M. Anne Szostak(1)
54 | 2021 Proxy Statement
| | | AUDIT COMMITTEE MATTERS | l | + | | | Sophie V. Vandebroek, PhD | | | l | l |
Independent Auditors’ Fees1.Audit Committee Financial Expert as defined under SEC rules 2.Independent Non-Executive Board Chair | | | | | | 48 | IDEXX 2024 PROXY STATEMENT |
CORPORATE GOVERNANCE + + + | | | | | | | | | | | | | | | | | | | | | Audit Committee Members +Mr. Junius (Chair) +Ms. Chang Britt +Mr. Claflin +Mr. Samad +Ms. Szostak Meetings held in 2023: 9 | | | Key Committee Responsibilities The following table summarizes the fees that PwC billed to us for each of the last two fiscal years for audit and other services. For fiscal year 2020, audit fees also include an estimate of amounts not yet billed.
| | | | | | | | | | Fiscal Years Ended December 31, | | 2020 ($) | 2019 ($) | Audit fees | $ | 2,116,625 | | $ | 2,071,155 | | Audit-related fees | — | | — | | Tax fees | 997,592 | | 436,522 | | All other fees | 900 | | 900 | | Total fees | $ | 3,115,117 | | $ | 2,508,577 | |
Audit Fees. Consists of fees billed for professional services rendered for the audit of our annual financial statements and review of the interim financial statements included in quarterly reports; the audit of the effectiveness of ourCommittee oversees: accounting; internal controlscontrol over financial reporting; statutory audits orinformation system controls relating to our financial audits forreporting process; our subsidiaries or affiliates; services associated with periodiccompliance and audit processes, including the selection, retention and oversight of our independent auditors; and our cybersecurity program. The Audit Committee also reviews and approves all related person transactions, receives and reviews management reports and other documents filed withrelating to the SEC; consultation concerning accounting or disclosure treatment of transactionspotential or events and actual or potential impact of final or proposed rules, standards or interpretations by the SEC, the Financial Accounting Standards Board or other regulatory or standard-setting bodies; and assistance with and review of documents provided to the SEC in responding to SEC comments. Audit-Related Fees. Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or reviewviolations of our Code of Ethics in accordance with our applicable policies and procedures and prepares the Audit Committee Report required to be included in our annual proxy statement. The Audit Committee also periodically reviews our environmental, social and governance disclosure controls and procedures. The Audit Committee meets from time to time with our financial statementspersonnel, other members of management, internal audit staff and are not reported under “Audit Fees.” Theseindependent auditors regarding these matters.
The Audit Committee has established policies and procedures for the pre-approval of all services include due diligence services pertaining to potential acquisitions and services pertaining to the Company’s transition to new accounting standards. Tax Fees. Consists of tax compliance fees of $134,700 and $92,022 in 2020 and 2019, respectively, and tax advice and tax planning fees $862,892 and $344,500 in 2020 and 2019, respectively. These services included U.S. federal, state and local tax planning and compliance advice; international tax planning, structure and compliance advice; and review of federal, state, local and international income, franchise and other tax returns.
Out-of-Pocket Expenses and Value-Added Taxes. Included in the fee schedule above as components of each of Audit Fees, Tax Fees and All Other Fees are amounts billedprovided by the independent auditors, for out-of-pocket expenses ($0 and $100,000 in 2020 and 2019, respectively) and value-added taxes ($66,997 and $100,464 in 2020 and 2019, respectively)which are described beginning on page 68.
Independent Auditor Fee Approval Policy
The Audit Committee has also adopted a policyprocedures for the pre-approvalreceipt, retention and treatment of audit and non-audit services performedcomplaints received by our independent auditor,IDEXX regarding accounting, internal accounting controls or auditing matters, and the fees paidconfidential, anonymous submission by us for such services, in order to assure that the provisionemployees of such services does not impair the auditor’s independence. Under the policy, at the beginning of the fiscal year, the Audit Committee pre-approves the engagement terms and fees for the annual audit. Certain types of other audit services, audit-related services and tax services have been pre-approved by the Audit Committee under the policy. any concerns regarding questionable accounting or auditing matters. The Audit Committee Report is ultimately responsible for the audit fee negotiations associated with the retention ofincluded beginning on page 66. |
| | | | | | IDEXX 2024 PROXY STATEMENT | 49 |
+ + + CORPORATE GOVERNANCE | | | | | | | | | | | | | | | | | | | | | Compensation and Talent Committee Members +Ms. Szostak (Chair) +Ms. Chang Britt +Mr. Kingsley +Mr. Samad Meetings held in 2023: 5 | | | Key Committee Responsibilities The Compensation and Talent Committee: oversees our independent auditor,executive compensation philosophy and any services that have not been pre-approved by the Audit Committee as previously described must be separately approved by the Audit Committee prior topractices; evaluates the performance of such services. Pre-approved fee levels for all pre-approved services are established periodically by the Audit Committee. The Audit Committee then periodically reviews actualour CEO; and anticipated fees for the pre-approved services against the pre-approved fee levels. Any anticipated fees exceeding the pre-approved fee levels require further pre-approval by the Audit Committee. With respect to each service for which separate pre-approval is proposed, the independent auditor will provide a detailed description of the services to permit the Audit Committee to assess the impact of the services on the independence of the independent auditor.
The Audit Committee may delegate pre-approval authority to one or more of its members and has delegated such authority to its chair. The Audit Committee member to whom such authority is delegated must report any pre-approval decisions to the Audit Committee at the next scheduled meeting. The Audit Committee does not delegate its pre-approval responsibilities to management.
During the last two fiscal years, no services were provided by PwC that were approved by the Audit Committee pursuant to the de minimis exception to pre-approval contained in the SEC’s rules.
56 | 2021 Proxy Statement
Executive Compensation
Proposal Three – Advisory Vote to Approve Executive Compensation
We are asking our shareholders to approve, on an advisory, non-binding basis,determines the compensation of our NEOs as described in this Proxy Statement at the 2021 Annual Meeting. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOsCEO and the philosophy, policies and practices described in this Proxy Statement. This proposal is commonly referred to as “say-on-pay.”
At the 2011 Annual Meeting, more than 93% of the votes cast by our shareholders were in favor of an annual advisory “say-on-pay” vote, and at the 2017 Annual Meeting, more than 91% of the votes cast by our shareholders were in favor of continuing to submit an advisory “say-on-pay” vote to our shareholders on an annual basis. Accordingly, since the 2011 Annual Meeting, we have annually submitted a “say-on-pay” proposal to our shareholders and received overwhelming shareholder support each year. At the 2020 Annual Meeting, our “say-on-pay” proposal was approved by our shareholders with approximately 96% of the votes cast in favor of approvingapproves the compensation of our NEOs. other executive officers.
The Board believes that this vote affirmed our shareholders’ supportCompensation and Talent Committee also: has primary responsibility to oversee the administration of our incentive compensation plans for executive officers and equity compensation program.plans; reviews and approves stock ownership and retention guidelines applicable to our Directors and senior executives and reviews compliance with those guidelines; reviews and makes recommendations to the Board regarding adoption of and changes to compensation-related policies applicable to executive officers, including our amended and restated clawback policy; and reviews and makes recommendations to the Board regarding the compensation of non-employee Directors. In deciding howaddition, the Compensation and Talent Committee: oversees our key human capital and talent strategies and policies and management of material human capital and talent risks and opportunities, including those relating to vote on this proposal,diversity, equity and inclusion, employee engagement, talent recruitment, development and retention, and health and wellness; monitors and analyzes risks associated with our shareholders are encouraged to read the Executive Compensation section of this Proxy Statement, includingcompensation policies and practices; reviews the Compensation Discussion and Analysis section, which discussesand prepares the Compensation and Talent Committee Report required to be included in detailour annual proxy statement; and may make or recommend changes to our executive compensation program and howpractices that it implementsdeems appropriate based on the results of the shareholder vote on the “say-on-pay” proposal set forth in our annual proxy statement. The Compensation and Talent Committee charter does not provide for any delegation of these duties except to a sub-committee or individual members of the Committee as the Compensation and Talent Committee may determine. The Compensation and Talent Committee Report is included on page 96. |
| | | | | | 50 | IDEXX 2024 PROXY STATEMENT |
CORPORATE GOVERNANCE + + + | | | | | | | | | | | | | | | | | | | | | Governance and Corporate Responsibility Committee Members +Mr. Claflin (Chair) +Dr. Collins +Dr. Essig +Mr. Kingsley +Dr. Vandebroek Meetings held in 2023: 6 | | | Key Committee Responsibilities The Governance and Corporate Responsibility Committee advises and makes recommendations to the Board with respect to corporate governance matters, including: Board composition, organization, function, membership and performance; Board committee structure and membership; our Corporate Governance Guidelines; succession planning for the Board Chair; succession planning for the Chief Executive Officer and other executive compensation philosophy, howofficers; matters of significance to shareholders and other stakeholders relating to corporate governance, corporate responsibility and environmental/sustainability and social matters; and shareholder proposals. The Governance and Corporate Responsibility Committee also: advises and makes recommendations to the Board on matters relating to Board oversight of the management of corporate responsibility, environmental/sustainability and social risks and opportunities; periodically reviews key strategies and policies relating to environmental/sustainability and social matters (other than human capital and talent matters); and periodically reviews our executive compensation program helps drivesignificant environmental, social and governance disclosures not addressed by another Committee. The Governance and Corporate Responsibility Committee also identifies, evaluates, recruits and makes recommendations to the Board regarding candidates to fill vacancies on the Board as described beginning on page 32. The Governance and Corporate Responsibility Committee annually reviews the performance of the Board, its Committees, the independent Board Chair and each of the Directors, as described under “Annual Board Self-Assessment” on page 41. The Governance and Corporate Responsibility Committee is also responsible for annually reviewing with the Board the requisite skills and criteria for new Board members, as well as the composition of the Board as a whole, and annually assessing, for each Director or person nominated to become a Director, the specific experience, qualifications, attributes and skills, including those described on page 33, that lead the Governance and Corporate Responsibility Committee to conclude that such Director or nominee should serve as a Director in light of our business and structure. The Governance and Corporate Responsibility Committee also annually reviews, evaluates and makes reports and recommendations to the Board regarding, as appropriate, succession plans for our CEO and other corporateexecutive officers. |
| | | | | | IDEXX 2024 PROXY STATEMENT | 51 |
+ + + CORPORATE GOVERNANCE | | | | | | | | | | | | | | | | | | | | | Finance Committee Members +Dr. Essig (Chair) +Mr. Ayers +Dr. Collins +Mr. Junius +Dr. Vandebroek Meetings held in 2023: 4 | | | Key Committee Responsibilities The Finance Committee advises the Board with respect to financial matters and capital allocation, including capital structure and strategies, financing strategies, investment policies and practices, major financial commitments, financial risk management, acquisitions and divestitures, stock repurchase strategies and activities and dividend policy. The Finance Committee also, among other things: monitors our liquidity and financial condition; oversees our financial risk management activities (including hedging activities and transactions involving derivatives); reviews and approves any proposed acquisition or divestiture having an aggregate value greater than $50 million but less than or equal to $100 million (or in its discretion refer to the Board); makes recommendations to the Board regarding any other proposed acquisition or divestiture having an aggregate value greater than $100 million; and reviews and approves a variance in capital expenditures that in the aggregate exceeds 10% of the total budgeted amount in the applicable annual budget approved by the Board or the Finance Committee. |
Compensation and Talent Committee Interlocks and Insider Participation Ms. Szostak (Chair), Ms. Chang Britt, Mr. Kingsley and Mr. Samad served on the Compensation and Talent Committee during 2023. There were no Compensation and Talent Committee interlocks or insider (employee) participation during 2023. Related Person Transactions Our Board has adopted a written Related Person Transaction Policy under which the Audit Committee must review and approve any transaction involving more than $120,000 in which the Company is a participant and in which any related person has or will have a direct or indirect material interest. The Audit Committee may approve any such transaction only if it determines that, under all of the applicable circumstances, the transaction is not inconsistent with the best interests of the Company. A related person under this policy is: +Any executive officer; +A Director, or nominee for Director; +A holder of 5% or more of our common stock; or +An immediate family member of any of those persons. | | | | | | 52 | IDEXX 2024 PROXY STATEMENT |
CORPORATE GOVERNANCE + + + The policy provides that a “direct or indirect material interest” does not arise solely from the related person’s position as a director of another entity that is a party to the transaction, the direct or indirect ownership by the related person and all other related persons in the aggregate of less than a 10% equity interest (other than a general partnership interest) in another entity which is a party to the transaction, both the position and ownership level described above or the related person’s position as an executive officer of another entity involved in a transaction with the Company, where, in the case the related person is an executive officer as described above: +The related person and all other related persons own in the aggregate less than a 10% equity interest in such entity; +The related person and their immediate family members are not involved in the negotiation of the terms of the transaction and do not receive any special benefits as a result of the transaction; +The amount involved in the transaction equals less than the greater of $200,000 or 5% of the annual gross revenue of the other entity involved in the transaction; and +The amount involved in the transaction equals less than 2% of the consolidated gross revenues of the Company for its most recent fiscal year. Since January 1, 2023, there has been one related person transaction requiring review and approval by the Audit Committee under the Related Person Transaction Policy: the employment of an adult son of Mr. James F. Polewaczyk, our Executive Vice President and Chief Commercial Officer. Since the beginning of 2023, Mr. Polewaczyk’s adult son received salary, cash bonus payments and 401(k) employer matching contributions of approximately $130,000 and participated in employee benefit plans and programs generally made available to employees of similar responsibility levels. His compensation is commensurate with peers’ compensation and established in accordance with the Company’s compensation practices applicable to employees with equivalent qualifications, experience and responsibilities. His past and current positions sit within functions outside of the direct or indirect purview of Mr. Polewaczyk and Mr. Polewaczyk has not exerted and does not exert any influence or control over the hiring, retention, career or compensation decisions regarding his adult son. Corporate Governance Guidelines and Code of Ethics The Board has adopted Corporate Governance Guidelines and a Code of Ethics, both of which are accessible on the Corporate Governance section of our website (www.idexx.com). Hard copies are available on request by contacting our Executive Vice President, General Counsel and Corporate Secretary at IDEXX Laboratories, Inc., One IDEXX Drive, Westbrook, Maine 04092. Our Code of Ethics applies to all our employees, officers and Directors. In addition, we intend to post on our website all disclosures required by law or Nasdaq listing standards concerning any amendments to, or waivers from, any provision of the Code of Ethics. Anti-Hedging and Short Sale and Anti-Pledging Policies Our Policy on Short Sales, Derivative Transactions and Hedging generally prohibits any Director, officer or employee, or any of their family members or affiliates, from engaging in (i) any short sales of IDEXX securities, (ii) purchases or sales of puts, calls or other derivative securities based upon IDEXX securities, or (iii) purchases of financial instruments that are designed to hedge or offset any decrease in the market value of IDEXX securities. Our Policy on Pledging of Company Stock prohibits our Directors and executive officers from pledging, hypothecating or otherwise encumbering the equity securities they own in IDEXX as collateral for indebtedness, including holding shares in a margin or similar account that would subject our equity securities to margin calls or otherwise making them available as collateral for a margin loan. | | | | | | IDEXX 2024 PROXY STATEMENT | 53 |
+ + + CORPORATE GOVERNANCE Shareholder Communication and Engagement We believe transparent communication and engagement with our shareholders is critical for our continued success. It enables us to convey our strategy for long-term value creation and sustainable financial performance and to understand and actively listen to our shareholders’ perspectives and concerns. We contact, meet and engage with our shareholders on a year-round basis in connection with our quarterly reporting of financial results, industry and investment conferences, our Annual Meeting, our Investor Day and the release of our Corporate Responsibility Report, as well as from time to time on discrete topics of interest to shareholders. In 2023, we engaged and interacted with a meaningful portion of our institutional investor base. As part of our engagement efforts, our senior management met with representatives of many of our top institutional shareholders at industry and investment community conferences and analyst meetings, as well as at engagement meetings arranged by us outside of such forums. We also held our annual 2023 Investor Day at our corporate headquarters in Westbrook, Maine in August 2023, with a live webcast available. To further advance our engagement with shareholders on corporate responsibility matters, we also contacted and met with many of our top institutional shareholders specifically in connection with the July 2023 release of our 2022 Corporate Responsibility Report to communicate and reinforce the key themes of the report while also seeking feedback regarding our corporate responsibility goals, progress toward those goals and our overall approach to corporate responsibility. Topics discussed during our 2023 engagement meetings included, among other things: +Our business strategy, long-term financial potential model and financial performance; +Customer and industry trends; +Investment in R&D, commercial resources and innovation; +Capital allocation and deployment; +Executive compensation, human capital and social matters; +Corporate governance; and +Environmental and sustainability issues. Management shares with the Board the feedback provided by our shareholders. We provide several additional ways for our shareholders and other interested parties to communicate with us. Written communications to any individual Director, the Board Chair or the full Board may be submitted by electronic mail to contactdirectors@idexx.com, by completing the online “Contact the Board” submission form available on our website at www.idexx.com/corporate/corporate-governance.html or by writing to the Office of the Corporate Secretary at One IDEXX Drive, Westbrook, Maine 04092. Written communications addressed to any individual Director are forwarded to that Director. In addition, our Executive Vice President, General Counsel and Corporate Secretary or her delegate reviews all written communications addressed to any individual Director, the Board Chair or the Board. The Corporate Secretary will forward all such written communications to the Board Chair (if the Board Chair is an independent Director) or the Chair of the Governance and Corporate Responsibility Committee, as applicable, for review, except for items that could not reasonably be interpreted to implicate or otherwise relate to the duties and responsibilities of the Board. | | | | | | 54 | IDEXX 2024 PROXY STATEMENT |
CORPORATE GOVERNANCE + + + Virtual Shareholder Meeting We will conduct our 2024 Annual Meeting virtually through a live audio webcast, with related online shareholder tools available. We are implementing the virtual meeting format for our 2024 Annual Meeting to enable full and equal participation by all our shareholders from any location in the world at little to no cost. We believe this is the right choice for IDEXX because: +We are a global company with shareholders all around the world; +The virtual meeting format is cost-effective and convenient for our shareholders, as well as the Company, and enables IDEXX to reduce the environmental impact of our 2024 Annual Meeting; and +Given the latest technology for holding virtual meetings and related online tools, we believe that the virtual meeting format will enhance shareholder access and participation in our 2024 Annual Meeting. We designed the format of our 2024 Annual Meeting to ensure shareholders who attend our 2024 Annual Meeting have the same rights and opportunities to participate as they would at an in-person meeting and to enhance shareholder access, participation and communication through online tools. For example, the format of our 2024 Annual Meeting will include the following: +An online pre-meeting forum will be available to our shareholders at www.proxyvote.com. By accessing this online pre-meeting forum, our shareholders will be able to submit questions in writing in advance of our 2024 Annual Meeting, vote, view the 2024 Annual Meeting’s Rules of Conduct and Procedures and obtain copies of proxy materials and our annual report. +By following instructions on the online pre-meeting forum or at www.virtualshareholdermeeting.com/IDXX2024, shareholders will have the ability to use their telephones to dial into a live audio webcast of the meeting and verbally ask questions during the meeting. In addition, shareholders accessing the audio webcast online will be able to submit questions in writing during the meeting. As part of the 2024 Annual Meeting, we will hold a live Q&A session, during which we will answer questions as they come in and address those asked in advance, as time permits. Please note, however, that the purpose of the meeting will be observed, and we will not address questions determined to be irrelevant or inappropriate. +We will publish the answer to each question received following the 2024 Annual Meeting, including those not addressed during the meeting due to insufficient time, except for those questions determined to be irrelevant or inappropriate. +Although the live audio webcast will be available only to shareholders at the time of the meeting, a replay of the meeting will be made publicly available at www.virtualshareholdermeeting.com/IDXX2024 after the meeting. | | | | | | IDEXX 2024 PROXY STATEMENT | 55 |
+ + + CORPORATE GOVERNANCE Non-Employee Director Compensation Our non-employee Director compensation program is designed to attract and retain qualified Directors, fairly compensate them and align their interests with our shareholders’ interests. The Compensation and Talent Committee reviews and makes recommendations regarding the form and amount of non-employee Director compensation, for discussion and approval by the Board. In 2023, Farient Advisors LLC (Farient), the Compensation and Talent Committee’s independent compensation consultant, provided director compensation program analysis, market data and advice to the Compensation and Talent Committee. Annual Non-Employee Director Compensation Our non-employee Directors receive annual compensation for their Board service as described in the chart below: | | | | | | Compensation Element | Non-Employee Director Compensation Program | | | Cash compensation(1) | | Annual retainer | $90,000(2) | Committee Chair retainer | $30,000 for the Audit Committee(2) | $25,000 for the Compensation and Talent Committee | $25,000 for the Governance & Corporate Responsibility Committee | $15,000 for the Finance Committee | Other Audit Committee has made undermember retainer(3) | $7,500 | Lead Director retainer (as applicable) | $25,000 | Non-Executive Board Chair retainer (as applicable) | $80,000 | Meeting fees | Not applicable; no fees are paid for meeting attendance | Equity compensation(4) | | Full-value awards(5) | $125,000 in target value(6) | Non-qualified stock options | $125,000 in value(7) | Total | $250,000(2) | Additional equity compensation for Non-Executive Board Chair(8) | Full-value awards(5) | $40,000 in target value(6) | Non-qualified stock options | $40,000 in value(7) | Total | $80,000 | Director stock ownership guidelines(9) | Target ownership of our executive compensation programcommon stock (including vested deferred stock units credited to a Director’s investment account) equal to six times the Annual Retainer |
1.All retainers are paid prospectively in quarterly installments, and each non-employee Director may, at their option, defer all or any portion of any retainer in the form of fully vested deferred stock units under our Director Deferred Compensation Plan (Director Plan). A non-employee Director who joins the Board after the date of an Annual Meeting receives a pro rata amount of their quarterly installment of the retainer based on the number of days until the end of the quarter during which they were appointed. 2.Effective as of May 17, 2023, the Board increased: (i) the amount of the annual retainer from $80,000 to $90,000; (ii) the amount of the Audit Committee Chair annual retainer from $25,000 to $30,000; and (iii) the amount of the annual equity award value from $230,000 to $250,000, with 50% of the value in the form of non-qualified stock options and 50% of the value in the form of full-value awards. 3.Paid to all Audit Committee members, except the Audit Committee Chair. | | | | | | 56 | IDEXX 2024 PROXY STATEMENT |
CORPORATE GOVERNANCE + + + 4.We annually grant a full-value award and a non-qualified stock option award to each non-employee Director on the date of the Annual Meeting. A non-employee Director who joins the Board after the date of an Annual Meeting receives a pro rata grant based on the number of months remaining until the next year’s grant. The maximum number of shares subject to equity awards granted under our 2018 Stock Incentive Plan (2018 Plan) during a single fiscal year to any non-employee Director, taken together with any cash fees paid during the fiscal year to the non-employee Director in respect of the Director’s service as a member of the Board during such year (including service as a member or chair of any committees of the Board), will not exceed $650,000 in total value (calculating the value of any such awards based on the grant date fair value of such awards for financial reporting purposes), provided that the non-employee Directors who are considered independent (under Nasdaq rules) may make exceptions to this limit for a Non-Executive Board Chair, if any, in which case the non-employee Director receiving such additional compensation may not participate in the decision to award such compensation. 5.Full-value awards in the form of RSUs or deferred stock units (DSUs) are granted to non-employee Directors. As a default, RSUs are granted to non-employee Directors as the full-value award portion of their annual equity awards; however, a non-employee Director may, at their option, elect to defer the entire full-value award portion of the annual equity award in the form of DSUs under the Director Plan. 6.The number of full-value award units granted equals the target value, divided by the price of our common stock on the grant date, rounded to the nearest whole share. 7.The number of stock options granted equals the target value, divided by the value of a non-qualified stock option, rounded to the nearest whole share. The value of the granted non-qualified stock options is calculated using the Black-Scholes-Merton option pricing model. This model is consistent with the valuation approach used to value executive awards on grant date. 8.In recognition of the additional responsibilities of the independent Non-Executive Board Chair, they receive an additional $80,000 in equity grants, as calculated in accordance with notes (6) and (7) above. 9.All non-employee Directors complied with the stock ownership guidelines as of December 31, 2023 either by satisfying or exceeding target levels of ownership of our common stock or complying with the applicable retention requirements. Equity Compensation A full-value award — either in the form of RSUs or DSUs — and non-qualified stock options are granted to non-employee Directors annually on the date of the Annual Meeting. The most recent grant date was May 17, 2023, and the next scheduled grant date is May 6, 2024, the date of the 2024 Annual Meeting. Full-Value Awards. The full-value awards granted to non-employee Directors, whether in the form of RSUs or DSUs, fully vest on the earlier of one year from the date of grant or the date of the next Annual Meeting. RSUs are granted under the 2018 Plan, and DSUs are granted under the Director Plan and subject to the terms of the 2018 Plan. As a default, RSUs are granted to non-employee Directors as the full-value award portion of their annual equity awards; however, a non-employee Director may defer the entire full-value award portion of the annual equity award in the form of DSUs under the Director Plan. When RSUs vest, an equivalent number of shares of our common stock is then issued and delivered to the non-employee Director. When DSUs vest, the vested DSUs are credited to a hypothetical investment account established in the non-employee Director’s name, and these vested DSUs will be distributed as an equal number of shares of our common stock in accordance with the Director Plan. For more information regarding DSUs and the Director Plan, refer to the discussion below under “Director Plan.” For more information regarding the 2018 Plan, refer to the discussion under “Stock Incentive Plans” beginning on page 110. Non-Qualified Stock Options. Non-qualified stock options are granted under the 2018 Plan and have the following terms: +Exercise price equal to the last reported sales price for a share of our common stock on the grant date; +Fully vest and are exercisable on the earlier of one year from the date of grant or the date of the next Annual Meeting; +Expire on the day immediately prior to the tenth anniversary of the grant date; and +Accelerated vesting upon a change in control of the Company as described in the discussion under “Stock Incentive Plans” beginning on page 110. | | | | | | IDEXX 2024 PROXY STATEMENT | 57 |
+ + + CORPORATE GOVERNANCE Director Plan Each non-employee Director may defer all or any portion of any cash compensation in the form of fully vested DSUs, which are issued under the Director Plan and subject to the terms of the 2018 Plan. In addition, each non-employee Director may defer the entire full-value award portion of the annual equity award in the form of DSUs, which fully vest on the earlier of one year from the date of grant or the date of the next Annual Meeting and are granted under the Director Plan and subject to the terms of the 2018 Plan. Compensation in the form of DSUs constitutes deferred compensation for federal income tax purposes. A hypothetical investment account is established in the name of each non-employee Director, and vested DSUs are credited as follows: +Any cash compensation the Director defers is credited to the account as the number of vested DSUs equal to the aggregate value of the deferred compensation divided by the price of a share of common stock on the date of the applicable deferral; and +When the grant of DSUs made on the date of an Annual Meeting (or any prorated grant of DSUs made when they join the Board) vests, those vested DSUs also are credited to this account. Director Plan account balances are not subject to any interest or other investment returns, other than returns produced by fluctuations in the price of a share of common stock affecting the value of the DSUs in the account. Vested DSUs are distributed in the form of an equal number of shares of our common stock as follows: | | | | | | | | | | | | Type of DSU | Deferrals and some recent changes made to our compensation program.Our Board recommends that our shareholders approve the following resolution:
RESOLVED, that the compensation paidGrants Prior to the Company’s NEOs,2022 Annual Meeting
| | Deferrals and Grants From and After the 2022 Annual Meeting | | | | | | | | | Deferred Cash Compensation | At the non-employee Director’s election: +A single lump sum one year after the termination of Board service; or +For deferrals made on or after January 1, 2011: (i) a single lump sum on a non-discretionary and objectively determinable fixed date; or (ii) four equal annual installments beginning as disclosed in this Proxy Statement forsoon as practicable on or after such a fixed date. If a non-employee Director fails to make a timely distribution election, the 2021 Annual Meeting pursuantapplicable DSUs will be distributed as a single lump sum one year after the termination of Board service. | | At the non-employee Director’s election: +A single lump sum as soon as practicable after the termination of Board service; +A single lump sum on a non-discretionary and objectively determinable fixed date; or +Four equal annual installments beginning as soon as practicable on or after such a fixed date. If a non-employee Director fails to Item 402make a timely distribution election, the applicable DSUs will be distributed as soon as practicable after the termination of Regulation S-K, includingBoard service. | | | | | | | | | Annual Full-Value Award | A single lump sum one year after the Compensation Discussiontermination of Board service. | | At the non-employee Director’s election: +A single lump sum as soon as practicable after the termination of Board service; +A single lump sum on a non-discretionary and Analysis, compensation tables and narrative discussion, is hereby approvedobjectively determinable fixed date; or +Four equal annual installments beginning as soon as practicable on an advisory basis.or after such a fixed date. As an advisory vote, itIf a non-employee Director fails to make a timely distribution election, the applicable DSUs will not be binding. However,distributed as soon as practicable after the termination of Board service.
