against | Abstain | ||||||
1b. | Mr. Robert A. Bradway | ☐ | ☐ | ☐ | 1j. Dr. Ronald D. Sugar | ☐ | ☐ | ☐ | |||||
1c. | Dr. Brian J. Druker | ☐ | ☐ | ☐ | 1k. Dr. R. Sanders Williams | ☐ | ☐ | ☐ | |||||
1d. |
Mr. Robert A. Eckert |
☐ | ☐ | ☐ | The Board of Directors recommends you vote “FOR” each of items #2 and #3. |
||||||||
1e. | Mr. Greg C. Garland | ☐ | ☐ | ☐ | |||||||||
2. | Advisory vote to approve our executive compensation. | ☐ | ☐ | ☐ | |||||||||
1f. | Mr. Fred Hassan | ☐ | ☐ | ☐ | |||||||||
1g. | Mr. Charles M. Holley, Jr. | ☐ | ☐ | ☐ | 3. | To ratify the selection of Ernst & Young LLP as our independent registered public accountants for the fiscal year ending December 31, 2020. | ☐ | ☐ | ☐ | ||||
1h. | Dr. Tyler Jacks | ☐ | ☐ | ☐ | |||||||||
1i. | Ms. Ellen J. Kullman | ☐ | ☐ | ☐ | |||||||||
The Board of Directors recommends you vote “AGAINST” the Stockholder Proposal in item #4. | |||||||||||||
4. | Stockholder proposal to require an independent board chair. | ☐ | ☐ | ☐ | |||||||||
NOTE: Such other business as may properly come before the meeting or any continuation, postponement, or adjournment thereof. |
| ||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. |
|
Signature [PLEASE SIGN WITHIN BOX] |
Date |
Signature (Joint Owners) |
Date | ||||||||||||
SAMPLE
ANNUAL MEETING OF STOCKHOLDERS OF
AMGEN INC.
May 19, 2020
GO GREEN
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 19, 2020:
The Notice of 2020 Annual Meeting of Stockholders, Proxy Statement, Form Proxy Card and 2019 Annual Report are available at www.proxyvote.com.
In light of the ongoing developments related to the COVID-19 pandemic, the Amgen Inc. 2020 Annual Meeting of Stockholders will be held solely by remote communication via the Internet at www.virtualshareholdermeeting.com/AMGN2020.
This Proxy Card will be voted as specified or, if no choice is specified, will be voted FOR the election of the named director nominees, FOR the advisory vote to approve our executive compensation, FOR ratification of the selection of Ernst & Young LLP as our independent registered public accountant, and AGAINST the Stockholder Proposal.
As of the date hereof, the undersigned hereby acknowledges receipt of the 2020 Proxy Statement and accompanying Notice of 2020 Annual Meeting of Stockholders to be held on May 19, 2020, Form Proxy Card, and the 2019 Annual Report.
In their discretion, the Proxy Holders (as defined below) are authorized to vote upon such other matters as may properly come before the 2020 Annual Meeting of Stockholders and at any continuation, postponement, or adjournment thereof. The Board of Directors, at present, knows of no other business to be presented at the 2020 Annual Meeting of Stockholders.
By signing this proxy you revoke all prior proxies. This proxy will be governed by the laws of the State of Delaware and federal securities laws.
D08476-Z76923 |
AMGEN INC. ONE AMGEN CENTER DRIVE, THOUSAND OAKS, CA 91320-1799 FOR THE 2020 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 19, 2020
Robert A. Bradway, Peter H. Griffith and Jonathan P. Graham (the “Proxy Holders”), or any of them, each with the power of substitution, hereby are authorized to represent the undersigned, with all powers which the undersigned would possess if personally present, to vote the shares of Amgen Inc. Common Stock of the undersigned at the 2020 Annual Meeting of Stockholders of Amgen Inc., to be held on Tuesday, May 19, 2020, at 11:00 A.M., Pacific Time, by remote communication via the internet at www.virtualshareholdermeeting.com/AMGN2020, and at any continuation, postponement, or adjournment of that meeting, upon and in respect of the following matters and in accordance with the following instructions, with discretionary authority as to any and all other business that may properly come before the meeting.
You are encouraged to specify your choices by marking the appropriate boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance with the Board of Directors’ recommendations.
PLEASE MARK, SIGN, DATE, AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side)
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THIS IS A VOTING INSTRUCTION FORM. You are receiving this voting instruction form because you hold shares in the above Security. You have the right to vote on proposals being presented at the upcoming Annual Meeting to be held on | ||||
VOTING INSTRUCTIONS | ||||
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D10017-P36263 |
THIS VOTING INSTRUCTION FORM IS VALID ONLY WHEN SIGNED AND DATED. PLEASE USE BLUE OR BLACK INK AND RETURN ONLY THE BOTTOM PORTION. |
Please check this box if you plan to attend the Meeting online and vote these shares | ☐ | ||||||||||
The Board of Directors recommends you vote “FOR” each listed nominee in item #1. |
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1. |
To elect eleven directors to the Board of Directors of Amgen Inc. for a term of office expiring at the 2021 annual meeting of stockholders. The nominees for election to the Board of Directors are: |
For
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Against
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Abstain
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The Board of Directors recommends you vote “FOR” each of items #2 and #3. | For
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Against
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Abstain
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1a. | Dr. Wanda M. Austin | ☐ | ☐ | ☐ | 2. | Advisory vote to approve our executive compensation. | ☐ | ☐ | ☐ | ||
1b. | Mr. Robert A. Bradway | ☐ | ☐ | ☐ | |||||||
3. |
To ratify the selection of Ernst & Young LLP as our independent registered public accountants for the fiscal year ending December 31, 2020. |
☐ | ☐ | ☐ | |||||||
1c. | Dr. Brian J. Druker | ☐ | ☐ | ☐ | |||||||
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1d. | Mr. Robert A. Eckert | ☐ | ☐ | ☐ | |||||||
1e.
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Mr. Greg C. Garland | ☐ | ☐ | ☐ | The Board of Directors recommends you vote “AGAINST” the Stockholder Proposal in item #4. |
For | Against | Abstain | |||
1f. | Mr. Fred Hassan | ☐ | ☐ | ☐ | |||||||
1g. | Mr. Charles M. Holley, Jr. | ☐ | ☐ | ☐ | 4. |
Stockholder proposal to require an independent board chair. |
☐ | ☐ | ☐ | ||
1h. | Dr. Tyler Jacks | ☐ | ☐ | ☐ | |||||||
NOTE: Such other business as may properly come before the meeting or any continuation, postponement, or adjournment thereof. |
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1i. | Ms. Ellen J. Kullman | ☐ | ☐ | ☐ | |||||||
1j. | Dr. Ronald D. Sugar | ☐ | ☐ | ☐ | |||||||
1k. | Dr. R. Sanders Williams | ☐ | ☐ | ☐ | |||||||
Yes | No | ||||||||||
HOUSEHOLDING ELECTION - Please indicate if you consent to receive certain future investor communications in a single package per household. | ☐ | ☐ |
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Signature [PLEASE SIGN WITHIN BOX] |
Date |
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