| | | | |
| | | | | | 58 | IDEXX 2024 PROXY STATEMENT |
CORPORATE GOVERNANCE + + + If the administrator of the Director Plan determines that a non-employee Director has suffered an unforeseeable emergency, the administrator may authorize the distribution of all or a portion of their vested DSUs. Unvested DSUs will vest immediately upon: +The non-employee Director’s death or disability. +A change in control of the Company. The shares of common stock credited to a non-employee Director’s hypothetical investment account will be distributed in a single lump sum as soon as practicable after a change in control. A change in control under the Director Plan occurs when: +Any person or group acquires direct or indirect beneficial ownership of stock possessing 35% or more of the total voting power of the Company’s stock; +A majority of the Board members is replaced during any twelve-month period by new Directors whose appointment or election is not approved by a majority of the Board members serving immediately before the appointment or election of any of these new directors; or +A change in the ownership of a substantial portion of our assets occurs such that any person or group acquires assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of our assets immediately prior to such acquisition. Other Benefits We reimburse Directors for their reasonable expenses incurred in connection with Board and Committee meetings and other Board-related activities (including orientations and site visits) and for their reasonable expenses (including travel expenses) incurred in connection with continuing education regarding their duties and responsibilities as Directors. We also extend coverage to them under our directors’ and officers’ indemnity insurance policies. We do not provide any other benefits, including retirement benefits or perquisites, to our independent non-employee Directors. Director Stock Ownership Guidelines Our stock ownership guidelines set a target level of ownership of a number of shares of our common stock for each non-employee Director as of March 31 (or the date of their election or appointment), equal to six times the annual retainer then in effect, divided by the closing stock price on that date. Shares that are owned by, or held in trust for the benefit of, a non-employee Director or their immediate family members residing in the same household and vested DSUs credited to the Director’s investment account are included in calculating stock ownership. If the number of shares of common stock held by a non-employee Director does not exceed the target level, then the Director must retain: +At least 75% of our common stock received upon the exercise of options or the vesting and release of RSUs or DSUs after payment or withholding of any applicable exercise price and taxes; and +All other shares of our common stock held by the Director. A non-employee Director complies with these stock ownership guidelines if their stock ownership equals or exceeds the target level at the end of the year or if they have complied with the applicable retention requirements under the stock ownership guidelines. | | | | | | IDEXX 2024 PROXY STATEMENT | 59 |
+ + + CORPORATE GOVERNANCE 2023 Non-Employee Director Compensation Table The table below shows 2023 compensation for each of our non-employee Directors. Mr. Mazelsky, who is an employee, receives no additional compensation for his Board service. For information regarding Mr. Mazelsky’s compensation, refer to the discussion under “How We Paid Our NEOs in 2023” beginning on page 86. | | | | | | | | | | | | | | | | | | | | | Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Option Awards(2) ($) | All other Compensation ($) | Total Compensation ($) | | | | | | | | | Jonathan W. Ayers | 85,000 | | 125,190 | | 124,971 | | — | | 335,161 | | | Irene Chang Britt | 46,101 | (3) | 106,348 | (4) | 106,444 | (4) | — | | 258,893 | | | Bruce L. Claflin | 117,500 | | 125,190 | | 124,971 | | — | | 367,661 | | | Asha S. Collins, PhD | 85,000 | | 125,190 | | 124,971 | | — | | 335,161 | | | Stuart M. Essig, PhD | 100,000 | | 125,190 | | 124,971 | | — | | 350,161 | | | Daniel M. Junius | 112,500 | (5) | 125,190 | | 124,971 | | — | | 362,661 | | | Lawrence D. Kingsley | 165,000 | | 165,134 | | 164,885 | | — | | 495,019 | | | Sam Samad | 92,500 | | 125,190 | | 124,971 | | — | | 342,661 | | | M. Anne Szostak | 117,500 | | 125,190 | | 124,971 | | — | | 367,661 | | | Sophie V. Vandebroek, PhD | 85,000 | | 125,190 | | 124,971 | | — | | 335,161 | | |
1.Stock awards to non-employee Directors are issued either in the form of RSUs pursuant to the 2018 Plan or DSUs pursuant to the Company’s Director Plan. The amount shown excludes DSUs received in lieu of deferred compensation as described in note 5 below and reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 (calculated by rounding $125,000 (or $165,000 in the case of the independent Non-Executive Board Chair) to the nearest share on the date of grant). Refer to Note 5 to the consolidated financial statements included in our 2023 Annual Report on Form 10-K for the relevant assumptions used to determine the valuation of our stock awards. As discussed under “Equity Compensation” on page 57, non-employee Directors receive only one full-value award grant and only one option grant during the fiscal year. As of December 31, 2023, each non-employee Director held the following number of outstanding RSUs: Mr. Ayers, 257; Ms. Chang Britt, 208; Mr. Claflin, 0; Dr. Collins, 257; Dr. Essig, 257; Mr. Junius, 0; Mr. Kingsley, 339; Mr. Samad, 0; Ms. Szostak, 257; and Dr. Vandebroek, 257. As of December 31, 2023, the following are the aggregate number of DSUs accumulated in each non-employee Director’s deferral account for all years of service as a Director, including DSUs issued for deferred fees elected by the Directors as well as DSUs issued as annual grants to non-employee Directors: Mr. Ayers, 584; Ms. Irene Chang Britt, 0; Mr. Claflin, 3,153; Dr. Collins, 511; Dr. Essig, 2,410; Mr. Junius, 4,666; Mr. Kingsley, 2,738; Mr. Samad, 1,488; Ms. Szostak, 4,515; and Dr. Vandebroek, 4,389. Refer to "Director Plan” beginning on page 58. 2.Reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Refer to Note 5 to the consolidated financial statements included in our 2023 Annual Report on Form 10-K for the relevant assumptions used to determine the valuation of our option awards. As of December 31, 2023, each non-employee Director had the following number of stock options outstanding: Mr. Ayers, 4,318; Ms. Chang Britt, 493; Mr. Claflin, 7,183; Dr. Collins, 2,671; Dr. Essig, 9,715; Mr. Junius, 4,996; Mr. Kingsley, 13,983; Mr. Samad, 4,617; Ms. Szostak 8,229; and Dr. Vandebroek, 4,996. Refer to "Stock Ownership of Directors and Officers" below. 3.Ms. Chang Britt was appointed to the Board effective July, 11, 2023. 4.Consists of a prorated equity grant made to Ms. Chang Britt in connection with her election to the Board, consisting of RSUs having a grant date fair value of $106,348 and nonqualified stock options having a grant date fair value of $106,444. 5.Includes compensation in the amount of $28,125 deferred and issued as 60 DSUs pursuant to the Director Plan.
| | | | | | 60 | IDEXX 2024 PROXY STATEMENT |
Stock Ownership Information Stock Ownership of Directors and Officers The table below shows the number of shares of our common stock beneficially owned as of March 8, 2024 by each of our Directors, each of our NEOs named in the Summary Compensation Table for 2023 and all of our Directors and executive officers as a group. The table below also includes information about stock options and vesting restricted stock units granted to our Directors and executive officers. Unless otherwise indicated, each person listed below has sole voting and investment power with respect to the shares and other securities listed. | | | | | | | | | | | | | | | | | | Beneficial Owner | Shares Owned | Options Exercisable and RSUs Vesting(1) | Total Number of Shares Beneficially Owned(2) | Percentage of Common Stock Outstanding(3) | | | | | | | | Jonathan W. Ayers | 577,573 (4) | 539,749 | 1,117,322 | 1.34% | | Irene Chang Britt | — | 701 | 701 | * | | Bruce L. Claflin | 1,921 (5) | 7,183 | 9,104 | * | | Asha S. Collins, PhD | 344 | 2,928 | 3,272 | * | | Stuart M. Essig, PhD | 568 | 9,972 | 10,540 | * | | Daniel M. Junius | 2,556 | 4,996 | 7,552 | * | | Lawrence D. Kingsley | 7,546 | 14,322 | 21,868 | * | | Sam Samad | — | 4,617 | 4,617 | * | | M. Anne Szostak | 6,304 (6) | 8,486 | 14,790 | * | | Sophie V. Vandebroek, PhD | 8,741 (7) | 3,849 | 12,590 | * | | Jonathan J. Mazelsky | 81,497 | 223,697 | 305,194 | * | | Brian P. McKeon | 29,203 (8) | 86,647 | 115,850 | * | | Tina Hunt, PhD | 11,836 (9) | 30,724 | 42,560 | * | | Michael J. Lane | 7,035 (10) | 18,748 | 25,783 | * | | James F. Polewaczyk | 10,711 | 5,214 | 15,925 | * | | All Directors and executive officers as of March 8, 2024 as a group: (21 persons) | 770,451 | 1,065,709 | 1,836,160 | 2.18% | |
* Less than 1% 1.Consists of options to purchase shares of common stock exercisable, and RSUs vesting, on or within 60 days after March 8, 2024. 2.The number of shares beneficially owned by each person or group as of March 8, 2024 includes shares of common stock that such person or group had the right to acquire on or within 60 days after March 8, 2024, including but not limited to, upon the exercise of stock options or vesting of RSUs, but excluding DSUs. | | | | | | IDEXX 2024 PROXY STATEMENT | 61 |
+ + + STOCK OWNERSHIP INFORMATION 3.For each individual and group included in the table, percentage of ownership is calculated by dividing the number of shares beneficially owned by such person or group as described in note (2) above by the sum of 83,054,119 shares of common stock outstanding on March 8, 2024 and the number of shares of common stock that such person or group had the right to acquire on or within 60 days after March 8, 2024, including but not limited to, upon the exercise of stock options or vesting of RSUs, but excluding DSUs. 4.Includes 302,179 shares held by the Jonathan W. Ayers 2022 GRAT and 10,000 shares held by the Ayers Family Trust. 5.Includes 1,560 shares held by the Claflin Family Trust, where Mr. Claflin’s spouse is the trustee, for the benefit of his spouse and children. Mr. Claflin disclaims beneficial ownership of the shares held in the Claflin Family Trust. 6.Includes 4,700 shares held by the Trust of M. Anne Szostak. 7.Includes 8,173 shares held by the Sophie Vandebroek Revocable Trust. 8.Includes 18,050 shares held by the Estony McKeon Family LLC. Mr. McKeon is the sole manager of the limited liability company and has sole voting and dispositive power for the shares held by the limited liability company. 9.Includes 160 shares held jointly with Dr. Hunt’s spouse. 10.Includes 592 shares held by Mr. Lane’s spouse in an IRA account. Mr. Lane disclaims beneficial ownership of the shares held in the IRA account. We also grant DSUs to our non-employee Directors as voluntary deferrals of annual fees or annual equity grants under the Director Plan (and prior to the 2022 Annual Meeting as annual equity grants). DSUs are not included in the table above because they do not represent a right to acquire shares of our common stock within 60 days after March 8, 2024. Although DSUs carry no voting rights, individuals holding fully vested deferred stock units are at risk as to the price of our common stock in their investment accounts, and therefore vested deferred stock units are included for purposes of determining satisfaction of target stock ownership levels under our stock ownership guidelines. Accordingly, the following table shows the total numbers of shares and fully vested DSUs owned as of March 8, 2024 by each of our Directors, each of our NEOs and all our Directors and executive officers as a group. | | | | | | 62 | IDEXX 2024 PROXY STATEMENT |
STOCK OWNERSHIP INFORMATION + + + | | | | | | | | | | | | | | | Beneficial Owner | Shares Owned | DSUs(1) | Total Number of Shares and DSUs Owned | | | | | | | Jonathan W. Ayers | 577,573 | (2) | 584 | | 578,157 | | | Irene Chang Britt | — | | — | | — | | | Bruce L. Claflin | 1,921 | (3) | 2,896 | | 4,817 | | | Asha S. Collins, PhD | 344 | | 511 | | 855 | | | Stuart M. Essig, PhD | 568 | | 2,410 | | 2,978 | | | Daniel M. Junius | 2,556 | | 4,217 | | 6,773 | | | Lawrence D. Kingsley | 7,546 | | 2,738 | | 10,284 | | | Sam Samad | — | | 1,211 | | 1,211 | | | M. Anne Szostak | 6,304 | (4) | 4,515 | | 10,819 | | | Sophie V. Vandebroek, PhD | 8,741 | (5) | 4,389 | | 13,130 | | | Jonathan J. Mazelsky | 81,497 | | — | | 81,497 | | | Brian P. McKeon | 29,203 | (6) | 34,708 | | 63,911 | | | Tina Hunt, PhD | 11,836 | (7) | — | | 11,836 | | | Michael J. Lane | 7,035 | (8) | — | | 7,035 | | | James F. Polewaczyk | 10,711 | | — | | 10,711 | | | All Directors and executive officers as of March 8, 2024 as a group: (21 persons) | 770,451 | | 58,179 | | 828,630 | | |
1.Consists of DSUs that are vested as of March 8, 2024. 2.Includes 302,179 shares held by the Jonathan W. Ayers 2022 GRAT and 10,000 shares held by the Ayers Family Trust. 3.Includes 1,560 shares held by the Claflin Family Trust, where Mr. Claflin’s spouse is the trustee, for the benefit of his spouse and children. Mr. Claflin disclaims beneficial ownership of the shares held in the Claflin Family Trust. 4.Includes 4,700 shares held by the Trust of M. Anne Szostak. 5.Includes 8,173 shares held by the Sophie Vandebroek Revocable Trust. 6.Includes 18,050 shares held by the Estony McKeon Family LLC. Mr. McKeon is the sole manager of the limited liability company and has sole voting and dispositive power for the shares held by the limited liability company. 7.Includes 160 shares held jointly with Dr. Hunt’s spouse. 8.Includes 592 shares held by Mr. Lane’s spouse in an IRA account. Mr. Lane disclaims beneficial ownership of the shares held in the IRA account.
Director and Officer Stock Ownership Guidelines We maintain stock ownership guidelines for our Directors and Officers. For more information regarding our Director stock ownership guidelines, refer to the discussion under “Director Stock Ownership Guidelines” on page 59, and for more information regarding our executive stock ownership guidelines, refer to the discussion under “Executive Stock Ownership and Retention” on page 94. | | | | | | IDEXX 2024 PROXY STATEMENT | 63 |
+ + + STOCK OWNERSHIP INFORMATION Stock Ownership of Certain Beneficial Owners Based solely on our review of filings made under Sections 13(d) and 13(g) of the Exchange Act, the only persons or entities known to us to beneficially own more than 5% of our common stock as of December 31, 2023 were: | | | | | | | | | Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Common Stock Outstanding(1) | | | | BlackRock, Inc.(2) 55 East 52nd Street New York, New York 10055 | 9,054,229 | 10.90% | The Vanguard Group(3) 100 Vanguard Boulevard Malvern, Pennsylvania 19355 | 8,377,667 | 10.09% |
1.For each group included in the table, percentage ownership is calculated by dividing the number of shares beneficially owned by such group on December 31, 2023, as reflected in the most recent filing by such group of statements of beneficial ownership with the SEC, by the 83,054,119 shares of common stock outstanding on March 8, 2024. Therefore, the percentage ownership may differ from the percentage ownership reported in such statements of beneficial ownership, which reflect ownership as of an earlier date. 2.Based solely upon information derived from a Schedule 13G/A filed by BlackRock, Inc. with the SEC on January 24, 2024, it has sole power to vote 8,372,298 shares and sole power to dispose of 9,054,229 shares. 3.Based solely upon information derived from a Schedule 13G/A filed by The Vanguard Group with the SEC on February 13, 2024, it has the sole power to vote 0 shares, sole power to dispose of 8,021,402 shares, shared power to vote 110,034 shares, and shared power to dispose of 356,265 shares. The Vanguard Group provides recordkeeping, managed account and other services for our 401(k) plan and is an investment manager to mutual funds and investment trusts that are investment options in our 401(k) Plan. The selection of Vanguard to provide recordkeeping and other administrative services to our 401(k) plan and the selection of the Vanguard mutual funds or investment trusts as investment options for our 401(k) plan are unrelated to Vanguard’s common stock ownership. The recordkeeping and other administrative service fees resulted from arm’s-length negotiations, and we believe they are reasonable in amount and reflect market terms and conditions. Delinquent Section 16(a) Reports Under Section 16(a) of the Exchange Act, our Directors, executive officers and any person holding more than 10% of our outstanding common stock must report their initial ownership of common stock and any subsequent changes in their ownership to the SEC. Based solely on our review of copies of Section 16(a) reporting forms that we received from reporting persons for transactions occurring during our 2023 fiscal year and written representations from our Directors and executive officers, we believe that no reporting person failed to timely file any report required by Section 16(a) during the 2023 fiscal year. | | | | | | 64 | IDEXX 2024 PROXY STATEMENT |
Proposal Two Ratification of Appointment of Independent Registered Public Accounting Firm Our Audit Committee is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm. The Audit Committee has appointed PwC to serve as our independent registered public accounting firm for 2024, subject to ratification by shareholders. The Audit Committee has retained PwC as our independent registered public accounting firm continuously since 2002. The Audit Committee annually evaluates the performance of our independent registered public accounting firm and determines whether to retain the current firm or consider other firms. In addition, in conjunction with the mandated rotation of our external auditor’s lead engagement partner, the Audit Committee and its chair are directly involved in the selection of the external auditor’s new lead engagement partner. In appointing PwC as our independent registered public accounting firm for 2024, the Audit Committee considered carefully PwC’s performance as the Company’s independent registered public accounting firm, its independence with respect to the services to be performed and its general reputation for adherence to professional auditing standards. The Audit Committee and the Board believe that the continued retention of PwC as our independent registered public accounting firm is in the best interests of the Company and our shareholders. Because the members of the Audit Committee value the views of our shareholders regarding our independent auditors, even though ratification is not required by law, shareholders will have an opportunity to ratify this selection at the 2024 Annual Meeting. Representatives of PwC will be present at the 2024 Annual Meeting, will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions. If this proposal is not approved at the 2024 Annual Meeting, the Audit Committee may reconsider its selection of PwC. Even if the appointment is ratified, the Audit Committee, in its discretion, can direct the appointment of a different firm at any time during the year if the Audit Committee determines that such a change would be in the Company’s and our shareholders’ best interests. | | | | | | | The Board of Directors valuerecommends that you vote “FOR” the opinions expressed byratification of PwC as our shareholders in their vote on this proposal and will consider the outcome of this vote when making future compensation decisionsindependent registered public accounting firm for our NEOs. | | | | | | | | | RECOMMENDATION OF THE BOARD OF DIRECTORS | The Board of Directors recommends that you vote “FOR” the approval of the advisory resolution on executive compensation.
| 2024. |
| | | | | | IDEXX 2024 PROXY STATEMENT | 65 |
Audit Committee Matters Audit Committee Report The Audit Committee is responsible for overseeing IDEXX’s accounting, internal control and financial reporting processes and audit processes. As set forth in the Audit Committee’s charter, which is available on our website at www.idexx.com/corporate/corporate-governance.html, management is responsible for the preparation, presentation and integrity of IDEXX’s financial statements, accounting and financial reporting principles and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. IDEXX has a full-time internal audit department, and the Chief Audit Executive reports directly to the Audit Committee (and administratively to the Chief Financial Officer). Our internal audit department is responsible for, among other things, objectively reviewing and assessing the adequacy and effectiveness of our internal controls and procedures. IDEXX’s independent registered public accounting firm is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States. IDEXX’s independent registered public accounting firm is also responsible for expressing an opinion on the effectiveness of IDEXX’s internal controls over financial reporting. The Audit Committee discusses our internal controls over financial reporting, management’s assessment of the effectiveness of those controls and the independent registered public accounting firm’s opinion about the effectiveness of IDEXX’s internal controls over financial reporting with management, the Chief Audit Executive and our independent registered public accounting firm. Each Audit Committee member is an independent Director as determined by the Board of Directors, based on Nasdaq listing standards and our Corporate Governance Guidelines. Each Audit Committee member also satisfies the SEC’s additional independence requirement for members of audit committees. Our Board has determined that Mr. Junius, Ms. Chang Britt, Mr. Claflin, Mr. Samad and Ms. Szostak each meet the criteria for “Audit Committee Financial Expert” as defined by SEC rules. At each of its nine regularly scheduled meetings in 2023, the Audit Committee met as a group with management, our independent registered public accounting firm, PwC, and the Chief Audit Executive. In addition, in performing its oversight function, the Audit Committee held separate private sessions with senior management and the independent auditors at each of its regularly scheduled meetings, and held separate private sessions with the Chief Audit Executive at each of its regularly scheduled meetings (other than those meetings scheduled to primarily review and discuss the Company’s quarterly earnings report), to assure that all were carrying out their respective responsibilities. Both PwC and the Chief Audit Executive had full access to the Audit Committee, including at regular meetings during which members of management were not present. In addition, the Audit Committee: +Reviewed the Company’s audited financial statements for the fiscal year ended December 31, 2023 and discussed them with management and PwC; +Discussed with PwC various communications that PwC is required to provide to the Audit Committee, including matters required to be discussed by Auditing Standard No. 16, Communications with Audit Committees; and +Received the written disclosures and the letter from PwC required by applicable requirements of the Public Company Accounting Oversight Board regarding PwC’s communications with the Audit Committee concerning independence and discussed with PwC their independence. | | | | | | | 66 | IDEXX 2024 PROXY STATEMENT | |
AUDIT COMMITTEE MATTERS + + + Based on the review and discussion referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements referred to above be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for filing with the SEC. Audit Committee Daniel M. Junius, Chair Irene Chang Britt Bruce L. Claflin Sam Samad M. Anne Szostak | | | | | | IDEXX 2024 PROXY STATEMENT | 67 |
+ + + AUDIT COMMITTEE MATTERS Independent Auditors’ Fees The following table summarizes the fees, including out-of-pocket expenses, that PwC billed for professional services for each of the last two fiscal years. For fiscal year 2023, audit fees also include an estimate of amounts not yet billed. | | | | | | | | | | | | | Fiscal Years Ended December 31, | | 2023 ($) | 2022 ($) | | | | | | Audit fees(1) | 2,501,257 | | 2,759,249 | | | Audit-related fees(2) | — | | — | | | Tax fees(3) | 273,485 | | 1,294,024 | | | All other fees(4) | 2,000 | | 900 | | | Total fees | 2,776,742 | | 4,054,173 | | |
1.Consists of fees billed for professional services rendered for the audit of our annual financial statements and review of the interim financial statements included in quarterly reports; the audit of the effectiveness of our internal controls over financial reporting; statutory audits or financial audits for our subsidiaries or affiliates; and services associated with periodic reports and other documents filed with the SEC. 2.Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under audit fees. These services include due diligence services pertaining to potential acquisitions and services pertaining to the Company’s transition to new accounting standards. No such services were performed in 2023 or 2022. 3.Consists of tax compliance fees of $59,512 and $81,200 in 2023 and 2022, respectively, and tax advice and consulting fees of $213,973 and $1,212,824 in 2023 and 2022, respectively. Included in tax advice and consulting fees are $5,296 and $1,049,750 in 2023 and 2022, respectively, related to an alignment of our global structure with our growth strategy and proposed and enacted changes in tax laws and regulations. The remaining tax compliance and tax advice and consulting fees were for services that included general U.S. federal, state and local tax consulting and compliance advice; general international tax consulting, structure and compliance advice; and review of federal, state, local and international income, franchise and other tax returns. 4.Consists of fees for online research tools for accounting and financial reporting rules and guidance. Independent Auditor Fee Approval Policy The Audit Committee has adopted a policy for the pre-approval of audit and non-audit services performed by our independent auditor, and the fees paid by us for such services, in order to assure that the provision of such services does not impair the auditor’s independence. Under the policy, at the beginning of the fiscal year, the Audit Committee pre-approves the engagement terms and fees for the annual audit. Certain types of other audit services, audit-related services and tax services have been pre-approved by the Audit Committee under the policy. The Audit Committee is ultimately responsible for the audit fee negotiations associated with the retention of our independent auditor, and any services that have not been pre-approved by the Audit Committee as previously described must be separately approved by the Audit Committee prior to the performance of such services. The Audit Committee periodically establishes pre-approved fee levels for all pre-approved services. The Audit Committee then periodically reviews actual and anticipated fees for the pre-approved services against the pre-approved fee levels. Any anticipated fees exceeding the pre-approved fee levels require further pre-approval by the Audit Committee. With respect to each service for which separate pre-approval is proposed, the independent auditor will provide a detailed description of the services to permit the Audit Committee to assess the impact of the services on the independence of the independent auditor. | | | | | | 68 | IDEXX 2024 PROXY STATEMENT |
AUDIT COMMITTEE MATTERS + + + The Audit Committee may delegate pre-approval authority to one or more of its members and has delegated such authority to its chair. The Audit Committee member to whom such authority is delegated must report any pre-approval decisions to the Audit Committee at the next scheduled meeting. The Audit Committee does not delegate its pre-approval responsibilities to management. During the last two fiscal years, no services were provided by PwC that were approved by the Audit Committee pursuant to the de minimis exception to pre-approval contained in the SEC’s rules. | | | | | | IDEXX 2024 PROXY STATEMENT | 69 |
Proposal Three Advisory Vote to Approve Executive Compensation We are asking our shareholders to approve, on an advisory, non-binding basis, the compensation of our NEOs as described in this Proxy Statement at the 2024 Annual Meeting, as required pursuant to Section 14A of the Exchange Act. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this Proxy Statement. This proposal is commonly referred to as “say-on-pay.” In recognition of the preference expressed by our shareholders regarding the frequency of “say-on-pay” advisory votes, we have submitted a “say-on-pay” proposal to our shareholders on an annual basis since our 2011 Annual Meeting. In light of the vote of shareholders to support an annual “say-on-pay” vote at our 2023 Annual Meeting, we anticipate that we will again submit a “say-on-pay” proposal to our shareholders at our 2025 Annual Meeting. We have received overwhelming shareholder support of our “say-on-pay” proposal each year since our 2011 Annual Meeting. At the 2023 Annual Meeting, our shareholders approved our “say-on-pay” proposal with approximately 95% of the votes cast voting in favor of approving the compensation of our NEOs. The Board believes that this vote affirmed our shareholders’ support of our executive compensation program. We encourage our shareholders, in deciding how to vote on this proposal, to read the Executive Compensation section of this Proxy Statement, including the Compensation Discussion and Analysis section, which discusses in detail our executive compensation program and how it implements our executive compensation philosophy, how our executive compensation program helps drive our business and other corporate strategies, the compensation decisions the Compensation and Talent Committee has made under our executive compensation program and some recent changes made to our compensation program. Our Board recommends that our shareholders approve the following resolution: RESOLVED, that the compensation paid to the Company’s NEOs, as disclosed in this Proxy Statement for the 2024 Annual Meeting pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby approved on an advisory basis. As an advisory vote, it will not be binding. However, our Compensation and Talent Committee and Board value the opinions expressed by our shareholders in their vote on this proposal and will consider the outcome of this vote when making future compensation decisions for our NEOs. | | | | | | | The Board of Directors recommends that you vote “FOR” the approval of the advisory resolution on executive compensation. |
| | | | | | 70 | IDEXX 2024 PROXY STATEMENT |
Executive Compensation Executive Officers Set forth below are the names, ages, current positions and biographical information of our executive officers as of March 27, 2024, other than Mr. Mazelsky, our President and CEO, whose biographical information is located on page 28: Executive Officers
Set forth below are the names, ages, current positions and biographical information of our executive officers as of March 31, 2021, other than Mr. Mazelsky, our President and CEO, whose biographical information is located on page 33: | | | | | | | | | | | Name | Age | Title | Brian P. McKeon | 58 | Executive Vice President, Chief Financial Officer and Treasurer | Tina Hunt, PhD | 53 | Executive Vice President and General Manager, Point of Care Diagnostics and Worldwide Operations | Michael J. Lane | 53 | Executive Vice President and General Manager, Reference Laboratories and Information Technology | James F. Polewaczyk | 58 | Executive Vice President and Chief Commercial Officer | Kathy V. Turner | 57 | Senior Vice President and Chief Marketing Officer | Giovani Twigge | 57 | Senior Vice President and Chief Human Resources Officer | Sharon E. Underberg | 59 | Senior Vice President, General Counsel and Corporate Secretary |
Brian P. McKeon. Mr. McKeon has been | 61 | Executive Vice President, Chief Financial Officer and Treasurer since January 2014. He leads our finance, corporate development and strategy and investor relations functions, and since June 2019, he has had oversight responsibility for our Water and Livestock, Poultry and Dairy business segments and the business of OPTI Medical Systems, Inc. In addition, from June 2019 to January 2020, Mr. McKeon had oversight responsibility over the Company Animal Group business in Latin America. Mr. McKeon has served as a Director of Alkermes plc since December 2020. Mr. McKeon also served as a Director of IDEXX from July 2003 through December 2013, including serving as Chair of the Audit Committee and as a member of the Compensation Committee, and as a Director of athenahealth, Inc. from September 2017 to February 2019. Mr. McKeon was Executive Vice President of Iron Mountain Incorporated from April 2007 to December 2013 and Chief Financial Officer of Iron Mountain from April 2007 to October 2013. Mr. McKeon was also | Michael Erickson, PhD | 50 | Executive Vice President and Chief Financial Officer of The Timberland Company from March 2000 to April 2007. From 1991 to 2000, Mr. McKeon held several finance and strategic planning positions with PepsiCo Inc., serving most recently as Vice President, Finance, at Pepsi-Cola, North America. Mr. McKeon holds an undergraduate degree in accounting from the University of Connecticut and an MBA with high distinction from Harvard University.Tina Hunt, PhD. Dr. Hunt has been an Executive Vice President of IDEXX and the General Manager, of Point of Care Diagnostics and Worldwide Operations since January 2020. Prior to that, she served as a Corporate Vice President at IDEXX from November 2016 to January 2020, with a portfolio that included the Company’s IDEXX VetLab, Diagnostic Imaging, and Telemedicine businesses. Dr.
| Tina Hunt, joined IDEXX in 2006 and served in various leadership roles in support of the Company’s robust innovation pipeline, most recently leading the IDEXX VetLab organization as General Manager. In this role, she led development of market-leading veterinary diagnostic analyzers and assays for a growing and increasingly complex global market. Prior to joining IDEXX, Dr. Hunt served as Vice President at Woodard Curran, where she led the firm’s litigation support practice. She holds an undergraduate degree in Civil Engineering from Panjab Engineering College, a master’s degree in Environmental Engineering from Purdue University, an MBA from the University of Southern Maine and a PhD in environmental engineering from Purdue University.Michael J.Lane. Mr. Lane has been an
| 56 | Executive Vice President, of IDEXX since January 2020 and previously served as a Corporate Vice President from July 2015 to January 2020 and a Vice President from 2012 to July 2015. He has been the General Manager of IDEXX’s Global Reference Laboratories business since November 2016, with a portfolio that also currently includes the Company’s worldwide Information Technology, Telemedicine business and IDEXX BioAnalytics. Prior to becoming the General Manager of our Global Reference Laboratories business, he served as the General Manager of the Company’s U.S. Reference Laboratories from June 2014 to November 2016. In addition to his responsibilities for the Reference Laboratories business, from July 2015 through December 2016, Mr. Lane provided strategic direction for the Company’s SNAP Point-of-Care testing. In 1999, he joined the IDEXX VetLab organization, where he held various leadership positions with responsibilities in commercial marketing, product management, and new product development, and served as General Manager from 2012 to 2014. Mr. Lane joined IDEXX in 1997, supporting strategic planning and business development for diagnostic laboratory services as IDEXX entered the global reference laboratory market segment. Mr. Lane holds an undergraduate degree in international politics and economics from Middlebury College and an MBA from the Tuck School of Business at Dartmouth College.58 | 2021 Proxy Statement
JamesF.Polewaczyk. Mr. Polewaczyk has been an Executive Vice President and the Chief Commercial Officer of IDEXX since January 2020. After joining IDEXX as a Corporate Vice President in February 2007, he served in various leadership roles. From June 2014 to January 2020, he led the Company’s North American Companion Animal Group Commercial Operations. Prior to this, from July 2012 to June 2014, he led the Company’s Companion Animal Group Reference Laboratories and Telemedicine lines of business, and from 2007 to 2012, he led the Company’s Rapid Assay, Digital Imaging and Telemedicine business lines. Prior to joining IDEXX, from 2001 to 2006, Mr. Polewaczyk was General Manager of the Medical Consumables and Sensors business at Philips Medical Systems, a subsidiary of Royal Philips Electronics, the Netherlands, a healthcare, lifestyle and lighting technologies company. Prior to that, Mr. Polewaczyk spent 15 years at Hewlett-Packard Corporation, a technology company, in a variety of senior marketing and medical technology product development roles. Mr. Polewaczyk holds an undergraduate degree in electrical engineering from Worcester Polytechnic Institute and an MBA from Boston University.
Kathy V. Turner. Ms. Turner serves as Senior Vice President and Chief Marketing Officer of IDEXX. In this capacity, she leads IDEXX’s Global Companion Animal Commercial MarketingStrategy, Sector Development and Global Medical organizations. Ms. Turner joined the Company in May 2014 as a Corporate Vice President, and she was appointed a Senior Vice President effective January 1, 2021. Previously, she led the Company’s Europe, Middle East and Africa (EMEA) Companion Animal Commercial Operations and the Company’s Asia Pacific Companion Animal, Water, Livestock, Poultry and Dairy Commercial Operations. Prior to joining IDEXX, from 1987 to May 2014, Ms. Turner held various leadership positions with increasing responsibilities at Abbott Laboratories, Inc., a broad-based healthcare company that manufactures and markets pharmaceuticals, medical products and diagnostics. Most recently, Ms. Turner was Divisional Vice President of European Commercial Operations for the Diagnostics Division from 2011 to 2014, and prior to that, Divisional Vice President of Global Strategic Operations for the Diagnostics Division from 2007 to 2011. Ms. Turner holds an undergraduate degree in marketing and advertising from Syracuse University.
Giovani Twigge. Mr. Twigge serves as Senior
| Michael P. Johnson | 47 | Executive Vice President and Chief Human Resources Officer. In this capacity, he leads the Company’s worldwide human resources and corporate social responsibility functions. Mr. Twigge joined the Company in August 2010 as a CorporateOfficer | Michael J. Lane | 56 | Executive Vice President and he was appointed a SeniorGeneral Manager, Global Reference Laboratories and Information Technology | James F. Polewaczyk(1) | 61 | Executive Vice President effective January 1, 2021. Prior to joining IDEXX, from 1999 to 2010, Mr. Twigge held various human resources leadership positions at Abbott Laboratories, Inc., a broad-based healthcare company that manufactures and markets pharmaceuticals, medical products and diagnostics. Most recently, Mr. Twigge was DivisionalChief Commercial Officer | Michael Schreck | 56 | Executive Vice President Human Resources, for Abbott Diagnostics and prior to that, he served as DivisionalGeneral Manager, Veterinary Software and Services, Corporate Accounts and Customer Experience | Martin Smith, PhD | 56 | Executive Vice President HR, for Abbott Nutrition International and as Regional HR Director for a number of international operations, including those in Europe, Latin America/Canada and the Middle East. Mr. Twigge holds an undergraduate degree in personnel management from the University of Pretoria, South Africa, with honors.Chief Technology Officer | Sharon E. Underberg. Ms. Underberg serves as Senior | 62 | Executive Vice President, General Counsel and Corporate Secretary. In this capacity, she leads IDEXX’s global legal, corporate governance, compliance and corporate secretary functions. Ms. Underberg joined the Company in February 2019 as a CorporateSecretary | George J. Fennell | 55 | Senior Vice President and assumed the roles of General Counsel and Corporate Secretary in March 2019,Chief Revenue Officer | |
1.Mr. Polewaczyk will be retiring effective April 1, 2024. Brian P. McKeon. Mr. McKeon has been Executive Vice President, Chief Financial Officer, and Treasurer since January 2014. He leads our finance and investor relations functions, and has oversight responsibility for our Water, OPTI Medical and Livestock, Poultry and Dairy businesses. Mr. McKeon previously had oversight responsibility over various functions, including our corporate development, strategy, global operations and information technology functions and the Companion Animal Group business in Latin America. Mr. McKeon has served as a Director of Alkermes plc since December 2020, where he serves as Chair of the Financial Operating Committee and as a member of the Compensation Committee. Mr. McKeon served as a Director of IDEXX from July 2003 through December 2013, including serving as Chair of the Audit Committee and as a member of the Compensation Committee. He also served as a Director of athenahealth, Inc. from September 2017 to February 2019. Mr. McKeon was Executive Vice President of Iron Mountain Incorporated from April 2007 to December 2013 and Chief Financial Officer of Iron Mountain from April 2007 to October 2013. Mr. McKeon was also Executive Vice President and Chief Financial Officer of The Timberland Company from March 2000 to April 2007. From 1991 to 2000, Mr. McKeon held several finance and strategic planning positions with PepsiCo Inc. Mr. McKeon holds an undergraduate degree in Accounting from the University of Connecticut and an MBA with high distinction from Harvard University. | | | | | | IDEXX 2024 PROXY STATEMENT | 71 |
+ + + EXECUTIVE COMPENSATION Michael Erickson, PhD. Dr. Erickson has been an Executive Vice President of IDEXX and General Manager of IDEXX’s Global Point of Care Diagnostics and Telemedicine businesses since January 2024. He previously served as a Senior Vice President from January 2020 to December 2023, a Corporate Vice President from January 2018 to January 2020, and a Vice President from 2014 to 2017. Dr. Erickson joined IDEXX as Senior Director and General Manager in 2011 and took on increasing leadership responsibilities, including as General Manager of Veterinary Software and Services from 2014 to 2018, General Manager of Corporate and Strategic Accounts from October 2018 through December 2022, and General Manager of Global Point of Care Diagnostics from January 2023 to December 2023. In addition, Dr. Erickson led the company’s Corporate Strategy and Advanced Analytics organization in 2022. Before joining IDEXX, Dr. Erickson was an Associate Principal in the Global Pharmaceutical Practice at McKinsey & Company where he served leading pharmaceutical, biotechnology and health service companies across areas in commercial, business development and health technology innovation. He earned his PhD in biomedical engineering at the Johns Hopkins School of Medicine and his Bachelor of Science degree in Electrical Engineering from Purdue University. Tina Hunt, PhD. Dr. Hunt has been Executive Vice President, Strategy, Sector Development, and Global Operations since January 2023. In this role, she currently leads our global operations, marketing, medical affairs, commercial learning, corporate development, and strategy and advanced analytics functions. Dr. Hunt joined IDEXX in 2006 and served in various leadership roles of increasing responsibilities, including leading the IDEXX VetLab organization and global operations function as Executive Vice President and General Manager of Point of Care Diagnostics and Worldwide Operations from January 2020 to December 2022 and as a Corporate Vice President from November 2016 to January 2020, with a portfolio that included the company’s IDEXX VetLab, Diagnostic Imaging and Telemedicine businesses. Prior to joining IDEXX, Dr. Hunt served as Vice President at Woodard Curran, an environmental and sustainability consulting firm that she joined in 1996. Since January 2022, Dr. Hunt has been a Director of Veeva Systems, Inc. a cloud-based software company for the life sciences industry. She holds a PhD in Environmental Engineering from Purdue University, an MBA from the University of Southern Maine and has participated in Executive Education programs at Stanford University and Harvard University. Michael P. Johnson. Mr. Johnson has been an Executive Vice President since January 2024 and previously served as a Senior Vice President from March 2022 to December 2023. As our Chief Human Resources Officer since joining IDEXX in March 2022, Mr. Johnson leads worldwide human resources. Prior to joining us, Mr. Johnson began his career in 1999 at Abbott Laboratories, Inc., a Fortune 100 human healthcare company, where he held various human resources positions of increasing seniority, including serving as Divisional Vice President of Diversity and Inclusion from July 2020 to March 2022, Divisional Vice President, Human Resources, for Abbott Diabetes Care from January 2017 to June 2020 and for Abbott Medical Optics from November 2013 to December 2016 and Regional Human Resources Director for a variety of international operations in Asia, Latin America and Europe from 2009 to 2013. Mr. Johnson holds a bachelor’s degree in Organizational Administration from the University of Illinois. Michael J. Lane. Mr. Lane has been an Executive Vice President of IDEXX since January 2020 and previously served as a Corporate Vice President from July 2015 to January 2020 and a Vice President from 2012 to July 2015. He has been the General Manager of IDEXX's Global Reference Laboratories business since November 2016, with a portfolio that currently includes the company's worldwide Information Technology function and IDEXX BioAnalytics business. Prior to becoming the General Manager of our Global Reference Laboratories business, he served as the General Manager of the company's U.S. Reference Laboratories from June 2014 to November 2016. In addition to his responsibilities for the Reference Laboratories business, from July 2015 through December 2016, Mr. Lane provided strategic direction for the company's SNAP Point-of-Care testing. In 1999, he joined the IDEXX VetLab organization, where he held various leadership positions with responsibilities in commercial marketing, product management and new product development, and served as General Manager from 2012 to 2014. Mr. Lane joined IDEXX in 1997, supporting strategic planning and business development for diagnostic laboratory services as IDEXX entered the global reference laboratory market segment. Mr. Lane holds a bachelor's degree in International Politics and Economics from Middlebury College and an MBA from the Tuck School of Business at Dartmouth College. James F. Polewaczyk. Mr. Polewaczyk has been an Executive Vice President and the Chief Commercial Officer of IDEXX since January 2020. After joining IDEXX as a Corporate Vice President in February 2007, he served in various leadership roles. From June | | | | | | 72 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + 2014 to January 2020, he led our North American Companion Animal Group Commercial Operations. Prior to this, from July 2012 to June 2014, he led our Companion Animal Group Reference Laboratories and Telemedicine lines of business, and from 2007 to 2012, he led our Rapid Assay, Digital Imaging and Telemedicine business lines. Prior to joining IDEXX, from 2001 to 2006, Mr. Polewaczyk was General Manager of the Medical Consumables and Sensors business at Philips Medical Systems, a subsidiary of Royal Philips Electronics (now named Royal Philips). Prior to that, Mr. Polewaczyk spent 15 years at Hewlett-Packard Corporation in a variety of senior marketing and medical technology product development roles. Mr. Polewaczyk holds an undergraduate degree in Electrical Engineering from Worcester Polytechnic Institute and an MBA from Boston University. Michael Schreck. Mr. Schreck has been an Executive Vice President of IDEXX and General Manager, Veterinary Software and Services, Corporate Accounts and Customer Experience since January 2024. He previously served as a Senior Vice President and General Manager, Veterinary Software and Services and Corporate Accounts from January 2023 to December 2023. He joined IDEXX as Senior Vice President and General Manager, Veterinary Software and Services in July 2020. Before joining IDEXX, Mr. Schreck held senior leadership positions at several financial technology companies, including as CEO of CloudVirga from 2017 to 2019 and Senior Vice President at Altisource from 2012 to 2017 with responsibility for its global software and analytics companies. Previously, he served as CEO at Corrective Solutions and General Partner at General Catalyst Partners, where he helped launch Upromise and m-Qube and served on the board of Coremetrics. Mr. Schreck holds a bachelor’s degree in Political Science from Brigham Young University and an MBA from Harvard University. Martin Smith, PhD. Dr. Smith has been Executive Vice President and Chief Technology Officer since August 2021. Prior to joining IDEXX, he served as Vice President and Chief Technology Officer of Cytiva, which is part of Danaher Corporation, from August 2020 to July 2021. Previously, Dr. Smith held various leadership positions with increasing responsibilities at Pall Corporation, most recently serving as Pall’s Chief Technology Officer from September 2014 to August 2020. Dr. Smith’s prior roles at Pall included Senior Vice President, Pall R&D from 2010 to 2014, Vice President, Research & Development, Pall Medical from 2008 to 2010 and Senior Director, Pall Life Science R&D from 2006 to 2008. Dr. Smith received a bachelor’s degree in Biological Sciences from University of Essex, a master’s degree in Biotechnology from Reading University and a PhD in Cell Biology from University College London. He is the holder of multiple U.S.-issued patents in the area of separations science. Sharon E. Underberg. Ms. Underberg serves as Executive Vice President, General Counsel and Corporate Secretary. In this capacity, she leads IDEXX’s global legal, corporate governance, compliance and corporate secretary functions. Ms. Underberg joined the Company in February 2019 as a Corporate Vice President and assumed the roles of General Counsel and Corporate Secretary in March 2019. She was appointed a Senior Vice President in January 2021, and an Executive Vice President in February 2022. Prior to joining IDEXX, Ms. Underberg served as General Counsel, Secretary and Senior Vice President of Eastman Kodak Company (Kodak) from January 2015 to January 2019. Before that, she served in various leadership roles of increasing responsibility in Kodak’s legal department, which she joined in October 1989. Ms. Underberg began her legal career as an attorney in private practice. She holds an undergraduate degree in Political Science from Brandeis University and a JD from the University of Pennsylvania School of Law. George Fennell. Mr. Fennell has been Senior Vice President of IDEXX since January 2020 and was a Corporate Vice President from June 2011 to January 2020. He has served as our Chief Revenue Officer since January 2024, and in this role he leads our global commercial sales and field support teams. Prior to becoming our Chief Revenue Officer, Mr. Fennell led the Companion Animal Group Customer Facing Organization in the Americas and Europe from May 2023 to December 2023 and the North American Companion Animal Group Customer Facing Organization from June 2011 to May 2023. Prior to joining IDEXX in 2011, Mr. Fennell worked at Pfizer Animal Health, a division of Pfizer Inc., where in April 2003 he began as head of marketing for the companion animal business. He then served as Vice President of the U.S. Companion Animal Division from 2005 through 2010, and from January 2011, was Vice President, Pfizer Animal Genetics, Diagnostics and Aquaculture. Before his tenure at Pfizer, he held a series of sales, marketing and operational roles in the crop sciences business for American Cyanamid and BASF, diversified chemical companies. Mr. Fennell holds a bachelor’s degree in Economics and Agricultural Business from the University of Delaware. | | | | | | IDEXX 2024 PROXY STATEMENT | 73 |
+ + + EXECUTIVE COMPENSATION Compensation Discussion and Analysis This section describes the material elements of our executive compensation program, including our principal compensation practices and policies, details the oversight provided by the Compensation and Talent Committee with respect to our executive compensation program and explains how we arrived at the specific compensation for our NEOs for 2023. Our NEOs for 2023 were as follows: | | | | | | Name | Position | | | Jonathan J. Mazelsky | President and CEO | Brian P. McKeon | Executive Vice President, effective January 1, 2021. Prior to joining IDEXX, Ms. Underberg served as General Counsel, SecretaryChief Financial Officer and SeniorTreasurer | Tina Hunt, PhD | Executive Vice President, of Eastman Kodak Company (Kodak) from January 2015 to January 2019. Prior to that, she served as Kodak’s Deputy General CounselStrategy, Sector Development and Global Operations | Michael J. Lane | Executive Vice President Legal Department, from September 2014 to January 2015, Assistantand General CounselManager, Global Reference Laboratories and Information Technology | James F. Polewaczyk(1) | Executive Vice President Legal Department, from June 2006 to September 2014, and as Assistant Secretary from June 2004 to June 2006. Prior to joining Kodak in October 1989, Ms. Underberg was an attorney in private practice. She holds an undergraduate degree in political science from Brandeis University and a JD from the University of Pennsylvania School of Law.Chief Commercial Officer |
1.Mr. Polewaczyk will be retiring effective April 1, 2024. To assist your review, note that the information provided in our Compensation Discussion and Analysis is organized in the following six subsections:
| | | | | | | Page | | | Executive Summary |
Key Compensation DiscussionPractices and AnalysisPolicies | This section describes our executive compensation program, the oversight provided by the Compensation Committee and the 2020 compensation for our NEOs:
| | | | | | Name | Position | Jonathan J. Mazelsky | President and CEO | Brian P. McKeon | Executive Vice President, Chief Financial Officer and Treasurer | Michael J. Lane | Executive Vice President and General Manager, Reference Laboratories and Information Technology | James F. Polewaczyk | Executive Vice President and Chief Commercial Officer | Sharon E. Underberg | Senior Vice President, General Counsel and Corporate Secretary |
To assist your review, note that the information provided in our Compensation Discussion and Analysis is organized in the following six subsections:
| | | | | | Executive Summary | | Key Compensation Practices and Policies | | How We Determine Compensation | | Compensation Benchmarking and Peer Group | | How We Paid Our NEOs in 2020 | | How We Manage Risk and Governance | |
Executive Summary
2020 Performance Highlights
Despite the challenges posed by the ongoing COVID-19 pandemic, we delivered exceptional results in 2020.How We performed well against all the financial goals we set for 2020Determine Compensation | | Compensation Benchmarking and exceeded all of the four financial measures used, in part, to determine the 2020 annual performance-based cash bonus paid to our NEOs.1Peer Group | | | | | | | | | | | | | | | | | | | | | | Organic Revenue Growth | | Operating Profit | | Earnings per Share | | ROIC | | | ($ in millions) | | (Diluted) | | | | | | | | | | | | | | | | |
Our delivery of consistent and strong results over time is reflected in our compound annual total shareholder return over the last one-, three- and five-year periods, which outperformed the S&P 500 Index over the same periods. In 2020, for example, our share price rose approximately 91%, outperforming the S&P 500 Index by 73% and making IDEXX the thirteenth best performing stock in the S&P 500 Index for this period. For more information, see “Equity-Based Long-Term Incentive Compensation” on page 73.1 Refer to Appendix A for a description and reconciliation of organic revenue growth and ROIC, to their most directly comparable financial measures under GAAP.
60 | 2021 Proxy Statement
Impact of 2020 Performance on NEO Pay
CEO Compensation Decisions
The Compensation Committee evaluated Mr. Mazelsky’s performance and made decisions regarding his compensation based on its assessment of his achievement of financial goals and non-financial goals geared toward sustaining our long-term growth and delivering shareholder value. Before making its final decisions regarding Mr. Mazelsky’s compensation, the Compensation Committee consulted with the Board and considered the Board members’ feedback and assessment of Mr. Mazelsky’s overall performance in 2020.
In light of Mr. Mazelsky’s outstanding delivery against the applicable goals in 2020, the exceptional leadership he demonstrated during his first full year as President and CEO while guiding the organization through unprecedented business challenges and pivoting to address the unanticipated operational complexities posed by the ongoing COVID-19 pandemic, and the compelling strategic vision he has provided to the Company, the Compensation Committee awarded Mr. Mazelsky an annual performance-based cash bonus of $1,700,000, which represented 160% of his target bonus. In addition, the Compensation Committee granted Mr. Mazelsky an annual equity award on February 14, 2020 with an aggregate grant date value of approximately $4,500,000, with 75% of the equity award value in the form of stock options and 25% of the equity award value in the form of RSUs, each of which vests ratably over four years and has a ten-year term.
Mr. Mazelsky’s annual base salary remained $850,000 in 2020 pursuant to the terms of the amended and restated employment agreement he and IDEXX entered into in connection with his appointment as our President and CEO on October 23, 2019 (Mazelsky Employment Agreement). In April 2020, in support of prudent compensation cost controls that we implemented in response to the economic uncertainty caused by the COVID-19 pandemic, Mr. Mazelsky voluntarily offered to reduce his salary by 30%, and the Compensation Committee accepted Mr. Mazelsky’s offer. That reduction remained in effect until July 2020. For more information regarding temporary compensation cost reductions in response to the COVID-19 pandemic, see below under “Compensation Actions in Response to the COVID-19 Pandemic” on page 63.The Compensation Committee believes that total direct compensation for the CEO in 2020 is below median in relation to the benchmark group used for compensation purposes. This total direct compensation was determined, in part, to provide appropriate room for future increases assuming sustained performance and demonstrated leadership and to appropriately incentivize Mr. Mazelsky to drive our business performance in 2020 and beyond. When making decisions regarding our CEO compensation for 2021, the Compensation Committee took these factors into account and, in recognition of Mr. Mazelsky’s outstanding performance and exceptional leadership in 2020, decided that an increase in the amount of Mr. Mazelsky’s base salary and annual equity award in 2021 was warranted. The incremental increase in Mr. Mazelsky’s annual equity award in 2021 is in the form of performance-based, premium-priced options that only provide value if our stock price increases by more than 10% over the stock price on the date of grant, which aligns with our pay-for-performance compensation philosophy and serves to further maximize alignment with shareholder and other stakeholder interests. For greater detail regarding the compensation determinations made by the Compensation Committee with respect to Mr. Mazelsky for 2020, see below under “HowHow We Paid Our NEOs in 2020” beginning on page 2023 | CEO Pay Supported by Financial Performance
The chart below illustrates the total direct compensation paid to our CEO for the last three fiscal years, a period during which we had an unexpected CEO transition in 2019. The numbers shown for fiscal year 2018 reflect compensation paid to then-CEO Mr. Ayers. The numbers shown for fiscal year 2019 reflect the annualized compensation that we expect would have been paid to Mr. Ayers as our CEO, if he had remained CEO for that entire fiscal year
| How We Manage Risk and Mr. Mazelsky had not succeeded him in 2019. The numbers shown for fiscal year 2020 reflect the annualized compensation we would have paid to Mr. Mazelsky in that fiscal year, without taking into account his voluntary salary reduction in effect from April 2020 to July 2020. The chart also includes the year-over-year change to total direct CEO compensation for 2019 and 2020.Governance |
| | | | | | | | | | 74 | IDEXX 2024 PROXY STATEMENT | CEO Pay (2018-2020) |
EXECUTIVE COMPENSATION + + + Executive Summary Our Compensation Philosophy and Objectives | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Philosophy | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Our compensation philosophy is to attract, motivate, focus and retain talented executives who are aligned with, and passionate about, our Purpose: to be a great company that creates exceptional long-term value for our customers, employees and shareholders by enhancing the health and well-being of pets, people and livestock. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Objectives | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | In furtherance of this philosophy, our executive compensation program is designed to achieve three key objectives: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 01 | | | | | 02 | | | | | | 03 | | | | | | | | | | | | | | | | | | | Attract, motivate, focus and retain highly-skilled executives who believe in and promote our mission and who embody IDEXX’s values. | | | | Create alignment between management and shareholder interests by establishing a strong connection between compensation, stock ownership and the creation of shareholder value. | | | | | Reward executives for: +Attaining short- and long-term financial and strategic objectives; +Achieving continuous improvement in revenues, earnings, return on invested capital and growth in shareholder value; and +Hiring, developing and promoting a talented workforce while sustaining a highly-engaged, high-performance culture that values equity, diversity and inclusion. | | | | | | | | | | | | | | | | |
| | | | | | IDEXX 2024 PROXY STATEMENT | 75 | (dollars in thousands) | |
+ + + EXECUTIVE COMPENSATION Compensation Key Elements In support of our compensation philosophy and objectives, our executive compensation program consists of the following three key elements, the value of which, in total for each NEO, are within a competitive range for similar positions of our peer group and market survey compensation data. As a whole, these elements are designed to be performance-based, with variable, at-risk pay from our annual and long-term performance-based compensation constituting a significant portion of total compensation: | | | Compensation Key Elements |
This year-over-year | | | | | | | | | Base Salary | Annual Performance-Based Cash Bonus | Equity-Based Long-Term Incentive Compensation | | | | | At Risk | | | | |
+Base Salary To provide a fixed amount of compensation that is positioned in a competitive range for similar positions, and takes into account the individual skills, abilities and performance of each of our executives, which supports our compensation philosophy of attracting and retaining talented individuals. +Annual Performance-Based Cash Bonus To motivate senior executives to achieve our annual goals for financial performance, as well as achieve key annual goals that strengthen the business and position us for longer-term performance. Target bonus percentages are positioned in a competitive range for similar positions and capped at 200% of target. +Equity-Based Long-Term Incentive Compensation To motivate long-term performance and align the interests of management and shareholders, which supports our compensation philosophy of rewarding long-term performance and sustained shareholder value creation in a way that attracts and retains talented senior executives. In general, long-term incentive opportunities are structured so that, when combined with salary and target bonus opportunity, total target direct compensation is positioned in a competitive range. 2024 Changes to the Equity-Based Long-Term Incentive Compensation Element In connection with the Compensation and Talent Committee’s review of the executive compensation program for 2024, it decided to modify the equity-based long-term incentive compensation component by introducing PSUs. In 2024, senior executives, other than our CEO, will receive 50% of their annual equity award value in the form of stock options, 25% in the form of PSUs and 25% in the form of time-based RSUs, which compares to our historical practice of an equity-based long-term incentive mix for our NEOs generally consisting of 75% stock options and 25% RSUs. The value of our CEO’s annual equity award package in 2024 will be divided equally between PSUs and stock options. The 2024 PSU awards are subject to a three-year performance period and the target payout is based on two equally weighted financial metrics: (i) our average annual organic revenue growth for 2024-2026 and (ii) our average annual comparable operating profit growth for 2024-2026, with a payout maximum of 200% of target. Following the end of the three-year performance period, the Compensation and Talent Committee will determine the payout ratio, and the earned shares underlying the PSU awards will vest on the later of the third anniversary of the grant date or the date of such determination, generally subject to the senior executive’s continued employment through the vesting date. The Compensation and Talent Committee decided to introduce PSU awards to further reinforce our senior executives’ focus on long-term performance goals tied to our growth strategy, additionally strengthen the direct alignment between the interests of our senior executives and shareholders and further support our long-held compensation philosophy of pay for performance. | | | | | | 76 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + 2023 Performance Highlights Management executed well in 2023 and delivered strong financial results supported by approximately 9% overall organic revenue growth and improved operating margins. Our growth was driven by sustained benefits from our execution drivers, including 11% growth in our premium instrument installed base, solid new business gains, high levels of customer retention, high growth in recurring veterinary software revenues and net price realization aligned with the value that we deliver. We achieved 25% growth in diluted earnings per share, or 29% comparable EPS growth, including a combined 12% benefit from a customer contract resolution payment and the lapping of discrete 2022 research and development investments, while also advancing significant strategic investments in research and development and commercial capability in support of our long-term objectives. Management achieved this strong financial performance despite headwinds from a sustained pullback in veterinary clinic capacity levels, following a period of record high demand in 2020 to 2021, as well as a challenging macro environment. We also continued to make meaningful progress against our long-term business strategy to position us to produce sustainable, long-term value creation for our shareholders and other stakeholders. Of particular note, we: +Successfully prepared for the announcement of the fourth quarter 2024 launch of our IDEXX inVue Dx Cellular Analyzer at the Veterinary Meeting & Expo in January 2024; +Delivered six new product, service and software solution enhancements consistent with our innovation strategy to drive long-term growth; +Sustained customer retention rates in the 97% to 99% range in the United States, and similarly high levels globally, within our CAG Diagnostics business; +Completed an expansion of U.S. commercial field-based team, which better sizes territories to enable more frequent interactions with our customers; +Achieved high levels of growth for our key cloud practice management systems solutions; +Maintained an excellent customer experience by exceeding our 99% CAG product availability goals and 98% reference lab on-time results delivery goals; +Exceeded our goal of delivering over $15 million in productivity savings in global operations without compromising customer experience; +Reduced the voluntary attrition rate of all employees, maintained high engagement levels of staff across the globe and achieved best-in-class employee net promoter scores; +Significantly advanced our efforts to execute on our strategy to reduce our Scope 1 and 2 greenhouse gas emissions by 37.8% against a 2021 baseline and source 100% renewable electricity by 2030, including successfully procuring a virtual power purchase agreement, which IDEXX signed in January 2024; and +Implemented a data management software solution to support the efficiency and governance of the collection of environmental, social and governance data for voluntary and mandatory reporting purposes. These achievements resulted from the outstanding leadership and work of IDEXX management and their global teams, and helped further strengthen our commercial engagement and execution capabilities, support our customer-first mindset and advance our innovation priorities. | | | | | | IDEXX 2024 PROXY STATEMENT | 77 |
+ + + EXECUTIVE COMPENSATION 2023 Performance-Related Executive Compensation Results Our strong financial performance in 2023 exceeded the budget targets for all four of the financial performance metrics used to determine the 2023 annual performance-based cash bonus paid to our NEOs. Our achievements against 2023 budget goals are illustrated in the following graphs. This strong financial performance reflects disciplined execution of our strategy in the face of headwinds from veterinary clinic capacity levels following a period of record high demand during 2020 and 2021 and a challenging macroeconomic environment, including inflation, increased interest rates and geopolitical instability. | | | | | | | | | | | | | | | | | | | | | Organic Revenue Growth(1) | | Operating Profit | | Earnings per Share | | ROIC(1) | | | | | | | | | | ($ in our CEO pay is supported by our overall financial performance, as demonstrated by our one-year total shareholder return of 40% for 2019 and 91% for 2020. These returns exceeded the annual total shareholder return for the S&P 500 Index for each of 2019 and 2020 (which was 31% for 2019 and 18% for 2020). In addition, as 2020 was Mr. Mazelsky’s first full fiscal year as our CEO following his internal promotion in 2019, his total direct compensation in 2020 was structured, in part, to allow for future increases based upon demonstrated leadership and ability to drive strong financial performance.millions) | | (Diluted) | | |
1.Refer to Appendix A for a description and reconciliation of organic revenue growth and ROIC to their most directly comparable financial measures under GAAP. The Compensation and Talent Committee approved an overall payout of 139% of target for our 2023 annual performance-based bonus plan, or our Executive Incentive Plan, after weighing our strong financial performance and substantial progress against our long-term strategic goals, reflecting direct alignment between performance and executive pay. Our longer-term financial performance remains strong, reflecting enduring and meaningful long-term value creation for and alignment with our shareholders and other stakeholders. For example, since 2019, our last full fiscal year prior to the COVID-19 pandemic, our operating profit has increased 98% and our earnings per share have grown 106%. Our delivery of these long-term financial results is reflected in our compound annual total shareholder return over the last one-, three- and five-year periods. 1-, 3- and 5-Year Compound Annual Total Shareholder Return %* * Based on total return to shareholders, assuming dividend reinvestment for those companies issuing dividends. All periods ended December 31, 2023. ** Average of the compensation peer group identified under “Compensation Benchmarking and Peer Group” beginning on page 84 and excludes IDEXX. 2020 Performance and Compensation for Our Other NEOs
The annual performance-based cash bonus paid to our other NEOs for 2020 was 160% of the applicable target bonus. These payout amounts were calculated based on our organic revenue growth, operating profit, EPS and ROIC performance in 2020 and our achievement of our 2020 non-financial goals that support our long-term business performance and growth.
For greater detail regarding the compensation determinations made by the Compensation Committee with respect to our NEOs, see below under “How We Paid Our NEOs in 2020” beginning on page 70. | | | | | | 78 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + Total Direct Compensation Summary Consistent with our executive compensation philosophy and objectives, the total direct compensation for each of our NEOs reflects their substantial contributions to our performance in 2023. Specifically, the Compensation and Talent Committee determined 2023 compensation for our NEOs in light of our strong, consistent execution against our strategy, performance against 2023 financial goals and substantial achievements against our non-financial goals geared toward sustaining our long-term growth and delivering shareholder value. In making these determinations, the Compensation and Talent Committee gave primary consideration to each NEO’s impact on our results in the context of our business model and their scope of responsibility, as well as other relevant factors (such as prior experience and sustained high performance) and data on prevailing market compensation levels in our identified peer group. The following table provides an overview of total direct compensation paid to our NEOs for fiscal year 2020,2023, including a breakdown of each of the three key elements of total direct compensation and the 20202023 target annual performance-based cash bonus compared to the actual amount of the 20202023 annual performance-based cash bonus,bonus. | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Performance-Based Cash Bonus | Equity-Based Long-Term Incentives | | | | Base Pay(1) ($) | Target Bonus (% of Base Pay) | Target Bonus ($) | Actual Bonus ($) | Grant Value(2) ($) | Total Direct Compensation ($) | | | | | | | | | | Jonathan J. Mazelsky | 1,000,000 | | 125% | 1,250,000 | | 1,737,500 | | 8,750,000 | | 11,487,500 | | | Brian P. McKeon | 673,000 | | 75% | 504,750 | | 701,603 | | 2,450,000 | | 3,824,603 | | | Tina Hunt, PhD(3) | 562,500 | | 75% | 421,875 | | 586,406 | | 2,400,000 | | 3,548,906 | | | Michael J. Lane | 562,500 | | 75% | 421,875 | | 586,406 | | 1,750,000 | | 2,898,906 | | | James F. Polewaczyk(4) | 562,500 | | 75% | 421,875 | | 586,406 | | 1,750,000 | | 2,898,906 | | |
1. Reflects annual base pay approved by the Compensation and not includingTalent Committee in February 2023 and effective in March 2023. 2. Reflects the temporary salary reductions. | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Performance-Based Cash Bonus | | Equity-Based Long-Term Incentives | | Base Pay ($) | Target Bonus (% of Base Pay) | Target Bonus ($) | Actual Bonus ($) | | Grant Value (1) ($) | Total Direct Compensation ($) | Jonathan J. Mazelsky | 850,000 | | 125 | % | 1,062,500 | | 1,700,000 | | | 4,500,087 | | 7,050,087 | | Brian P. McKeon | 610,000 | | 75 | % | 457,500 | | 732,000 | | | 1,999,925 | | 3,341,925 | | Michael J. Lane | 500,000 | | 75 | % | 375,000 | | 600,000 | | | 800,126 | | 1,900,126 | | James F. Polewaczyk | 500,000 | | 75 | % | 375,000 | | 600,000 | | | 1,000,065 | | 2,100,065 | | Sharon E. Underberg | 438,000 | | 60 | % | 262,800 | | 420,480 | | | 1,000,065 | | 1,858,545 | |
(1)Reflectsaggregate grant value (expressed in dollars) approved by the Compensation and Talent Committee, which differs slightly from the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. See718 that results from the conversion of the approved grant value into shares and rounding the resulting number of shares underlying an award to the nearest whole number to avoid the issuance of fractional shares. Refer to Note 5 to our consolidated financial statements included in our 20202023 Annual Report on Form 10-K for the relevant assumptions used to determine the valuationgrant date fair value of our stock awards and stock options.
3. Dr. Hunt’s $2.4 million grant value includes a one-time equity award granted to Dr. Hunt in 2023 in the form of RSUs which vest on February 14, 2026 and had a grant date value of $750,000. This special, one-time award was made to Dr. Hunt in recognition of her expanded job responsibilities encompassing corporate strategy, marketing and sector development. 4. Mr. Polewaczyk will be retiring effective April 1, 2024. For greater detail regarding the compensation determinations made by the Compensation and Talent Committee with respect to our NEOs, refer to the discussion under “How We Paid Our NEOs in 2023” beginning on page 86. 62 | 2021 Proxy Statement
| | | | | | IDEXX 2024 PROXY STATEMENT | 79 |
+ + + EXECUTIVE COMPENSATION Compensation Actions in Response to the COVID-19 Pandemic
The COVID-19 pandemic significantly affected our businesses and operations in 2020. In response, we modified aspects of our business practices to protect the health and safety of our workforce, customers and communities. In addition, in response to the economic uncertainty caused by the COVID-19 pandemic, we proactively took steps in April 2020 to prudently control costs, while ensuring we would be well-positioned for a recovery in market conditions. These steps included the following compensation reductions:
•30% salary reduction for our CEO, which was voluntarily offered by Mr. Mazelsky and accepted by our Board;
•20% salary reduction for our other NEOs;
•Suspension of our U.S. 401(k) plan’s matching contributions; when reinstated in July 2020, we also matched eligible contributions made during the suspension period; and
•Suspension of all cash compensation payable to our non-employee Directors.
As market trends improved and business impacts became clearer, we were able to discontinue these temporary reductions in July 2020. Other than the subsequent matching of 401(k) plan contributions made by employees during the suspension period as referenced above, none of these compensation reductions were retroactively reimbursed. While temporary, these compensation reductions enabled us to preserve jobs, organizational capability and business continuity, positioning us to make necessary investments for sustaining long-term growth at IDEXX.
Key Compensation Practices and Policies We seek to promote the long-term interests of our shareholders through our prudent compensation practices and policies with respect to our NEOs and other senior executives:executive officers: Executive Compensation Program Design | | | | | | | | | What We Do | | What We Don’t Do | | ü | Align pay with our performance by having a weighted averageweighting variable compensation at 91% of 80% of 20202023 total target total direct compensation for our NEOs consistCEO and an average of variable compensationapproximately 81% for our other NEOs | | | | | | | | ü | Generally target total direct compensation value for our NEOs atwithin a competitive market range, considering the median of our peer group Focus, in part, on effectiveness ofCompany’s performance and relative growth trajectory; the individual’s performance and experience; and competitive market factors | | | | | | | | ü | Seek to focus management to effectively invest in the future of the business through its innovation, employees, systems and processes | | | | |
| | | | | | What We Don’t Do | | | X | No uncapped payouts under our Executive Incentive Plan | | | | |
Equity-Award-Related Practices | | | | | | | | | What We Do | | What We Don’t Do | | Apply | | ü | Require a one-year minimum vesting period tofor equity awards granted to employees Minimum | | | | | | | | ü | Set minimum fair market value exercise price for options Include non-competition, non-solicitation | | | | | | | | ü | Align executive officers’ interests with shareholder interests and related forfeiture provisionssupport executive officer retention by providing a significant percentage of total target direct compensation in ourthe form of long-term equity award agreements for our executivesincentive awards | | | | |
| | | | | | What We Don’t Do | | | X | No dividends or dividendthe equivalents on unearnedequity awards until the award vests | | | | | X | No backdating, “spring-loading” or unvested equity awards No backdating“bullet-dodging” of options, and no repricing or buyout of underwater stock options without shareholder approval | | | | |
| | | | | | 80 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + Compensation Governance and Risk Mitigation | | | | | | | | | What We Do | | What We Don’t Do | | ü | Review our peer group annually and engage in rigorous, annual benchmarking to align our executive compensation program with the market Review and verify | | | | | | | | ü | Assess annually the independence of the Compensation and Talent Committee’s independent compensation consultant and the absence of any conflicts of interest | | | | | | | | ü | Conduct an annual compensation program risk assessment | | | | | | | | ü | Provide only limited benefits and perquisites to our senior executivesexecutive officers that are not otherwise made available to our other salaried employees | | | | | | | | ü | Require our senior executives to satisfy strict and meaningfulrobust stock ownership guidelines to strengthen the alignment with our shareholders’ interests | | | | | | | | ü | Maintain a clawback policy that allowscomplies with and exceeds Nasdaq listing standards and generally requires us (or, in certain instances, provides discretion to the Board) to recover annual and long-term performance-basederroneously awarded incentive-based compensation from our executive officers if we are required to restate our financial results other than a restatement due to changes in accounting principles or applicable law.material noncompliance with any financial reporting requirement under federal securities laws | | | | | | | | ü | Hold an advisory vote on executive compensation on an annual basis to provide our shareholders with an opportunity to give feedback on our executive compensation program | | | | | | | | ü | Cap annual performance-based cash bonuses at 200% of target | | | | |
| | | | | | What We Don’t Do | | | X | No employment contracts with our NEOs, other than with our CEO | | | | | X | No tax gross-ups of perquisites or 280G excise taxes, except(except standard tax equalization measures for expatriates, relocation costs and de minimis amounts for spousal and partner travel expenses to our annual President’s Club eventsevents) | | | | | X | No supplemental executive retirement plan | | | | | X | No single-trigger change-in-control bonus payments or vesting of equity awards (except for 25% vesting of equity awards upon a change-in-control) | | | | | X | No stock options granted below fair market value | | | | | X | No allowance forhedging, pledging ofor selling short our common stock by executive officers andor Directors No allowance for employees to hedge or sell short our common stock | | | | |
64 | 2021 Proxy Statement
| | | | | | IDEXX 2024 PROXY STATEMENT | 81 |
+ + + EXECUTIVE COMPENSATION How We Determine Compensation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Philosophy | | | | Attract, motivate and retain talented executives who are aligned with and passionate about our Purpose: to be a great company that creates exceptional long-term value for our customers, employees and shareholders by enhancing the health and well-being of pets, people and livestock | Pay-for-Performance Framework | | | | In furtherance of this philosophy, our executive compensation program is largely based on a pay-for-performance framework designed to achieve three key objectives | | | | | | | | | | | | | | Objectives | | | | | | | | | | | | | | | | | | 1 | | 2 | | 3 | | | Attract, motivate and retain highly-skilled executives. | Create alignment between management and shareholder interests by establishing a strong connection between compensation, stock ownership and creation of shareholder value. | Reward executives for building a highly engaged, high-performance culture that values equity, diversity and inclusion and corresponds with our Guiding Principles: •Sustaining market leadership; •Exceeding the expectations of our customers; •Empowering and rewarding our employees; •Innovating with intelligence; •Cultivating entrepreneurial spirit; and •Contributing to our communities. |
Compensation MixCompensation Elements and Objectives
In support ofConsistent with our executive compensation philosophy and objectives our executive compensation program consists of the following three key elements, which in total are targeted at the median of our peer group:
| | | Compensation Key Elements | | Base Salary To provide a fixed amount of compensation that is positioned generally at the median of the competitive market for similar positions, and takes into account the individual skills, abilities and performance of each of our executives, which supports our compensation philosophy of attracting and retaining talented individuals. Annual Performance-Based Cash Bonus To motivate executives to achieve our annual goals for financial performance, as well as achieve key annual goals that strengthen the business and position us for longer-term performance. Target bonus percentages are positioned at the median of the competitive market for similar positions and capped at 200% of target. Equity-Based Long-Term Incentives To motivate long-term performance and align the interests of management and shareholders, which supports our compensation philosophy of rewarding long-term performance and sustained shareholder value-creation in a way that attracts and retains talented executives. In general, long-term incentive opportunities are structured so that, when combined with salary and target bonus opportunity, total target direct compensation is approximately at the median of the market. |
Compensation Mix
Wedescribed on page 75, we believe that variable compensation, such as performance-based cash bonuses and equity-based compensation with four-year vesting, should be a higher percentage of total compensation for our senior executives, includingexecutive officers (including our NEOs,NEOs) than for our other employees. We also believe that variable compensation relates most directly to the creation ofcreating long-term shareholder value by providing strong incentives to achieve strategic and financial objectives over time, as well as serving as a form of compensation that willtime. It also serves to motivate, focus and retain executives. In general, the total direct compensation mix for our CEO and our other NEOs for 2020 is as follows: | | | | | | Components of CEO 2020 Pay | Base Salary 12% Annual Performance-Based Cash Bonus 24% Equity-Based Long-Term Incentives 64% At Risk 88% | |
| | | | | | Components of Other NEOs’ 2020 Pay (Average) | | executive officers.When the Compensation and Talent Committee makes decisions with respect to each element of an executive’sexecutive officer’s compensation, it also considers the total compensation that may be awarded to the executive.executive officer. Overall, the Compensation and Talent Committee’s goal is to award compensation that corresponds with the Company’sour compensation philosophy and objectives when all the elements of the compensation program are considered individually and in total. In general, the total target direct compensation mix for our CEO and our other NEOs (as an average) for 2023 was as follows: Components of CEO 2023 Total Target Direct Compensation | | | | | | | | | | | | | | | Base Salary | Annual Performance-Based Cash Bonus | Equity-Based Long-Term Incentive Compensation (LTI) | | | | | | 9% | 11% | 80% | | | Stock Options | RSUs | Premium-Priced Stock Options | | | | | | | | 50% of LTI | 25% of LTI | 25% of LTI | | | | | | | | | | | | 91% at Risk |
Components of Other NEOs’ 2023 Total Target Direct Compensation (Average) | | | | | | | | | | | | Base Salary | Annual Performance-Based Cash Bonus | Equity-Based Long-Term Incentive Compensation (LTI) | | | | | 19% | 14% | 67% | | | Stock Options | RSUs | | | | | | | 68% of LTI* | 32% of LTI* | | | | | | | | | | 81% at Risk | *Excluding the one-time special RSU award to Dr. Hunt, stock option awards would have represented 75% of LTI and RSU awards would have represented 25% of LTI for our other NEOs. |
66 | 2021 Proxy Statement
| | | | | | EXECUTIVE COMPENSATION82 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + Roles and Responsibilities The Compensation and Talent Committee has engaged FW Cook as itsengages an independent compensation consultant. Theconsultant, Farient, to inform and support its decisions on executive compensation. Farient participated, along with the Compensation and Talent Committee FW Cook and our senior management, participated in a collaborative process to determine the compensation that our NEOs earned in 2020:2023: | | | | | | Responsible Party | Primary Role and Responsibilities Relating to Compensation Decisions | | | | | Compensation and Talent Committee
(Composed solely of independent, non-employee Directors and reports to the Board) | •+Oversees our executive compensation program, policies and practices, taking into account business goals and strategies, legal and regulatory developments and evolving best practices;
•+Establishes performance goals for purposes of compensation decisions for our NEOs;
•+Conducts an annual evaluation of the CEO’s performance in consultation with the full Board and determines his compensation;
•+Reviews and approves the CEO’s recommendations for compensation for the other NEOs and senior executives,executive officers, making changes when deemed appropriate;
•+Approves all changes to the composition of the peer group; and
•+Reviews and makes recommendations to the full Board with respect to Director compensation.
| | |
| | Independent Consultant to the Compensation Committee*
(FW Cook)and Talent Committee* | •+Provides the Compensation and Talent Committee with analysis and advice pertaining to CEO, executive officer and Director compensation program design, including industry survey analysis, explanation of current and developing best practices and regulatory changes;
•+Recommends a relevant group of peer companies against which to benchmark the competitiveness and appropriateness of our CEO, executive officer and Director compensation;
•+Analyzes peer companies’ CEO and executive compensation annually, and Director compensation no less frequently than every two years, to assist the Compensation and Talent Committee in determining the appropriateness and competitiveness of our CEO, executive officer and Director compensation;
•+Reviews any proposed changes to CEO, executive officer and Director compensation program design;
•+Reviews compensation disclosure materials;
•+Analyzes our compensation practices to assist the Compensation and Talent Committee in determining whether risks arising from such practices are reasonably likely to have a material adverse effect on IDEXX; and
•+Provides specific analysis and advice periodically as requested by the Compensation and Talent Committee.
| | | | | Senior Management | •+Our CEO recommends to the Compensation and Talent Committee annual compensation for the other NEOs and senior executives reporting directly to the CEO based on his assessment of their performance;
•+Our CEO; SeniorCEO, Executive Vice President, General Counsel and Corporate Secretary;Secretary and our SeniorExecutive Vice President and Chief Human Resources Officer work with the Compensation and Talent Committee Chair and our independent compensation consultant to set agendas, prepare materials for Compensation and Talent Committee meetings, and generally attend meetings as appropriate and prepare meeting minutes;
•+Our SeniorExecutive Vice President, General Counsel and Corporate Secretary, with the assistance of internal legal counsel and external legal counsel, provides the Compensation and Talent Committee with legal advice and support on executive compensation and related matters from time to time; and
•+Our Chief Financial Officer also works with the Seniorour Executive Vice President and Chief Human Resources Officer in the preparation of some materials for Compensation and Talent Committee meetings.
No member of management is present in Compensation and Talent Committee meetings when matters related to his or hertheir individual compensation are under discussion when the Compensation Committee is approving or deliberating on CEO compensation or when the Compensation and Talent Committee otherwise meets in executive session. | | |
*During 2020,2023, the Compensation and Talent Committee was assisted by its independent compensation consultant FW Cook.Farient. Other than the support that it provided to the Compensation and Talent Committee, FW CookFarient provided no other services to the Company or management and only received compensation from the Company for the services provided to the Compensation and Talent Committee. During the year, the Compensation and Talent Committee conducted an evaluationassessment of theFarient’s independence of FW Cook considering the relevant SEC regulations of the SEC and the NASDAQNasdaq listing standards. TheIn connection with such independence assessment, the Compensation and Talent Committee concludedalso determined that FW Cook was independent of the Company and the services performed by FW CookFarient and the individual compensation advisors employed by FW Cookit who provide services to the Compensation and Talent Committee raised no conflicts of interest. | | | | | | IDEXX 2024 PROXY STATEMENT | 83 |
+ + + EXECUTIVE COMPENSATION Results of the 20202023 “Say-on-Pay” Advisory Vote At our 20202023 Annual Meeting, our shareholders casting votes on the proposal voted approximately 96%95% (represented by 66,704,93765,447,348 votes) in favor of approving the compensation of our NEOs and 4% (represented by 3,017,430 votes) against.NEOs. Although the results of this vote are non-binding, the Compensation and Talent Committee considered these results in determining compensation policies and decisions and concluded that the compensation paid to our NEOs and our overall pay practices are strongly supported by our shareholders. We regularly engage shareholders on a year-round basis to convey our strategy and actively listen to their perspectives and concerns, including regarding our executive compensation program. For more information about our shareholder engagement efforts refer to the discussion under “Shareholder Communication and Engagement” on page 54.2021 Proxy Statement| 67
The chart below illustrates the results of our last three annual shareholder votes regarding the compensation of our NEOs:
Compensation Benchmarking and Peer Group The Compensation and Talent Committee believes that market data, including compensation data from a peer group of comparable companies, is essential to determining compensation targets and the actual awards for executives in an effort tothat attract and retain highly talented senior executives. Marketexecutive officers. The Compensation and Talent Committee uses market data is used to assess the competitiveness of our compensation packages relative to similar companies and to ensure that our compensation program is consistent with our compensation philosophy. Annually (and at additional times as consideredmore frequently, where appropriate), the Compensation and Talent Committee engages FW Cookits independent compensation consultant to conduct a market benchmarking study for our senior executives,executive officers, including our CEO and our other NEOs. The Compensation and Talent Committee’s objective is to provide executivesexecutive officers with total target total direct compensation that is generally corresponds with thewithin a competitive market median,range, unless the circumstances warrant a different determination.determination (e.g., prior experience, sustained high performance). Our executive compensation program is benchmarked against a peer group of medical device, technologyhealthcare equipment and healthcaresupplies, veterinary medicine and life sciences tools and services companies selected by our Compensation and Talent Committee. The Compensation and Talent Committee, based on recommendations by FW Cook. The composition of thiswith input from our independent compensation consultant, reassesses our peer group is reassessed by FW Cookcomposition annually in order to identify appropriate changes needed to the group and ensure that itthe peer group continues to provide an appropriate benchmark for competitive pay analysis, and allanalysis. All changes to the group recommended by FW Cookour independent compensation consultant are subject to the review and approval of ourthe Compensation and Talent Committee. | | | | | | 84 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + We view the peer group selection process as a critical aspect of our executive compensation program because benchmarking our pay practices against our market peers provides us with key information relevant to the attraction and retention of talent. The composition of our peer group is based upon a number of criteria, including the following: | | | | | | | | Industry and
Business Characteristics | Our peer companies are publicly-traded U.S. companies that operate in similar industries and, to the extent possible, have similar cost structures, business models and global reach. Generally speaking, we look to companies that fall within our industry classification, based on the Global Industry Classification Standard (GICS), and specifically companies that qualify as Healthcare Equipment and Supplies, Healthcare Providers and Services, Biotechnology, Healthcare Technology and Life Sciences Tools & Services companies under GICS.(1) | | | | | Size | Based on the strong correlation between compensation opportunity levels and company size, we look for comparably sized companies as measured by metrics such as revenue, net income, market capitalization and number of employees. Generally speaking, our peer group companies fall within the range of approximately one-third to three times our size based on revenue, net income and market capitalization. | | | | | Competition for
Executive Talent | In selecting our peer group, we seek to identify companies with which we compete with respect to attracting or retaining executive talent. | | | | | Competition for
Investor Capital | Because compensation expense is a factor in financial performance and resulting margins, it is important to consider companies that shareholders may consider as alternative investment opportunities. | | | | | Statistical Reliability | We believe that, in order to provide a statistically significant number of data points that will yield statistically meaningful benchmarking opportunities, our peer group should be composed of at least twelve companies, with a target group of between fifteen and twenty. | | | | | Additional Factors | In addition to the foregoing, we consider certain other refining characteristics when selecting peers, including our ISS and Glass Lewis peer companies and companies that identify IDEXX as a peer for compensation purposes. | | | | | Overall Reasonableness | While individual peer companies may satisfy some but not all of the relevant criteria, we view the group as a whole and determine whether, in totality, the group is reasonable and defensible for benchmarking purposes and whether the resulting comparison data is rational. | | |
1.Zoetis Inc. and Elanco Animal Health Incorporated, veterinary medicine companies serving the animal health sector, are in our peer group and are classified under GICS as pharmaceutical companies.
68 | 2021 Proxy Statement
| | | | | | EXECUTIVE COMPENSATIONIDEXX 2024 PROXY STATEMENT | 85 |
+ + + EXECUTIVE COMPENSATION In February 2020,2023, when the Compensation and Talent Committee set 20202023 base salaries, approved the Executive Incentive Plan and made 2020approved 2023 equity awards for our NEOs, our peer group included the following firms: IDEXX ProxyCompensation Peer Group (16 Companies in Total) | | | | | | | | | | | | | | | Peer Company | Ticker Symbol | | Peer Company | | | Ticker Symbol | | | | | | Agilent Technologies, Inc. | Integra LifeSciences Holdings CorporationA | | Illumina, Inc. | ILMN | Align Technology, Inc. | PerkinElmer,ALGN | | Intuitive Surgical, Inc. | ISRG | Bio-Rad Laboratories, Inc. | ResMedBIO | | Mettler-Toledo International Inc. | MTD | The Cooper Companies, Inc. | STERIS plcCOO | | PerkinElmer, Inc.(1) | PKI(1) | DexCom, Inc. | DXCM | | ResMed Inc. | RMD | Edwards Lifesciences Corporation | Teleflex IncorporatedEW | | STERIS plc | STE | Elanco Animal Health Incorporated | Varian Medical Systems, Inc.ELAN | | Waters Corporation | WAT | Hologic, Inc. | Waters Corporation | Illumina, Inc.HOLX | | Zoetis Inc. | ZTS |
1.In May 2023, PerkinElmer, Inc. changed its name to Revvity, Inc. and now trades under the ticker symbol RVTY.
This peer group included the same companies that constituted the peer group referenced by the Compensation and Talent Committee when it determined 2019 compensation. The following table sets forth certain information regarding2022 compensation, except that we replaced Teleflex Incorporated with Mettler-Toledo International Inc. based on the size and valuefact that it more closely aligns with IDEXX with respect to a number of the above-referenced peer group companies relative to the Company as of October 2019, which is when this peer group was selected by the Compensation Committee.
Peer Group Comparisons*
| | | | | | | | | | | | | | | ($ in millions) | | | | | | Revenue ($) | Market Capitalization ($) | Net Income ($) | Employees | Peer Group 75th Percentile | 3,337 | (1) | 20,512 | (2) | 769 | (1) (3) | 12,125 | (4) | Peer Group Median | 2,821 | (1) | 14,385 | (2) | 411 | (1) (3) | 9,130 | (4) | Peer Group 25th Percentile | 2,490 | (1) | 11,893 | (2) | 267 | (1) (3) | 7,224 | (4) | IDEXX Laboratories, Inc. | 2,291 | (1) | 24,944 | (2) | 407 | (1) | 8,377 | (4) | IDEXX Laboratories, Inc. – 2020(5) | 2,707 | | 42,713 | | 582 | | 9,285 | | | | | | |
* All data in this table, except for the IDEXX Laboratories, Inc. – 2020 data, was compiled by FW Cook from Standard & Poor’s Capital IQ database.
(1) Most recently reported four quarters publicly available as of August 31, 2019.
(2) Calculated using the most recently reported shares outstanding and stock price publicly available as of August 31, 2019.
(3) Excludes extraordinary items and discontinued operations, as applicable.
(4) Fiscal year employee number based upon the most recently filed Annual Report on Form 10-K as of August 31, 2019.
(5) For comparative purposes only. The 2020 data is as of or for the year ended December 31, 2020.business characteristics.
As part of our compensation benchmarking process, we supplement ourutilize a blend of peer group data with industry-specificand survey data of technology, life science and other companies representing companies similar to IDEXX in size and business model.
How We Paid Our NEOs in 20202023 In making compensation determinations with respect tofor our NEOs, the Compensation and Talent Committee gives primary consideration to their impact on the Company’sour results in the context of our business model and their scope of responsibility, in addition to other relevant factors (such as prior experience and performance) and data on prevailing market compensation levels. ConsiderableThe Compensation and Talent Committee also gives considerable weight is also given to the CEO’s evaluation of the other NEOs because of his unique knowledge of their responsibilities, performance and contributions. Before making its final decisions regarding Mr. Mazelsky’s 2023 compensation, the Compensation and Talent Committee consulted with the Board and considered the Board members’ feedback and assessment of Mr. Mazelsky’s overall performance. For each of our NEOs, including our CEO, the Compensation and Talent Committee determines each component of compensation — base salary, annual performance-based cash bonus and equity-based long-term incentive compensation — based on overall achievement of our financialvarious relevant factors. We describe those components and non-financial performance goals.how they are determined in more detail in the sections that follow. | | | | | | 86 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + Base Salary BaseThe Compensation and Talent Committee reviews and approves base salary levels are reviewed and approved by the Compensation Committee annually, typically in the first fiscal quarter, as part of our compensation planning process. The Compensation and Talent Committee targets base salary toward the median for the peer group proxy data andexecutive officers within a competitive market survey compensation data.range. Individual executive officer base salary levels may vary on either sideat the high or low end of the mediancompetitive range when factoring in contributions to our overall financial performance, and an individual’s strengths, level and scope of responsibilities, skills, experience, past performance and potential.
The 20202023 base salaries of our NEOs are included in the table under “Total Direct Compensation Summary” on page 6279. The Mazelsky Employment Agreement sets forth Mr. Mazelsky’s 2020 base salary and provides for an annual base salary review by the Board commencing in the first quarter of 2021. In February 2020,2023, the Compensation and Talent Committee approved 2023 base salary increases in 2020 for each of theour NEOs other NEOs to reflect promotions andthan our CEO based on individual performances, certain changes in roles and responsibilities, and roles supporting our global commercial efforts and growth, to more closely align these base salaries to the medianmaintain alignment of the proxy peer group andeach individual’s compensation within a competitive market survey datarange for these positions and to ensure they are internally equitable, where appropriate.equitable. As described above under “Compensation Actions in Response to the COVID-19 Pandemic” on page 63, in April 2020, we took proactive steps to prudently control costs in response to the COVID-19 pandemic, including Mr. Mazelsky’s voluntary offer, and the Board’s acceptance, of a 30% salary reduction and a 20% salary reduction for our other NEOs and senior executives. These salary reductions were discontinued in July 2020 and were not reimbursed, and the impacts of the temporary reductions on the salaries earned by our CEO and other NEOs in 2020 are reflected in the table under “Summary Compensation Table for 2020” on page 78.Even without taking into account Mr. Mazelsky’s voluntary pandemic-related reduction, his 2020 base salary was belowkept the median of peer group CEO base salary, thereby providing room for future increasessame as it was in base salary, assuming sustained performance and demonstrated leadership, and also reflecting our philosophy2022 after determination that the portion of the CEO’s total compensation that is variable should be higher than for our other employees, including the other NEOs.it was in a competitive range.
Annual Performance-Based Cash Bonus Annual performance-based cash bonuses for 2020 were paidPursuant to our NEOs, as well as certain other senior executives, pursuant to our 2020 Executive Incentive Plan (Executive Incentive Plan) adopted by the Compensation Committee in February 2020. Under the Executive Incentive Plan that the amountCompensation and Talent Committee adopted in February 2023, each of eachour NEOs and other participating senior executive’sexecutives received an annual performance-based cash bonus for 2020 was determined based on2023 calculated by multiplying the senior executive’s target bonus amount by an overall performance factor described below.consisting of two weighted components:
In connection with adopting the Executive Incentive Plan, the Compensation Committee determined, for each NEO and other | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Overall Performance Factor | | | | | | | | | | | | | Target Annual Performance- Based Cash Bonus Amount | x | | Financial Performance Factor | + | Non-Financial Performance Factor | | = | Actual Annual Performance- Based Cash Bonus Amount | | | | 60% Weighting | | 40% Weighting | | | | | | | | | | | | |
Each participating senior executive, theexecutive’s target annual performance-based cash bonus amount for 2020 based onis equal to a certain percentage of the participant’s annual base salary: | | | | | | | | | | | | | | | Base
Salary | x | Target
Incentive % | = | Target Annual
Performance-Based
Cash Bonus Amount |
The target annual performance-based bonus amount for Mr. Mazelsky was calculated using 125% of histheir annual base salary, as described inand their actual bonus is capped at 200% of this target bonus amount, mitigating the Mazelsky Employment Agreement.risk associated with this type of incentive compensation design. The Compensation and Talent Committee also limitedsets the maximum amount of the 2020 annual performance-based cash bonus payable to any NEO, or other participating senior executive, to 200% of his or her target. The target percentages are set with the intention to provide a suitable mix of fixed and variable compensation and to maintain an appropriate weighting of annual versus longer-term incentives, consistent with our compensation philosophy, and capping the potential amount of the annual performance-based cash bonus mitigates the risk associated with this type of incentive compensation design.
70 | 2021 Proxy Statement
| | | | | | | | | | | | | | | EXECUTIVE COMPENSATIONBase Salary | x | Target Incentive % | = | Target Annual Performance-Based Cash Bonus Amount |
The amount of the 2020 annual performance-based cash bonus payable to each of our NEOs and other participating senior executives under the Executive Incentive Plan was determined based upon an overall performance factor that is calculated using two weighted factors:used to calculate these bonuses consists of: •A+a financial performance factor, (determineddetermined by measuring against four specific financial metrics selected by the Compensation Committee)and Talent Committee (for more detail, refer to the discussion under “Financial Performance Factor” beginning on page 88); and•A+a non-financial performance factor, (determineddetermined by measuring the Company’sour achievement of non-financial performance goals, typically approved by the Board in February, that are focused on strengthening and positioning the CompanyIDEXX for sustained future growth and profitability)profitability (for more detail, refer to the discussion under “Non-Financial Performance Factor” beginning on page 90). | | | | | | | | | | | | | | | | | | | | | | | | | | | IDEXX 2024 PROXY STATEMENT | | | Overall Performance Factor | | | | | | | | | | | | | Target Annual
Performance-
Based Cash
Bonus Amount | x | | Financial
Performance
Factor | + | Non-
Financial
Performance
Factor | | = | Actual Annual
Performance-
Based Cash
Bonus Amount | | | | 60% Weighting | | 40% Weighting | | | | | | | | | | | | 87 |
+ + + EXECUTIVE COMPENSATION The Compensation and Talent Committee annually establishes the respective weightings of the financial and non-financial performance factors. In February 2020,For 2023, the Compensation and Talent Committee increased the weightingestablished weightings of 60% for the financial performance factor to 60% (from 50%and 40% for 2019) and decreased the weighting of the non-financial performance factor. These were the same as the weightings used for 2022. Overall and Individual Performance Factors In 2023, the overall performance factor, to 40% (from 50% in 2019) to more closely align with institutional investors’ expectations. While we temporarily reduced some compensation costs from April to July 2020 in response to the economic uncertainty caused by the COVID-19 pandemic, we did not adjust or change the respective weightingswhich has a maximum payout of 200% of target for each of our NEOs, was calculated as 139% for each of our NEOs based on achievement against both the financial and non-financial factors. As described in greater detail below, our financial performance factorsin 2023 resulted in a payout rating between target and maximum with respect to three of the four financial metrics used to determinecalculate the 2020 annual performance-based cash bonus underfinancial performance factor (organic revenue growth, operating profit and ROIC), and a payout rating of 200% (or maximum) with respect to the Executive Incentive Plan.other financial metric (earnings per share (diluted)). With respect to the non-financial factor, the Compensation and Talent Committee considered the significant progress our NEOs achieved against our long-term growth strategy. The Compensation and Talent Committee also considered the relative contributions made by each NEO to the achievement of our financial and non-financial goals, as well as the scope of and tenure in their roles at IDEXX, in determining the final amount of each award. Financial Performance Factor The Compensation and Talent Committee annually establishes the financial metrics used to calculate the financial performance factor and their respective weightings are established annually by the Compensation Committee.weightings. For 2020,2023, the Executive Incentive Plan included four financial performance metrics: organic revenue growth, operating profit, earnings per share (diluted) and ROIC: | | | | | | | | | | | | | | | | | | | | | | | | | | | Organic Revenue
Growth Rating | + | Operating
Profit
Rating | + | Earnings per
Share (Diluted)
Rating | + | ROIC Rating | = | Financial
Performance
Factor | 40% Weighting | | 20% Weighting | | 20% Weighting | | 20% Weighting | | |
These metrics relate to Company-wide performance that our participating senior executives directly influence, which ensures a connection between their annual performance and the actual performance-based cash bonus payment amounts. In addition, the Compensation and Talent Committee selected these financial metrics (and the applicable weighting) because the Compensation Committeeit believes that strong performance in these financial measures of growth, profitability and return will maximize shareholder value: | | | | | | Financial Metric | Purpose | | | | | Organic Revenue Growth | •Top-line revenue growth drives+Drives our overall performance
•+Enables profitability and economic return
| | | | | Operating Profit | •The+Reflects the profitability of our core business operations and demonstrates the efficiency with which we convert our top-line revenue into profits
•+Drives focus on sustaining revenue growth that is profitable
| | | | | Earnings per Share (Diluted) | •EPS measures+Measures our profitability to shareholders after financing costs and taxes
•+Supports stronger alignment with our shareholders’ interests
| | | | | ROIC | •ROIC measures+Measures the efficiency with which we use our invested capital to generate returns
•+In balance with revenue growth, drives long-term shareholder value creation
| | |
| | | | | | 88 | IDEXX 2024 PROXY STATEMENT |
EachEXECUTIVE COMPENSATION + + + The Compensation and Talent Committee established 2023 threshold, budget (i.e., target) and maximum performance goals for each of these metrics, is subject to a rating calculated on a sliding scale, ranging from 50% to 180% (with no payout below threshold performance), using the approved budget goal for the applicable metric as 100% of target payout. The approved
budget goals for these metricswhich are aligned with our long-term financialthe goals as reflectedincluded in our long-term financial potential model described under “Generating Long-Term Value” on page 9.the Company’s 2023 annual business plan approved by the Board:+The threshold goal for each metric is the minimum level of performance required to achieve a payout rating for that metric. The payout rating for threshold performance is 25%, and below threshold performance will result in a 0% payout rating for that metric. +The budget goals are aligned with the 2023 annual business plan approved by the Board and are intended to encourage stretch performance, while at the same, time being achievable. Establishing these budget goals as performance targets incentivizes our participating senior executives to deliver on those financial goals.goals, and achieving the budget goal will result in a 100% payout rating for the applicable metric. +The maximum goal for each metric is set at a level that requires superior performance, and performance at or above the maximum goal will result in a maximum payout rating of 200% for that metric. In the event performance of any metric is between the threshold and target goals or target and maximum goals, the payout rating for that metric is calculated on a sliding scale, ranging from 25% to 200%, under the Executive Incentive Plan. The Compensation and Talent Committee decided to use a wider range under the Executive Incentive Plan (compared to the 50% to 180% used under our annual performance-based cash bonus program in 2022) to more closely align with the practices of our peer group and create consistency between the maximum payout percentage for individual financial performance metrics and the overall maximum payout percentage. The Company’sfollowing table illustrates our performance versus the approved budget goal with respect to each financial metric selected by the Compensation and Talent Committee for the Executive Incentive Plan, for 2020, and the resulting calculation of the financial performance factor,factor. | | | | | | | | | | | | | | | | | | | Organic Revenue Growth(1) | Operating Profit ($ in millions) | Earnings per Share (Diluted) | ROIC(2) | 2023 Financial Performance Factor (%) | | | | | | | 2023 Actual | 8.8% | $1,097.1 | $10.06 | 47.5% | | 2023 Budget Goal(3)(4) | 7.8% | $1,058.6 | $9.51 | 44.5% | | Variance to 2023 Budget Goal(5) | 1.1% | $38.6 | $0.55 | 3.1% | | Payout Rating(4) | 128.1% | 175.2% | 200% | 144.5% | | Weighting | 40% | 20% | 20% | 20% | | Weighted Average Percentage | 51.3% | 35.0% | 40.0% | 28.9% | 155% |
1.Organic revenue growth is illustrateda non-GAAP financial measure. Information regarding organic revenue growth and its calculation is provided in the table below:Appendix A. | | | | | | | | | | | | | | | | | | | | | | 2020 Actual | 2020 Approved Budget Goal (1) | Variance to Approved Budget Goal | Payout Rating (2) | Weighting | Weighted Average Percentage | Organic Revenue Growth(3) | 12.0 | % | 10.0 | % | 2.0 | % | 135.6 | % | 40 | % | 54.2 | % | Operating Profit ($ in millions) | $694.5 | $614.0 | $80.50 | 180.0 | % | 20 | % | 36.0 | % | Earnings per Share (Diluted) | $6.71 | $5.91 | $0.80 | 180.0 | % | 20 | % | 36.0 | % | ROIC(4) | 54.6 | % | 45.7 | % | 8.9 | % | 180.0 | % | 20 | % | 36.0 | % | 2020 Financial Performance Factor (%) | | | | | | 162 | % |
2.ROIC is a non-GAAP financial measure. Information regarding ROIC and its calculation is provided in Appendix A.(1)3.In evaluating financial performance, the Compensation and Talent Committee reviewed the 2020 budget2023 goals as adjusted to eliminate, among other things, the effects of changes indifferences between actual foreign currency exchange rates during 2020,2023, as compared to the rates assumed in setting the budget, and the effects of discrete items not anticipated at the beginning of the 2023 fiscal year, such as acquisitions and acquisition-related expenses and a $16 million customer contract resolution benefit, as well as the effects of acquisitions, the tax effects of share-based compensation activity under ASU 2016-09, ”Compensation –“Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” the discrete operating expense impact from an ongoing litigation matter involving a royalty claim under an expired patent license agreement recorded in the third quarter of 2020 and the one-time positive income tax impact related to the enactment of tax reform in Switzerland in the fourth quarter of 2020.
(2)4.Achievement of the Company’s approved budget goal for each of the financial metrics equates to 100% payout for that metric, with separate pre-definedpredefined performance scales for each financial metric resulting in an increase or decrease in the percentage payout, as described above. The maximum payout rating for each financial metric is 180%, and we achieved this maximum payout rating for three financial metrics: operating profit, earnings per share (diluted), and ROIC.
(3)Organic revenue growth is5.Numbers may not a measure defined by GAAP, otherwise referredfoot due to herein as a non-GAAP financial measure. In calculating organic revenue growth, we exclude the effect of changes in foreign currency exchange rates because changes in foreign currency exchange rates are not under management’s control, are subject to volatility and can obscure underlying business trends. We also exclude the effect of acquisitions that are considered to be acquisitions of “businesses” consistent with ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” because the nature, size and number of such acquisitions can vary dramatically from period to period and therefore can also obscure underlying business trends. Information regarding organic revenue growth and its calculation is provided in Appendix A.rounding.
(4)ROIC is a non-GAAP financial measure. Information regarding ROIC and its calculation is provided in Appendix A. | | | | | | IDEXX 2024 PROXY STATEMENT | 89 |
+ + + EXECUTIVE COMPENSATION Non-Financial Performance Factor The Compensation and Talent Committee determines the non-financial performance factor, is determinedrepresenting 40% of the overall performance factor under the Executive Incentive Plan, by considering achievement against the Compensation Committee by measuring achievement of annual non-financial goals approved by the Board and intended to strengthen the business to support long-term performance. The Board approved annual non-financial goals for 2020 for the Executive Incentive Plan focused on five strategic priorities set in general coveredFebruary 2023 as detailed in the following objectives: •Expand our commercial execution capabilities globally by, among other things, implementing enhancements to our systems and completing the training and onboarding of our expanded CAG field-based sales and technical workforce;
•Deliver memorable customer experiences through, among other things, best-in-class customer support and a smooth, on-time integration of our new core reference laboratory located in Kornwestheim, Germany into our Europe reference lab network;
•Innovate for continued long-term growth, including the launch of our new ProCyte One hematology analyzer and continued progress in developing (and protecting our rights to) new, innovative and proprietary products and services; and
•Develop great leaders and sustain high employee engagement to fuel growth through, among other things, developing and deepening the leadership bench, increasing the percentage of women in senior leadership positions and maintaining positive employee engagement and employee turnover.table that follows.
The Compensation and Talent Committee evaluated our 2023 performance against these goals, and based upon that evaluation, and level of achievement ofit determined that the Company exceeded expectations in its non-financial goals described above, the Compensation Committee determinedperformance and that the non-financial performance factor for the senior executives was 157%115% of target. The Compensation and Talent Committee believed this represented an appropriate recognition of management’s strong execution of our growth strategy in 2023 and the meaningful progress management achieved against our compelling long-term strategic and investment plans to support future growth, which it believes will result in long-term value creation for our shareholders and other stakeholders. The following table summarizes the achievements against our 2023 goals that were considered by the Compensation and Talent Committee in making this determination: | | | | | | 2023 Strategic Goal Priorities | 2023 Assessment Highlights | | | | | Innovate for Continued Long-term Growth | +Successfully advanced development of our IDEXX inVue DX cellular analyzer to enable a January 2024 announcement. +Delivered six new product, service and software solution enhancements. +Achieved readiness to launch an ezyVet enterprise software solution, purpose-built for corporate groups. +Successfully advanced development of a new point-of-care platform and achieved key development milestones. | | | | | Enhance our Global Commercial Presence and Capability | +Finalized the launch plan for our IDEXX inVue DX cellular analyzer announcement in January 2024. +Completed expansion of U.S. commercial field-based team, which better sizes territories to enable more frequent interactions with customers. +Exceeded goal of a 30% growth rate for key cloud practice management systems and related applications. | | | | | Deliver a Differentiated Customer Experience | +Delivered productivity savings of more than $15 million across our global operations without compromising the customer experience. +Exceeded goals for 99% CAG product availability and 98% reference laboratory on-time results delivery. +Launched a “beta” release of a pet owner engagement application across key practice management systems. | | | | | Strengthen and Engage Our Talent While Building a More Diverse and Inclusive Organization | +Reduced the voluntary attrition rate of all employees, maintained high engagement levels of staff across the globe and achieved best-in-class employee net promoter scores. +Achieved goal of 37% of employees in compensation grades considered director or above self-identifying as women as of December 31, 2023. +Increased the proportion of employees in U.S. management who voluntarily self-identify as belonging to underrepresented groups by approximately two percentage points. | | | | |
72 | 2021 Proxy Statement
| | | | | | 90 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + | | | | | | 2023 Strategic Goal Priorities | 2023 Assessment Highlights | | EXECUTIVE COMPENSATION | | | Advance our Commitment to Corporate Responsibility and Sustainability | +Significantly advanced our efforts to execute on our strategy to reduce our Scope 1 and 2 greenhouse gas emissions by 37.8% against a 2021 baseline and source 100% renewable electricity by 2030, including successfully procuring a virtual power purchase agreement, which IDEXX signed in January 2024. +Implemented a data management software solution to support the efficiency and governance of the collection of environmental, social and governance data for voluntary and mandatory reporting purposes. +Completed a human rights risk assessment of our operations and certain aspects of our supply chain. +Our Global Giving Campaign supported achieving over 18,000 logged employee volunteer hours, exceeding our 2025 goal of 15,000 annual volunteer hours, as stated in our 2021 Corporate Responsibility Report. | | |
Overall and Individual Performance Factors
In accordance with the relative weighting applied to the financial (60%) and non-financial (40%) performance factors set forth in theUnder our Executive Incentive Plan, applying the incentive plan design results in a 160% overall performance factor for the participants in the Executive Incentive Plan. The Compensation Committee also considered the relative contributions made by each participating senior executive to the achievement of the Company’s financial and non-financial goals, as well as other factors such as their performance managing through the business and operational challenges presented by the ongoing COVID-19 pandemic, and the scope of and tenure in their roles at the Company.
Based on the overall performance factor and after considering individualthe non-financial performance assessments and other factors, the Compensation Committee awardedfactor, as described above, resulted in each NEO a 2020of our NEOs receiving an annual performance-based cash bonus that equaled 160%139% of his or her target.their target bonus amount. The Compensation and Talent Committee believes thesethat this bonus amount is appropriate and reflects a direct linkage between executive pay and performance. This alignment is demonstrated by our strong financial performance factors over target are appropriate due to the outstanding performancewell in excess of the Company in 2020, particularly in lighttarget goals for each of the four metrics and our achievement of substantial progress in support of future growth and long-term value creation, despite continued veterinary clinic capacity management challenges presented by the COVID-19 pandemic, and each participating NEO’s contribution to the Company’s performance against the financial and non-financial performance goals described above.macroeconomic headwinds.
Equity-Based Long-Term Incentive Compensation We believe that the practice of granting equity-based awards is importantan effective tool in recruiting and retaining the key talent necessary to ensure our continued success.success and further aligns the interests of our senior executives with those of our shareholders by rewarding long-term total shareholder return while providing a retention incentive through multi-year vesting periods. We also believe that grantingin order to attract and retain key talent and support long-term value creation, our annual equity-basedequity awards with a high percentageshould be designed to be easy to understand and communicate. Types and Mix of those awards made in the form of stock options that vest over multiple years, provides our executives a strong financial incentive to maximize shareholder returns over the long term. In fact, our compound annual total shareholder return outperformed the S&P 500 Index and the average of our proxy peer group over the last one-, three- and five-year periods. | | | | | | 1-, 3- and 5-Year Compound Annual Total Shareholder Return %*
| | *Based on total return to shareholders, assuming dividend reinvestment for those companies issuing dividends. All three periods ended December 31, 2020.
**Average of the proxy peer group identified beginning on page 68 and excludes IDEXX. |
The following table summarizes the key aspects of the annual equity compensation awards made to our senior executives (including our NEOs):NEOs in 2023 consisted of stock options and RSUs, with the following key terms: | | | | | | | | | | Stock Options | | | | | RSUs | | Aspect of Equity Awards | | | | | Vesting | DescriptionVest in four equal annual installments | Vests in four equal annual installments | | Types of Equity Awards | Annual equity awards may consist of stock options, RSUs or a combination of both.
Because stock options have value only to the extent our stock price increases in comparison to the stock price on the date of the grant, and vest ratably over four years (or, for awards granted prior to February 2020, five years) with ten-year terms, they directly reward creation of long-term shareholder value after the grant date. For these reasons, we view options as an effective means of implementing our compensation philosophy that emphasizes pay-for-performance and seeks to align the interests of our executives and shareholders.
RSUs, which also vest ratably over four years (or, for awards granted prior to February 2020, five years), vary in value depending on the stock price of our common stock prior to vesting, but will have some value in the long term, which encourages retention and rewards the creation of shareholder value over time.
The design of our annual equity awards is easy to understand, communicate and administer and empowers and incentivizes our senior executives to identify and achieve the most strategically important objectives in their respective areas of responsibility to create long-term shareholder value.
| | Four- or Five-Year Vesting Schedule | Commencing with equity awards granted in February 2020, all equity awards have a four-year vesting schedule, and equity awards granted in prior years have afive-year vesting schedule.
The vesting period was shortened to enhance our ability to attract key talent by aligning our employee equity award vesting schedule more closely with typical market practice and enabling our employees to realize the value of their equity awards more quickly.
Our employee equity awards serve as an important retention tool due to their multi-year vesting schedules.
| Ten-Year Term | Term and Expiration | Stock option awards generally expireexpires on the day immediately prior to the tenth anniversary of their grant date.
Generally, our stock option awards granted to our employees are exercisable only while employed or within three months after ceasing to be an employee of the Company. However, if an employee retires at or after the age of 60 and after having been employed by IDEXX for at least ten years, then his or her vested stock option awards remain exercisable for a two-year period after retirement (subject to earlier expiration).
In addition, stock option awards granted in 2018 and 2019 continue to vest for two vesting periods after retirement for eligible employees, and these awards remain exercisable by eligible employees until the 90th day following the second, post-retirement vesting date (or the tenth anniversary of their grant dates, if earlier). Eligibility criteria include having been employed by IDEXX for at least ten years, retiring from the Company at the age of 60 years or older and providing notice to the Company at least six months prior to retirement.
| Not applicable | | Mix | | | | | Exercise Price | Closing sale price of Equity Incentive Compensationour common stock on the Nasdaq Global Select Market on the grant date* | Given the different risk/reward characteristics of stock options and RSUs and alignment with our executive compensation philosophy, the Compensation Committee believes that equity awards granted to executives should have a greater proportion of stock options relative to RSUs:Not applicable
| | | |
*In February 2023, the Compensation and Talent Committee granted premium-priced stock options to Mr. Mazelsky with an exercise price equal to 115% of the closing sale price of our common stock on the grant date. •Executives have the most direct impact on our performance and should bear the highest risk, and realize the highest potential reward, associated with that performance.
•Senior executives generally receive 75% of their equity award value in the form of stock options and 25% of their equity award value in the form of RSUs.
We believe that these higher percentages of options, which only have value to the extent our stock price increases, combined with the multi-year vesting schedule described above, serve as effective incentives to create long-term shareholder value for our CEO and other NEOs, which is evidenced by our strong stock price performance over the last several years.
| | | | | | IDEXX 2024 PROXY STATEMENT | 91 |
+ + + EXECUTIVE COMPENSATION Generally, unvested RSUs and stock options are subject to forfeiture when a senior executive’s employment at IDEXX ends, and vested stock options are exercisable only while the senior executive remains employed by IDEXX or within three months after their employment at IDEXX ends. However, our equity awards include certain death and disability provisions, as well as retirement provisions aimed to enhance our ability to retain talent and facilitate succession and transition planning for key positions. For more information regarding these provisions, refer to the discussion under “Stock Incentive Plans” beginning on page 110. Historically, and in 2023, executive officers generally received 75% of their annual equity award value in the form of stock options and the remaining 25% in the form of RSUs, with Mr. Mazelsky receiving one-third of his annual stock option award value in the form of premium-priced stock options. Previously, Mr. Mazelsky’s premium-priced stock option awards had an exercise price equal to 110% of the closing sale price of our common stock on the grant date, but in approving Mr. Mazelsky’s 2023 annual equity awards, the Compensation and Talent Committee approved a premium-priced stock option award with an exercise price equal to 115% of the closing sale price of our common stock on the grant date to further align Mr. Mazelsky’s interests with those of our shareholders and require a greater increase in stock price for his premium-priced option awards to be “in-the-money.” Given the different risk and reward characteristics of stock options and RSUs, the Compensation and Talent Committee believes that this mix of annual equity awards, together with a multi-year vesting schedule, has served as an effective means of implementing our compensation philosophy, which seeks to align the interests of our executive officers and shareholders and retain key talent. Our executive officers have the most direct impact on our performance, and we therefore believe they should bear the highest risk and realize the highest potential reward associated with that performance. Stock options, which only have value to the extent our stock price exceeds the per-share exercise price and vest ratably over time, create alignment with shareholder interests and serve as effective incentives for our executive officers to create long-term shareholder value. Stock options are also retentive even after vesting because the opportunity to exercise is generally contingent on continued employment. RSUs, which also vest ratably over time, vary in value depending on the stock price of our common stock prior to vesting, but will have some value in the long term, which encourages retention and rewards the creation of shareholder value over time. In connection with the Compensation and Talent Committee’s review of the executive compensation program for 2024, it decided to modify the equity-based long-term compensation component by introducing PSUs. For more information about the terms of the PSUs and the Compensation and Talent Committee’s rationale for this modification, refer to the discussion under “2024 Changes to the Equity-Based Long-Term Incentive Compensation Element” on page 76. 2023 NEO Annual Equity Awards In determining the value of annual equity awards granted to each NEO, the Compensation and Talent Committee begins withevaluates a number of factors, including a competitive assessment based upon our proxy peer group and market survey data. The determination of the equity award is based on themarket and each senior executive’s responsibilities, of each NEO’s position. Annual award value is determined based on the executive’s job scope,performance, long-term leadership potential total compensation relative to median total compensation for market-comparable positions, and equity holdings. The Compensation and Talent Committee also considers the impact of the equity award values in total on shareholder dilution and shareholder value transfer in relation to the average of such totals for the proxy peer group. In February 2020, theour peers. The Compensation and Talent Committee granted Mr. Mazelsky stock options and RSUs with an aggregate value of approximately $4,500,000, with 75% of the equity award value in the form of stock options and 25% of the equity award value in the form of RSUs, each of which vests ratably over four years and has a ten-year term. Although the Compensation Committee considered the peer group proxy and market data, among other factors, in making this equity award, it did not target any particular percentage of the median total direct compensation. However, the Compensation Committee believes this award resulted in total direct compensation in 2020 for Mr. Mazelsky that was below median in relation to the benchmark group.
74 | 2021 Proxy Statement
In February 2020, the Compensation Committee granted stock options and RSUs with an aggregatemay also grant value of approximately $2,000,000 to Mr. McKeon, $1,000,000 to each of Mr. Polewaczyk and Ms. Underberg, and $800,000 to Mr. Lane, in each case that vest ratably over four years and have a ten-year term. Each of these NEOs received 75% of their equity award value in the form of stock options and 25% of their equity award value in the form of RSUs. In determining the size ofone-time, special equity awards grantedin recognition of strong annual performance or in light of expanded or differing job responsibilities from time to these NEOstime.
The Compensation and Talent Committee targets being in 2020, thea specific competitive range when determining equity awards. The Compensation and Talent Committee reviewedalso reviews compensation summaries for each NEO that set forth the value of outstanding vested and unvested stock options and RSUs and the cumulative value realized by the senior executives upon exercise of stock options and vesting of RSUs since commencement of employment. As | | | | | | 92 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + In February 2023, the Compensation and Talent Committee granted the following equity awards to all our NEOs given these considerations: | | | | | | | | | | | | | | | | | | | Stock Option Award Value ($)(1)(2) | Premium-Priced Stock Option Award Value ($)(1)(3) | Restricted Stock Unit Award Value ($)(1)(4) | Total Equity Award Value ($)(1) | | | | | | | | Jonathan J. Mazelsky(5) | 4,375,000 | | 2,187,500 | | 2,187,500 | | 8,750,000 | | | Brian P. McKeon | 1,837,500 | | — | | 612,500 | | 2,450,000 | | | Tina Hunt, PhD(6) | 1,237,500 | | — | | 1,162,500 | | 2,400,000 | | | Michael J. Lane | 1,312,500 | | — | | 437,500 | | 1,750,000 | | | James F. Polewaczyk | 1,312,500 | | — | | 437,500 | | 1,750,000 | | |
1.Reflects the aggregate grant value (expressed in dollars) approved by the Compensation and Talent Committee, which differs slightly from the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 that results from the determinationconversion of the approved grant value into shares and rounding the resulting number of shares underlying an award to the nearest whole number to avoid the issuance of fractional shares. Refer to Note 5 to our consolidated financial statements included in our 2023 Annual Report on Form 10-K for the relevant assumptions used to determine the grant date fair market value of our stock awards and stock options. 2.Stock options awards vest ratably over four years and have a term of 10 years. 3.Premium-priced stock option awards vest ratably over four years, have a term of 10 years and have an exercise price equal to 115% of the closing sale price of our common stock on the Nasdaq Global Select Market on the grant date. 4.Restricted stock units vest ratably over four years. 5.The 2023 annual equity awards granted to Mr. Mazelsky’sMazelsky will continue to vest so long as he remains an IDEXX employee, Board member or consultant. 6.Includes a one-time equity award granted by the Compensation and Talent Committee consideredto Dr. Hunt in February 2023 in the peer group proxyform of RSUs, which vest in their entirety on February 14, 2026, and market data, among other factors, in determining the amounts of the awards, but did not target any particular percentage of the median total direct compensation. The Compensation Committee also reviewed an analysis of the Company’s aggregate share usage and aggregate fairhave a grant value of equity compensation awardedapproved by the Company, relativeCompensation and Talent Committee of $750,000. This special, one-time award was made to the Company’s prior levelsDr. Hunt in recognition of her expanded job responsibilities encompassing corporate strategy, marketing and in relation to the peer group’s aggregate fair values as a percentage of market capitalization. The aggregate fair value of equity compensation awarded in 2020 as a percentage of market capitalization was below the median of the latest year available of peer group data and below the median for the average of the past three years. The Compensation Committee considered this information as well as Mr. Mazelsky’s advice and recommendation regarding the prospects for long-term contribution by each of the NEOs, other than Mr. Mazelsky, in making these 2020 equity awards.sector development.
Minimal Executive Benefits and Perquisites We provide a wide array of health and welfare benefits tothat support our employees, including our NEOs.employees’ overall well-being. This includes comprehensive health, insurance, affordable access to physical fitness facilities, life insurance and disability insurance.insurance, generous time-off and leave programs and financial support. We provide free counseling for employees and their dependents through our mental wellness partner. In addition, all U.S. employees mayare eligible to participate in our 401(k) retirementplan. Participants in our 401(k) plan for which we provide areceive matching contributions of up to 5% matching contribution to each participant, and allof their eligible compensation. All full-time U.S. employees who have been employed for at least one month also have an opportunity to purchase shares of our common stock through payroll deductions pursuant to our 1997 Employee Stock Purchase Plan, as amended. All employees have access to financial education and our employees in North America can engage with a financial coach. We also provide reimbursement to our employees for reasonable relocation costs when necessary based on business needs. In 2020,2023, the only benefits available exclusively to our executive officers and other senior executives directly reporting to our CEO were Company-funded supplemental disability coverage, annual executive physical examinations and wellness coaching and tax return preparation and financial planning services, which havehad a combined value of under $15,000 per executive.NEO. In addition, we have fractional interests in aircraft available, as needed, to provide efficient business travel for our CEO, other senior executives and Board members, subject to compliance with our policies. Personal use of these aircraft is prohibited, unless a special exception is approved by the Board Chair or Audit Committee Chair in the case of the CEO, and by the CEO in all other cases. There was no personal use of these aircraft in 2023. The supplemental disability coverage is provided for additional financial security in the case of disability. Annual physical examinations and wellness coaching are provided because the health of our executivesexecutive officers is | | | | | | IDEXX 2024 PROXY STATEMENT | 93 |
+ + + EXECUTIVE COMPENSATION critical to their performance. The tax preparation and financial planning service is provided to maximize the amount of time that our senior executivesexecutive officers are able to spend on Company business rather than personal financial matters.matters, support executive officer retention and assist them in navigating complex tax, financial and regulatory issues. In addition, some of our senior executivesexecutive officers and their spouses and partners may be invited to participate in our annual President’s Club event recognizing our highest performing sales employees, and we reimburse them for their reasonable travel expenses, including the expenses of their spouses and partners. We do not gross up our senior executives’executive officers’ perquisites and benefits to compensate for any taxes due on the value of these perquisites and benefits, with the exception of typical tax equalization benefits for executivesexecutive officers on expatriate assignments and gross-up payments for reasonable relocation costs.costs, as applicable. In addition, de minimis tax gross-up payments on the reimbursed expenses for spousal or partner travel to our President’s Club events are provided to all employees who attend these events –— not just our senior executives.executive officers. Ms. Underberg was provided relocation assistance in connection with her hiring in February 2019, including the reimbursement of her reasonable relocation expenses and associated tax gross-ups for her taxable relocation amounts. For greater detail regarding the portion of these relocation benefits provided to Ms. Underberg in 2020, see “Summary Compensation Table for 2020” (and accompanying footnotes) on page 78.Tax Considerations Under Section 162(m)
Under Section 162(m) of the Code, as amended, compensation paid to any “covered employee,” including, among others, the Company’s NEOs, in excess of $1 million will not be deductible, unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017. Since compensation design objectives may not always be consistent with the requirements for tax deductibility, the Compensation Committee will in its discretion and when it deems appropriate, enter into compensation arrangements under which payments will not be deductible under Section 162(m).
How We Manage Risk and Governance Executive Stock Ownership and Retention We maintain stock ownership guidelines intended to further align the financial interests of our senior executives with those of our shareholders. These guidelines set a target levelslevel of ownership of a number of shares of our common stock for each of our NEOs and other senior executives (including all of our Senior Vice Presidents): each year as of March 31 (or their hire date or date of promotion during the year they were hired or promoted) based on a target multiple of annual base salary shown in the table below, divided by the closing price of our common stock on the relevant calculation date. | | | | | | | Target Multiple of Annual Base Salary
| | | CEO | 10X | Executive Vice Presidents | 4X | Senior Vice Presidents | 1X |
These target levels determine whether the senior executive must retain additional stock acquired upon the vesting and releasesettlement of RSUs or the exercise of options. Specifically, unless and until the valuenumber of shares of our common stock held by a senior executive equals or exceeds his or hertheir target level at the endestablished each year as of a calendar yearMarch 31 (or his or hertheir hire date or date of promotion to Senior Vice President during the year he or she wasthey were hired or so promoted), thisthe senior executive must retain: •+At least 75% of our common stock received upon the exercise of options or the vesting and releasesettlement of RSUs during the following year, after payment or withholding of any applicable exercise price and taxes; and
•+All other shares of our common stock held by the senior executive.
We do not apply the value of unexercised stock options (whether or not vested) or unvested RSUs towards satisfying these guidelines, as we believe that these guidelines are meant to encourage outright ownership of our common stock and to further align the financial interests of our senior executives with those of our shareholders. Each senior executive’s compliance with the guidelines is measured annually as of December 31 and reviewed by the Compensation and Talent Committee. All NEOs were in compliance with the guidelines as of December 31, 2020.2023. For more information regarding the stock ownership guidelines applicable to our non-employee Directors, seerefer to “Director Stock Ownership Guidelines” beginning on page 4859. | | | | | | 94 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + Recovery of Incentive Compensation (Clawback Policy) UnderIn October 2023, the Board amended and restated our Amended and Restated Clawback Policy to comply with, and exceed the requirements of, the finalized and effective SEC and Nasdaq rules (Section 10D of the Exchange Act, Rule 10D-1 of the Dodd Frank Wall Street Reform and Consumer Protection Act promulgated thereunder and Nasdaq Rule 5608). Pursuant to our Clawback Policy, in the event of an “accounting restatement” (as defined in the policy), our “covered executives” (as defined in the policy), including current and former NEOs and other executive officers, must reimburse us for any “erroneously awarded compensation” (as defined in the policy) they received during the three completed fiscal years preceding the date on which we may seekare required to recover certain performance-basedprepare an accounting restatement. Incentive compensation subject to mandatory recoupment under the Clawback Policy includes the amount of incentive compensation (including performance-based equity compensation) granted toreceived by a covered executive during the three fiscal years preceding the required accounting restatement based on our senior executivesachievement of “financial reporting measures” (as defined in the policy) in excess of the amount that the covered executive would have received based on the restated financial reporting measures. In addition, in the event we are required to restateprepare a “‘Big R’ accounting restatement” (as defined in the policy), our financial results for anyBoard has discretionary authority to recover covered executives’ “additional compensation” (as defined in the policy), including their time-based equity awards and annual cash bonus amounts tied to the non-financial performance factor, to the extent such forms of compensation are not otherwise subject to mandatory recoupment. The Board has the three most recent fiscal years, other thanauthority to interpret and make all determinations under the Clawback Policy, in a restatement due to changes in accounting principles ormanner consistent with applicable law.SEC and Nasdaq rules.
Policy on Short-Sales, Derivatives and Hedging Pursuant to our Policy on Short Sales, Derivative Transactions and Hedging, no Director or employee of the CompanyIDEXX may engage in short sales of our securities; purchases or sales of puts, calls or other derivative securities based on our securities; or purchases of financial instruments that are designed to hedge or offset any decrease in the market value of our securities. Anti-Pledging Policy We maintain a Policy on Pledging of Company Stock that prohibits our Directors and senior executivesexecutive officers from pledging, hypothecating or otherwise encumbering our equity securities as collateral for indebtedness, including holding shares in a margin or similar account that would subject our equity securities to margin calls.calls or otherwise making them available as collateral for a margin loan. Executive Agreements In connection with Mr. Mazelsky’s appointment as our President and CEO in October 2019, IDEXX and Mr. Mazelsky entered into the Mazelsky Employment Agreement. Among other things, the Mazelsky Employment Agreement provides Mr. Mazelsky with certain severance benefits if he were to be terminated by IDEXX other than for cause (as defined in the Mazelsky Employment Agreement) or in connection with a change in control (as described below). For more information regarding these severance benefits, see belowrefer to the discussion under “Potential Payments Upon Termination or Change in Control” beginning on page 88112. 76 | 2021 Proxy Statement
In addition, each of the NEOs and certain other senior executives has a change in control agreement with the Company.IDEXX. With respect to Mr. Mazelsky, the terms of this change in control agreement are included in the Mazelsky Employment Agreement. The purpose of these agreements is to provide strong incentives for these senior executives to act in the best interest of our shareholdersstakeholders before, during and after any change in control transaction by providing them with certain payments, benefits and accelerated vesting of equity awards in the event their employment is terminated or materially changed following a change in control. The agreements do not provide for any 280G excise tax gross-ups. The change in control agreements (other than the Mazelsky Employment Agreement) renew annually unless we provide timely notice of our intent not to renew. The Compensation and Talent Committee believes these terms are reasonable and consistent with market practice. The Compensation and Talent Committee periodically reviews the change in control agreements and obtains updated industry benchmarking advice from FW Cookits independent compensation consultant to assist in determining whether any modifications to the agreements are necessary or whether we should permit | | | | | | IDEXX 2024 PROXY STATEMENT | 95 |
+ + + EXECUTIVE COMPENSATION renewal. For more information regarding these change in control agreements and the payments and benefits provided thereunder, see belowrefer to the discussion under “Potential Payments Upon Termination or Change in Control” beginning on page 88112. We have also entered into Confidential Information, Work Product and Restrictive Covenant Agreements with our senior executives, including each of our NEOs, pursuant to which senior executives agree to abide by standard non-competition, non-solicitation, confidentiality and invention assignment covenants. Equity Award Grant Policy We have an equity award grantinggrant policy that determines when and how we grant equity awards are granted by the Company.awards. This policy provides for an award date on the date the Compensation and Talent Committee approves an equity award at its regularly scheduled February meeting, and as to any other equity awards, a fixed award datesdate that occuroccurs outside the quarterly quiet periods during which our executives and Directors are precluded from trading in our securities, butsecurities. In addition, the Compensation and Talent Committee may grant an equity award on other dates if determined to be advisable. MostHowever, our equity awards, including all annual awards toaward grant policy prohibits manipulating either the NEOs, are made on or about February 14 of each year, which shortly follows both our earnings announcement for the fourth quartertiming of the prior year andrelease of material nonpublic information or the Compensation Committee meeting at which annual compensation determinations are made. timing of the grant of an equity-based award with the intent of benefiting any equity award grantee. All annual equity awards to our NEOs require the approval of the Compensation and Talent Committee. PursuantPrior to 2023, most equity awards, including all annual awards to the equity award granting policy,NEOs, were made on February 14 following the meeting of the Compensation and Talent Committee has delegated to the Compensation Committee Chair the power and authority to grant certain new hireat which annual compensation determinations are made. Annual equity awards granted in 2023 and thereafter are made on the date of the regularly scheduled Compensation and Talent Committee meeting in February, which shortly follows our earnings announcement for executive officers, subject to certain limitations set forth in the equity award granting policy.fourth quarter of the prior year. Risk Analysis The Compensation and Talent Committee engaged FW CookFarient to conduct an analysis of our compensation practices in order to assist the Compensation and Talent Committee in determining whether those practices created risks that were reasonably likely to have a material adverse effect on the Company.IDEXX. The results of this analysis were presented by FW CookFarient to the Compensation and Talent Committee in December 2020.2023. Based on this analysis, the Compensation and Talent Committee determined that our compensation practices were not reasonably likely to have a material adverse effect on the Company.IDEXX. This conclusion was based on the use of a reasonably balanced pay mix; multiple performance metrics used for the cash bonus plan,Executive Incentive Plan, including non-financial goals; capped cash bonus payouts; multi-year equity compensation vesting periods; stock ownership guidelines; a clawback policy; and a prohibition against pledging and hedging activity. Compensation and Talent Committee Report The Compensation and Talent Committee has reviewed and discussed with management the Compensation Discussion and Analysis set forth in this Proxy Statement for the year ended December 31, 2020.2023. Based on this review and discussion, the Compensation and Talent Committee recommended to the Board of Directors, and the Board of Directors has approved, the inclusion of the Compensation Discussion and Analysis in this Proxy Statement. Compensation and Talent Committee M. Anne Szostak, Chair
Rebecca M. Henderson, PhD
Irene Chang Britt Lawrence D. Kingsley Sam Samad 2021 Proxy Statement| 77
| | | | | | 96 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + Executive Compensation Tables Summary Compensation Table for 20202023 The following table sets forth the compensation earned during 2020, 20192023, 2022 and 20182021 by our CEO, Chief Financial Officer and the three other highest-paid executivesexecutive officers for the Company’s 20202023 fiscal year. | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position
| Year
| Salary
($) | Bonus
($) | Stock Awards (1) ($) | Option Awards (1) ($) | Non-Equity Incentive Plan Compensation (2) ($) | All Other Compensation
($) | Total ($)
| Jonathan J. Mazelsky (3) | 2020 | 814,039 | | — | | 1,125,087 | | 3,375,000 | | 1,700,000 | | 24,049 | (4) | 7,038,175 | | President and Chief Executive Officer | 2019 | 631,561 | | — | | 950,209 | (5) | 4,849,078 | (5) | 962,522 | | 25,965 | | 7,419,335 | | 2018 | 555,385 | | — | | 449,928 | | 1,348,870 | | 517,500 | | 25,442 | | 2,897,125 | | Brian P. McKeon | 2020 | 597,202 | | — | | 499,878 | | 1,500,047 | | 732,000 | | 21,058 | (6) | 3,350,185 | | Executive Vice President, Chief Financial Officer and Treasurer | 2019 | 588,933 | | — | | 700,022 | (7) | 2,099,590 | (7) | 533,025 | | 18,736 | | 3,940,306 | | 2018 | 570,577 | | — | | 449,928 | | 1,348,870 | | 517,500 | | 19,059 | | 2,905,934 | | Michael J. Lane | 2020 | 485,539 | | — | | 200,125 | | 600,002 | | 600,000 | | 23,339 | (8) | 1,909,005 | | Executive Vice President and General Manager, Reference Laboratories and IT | 2019 | 404,885 | | — | | 187,488 | | 562,374 | | 296,640 | | 22,493 | | 1,473,880 | | 2018 | 365,385 | | — | | 175,051 | | 524,537 | | 270,000 | | 22,702 | | 1,357,675 | | James F. Polewaczyk (9) | 2020 | 486,461 | | — | | 250,083 | | 749,981 | | 600,000 | | 19,175 | (10) | 2,105,700 | | Executive Vice President and Chief Commercial Officer | 2019 | — | | — | | — | | — | | — | | — | | — | | 2018 | — | | — | | — | | — | | — | | — | | — | | Sharon E. Underberg (11) | 2020 | 429,772 | | — | | 250,083 | | 749,981 | | 420,480 | | 30,801 | (12) | 1,881,117 | | Senior Vice President, General Counsel and Corporate Secretary | 2019 | 359,616 | | 112,000 | (13) | 499,967 | (14) | 499,839 | (14) | 272,340 | | 65,466 | | 1,809,228 | | 2018 | — | | — | | — | | — | | — | | — | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Option Awards(1) ($) | Non-Equity Incentive Plan Compensation(2) ($) | All Other Compensation ($) | Total ($) | | | | | | | | | | | | Jonathan J. Mazelsky | 2023 | 1,000,000 | | — | | 2,187,697 | | 6,562,842 | | 1,737,500 | | 31,270 | (3) | 11,519,309 | | | President and Chief Executive Officer | 2022 | 1,000,000 | | — | | 1,937,696 | | 5,812,593 | | 1,012,500 | | 25,599 | | 9,788,388 | | | 2021 | 976,923 | | — | | 1,500,029 | | 4,499,229 | | 2,062,500 | | 26,340 | | 9,065,021 | | | Brian P. McKeon | 2023 | 669,023 | | — | | 612,336 | | 1,837,574 | | 701,603 | | 24,529 | (4) | 3,845,065 | | | Executive Vice President, Chief Financial Officer and Treasurer | 2022 | 644,249 | | — | | 612,702 | | 1,837,483 | | 393,143 | | 23,249 | | 3,510,826 | | | 2021 | 625,485 | | — | | 550,065 | | 1,649,731 | | 777,521 | | 22,233 | | 3,625,035 | | | Tina Hunt, PhD | 2023 | 559,154 | | — | | 1,162,494 | | 1,237,487 | | 586,406 | | 25,252 | (5) | 3,570,793 | | | Executive Vice President, Strategy, Sector Development and Global Operations | 2022 | 538,327 | | — | | 412,512 | | 1,237,583 | | 328,506 | | 20,935 | | 2,537,863 | | | 2021 | 513,462 | | — | | 349,843 | | 1,049,814 | | 649,688 | | 20,298 | | 2,583,105 | | | Michael J. Lane | 2023 | 559,154 | | — | | 437,738 | | 1,312,524 | | 586,406 | | 25,539 | (6) | 2,921,361 | | | Executive Vice President and General Manager, Global Reference Laboratories and Information Technology | 2022 | 538,327 | | — | | 412,512 | | 1,237,583 | | 328,506 | | 24,263 | | 2,541,191 | | | 2021 | 521,154 | | — | | 349,843 | | 1,049,814 | | 649,688 | | 22,159 | | 2,592,658 | | | James F. Polewaczyk | 2023 | 559,154 | | — | | 437,738 | | 1,312,524 | | 586,406 | | 21,214 | (7) | 2,917,036 | | | Executive Vice President and Chief Commercial Officer | 2022 | 538,327 | | — | | 412,512 | | 1,237,583 | | 328,506 | | 23,158 | | 2,540,086 | | | 2021 | 521,154 | | — | | 349,843 | | 1,049,814 | | 649,688 | | 22,476 | | 2,592,975 | | |
(1)1.Reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. SeeRefer to Note 5 to our consolidated financial statements included in our 20202023 Annual Report on Form 10-K for the relevant assumptions used to determine the valuation of our stock awards and option awards.stock options.
(2)2.Amounts shown reflect the NEOs’NEOs' annual, performance-based cash bonus amounts under our Executive Incentive Plan. SeeRefer to the discussion under “Annual"Annual Performance-Based Cash Bonus” beginning on page 1987 above.(3)Mr. Mazelsky served as our Executive Vice President during 2018 and until his appointment as our Interim President and CEO in June 2019. Mr. Mazelsky was appointed our President and CEO. and became a Director, in October 2019. Amounts shown reflect compensation Mr. Mazelsky received as an employee. Mr. Mazelsky received no additional compensation for his service as a Director.
(4)3.Amount shown includes $14,250$16,500 in Company matching contributions under the Company’s 401(k) plan, and the remainder includes tax preparation and financial planning fees and premiums paid on behalf of Mr. Mazelsky under the Company’s disability and life insurance plans.
(5)Amounts shown include an annual equity award having a grant date value of approximately $1,800,000 granted in the ordinary course in February 2019, a one-time Interim CEO equity award having a grant date value of approximately $2,000,000 granted in August 2019 in connection with his appointment as our Interim President and CEO, and a one-time promotion equity award having a grant date value of approximately $2,000,000 granted in November 2019 in connection with his appointment as our President and CEO.
(6)4.Amount shown includes $14,250$16,500 in Company matching contributions under the Company’s 401(k) plan, and the remainder includes tax preparation fees, reimbursements for executive physical examinations and premiums paid on behalf of Mr. McKeon under the Company’s disability and life insurance plans.
(7)Amounts shown include an annual equity award having a grant date value of approximately $1,800,000 granted in the ordinary course in February 2019 and an additional one-time equity having a grant date value of approximately $1,000,000 granted in August 2019 in recognition of Mr. McKeon’s assumption of additional responsibilities following Mr. Mazelsky’s appointment as our Interim President and CEO.
78 | 2021 Proxy Statement
| | | | | | EXECUTIVE COMPENSATIONIDEXX 2024 PROXY STATEMENT | 97 |
(8)+ + + EXECUTIVE COMPENSATION 5.Amount shown includes $14,250$16,500 in Company matching contributions under the Company’s 401(k) plan, and the remainder includes tax preparation fees and premiums paid on behalf of Dr. Hunt under the Company’s disability and life insurance plans. 6.Amount shown includes $16,500 in Company matching contributions under the Company’s 401(k) plan, and the remainder includes tax preparation fees and premiums paid on behalf of Mr. Lane under the Company’s disability and life insurance plans. (9)Mr. Polewaczyk became an executive officer on January 15, 2020.
(10)7.Amount shown includes $14,250$16,500 in Company matching contributions under the Company’s 401(k) plan, and the remainder includes tax preparation fees and premiums paid on behalf of Mr. Polewaczyk under the Company’s disability and life insurance plans.
(11)Ms. Underberg was hired by the Company and became an executive officer on February 11, 2019.
(12)Amount shown includes $14,250 in Company matching contributions under the Company's 401(k) plan, and the remainder includes tax preparation fees, reimbursements for executive physical examinations and premiums paid on behalf of Ms. Underberg under the Company’s disability and life insurance plans, and certain relocation costs and associated tax gross-up for taxable relocation amounts.
(13)Amount shown includes a signing bonus of $112,000 paid in connection with the hiring of Ms. Underberg in February 2019.
(14)Amounts shown include the aggregate grant date fair value of equity awards granted to Ms. Underberg in February 2019 when Ms. Underberg commenced employment with the Company.
2021 Proxy Statement| 79
| | | | | | 98 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + 20202023 Grants of Plan-Based Awards for 2020
The following table sets forth each grant of an award made to the NEOs during the Company’s 20202023 fiscal year. All equity awards were made under the Company’s 2018 Stock Incentive Plan (the 2018 Plan) described below. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Possible Pay-outs under Non-Equity Incentive Plan Awards (2) | Estimated Possible Pay-outs under Equity Incentive Plan Awards (5)(7) (#) | All Other Option Awards: Number of Securities Underlying Options (6)(7) (#) | Exercise /Base Price of Option Awards (1) ($) | Grant Date Fair Value of Stock Option Awards (8) ($) | Name | Grant Date | Action Date (1) | Target (3) ($) | Maximum (4) ($) | Jonathan J. Mazelsky (9) | 2/14/2020 | 2/12/2020 | — | | — | | 3,896 | | — | | — | | 1,125,087 | | 2/14/2020 | 2/12/2020 | — | | — | | — | | 40,078 | | 288.78 | | 3,375,000 | | | — | | — | | 1,062,500 | | 2,125,000 | | — | | — | | — | | — | | Brian P. McKeon | 2/14/2020 | 2/12/2020 | — | | — | | 1,731 | | — | | — | | 499,878 | | 2/14/2020 | 2/12/2020 | — | | — | | — | | 17,813 | | 288.78 | | 1,500,047 | | | — | | — | | 457,500 | | 915,000 | | — | | — | | — | | — | | Michael J. Lane | 2/14/2020 | 2/12/2020 | — | | — | | 693 | | — | | — | | 200,125 | | 2/14/2020 | 2/12/2020 | — | | — | | — | | 7,125 | | 288.78 | | 600,002 | | | — | | — | | 375,000 | | 750,000 | | — | | — | | — | | — | | James F. Polewaczyk | 2/14/2020 | 2/12/2020 | — | | — | | 866 | | — | | — | | 250,083 | | 2/14/2020 | 2/12/2020 | — | | — | | — | | 8,906 | | 288.78 | | 749,981 | | | — | | — | | 375,000 | | 750,000 | | — | | — | | — | | — | | Sharon E. Underberg | 2/14/2020 | 2/12/2020 | — | | — | | 866 | | — | | — | | 250,083 | | 2/14/2020 | 2/12/2020 | — | | — | | — | | 8,906 | | 288.78 | | 749,981 | | | — | | — | | 262,800 | | 525,600 | | — | | — | | — | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Possible Pay-outs under Non-Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units(5)(7) (#) | All Other Option Awards: Number of Securities Underlying Options(6)(7) (#) | Exercise /Base Price of Option Awards(1) ($) | Grant Date Fair Value of Stock and Option Awards(8) ($) | | Name | Grant Date(1) | Target(3) ($) | Maximum(4) ($) | | | | | | | | | | | Jonathan J. Mazelsky(9) | 2/08/23 | — | | — | | 4,398 | — | — | | 2,187,697 | | | 2/08/23 | — | | — | | — | 21,457 | 497.43 | | 4,375,147 | | | 2/08/23 | — | | — | | — | 12,181 | 572.04 | | 2,187,695 | | | | 1,250,000 | | 2,500,000 | | — | — | — | | — | | | Brian P. McKeon | 2/08/23 | — | | — | | 1,231 | — | — | | 612,336 | | | 2/08/23 | — | | — | | — | 9,012 | 497.43 | | 1,837,574 | | | | 504,750 | | 1,009,500 | | — | — | — | | — | | | Tina Hunt, PhD | 2/08/23 | — | | — | | 1,508 | — | — | | 750,124 | | | 2/08/23 | — | | — | | 829 | — | — | | 412,369 | | | 2/08/23 | — | | — | | — | 6,069 | 497.43 | | 1,237,487 | | | | 421,875 | | 843,750 | | — | — | — | | — | | | Michael J. Lane | 2/08/23 | — | | — | | 880 | — | — | | 437,738 | | | 2/08/23 | — | | — | | — | 6,437 | 497.43 | | 1,312,524 | | | | 421,875 | | 843,750 | | — | — | — | | — | | | James F. Polewaczyk | 2/08/23 | — | | — | | 880 | — | — | | 437,738 | | | 2/08/23 | — | | — | | — | 6,437 | 497.43 | | 1,312,524 | | | | 421,875 | | 843,750 | | — | — | — | | — | | |
(1)1.On each of the actiongrant dates reflected, the Compensation and Talent Committee approved the grant of the above-described stock options and RSUs to the NEOs at the closing sale price of the common stock on the NASDAQNasdaq Global Select Market on the applicable grant date. SeeRefer to the discussion under "Equity Award Grant Policy'" on page 7796 above..(2)2.The non-equity incentive plan awards reported under this caption represent the possible annual, performance-based cash bonus amounts under our Executive Incentive Plan, the material terms of which are discussed under “Annual"Annual Performance-Based Cash Bonus” beginning on page 1987 above.. The actual award payments under the Executive Incentive Plan, as determined by the Compensation and Talent Committee onin February 9, 2021,2024, are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for 20202023 above. The Executive Incentive Plan does not provide for a threshold payout, and if minimum performance goals are not met, no annual performance-based cash bonus is earned under the plan. | | | | | | IDEXX 2024 PROXY STATEMENT | 99 |
+ + + EXECUTIVE COMPENSATION 3.Annual performance-based cash bonus amounts for 20202023 awarded under the Executive Incentive Plan are determined by multiplying a target bonus, represented as a percentage of annual base salary, by a factor calculated by combining two weighted measures: (1) Company financial performance against budget with respect to pre-determined financial metrics (60% weight), and (2) achievement of non-financial performance goals, and in consideration of individual performance (40% weight). For a discussion of the 20202023 financial metrics and performance goals under the Executive Incentive Plan, seerefer to the discussion under "Annual Performance-Based Cash Bonus" beginning on page 1987above.. For 2020,2023, Mr. Mazelsky had a target bonus of 125% of base salary, each ofand Mr. McKeon, Mr. Lane, and Mr. Polewaczyk and Dr. Hunt each had a target bonus of 75% of base salary and Ms. Underberg had a target bonus of 60% of base salary. The “Target” amount set forth above represents an assumption that the financial and non-financial performance goal ratings for each of the NEOs participating in the Executive Incentive Plan is 100%. (4)4.The maximum annual performance-based cash bonus for fiscal year 20202023 was determined under the Executive Incentive Plan as 200% of target bonus.
(5)5.Granted under our 2018 Plan as RSUs that vest in equal annual installments over a four-year period commencing on the first anniversary of the date of grantFebruary 14, 2024 (subject to the executive'sexecutive officer's continued employment), except for Dr. Hunt's award of 1,508 RSUs that vests in full on February 14, 2026 (subject to her continued employment). For more information regarding these RSUs, seerefer to the information under "Equity-Based Long TermLong-Term Incentive Compensation”Compensation" beginning on page 7391.(6)6.Options become exercisable in equal annual installments over a four-year period commencing on the first anniversary of the date of grantFebruary 14, 2024 (subject to the executive’sexecutive officer's continued employment).
(7)7.Pursuant to the 2018 Plan, upon a change in control of IDEXX, each outstanding stock option or RSU award held by all employees of IDEXX, including executives,the NEOs, is subject to the vesting provisions described below under “Stock Incentive Plans.”Plans” beginning on page 110. Under the change in control agreements between the Company and each of its senior executives, vesting of options and RSUs held by each senior executive may accelerate in full in the event of a change in control of the Company followed by a qualifying termination of the senior executive’s employment, as described below under “Change"Change in Control Agreements”Control" beginning on page 89116 below..80 | 2021 Proxy Statement
(8)8.Reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. SeeRefer to Note 5 to our consolidated financial statements included in our 20202023 Annual Report on Form 10-K for the relevant assumptions used to determine the valuation of our stock option awards.
(9)9.Mr. Mazelsky’s stock options and RSUs granted in February 2023 will continue to vest so long as he is an employee of the Company, a member of the Board or a consultant of the Company. In the event of termination of Mr. Mazelsky's employment by the Company other than for cause (except following a change in control), even if he is not a member of the Board or a consultant of the Company, his stock options and RSUs granted in February 2023 will continue to vest in accordance with their terms for two years. See “Mazelsky Employment Agreement”Refer to “Involuntary Termination without Cause” beginning on page88114 below..In addition to the footnotes to the Summary Compensation Table for 20202023 and 20202023 Grants of Plan-Based Awards table above, the following sections of this Proxy Statement further describe other material factors of the compensation and awards described in those tables. For a description of the material terms of Mr. Mazelsky’s employment agreement, refer to the Mazelsky Employment Agreement, see “Mazelsky Employment Agreement”discussion under “Involuntary Termination without Cause” beginning on page 88114 below.. For a discussion of the change in control agreements we have in place with each of our NEOs, seerefer to the discussion under "Change in Control Agreements"Control” beginning on page 89116 below.. For a description of the material terms of the 2018 Plan, seerefer to the discussion under "Stock Incentive Plans" beginning on page 86110 below.. For an explanation of the amount of salary and bonus in proportion to total compensation, and a description of the criteria applied in determining grants of plan-based awards, seerefer to the “Compensation Discussion and Analysis” beginning on page 6074 above.. 2021 Proxy Statement| 81
| | | | | | 100 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + 20202023 Outstanding Equity Awards at 20202023 Fiscal Year EndYear-End
The table below sets forth information with respect to unexercised options and stock awards that have not vested for each of the NEOs as of the end of the Company’s 20202023 fiscal year. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards(1) | | Stock Awards(1) | Name | Grant Date (2) | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date (3) | | Number of Shares/ Units of Stock Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested (4) ($) | Jonathan J. Mazelsky (5) | 12/5/2013 | 49,002 | | — | | 52.000 | | 12/4/2023 | | — | | — | | | 2/14/2014 | 18,998 | | — | | 62.000 | | 2/13/2024 | | — | | — | | | 2/14/2015 | 26,848 | | — | | 79.540 | | 2/13/2025 | | — | | — | | | 2/14/2016 | 34,188 | | 8,547 | | 67.850 | | 2/13/2026 | | 737 | | 368,404 | | | 2/14/2017 | 14,420 | | 9,612 | | 141.600 | | 2/13/2027 | | 918 | | 458,881 | | | 2/14/2018 | 10,280 | | 15,420 | | 178.260 | | 2/13/2028 | | 1,514 | | 756,803 | | | 2/14/2019 | 4,248 | | 16,988 | | 206.940 | | 2/13/2029 | | 1,740 | | 869,774 | | | 8/5/2019 | 4,024 | | 16,092 | | 260.070 | | 8/4/2029 | | 1,538 | | 768,800 | | | 11/4/2019 | 5,599 | | 22,393 | | 306.526 | | 11/3/2029 | | — | | — | | | 2/14/2020 | | 40,078 | | 288.780 | | 2/13/2030 | | 3,896 | | 1,947,494 | | Brian P. McKeon (6) | 2/14/2016 | 37,608 | | 9,401 | | 67.850 | | 2/13/2026 | | 810 | | 404,895 | | | 2/14/2017 | 14,420 | | 9,612 | | 141.600 | | 2/13/2027 | | 918 | | 458,881 | | | 2/14/2018 | 10,280 | | 15,420 | | 178.260 | | 2/13/2028 | | 1,514 | | 756,803 | | | 2/14/2019 | 4,248 | | 16,988 | | 206.940 | | 2/13/2029 | | 1,740 | | 869,774 | | | 8/5/2019 | 2,012 | | 8,046 | | 260.070 | | 8/4/2029 | | 768 | | 383,900 | | | 2/14/2020 | — | | 17,813 | | 288.780 | | 2/13/2030 | | 1,731 | | 865,275 | | Michael J. Lane | 2/14/2016 | 461 | | 2,564 | | 67.850 | | 2/13/2026 | | 221 | | 110,471 | | | 2/14/2017 | 2,218 | | 4,436 | | 141.600 | | 2/13/2027 | | 423 | | 211,445 | | | 2/14/2018 | 1,999 | | 5,996 | | 178.260 | | 2/13/2028 | | 588 | | 293,924 | | | 2/14/2019 | 1,770 | | 7,079 | | 206.940 | | 2/13/2029 | | 724 | | 361,906 | | | 2/14/2020 | — | | 7,125 | | 288.780 | | 2/13/2030 | | 693 | | 346,410 | | James F. Polewaczyk | 2/14/2016 | 11,283 | | 2,820 | | 67.850 | | 2/13/2026 | | 243 | | 121,468 | | | 2/14/2017 | 4,715 | | 3,142 | | 141.600 | | 2/13/2027 | | 300 | | 149,961 | | | 2/14/2018 | 2,570 | | 3,855 | | 178.260 | | 2/13/2028 | | 378 | | 188,951 | | | 2/14/2019 | 1,239 | | 4,955 | | 206.940 | | 2/13/2029 | | 507 | | 253,434 | | | 2/14/2020 | | 8,906 | | 288.780 | | 2/13/2030 | | 866 | | 432,887 | | Sharon E. Underberg (7) | 2/14/2019 | 1,090 | | 6,292 | | 206.940 | | 2/13/2029 | | 1,932 | | 965,749 | | | 2/14/2020 | — | | 8,906 | | 288.780 | | 2/13/2030 | | 866 | | 432,887 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards (1) | Stock Awards(1) | | Name | Grant Date(2) | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date(3) | Number of Shares/ Units of Stock Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($)(4) | | | | | | | | | | | Jonathan J. Mazelsky(5) | 2/14/2016 | 41,260 | — | 67.85 | | 2/13/2026 | — | — | | | 2/14/2017 | 23,326 | — | 141.60 | | 2/13/2027 | — | — | | | 2/14/2018 | 25,140 | — | 178.26 | | 2/13/2028 | — | — | | | 2/14/2019 | 16,989 | 4,247 | 206.94 | | 2/13/2029 | 435 | 241,447 | | | 8/5/2019 | 16,093 | 4,023 | 260.07 | | 8/4/2029 | 384 | 213,139 | | | 11/4/2019 | 22,394 | 5,598 | 306.53 | | 11/3/2029 | — | — | | | 2/14/2020 | 30,059 | 10,019 | 288.78 | | 2/13/2030 | 974 | 540,619 | | | 2/14/2021 | 8,838 | 8,836 | 544.08 | | 2/13/2031 | 1,378 | 764,859 | | | 2/14/2021 | 4,950 | 4,950 | 598.48 | | 2/13/2031 | — | — | | | 2/14/2022 | 3,140 | 9,417 | 556.08 | | 2/13/2032 | 2,874 | 1,595,214 | | | 2/14/2022 | 5,641 | 16,922 | 505.53 | | 2/13/2032 | — | — | | | 2/8/2023 | — | 12,181 | 572.04 | | 2/7/2033 | 4,398 | 2,441,110 | | | 2/8/2023 | — | 21,457 | 497.43 | | 2/7/2033 | — | — | | | Brian P. McKeon(6) | 2/14/2017 | 23,326 | — | 141.60 | | 2/13/2027 | — | — | | | 2/14/2018 | 25,140 | — | 178.26 | | 2/13/2028 | — | — | | | 2/14/2019 | 16,989 | 4,247 | 206.94 | | 2/13/2029 | 435 | 241,447 | | | 8/5/2019 | 8,047 | 2,011 | 260.07 | | 8/4/2029 | 192 | 106,570 | | | 2/14/2020 | 13,360 | 4,453 | 288.78 | | 2/13/2030 | 432 | 239,782 | | | 2/14/2021 | 4,861 | 4,860 | 544.08 | | 2/13/2031 | 505 | 280,300 | | | 2/14/2022 | 2,675 | 8,024 | 505.53 | | 2/13/2032 | 909 | 504,540 | | | 2/8/2023 | — | 9,012 | 497.43 | | 2/7/2033 | 1,231 | 683,267 | | |
| | | | | | IDEXX 2024 PROXY STATEMENT | 101 |
+ + + EXECUTIVE COMPENSATION | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards (1) | Stock Awards(1) | | Name | Grant Date(2) | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date(3) | Number of Shares/ Units of Stock Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($)(4) | | | | | | | | | | | Tina Hunt, PhD (7) | 2/14/2017 | 1,218 | — | 141.60 | | 2/13/2027 | — | — | | | 2/14/2018 | 6,425 | — | 178.26 | | 2/13/2028 | — | — | | | 2/14/2019 | 4,956 | 1,238 | 206.94 | | 2/13/2029 | 126 | 69,936 | | | 2/14/2020 | 5,344 | 1,781 | 288.78 | | 2/13/2030 | 173 | 96,024 | | | 2/14/2021 | 3,094 | 3,092 | 544.08 | | 2/13/2031 | 321 | 178,171 | | | 2/14/2022 | 1,802 | 5,404 | 505.53 | | 2/13/2032 | 612 | 339,691 | | | 2/8/2023 | — | 6,069 | 497.43 | | 2/7/2033 | 1,508 | 837,015 | | | 2/8/2023 | — | — | — | — | 829 | 460,136 | | | Michael J. Lane | 2/14/2019 | — | 1,769 | 206.94 | | 2/13/2029 | 181 | 100,464 | | | 2/14/2020 | 5,344 | 1,781 | 288.78 | | 2/13/2030 | 173 | 96,024 | | | 2/14/2021 | 3,094 | 3,092 | 544.08 | | 2/13/2031 | 321 | 178,171 | | | 2/14/2022 | 1,802 | 5,404 | 505.53 | | 2/13/2032 | 612 | 339,691 | | | 2/8/2023 | — | 6,437 | 497.43 | | 2/7/2033 | 880 | 488,444 | | | James F. Polewaczyk | 2/14/2019 | — | 1,238 | 206.94 | | 2/13/2029 | 126 | 69,936 | | | 2/14/2020 | — | 2,226 | 288.78 | | 2/13/2030 | 216 | 119,891 | | | 2/14/2021 | 3,094 | 3,092 | 544.08 | | 2/13/2031 | 321 | 178,171 | | | 2/14/2022 | 1,802 | 5,404 | 505.53 | | 2/13/2032 | 612 | 339,691 | | | 2/8/2023 | — | 6,437 | 497.43 | | 2/7/2033 | 880 | 488,444 | | |
1.Upon a change in control of IDEXX, each outstanding stock option or RSU award held by all employees of IDEXX, including executives,the NEOs, is subject to the vesting provisions described below under “Stock Incentive Plans” beginning on page 86110. Under the change in control agreements between the Company and each of its senior executives, vesting of options and RSUs held by each senior executive may accelerate in full in the event of a change in control of the Company followed by a qualifying termination of the senior executive’s employment. SeeRefer to “Change in Control Agreements”Control” beginning on page 89116. (2)2.Option grants made in 2023 become exercisable in equal annual installments over a four-year period commencing on February 14, 2024 and option grants made in 2020, 2021 and 2022 become exercisable in equal annual installments over a four-year period commencing on the first anniversary of the date of grant. Option grants made prior to 2020 become exercisable in equal annual installments over a five-year period commencing on the first anniversary of the date of grant. RSU grants made in 2023 vest in equal installments over a four-year period commencing on February 14, 2024 (except for Dr. Hunt’s February 8, 2023 grant of 1,508 RSUs, which vests in full on February 14, 2026). RSU grants made in 2020, 2021 and 2022 vest in equal installments over a four-year period commencing on the first anniversary of the date of grant. RSU grants made prior to 2020 vest in equal installments over a five-year period commencing on the first anniversary of the date of grant.
(3)Options expire on3.The last day options can be exercised is the day immediately prior to the tenth anniversary of the date of grant.
(4)4.Market value of unvested stock awards is determined by multiplying the number of unvested shares by $499.87,$555.05, the closing sale price of the Company’s common stock onat December 31, 2020.29, 2023, the last trading day of 2023.
(5)5.Mr. Mazelsky was granted a one-time Interim CEO equity award on August 5, 2019 in connection with his appointment as our Interim President and CEO and a one-time promotion equity award on November 4, 2019 in connection with his appointment as our President and CEO. Mr. Mazelsky’s stock options and RSUs granted in February 2021, February 2022 and February 2023 will continue to vest so long as he is an employee of the Company, a member of the Board or a consultant of the Company. In the event of termination of Mr. Mazelsky’sMazelsky's employment
| | | | | | 102 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + by the Company other than for cause (except following a change in 82 | 2021 Proxy Statement
control), his stock options and RSUs will continue to vest in accordance with their terms for two years. See “Mazelsky Employment Agreement”Refer to the discussion under "Involuntary Termination without Cause" beginning on page 88114 below.. (6)6.Mr. McKeon was granted awards prior to January 1, 2014 as a Director. All grants after January 1, 2014 were in connection with his hiring or employment as Executive Vice President, Chief Financial Officer and Treasurer, including a one-time additional equity award granted to Mr. McKeon on August 5, 2019 in recognition of his assumption of additional responsibilities following Mr. Mazelsky’sMazelsky's appointment as our Interim President and CEO.
(7)Ms. Underberg7.Dr. Hunt was granted awardsa special, one-time award of 1,508 RSUs on February 14, 20198, 2023 in connection withrecognition of her hiring as an executive officer in February 2019.expanded job responsibilities encompassing corporate strategy, marketing and sector development.
20202023 Option Exercises and Stock Vested
The table below sets forth information with respect to exercises of stock options and vesting of RSUs for the NEOs during the 20202023 fiscal year. | | Option Awards(1) | | Name | | Name | | Name | | | | Option Awards | | Stock Awards | Name | Number of Shares Acquired on Exercise (1) (#) | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (2) (#) | Value Realized on Vesting ($) | Jonathan J. Mazelsky | | | Jonathan J. Mazelsky | | | Jonathan J. Mazelsky | Jonathan J. Mazelsky | 18,880 | | 4,889,369 | | | 2,992 | | 905,198 | | Brian P. McKeon | Brian P. McKeon | 123,076 | | 42,238,590 | | | 3,030 | | 895,641 | | Brian P. McKeon | | Brian P. McKeon | | Tina Hunt, PhD | | Tina Hunt, PhD | | Tina Hunt, PhD | | Michael J. Lane | Michael J. Lane | 2,851 | | 1,062,508 | | | 1,000 | | 288,780 | | James F Polewaczyk | 17,520 | | 3,862,449 | | | 853 | | 246,329 | | Sharon E. Underberg | 483 | | 84,312 | | | 484 | | 139,770 | | Michael J. Lane | | Michael J. Lane | | James F. Polewaczyk | | James F. Polewaczyk | | James F. Polewaczyk | |
(1)1.Reflects the gross number of shares acquired and value realized upon exercise by each NEO, without reduction for shares that were used to pay the exercise price or to satisfy tax obligations.
(2)2.Reflects the number of shares acquired and value of such shares upon vesting prior to the withholding of the following number of shares for each NEO to satisfy such officer’stheir tax obligations: Mr. Mazelsky (1,389)(1,827), Mr. McKeon (1,076)(1,325), Dr. Hunt (239), Mr. Lane (303),(275) and Mr. Polewaczyk (259) and Underberg (153)(252).
2021 Proxy Statement| 83
| | | | | | IDEXX 2024 PROXY STATEMENT | 103 |
+ + + EXECUTIVE COMPENSATION CEO Pay Ratio
Pursuant to Section 953(b)953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are required to provide annual disclosure of certain information to describe the relationship between “compensation actually paid” to our CEO and other NEOs and our financial performance. For further information regarding our compensation philosophy and how executive compensation aligns with performance, refer to the discussion under “Compensation Discussion and Analysis” beginning on page 74. Pay Versus Performance Table for 2023 The following pay versus performance table sets forth information required by Item 402(v) of Regulation S-K, including: (i) the total compensation earned by our CEO (as reported on our Summary Compensation Table), (ii) the “compensation actually paid” to our CEO (calculated in accordance with Item 402(v) of Regulation S-K), (iii) the average of the total compensation earned by our other NEOs (derived from our Summary Compensation Table), (iv) the average “compensation actually paid” to our other NEOs (calculated in accordance with Item 402(v) of Regulation S-K), (v) our net income and (vi) our organic revenue growth rate, in each case, for each of the covered fiscal years of 2020, 2021, 2022 and 2023, as well as our cumulative total shareholder return and that of the S&P 500 Health Care Index (our pay versus performance peer group) over such period. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year (1) | Summary Compensation Table Total for CEO | Compensation Actually Paid to CEO(2)(4) | Average Summary Compensation Table Total for Other NEOs | Average Compensation Actually Paid to Other NEOs(3)(4) | Value of Initial Fixed $100 Investment Based on: | IDEXX Net Income (MM) | IDEXX Organic Revenue Growth(7) | | IDEXX TSR(5) | Peer Group TSR(6) | | | | | | | | | | | | 2023 | $11,519,309 | | $22,675,198 | | $3,313,564 | | $6,133,478 | | $212.56 | | $143.18 | | $845.0 | | 9% | | 2022 | $9,788,388 | | ($13,754,140) | | $2,782,492 | | ($3,411,052) | | $156.23 | | $140.29 | | $679.1 | | 7% | | 2021 | $9,065,021 | | $28,210,038 | | $2,848,443 | | $8,009,991 | | $252.16 | | $143.09 | | $744.8 | | 16% | | 2020 | $7,038,175 | | $34,873,879 | | $2,311,502 | | $10,522,557 | | $191.43 | | $113.45 | | $581.8 | | 12% | |
1.For each of the years presented in the table, our CEO was Jonathan J. Mazelsky. Our other NEOs were Brian P. McKeon (2020-2023), James F. Polewaczyk (2020-2023), Michael J. Lane (2020-2023), Tina Hunt (2021-2023), and Sharon E. Underberg (2020). 2.The table below provides a summary of deductions and additions made from the summary compensation table (SCT) total for our CEO to calculate the “compensation actually paid” to our CEO. The amount has been calculated in accordance with Item 402(v) of Regulation S-K and the dollar amount of the “compensation actually paid” does not reflect the actual amount of compensation earned or paid to the CEO during the applicable year. There were no equity award forfeitures nor dividends or other earnings paid on stock or option awards in any of the applicable years and thus no adjustments are reflected for such events in the table below. | | | | | | 104 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + | | | | | | | | | | | | | | | | | | | | | Year | 2023 ($) | 2022 ($) | 2021 ($) | 2020 ($) | | | | | | | | | Summary Compensation Table for CEO | 11,519,309 | | 9,788,388 | | 9,065,021 | | 7,038,175 | | | Deductions | Grant date value of Stock Awards granted during fiscal year as reported in the SCT | 2,187,697 | | 1,937,696 | | 1,500,029 | | 1,125,087 | | | Grant date value of Option Awards granted during fiscal year as reported in the SCT | 6,562,842 | | 5,812,593 | | 4,499,229 | | 3,375,000 | | | Additions | Fair value as of year end of outstanding and unvested equity awards granted during fiscal year | 10,282,274 | | 6,449,518 | | 8,858,781 | | 11,773,116 | | | Change in fair value (comparing year end to the end of prior fiscal year) of equity awards granted in a prior fiscal year that are outstanding and unvested at year end | 6,759,528 | | (15,299,044) | | 13,640,628 | | 18,767,155 | | | Fair value of equity awards on vest date for equity awards granted and vested during fiscal year | — | | — | | — | | — | | | Change in fair value (comparing the vesting date to the end of the prior fiscal year) of equity awards granted in a prior fiscal year that vested during the fiscal year | 2,864,627 | | (6,942,713) | | 2,644,866 | | 1,795,521 | | | Compensation Actually Paid to CEO | 22,675,198 | | (13,754,140) | | 28,210,038 | | 34,873,879 | | |
3.The table below provides a summary of deductions and additions made from the average summary compensation table (SCT) total for our other NEOs to calculate the average “compensation actually paid” to our other NEOs. The amount has been calculated in accordance with Item 402(v) of Regulation S-K and the dollar amount of the average “compensation actually paid” does not reflect the actual average amount of compensation earned or paid to the other NEOs during the applicable year. There were no equity award forfeitures nor dividends or other earnings paid on stock or option awards in any of the applicable years and thus no adjustments are reflected for such events in the table below. | | | | | | | | | | | | | | | | | | | | | Year | 2023 ($) | 2022 ($) | 2021 ($) | 2020 ($) | | | | | | | | | Summary Compensation Table Average for other NEOs | $ | 3,313,564 | | $ | 2,782,492 | | $ | 2,848,443 | | $ | 2,311,502 | | | Deductions | Grant date value of Stock Awards granted during fiscal year as reported in the SCT | 662,577 | | 462,560 | | 399,899 | | 300,042 | | | Grant date value of Option Awards granted during fiscal year as reported in the SCT | 1,425,027 | | 1,387,558 | | 1,199,793 | | 900,003 | | | Additions | Fair value as of year end of outstanding and unvested equity awards granted during fiscal year | 2,418,164 | | 1,520,657 | | 2,340,819 | | 3,139,539 | | | Change in fair value (comparing year end to the end of prior fiscal year) of equity awards granted in a prior fiscal year that are outstanding and unvested at year end | 1,606,730 | | (3,973,866) | | 3,751,718 | | 5,913,551 | | | Fair value of equity awards on vest date for equity awards granted and vested during fiscal year | — | | — | | — | | — | | | Change in fair value (comparing the vesting date to the end of the prior fiscal year) of equity awards granted in a prior fiscal year that vested during the fiscal year | 882,624 | | (1,890,216) | | 668,703 | | 358,010 | | | Average Compensation Actually Paid to Other NEOs | $ | 6,133,478 | | $ | (3,411,052) | | $ | 8,009,991 | | $ | 10,522,557 | | |
4.Equity values used to determine the deductions and additions set forth in the tables in notes (2) and (3) above to calculate “compensation actually paid” for our CEO and average “compensation actually paid” for our other NEOs are calculated in accordance with FASB ASC Topic 718. Adjustments with respect to stock option awards have been made as of each measurement date using the stock price as of the measurement date and updated assumptions (i.e., term, volatility and risk free rates) as of the relevant measurement date in accordance with U.S. GAAP. The methodology used to develop the valuation assumptions as of each relevant measurement date does not differ materially from those disclosed at the time of grant. | | | | | | IDEXX 2024 PROXY STATEMENT | 105 |
+ + + EXECUTIVE COMPENSATION 5.The measurement period to calculate total shareholder return (TSR) begins as of market close on December 31, 2019 and ends on December 31, 2020, 2021, 2022 and 2023, as applicable. The calculation of TSR assumes an initial investment of $100 as of the close of trading on December 31, 2019, and assumes dividends, if any, were reinvested. 6.The peer group TSR set forth in the table utilizes the S&P 500 Health Care Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report on Form 10-K for the year ended December 31, 2023. The measurement period to calculate the S&P 500 Health Care Index TSR begins as of market close on December 31, 2019 and ends on December 31, 2020, 2021, 2022 and 2023 as applicable. The calculation of the S&P 500 Health Care Index TSR assumes an investment of $100 in the S&P 500 Health Care Index as of the close of trading on December 31, 2019, and assumes dividends, if any, were reinvested. 7.For a discussion of how organic revenue growth was used by IDEXX to link “compensation actually paid” to our NEOs in 2023 to our financial performance, refer to the discussion under “Financial Performance Factor” beginning on page 88. Organic revenue growth is a non-GAAP financial measure. Information regarding organic revenue growth and its calculation is provided in Appendix A. While we use a variety of financial performance measures for the purpose of evaluating performance as part of our executive compensation programs, we have determined that organic revenue growth is the financial performance measure that, in our assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table) used in 2023 to link “compensation actually paid” to the NEOs to the Company’s performance because it is the metric with the highest weighting in the financial performance factor portion of our Executive Incentive Plan. As detailed earlier under “Compensation Discussion and Analysis” beginning on page 74, we seek to create alignment between management and shareholder interests. We do so, in part, by compensating our NEOs primarily with variable and “at-risk” compensation elements. In particular, a majority of the value of our NEOs’ total target direct compensation is in the form of long-term equity awards. As a result, the increase in our stock price during 2023 resulted in “compensation actually paid” for our CEO and average “compensation actually paid” for our other NEOs that was significantly higher than the corresponding total compensation amounts reported in the Summary Compensation Table for 2023. Relationship Between Compensation Actually Paid and Certain Measures The following graphs describe the relationship between the annual total compensation actually paid to our CEO, the average annual total compensation actually paid to our other NEOs, the total shareholder return of our stock, the total shareholder return of the S&P 500 Health Care Index, our net income and our organic revenue growth rate, as each is disclosed in the pay versus performance table above. | | | | | | 106 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + | | | | | | IDEXX 2024 PROXY STATEMENT | 107 |
+ + + EXECUTIVE COMPENSATION 2023 Financial Performance Measures Pursuant to Item 402(v)(6) of Regulation S-K, we are required to provide a tabular list of at least three, and up to seven, financial performance measures, which in our assessment represent the most important financial performance measures used by us to link compensation actually paid to our NEOs, for 2023, to our performance. Based on the components of our CEO and other NEO pay, as well as the financial metrics used to calculate the financial performance factor of our 2023 Executive Incentive Plan, it is our assessment that the following were the most important financial performance measures used by us to link “compensation actually paid” to our CEO and other NEOs in 2023 to company performance: | | | | | | Financial Performance Measures(1) | | | Organic revenue growth | Operating profit | Earnings per share (diluted) | ROIC |
1.For a description of the financial performance measures and how they factor into our annual performance-based cash bonus program, refer to the discussion under “Financial Performance Factor” beginning on page 88. | | | | | | 108 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + CEO Pay Ratio Pursuant to Item 402(u) of Regulation S-K, we are required to provide annual disclosure of the ratio of (i) the median oftotal annual total compensation of all of our employees other than our CEO, to (ii) the total annual compensation of our CEO. median employee. For fiscal year 2020, Mr. Mazelsky’s2023: +the total annual compensation of our CEO was $7,038,175 (as reported in $11,519,309; +the “Total Compensation” column of the Summary Compensation Table above). Based on the methodology described in the footnote below, and the adjustments and estimates described below, the estimatedtotal annual total compensation for the employee identified at theas our median of our Company (other than our CEO)employee was calculated as $66,182. Based on this information, $61,136; and +the ratio of our CEO’s annual total compensation to that of our median employee for fiscal year 2020 was estimated to be 106188 to 1.* The foregoing pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules, which permit the use of estimates, assumptions and adjustments in connection with the identification of our median employee. Because the applicable SEC rules permit companies to adopt a variety of methodologies and exclusions and to make reasonable estimates and assumptions based on the particular compensation practices of such companies, the pay ratio reported by other companies may not be comparable to the one we report above. In addition, because Mr. Mazelsky’s total annual compensation for 2020 decreased from the annualized amount used for purposes of calculating our pay ratio in 2019 (and did not include certain non-recurring equity grants made in 2019 related to his transition to President and CEO) and the annual total compensation for our current median employee increased from our previously identified median employee, the Company’s pay ratio for 2020 may not be comparable to its pay ratio in other years.
_______________
* In calculating this ratio, we identified our median employee, who is a salariedan hourly employee located in the United States, by examining the total gross earnings for fiscal year 2023 using available payroll data for such period (i.e., base salary plus bonus or commission, income from vesting equity, if applicable, overtime paid and other income and allowances) for all individuals, excluding our CEO, employed by us on December 31, 20202023 (whether employed on a full-time, part-time, seasonal or temporary basis). As of this date, we estimate that we had a total of 9,285 such employees, of whom 5,917 are U.S. employees and 3,368 are non-U.S. employees. For purposes of identifying the median employee, we excluded, as the SEC rules allow, certain non-U.S. employees, as depicted in the following table:
84 | 2021 Proxy Statement
| | | | | | Total U.S. Employees | 5,917 | | Total Non-U.S. Employees (no exclusions) | 3,368 | | Total Employees (as of December 31, 2020) | 9,285 | | Exclusions (by jurisdiction): | | Belgium | 11 | | Brazil | 178 | | Czech Republic | 11 | | Denmark | 7 | | Finland | 11 | | India | 10 | | Ireland | 2 | | Korea | 32 | | Mexico | 13 | | Norway | 5 | | Poland | 19 | | Russia | 20 | | Singapore | 18 | | Slovakia | 4 | | Sweden | 18 | | Taiwan | 31 | | Thailand | 27 | | Ukraine | 33 | | United Arab Emirates | 4 | | Total Exclusions: | 454 | | Total U.S. Employees | 5,917 | | Total Non-U.S. Employees (minus exclusions) | 2,914 | | Total Employees for Median Determination | 8,831 | |
For these employees, we calculated total gross earnings for fiscal year 2020 using available payroll data for such period. We converted amounts paid in foreign currencies to U.S. dollars using the applicable average exchange rate for fiscal year 2020.2023. Except for this currency conversion, we did not make any assumptions, adjustments or estimates with respect to total gross earnings, and we did not annualize the compensation for any full-time employees that were not employed by us for all of 2020. 2023. As of December 31, 2023, we estimate that we had a total of 11,222 employees (excluding the CEO), of whom 6,820 were U.S. employees and 4,402 were non-U.S. employees. For purposes of identifying the median employee, we excluded, as the SEC rules allow, a total of 560 employees in the following countries: Belgium (17); Brazil (306); Czech Republic (11); India (10); Ireland (5); Korea (65); Mexico (16); Norway (8); Singapore (29); Slovakia (6); Taiwan (45); and Thailand (42). After excluding such employees, 6,820 U.S. employees and 3,842 non-U.S. employees were considered for identifying the median employee.
After identifying our median employee using the methodology described above, we calculated annual total compensation for this employee using the same methodology we use for our NEOs in the Summary Compensation Table for 20202023 set forth in this Proxy Statement under the heading “Executive Compensation Tables.” The compensation for our hourly employees is variable based on, among other things, the amount of overtime worked. For purposes of the pay ratio calculation, a significant portion of our CEO’s annual total compensation includes annual equity awards that are not widely distributed to our employees, including our median employee. The foregoing pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules. Because the applicable SEC rules permit companies to adopt a variety of methodologies and exclusions and to make reasonable estimates and assumptions based on the particular compensation practices of such companies, the pay ratio reported by other companies may not be comparable to the one we report above. 2021 Proxy Statement| 85
| | | | | | IDEXX 2024 PROXY STATEMENT | 109 |
+ + + EXECUTIVE COMPENSATION Equity Compensation Plan Information The following table summarizes our equity compensation plan information as of December 31, 2020:2023: | Plan Category | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (1) (b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) | | Equity compensation plans approved by security holders | | | Equity compensation plans approved by security holders | | | Equity compensation plans approved by security holders | Equity compensation plans approved by security holders | 2,260,589 | (2) | 149.3162 | | 7,715,376 | (3) | Equity compensation plans not approved by security holders | Equity compensation plans not approved by security holders | — | | — | | — | | Equity compensation plans not approved by security holders | | Equity compensation plans not approved by security holders | |
(1)1.Only stock option awards were used in computing the weighted-average exercise price.
(2)2.Consists of shares of common stock subject to outstanding options, restricted stock units and deferred stock units under the 2009 Stock Incentive Plan (1,556,669(824,473 shares) and 2018 Plan (703,920(971,647 shares). As of December 31, 2020,2023, the Company had 1,952,8281,595,878 options outstanding with a weighted average exercise price of $149.3162$250.1425 and a weighted average term of 6.324.80 years, and 307,761 full value200,242 full-value shares outstanding and granted under equity compensation plans (217,588(138,660 restricted stock units granted to employees, 1,0911,832 restricted stock units granted to Directors, 588 deferred stock units issued to employees, and 89,08259,162 deferred stock units issued to directors)Directors). Excludes 1,108,307997,941 shares issuable under the Company’s 1997 Employee Stock Purchase Plan (the 1997 Plan) in connection with the current and future offering periods. SeeRefer to Note 5 to theour consolidated financial statements included in our 20202023 Annual Report on Form 10-K for a description of our equity compensation plans.
(3)3.Includes 6,607,0696,100,794 shares available for issuance under the 2018 Plan. The 2018 Plan provides for the issuance of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock unit awards and other stock unit awards. Also includes 1,108,307997,941 shares issuable under the 1997 Plan in connection with the current and future offering periods. SeeRefer to Note 5 to theour consolidated financial statements included in our 20202023 Annual Report on Form 10-K for a description of our equity compensation plans.
Stock Incentive Plans In February 2018, the Board adopted the 2018 Plan, which was approved by the shareholders at our 2018 Annual Meeting. Prior to the 2018 Plan, options and other equity awards were granted under the 2009 Stock Incentive Plan (2009 Plan) and prior stock incentive plans, each of which were approved by our shareholders. The vesting, change in control, transferability and other relevant provisions for grants under the 2018 Plan are generally the same as for grants under the 2009 Plan. Upon a “change in control” (as defined in the 2018 Plan), options and awards granted to all participants, including our executivesexecutive officers and Directors, are subject to the following vesting provisions: 25% of the unvested options and stock appreciation rights vest and become exercisable, and the restrictions and deferral limitations and other conditions applicable to any restricted stock or other stock unit award shall lapse as to 25% of the remaining number of shares subject to the award, unless the successor company in a corporate transaction does not assume or substitute awards, in which case all awards granted under the 2018 Plan become fully vested and exercisable. In addition, if a participant is terminated by the successor company without cause, as defined in the 2018 Plan (unless otherwise provided in the applicable award agreement or employment agreement between the participant and the Company), within two years following a change in control, then all awards held by such participant become fully vested and exercisable. In general, options granted under the 2018 Plan and 2009 Plan are not transferable, except by will or the laws of descent and distribution, and are exercisable during the lifetime of the grantee only while he or she isthey are serving as an employee or Director of the Company or, except as described below, within three months after he or she ceasesthey cease to serve as an employee or Director of the Company; provided,, however,, that the Board has the discretion to allow a grantee to designate a beneficiary to exercise the options upon the grantee’s death. | | | | | | 110 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + If a grantee dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) while serving as an employee or Director, or dies within three months after ceasing to serve as an employee or Director, options are exercisable within one year following the date of death or disability. In addition, options granted to Directors and employees since February 2016 will vest immediately upon the grantee’s death or disability. Options granted to Directors are exercisable for two years following the date of retirement, provided the Director has served on the Board for at least five years. Options granted to employees are exercisable for two years following the date of retirement, provided the employee retires from the Company at or after age 60, and that the employee has been an employee of the Company for at least ten years. Options granted in 2018 and 2019 will continue to vest for two vesting periods after retirement for employees meeting certain eligibility criteria, including having been employed by the Company or any of its subsidiaries for at least ten years, retiring
86 | 2021 Proxy Statement
from the Company at the age of 60 years or older and providing written notice to the Company at least six months prior to retirement. This continued vesting provision was removed for all employee option awards granted after December 4, 2019. Options expire on the day immediately prior to the tenth anniversary of the date of grant.
When RSUs granted under the 2009 Plan and the 2018 Plan vest, an equivalent number of shares of our common stock is then issued and delivered to the grantee. Generally, if a grantee ceases to be an employee or Director, then the balance of each RSU award that has not yet vested will be forfeited, except that unvested RSUs from awards granted since February 2016 will vest immediately upon the grantee’s death or disability. Our currently outstanding options and RSUs granted in 2018 and 2019 will continue to vestinclude the following post-retirement provisions: | | | | | | | | | Equity Award | Post-Retirement Vesting | Post-Retirement Exercisability (Options Only)(1) | | | | | | | Stock Options Granted to Directors Prior to 2022 | None | Two years following retirement date, provided the Director has served on the Board for at least five years. | | | | | | | Stock Options Granted to Directors in 2022 or Later | None | Three years following retirement date, provided the Director has served on the Board for at least five years. | | | | | | | Stock Options and RSUs Granted to Employees Prior to 2018 or in 2020 or 2021 | None | Two years following retirement date, provided the employee retires from IDEXX at or after age 60 and has been employed by IDEXX or any of its subsidiaries for at least ten years. | | | | | | | Stock Options and RSUs Granted to Employees in 2018 or 2019 | Continued vesting for an additional two vesting periods after retirement, provided the employee retires from IDEXX at or after age 60, has been employed by IDEXX or any of its subsidiaries for at least ten years and provides notice to IDEXX at least six months prior to retirement. | Until the 90th day following the second vesting date following the retirement date (or, if the option is not subject to two additional vesting dates, the date that would have been the second vesting date following the retirement date if the option had remained subject to two additional vesting dates under its regular vesting schedule as of the optionee’s retirement), provided the employee retires from IDEXX at or after age 60, has been employed by IDEXX or any of its subsidiaries for at least ten years and provides notice to IDEXX at least six months prior to retirement. | | | | | | | Stock Options and RSUs Granted to Employees in 2022 or Later | Continued vesting for an additional two vesting periods after retirement, provided the retirement date is after the first anniversary of the grant date, and the employee retires from IDEXX at or after age 60, has been an IDEXX employee for at least ten years and provides notice to IDEXX at least six months prior to retirement. | Three years following retirement date, provided the employee retires from IDEXX at or after age 60, has been an IDEXX employee for at least ten years and provides notice to IDEXX at least six months prior to retirement. | | | |
1.Notwithstanding any post-retirement exercisability period, no stock option is exercisable on or after retirement for employees meeting certain eligibility criteria, including having been employed by the Company or anytenth anniversary of its subsidiaries for at least ten years, retiring from the Company at the age of 60 years or older and providing written notice to the Company at least six months prior to retirement. This continued vesting provision was removed for all RSUs granted in 2020 or later.grant date. Deferred stock units are granted to our Directors pursuant to the Director Plan, and for information regarding deferred stock units, seerefer to the discussion under “Director Plan” beginning on page 4758. | | | | | | IDEXX 2024 PROXY STATEMENT | 111 |
+ + + EXECUTIVE COMPENSATION Executive BonusCompensation Recovery Policy (Clawback Policy) Effective March 3, 2010,October 2, 2023, our Board amended and restated our Clawback Policy to comply with, and exceed the requirements of, the finalized and effective SEC and Nasdaq rules (Section 10D of the Exchange Act, Rule 10D-1 of the Dodd Frank Wall Street Reform and Consumer Protection Act promulgated thereunder and Nasdaq Rule 5608). Pursuant to our Clawback Policy, in the event of an “accounting restatement” (as defined in the policy), our “covered executives” (as defined in the policy), including current and former NEOs and other executive officers, must reimburse us for any “erroneously awarded compensation” (as defined in the policy) they received during the three completed fiscal years preceding the date on which we are required to prepare an accounting restatement. Incentive compensation subject to mandatory recoupment under the Clawback Policy includes the amount of incentive compensation received by a covered executive during the three fiscal years preceding the required accounting restatement based on our achievement of “financial reporting measures” (as defined in the policy) in excess of the amount that the covered executive would have received based on the restated financial reporting measures. In addition, in the event we are required to prepare a “‘Big R’ accounting restatement” (as defined in the policy), our Board adoptedhas discretionary authority to recover covered executives’ “additional compensation” (as defined in the policy), including their time-based equity awards and annual cash bonus amounts tied to the non-financial performance factor, to the extent such forms of compensation are not otherwise subject to mandatory recoupment. The Board has the authority to interpret and make all determinations under the Clawback Policy, in a manner consistent with applicable SEC and Nasdaq rules. The description of our Clawback Policy is qualified in its entirety by reference to the Clawback Policy, which is filed as an exhibit to our Annual Report on Form 10-K. Compensation received prior to October 2, 2023 is subject to recoupment under our Policy on Recovery of Incentive Compensation in Event of Certain Financial Restatements, also known as a “clawback policy,amended from time to time, or the Prior Clawback Policy, which our Board first adopted effective March 3, 2010. The Prior Clawback Policy initially applied to “incentive compensation,” that applies to annual performance-baseddefined as bonuses and other cash incentive compensationpayouts granted to all officers of the Company subject to reporting under Section 16 of the Exchange Act on or after March 3, 2010. For purposes of the policy as originally adopted, “incentive compensation” meant bonuses and other cash incentive payouts,2010, whether paid or unpaid, vested or unvested. In March 2014, the policyPrior Clawback Policy was amended to include stock options, restricted stock units and other similar equity awards within the definition of “incentive compensation” subject to the policy. Incompensation,” and in December 2020, the policyPrior Clawback Policy was amended and restated to remove the fraud or willful misconduct requirement for seeking to recover incentive compensation granted or awarded to an executive on or after December 2, 2020 and to expand its application with respect to such incentive compensation to all officers subject to reporting under Section 16 of the Exchange Act and current or former direct reports to our CEO.
Under the clawback policy,Prior Clawback Policy, if the Company is required to restate its financial results for any of the three most recent fiscal years, other than a restatement due to changes in accounting principles or applicable law, and the Board or the Compensation and Talent Committee determines that an executive subject to the policy has received more incentive compensation for the relevant fiscal year than would have been paid had the incentive compensation been based on the restated financial results, the Board or Compensation and Talent Committee will take such action in its discretion that it determines appropriate to recover or recoup the incentive compensation that would not have been paid or awarded to the executive.executive subject to the policy. A required condition to the recovery or recoupment of incentive compensation granted or awarded prior to December 2, 2020 under the clawback policy is that the Board or Compensation and Talent Committee determine that the executive subject to the policy engaged in fraud or willful misconduct that caused or partially caused the restatement. The Board or Compensation and Talent Committee has the sole discretion to determine whether an executive subject to the policy has engaged in such conduct.
Potential Payments Upon Termination or Change in Control Mazelsky Employment AgreementThe following table discloses amounts payable to our NEOs under various scenarios had they occurred as of December 31, 2023. The actual amounts to be paid out can only be determined in the event of and at the time any scenario occurs, and, in the event of a change of control, a qualifying termination of the NEO following such change of control, as described below. Each NEO would
| | | | | | 112 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + receive certain payments upon termination which vary in amount depending upon the reason for termination. Each NEO would also receive a specified payment in connection with a change in control of the Company. The payments to our NEOs described in the table below are governed by the various agreements or arrangements described in the footnotes to the table. Except as described below, we do not have any other contracts, agreements, plans or arrangements with any NEO providing for the payment of severance or other benefits to such NEOs upon a termination of employment with the Company for any reason, other than arrangements that are generally available to all salaried employees. | | | | | | | | | | | | | | | | | | Name and Form of Payment | Involuntary Termination without Cause(1) ($) | Retirement(2) ($) | Death or Disability(3) ($) | Change in Control(4) ($) | | | | | | | Jonathan J. Mazelsky | | | | | | Salary | 2,000,000 | | — | | — | | 3,000,000 | | | Multiple of Average Bonus | — | | — | | — | | 4,775,000 | | | Pro-Rated Bonus | — | | — | | — | | — | | | Benefits | 37,339 | | — | | 95,000 | | 56,008 | | | Outplacement | — | | — | | — | | 25,000 | | | Continued Vesting of Equity Awards | 12,042,594 | | 6,133,111 | | — | | — | | | Accelerated Vesting of Equity Awards | — | | — | | 14,691,772 | | 14,691,772 | | Mr. Mazelsky Total | 14,079,933 | | 6,133,111 | | 14,786,772 | | 22,547,780 | | Brian P. McKeon | | | | | | Salary | — | | — | | — | | 1,346,000 | | | Multiple of Average Bonus | — | | — | | — | | 1,268,443 | | | Pro-Rated Bonus | — | | — | | — | | 504,750 | | | Benefits | — | | — | | — | | 34,247 | | | Outplacement | — | | — | | — | | 25,000 | | | Continued Vesting of Equity Awards | — | | 3,020,937 | | — | | — | | | Accelerated Vesting of Equity Awards | — | | — | | 6,283,168 | | 6,283,168 | | Mr. McKeon Total | — | | 3,020,937 | | 6,283,168 | | 9,461,607 | | Tina Hunt, PhD | | | | | | Salary | — | | — | | — | | 1,125,000 | | | Multiple of Average Bonus | — | | — | | — | | 1,012,129 | | | Pro-Rated Bonus | — | | — | | — | | 421,875 | | | Benefits | — | | — | | 555,000 | | 44,923 | | | Outplacement | — | | — | | — | | 25,000 | | | Continued Vesting of Equity Awards | — | | — | | — | | — | | | Accelerated Vesting of Equity Awards | — | | — | | 3,537,382 | | 3,537,382 | | Dr. Hunt Total | — | | — | | 4,092,382 | | 6,166,309 | | | | | | | |
| | | | | | IDEXX 2024 PROXY STATEMENT | 113 |
+ + + EXECUTIVE COMPENSATION | | | | | | | | | | | | | | | | | | Name and Form of Payment | Involuntary Termination without Cause(1) ($) | Retirement(2) ($) | Death or Disability(3) ($) | Change in Control(4) ($) | | | | | | | Michael J. Lane | | | | | | Salary | — | | — | | — | | 1,125,000 | | | Multiple of Average Bonus | — | | — | | — | | 1,052,129 | | | Pro-Rated Bonus | — | | — | | — | | 421,875 | | | Benefits | — | | — | | 525,000 | | 45,057 | | | Outplacement | — | | — | | — | | 25,000 | | | Continued Vesting of Equity Awards | — | | — | | — | | — | | | Accelerated Vesting of Equity Awards | — | | — | | 2,965,252 | | 2,965,252 | | Mr. Lane Total | — | | — | | 3,490,252 | | 5,634,314 | | James F. Polewaczyk | | | | | | Salary | — | | — | | — | | 1,125,000 | | | Multiple of Average Bonus | — | | — | | — | | 1,052,129 | | | Pro-Rated Bonus | — | | — | | — | | 421,875 | | | Benefits | — | | — | | 255,000 | | 45,009 | | | Outplacement | — | | — | | — | | 25,000 | | | Continued Vesting of Equity Awards | — | | 905,777 | | — | | — | | | Accelerated Vesting of Equity Awards | — | | — | | 2,892,235 | | 2,892,235 | | Mr. Polewaczyk Total | — | | 905,777 | | 3,147,235 | | 5,561,249 | |
(1) Involuntary Termination without Cause In connection with the promotion of Mr. Mazelsky to our President and CEO in October 2019, the Company and Mr. Mazelsky entered into the Mazelsky Employment Agreement. This agreementAgreement described below. The amounts set forth in the table above in the Involuntary Termination without Cause column represent potential payments to Mr. Mazelsky under the Mazelsky Employment Agreement, assuming he was terminated without cause on December 31, 2023 and not within two years after a change in control (such period a “change in control period”). The Mazelsky Employment Agreement provides, among other things, that if Mr. Mazelsky were to be terminated by IDEXX other than for cause (except within two years followingoutside of a change in control),control period, he will be entitled to each of the following severance benefits: (i) base + Base salary continuation for two years following termination, (ii) atermination. The amount shown in the table is two times Mr. Mazelsky’s annual base salary in effect as of December 31, 2023. + A lump sum cash payment equal to two years of the employer portion of medical coverage for Mr. Mazelsky and his covered dependents to the same extent as was paid immediately prior to termination, and (iii) continuedtermination. The amount shown in the table represents the estimated amount of such payment based on the level of coverage in effect as of December 31, 2023. + Continued vesting of any outstanding equity incentive awards that otherwise would have vested during the two-year period following termination, which awards, if stock options, would remain exercisable for a period of 90 days following the end of such two-year period. The amount shown in the table represents the intrinsic value of unvested stock options and RSUs as | | | | | | 114 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + of December 31, 2023 that would continue to vest for two years following termination on December 31, 2023 using the closing sale price of the Company’s common stock as of December 31, 2023 to illustrate the potential value at termination. In addition, any options that were vested immediately prior to such termination date will remain exercisable for a period of 90 days following his termination (or, if Mr. Mazelsky is retirement-eligible (as defined in the applicable equity award agreement) as of such termination date, for a period of 24 months following such termination date). Under the Mazelsky Employment Agreement, “cause” with respect to Mr. Mazelsky is defined as: (i) willful misconduct or gross negligence in the performance of his duties; (ii) willful failure or refusal to perform reasonably assigned directives of, or internal investigations conducted by or at the direction of, the Board; (iii) an indictment or conviction for a felony or any other crimes (whether or not a felony) involving fraud, theft, breach of trust or similar acts; (iv) willful or continued failure to comply with Company rules, regulations, policies or procedures; or (v) abuse of alcohol or another controlled substance that would reasonably be expected to result in a material adverse effect on the business, financial condition or reputation of the Company. As a condition of receipt of any payments or benefits under the Mazelsky Employment Agreement, Mr. Mazelsky will be required to sign a release in the form attached as an exhibit to the Mazelsky Employment Agreement and to abide by the provisions thereof. The release contains a release and waiver of certain claims Mr. Mazelsky or his heirs and assigns may have against the Company (or its successor) and its officers, Directors, affiliates and/or representatives, and will release those entities and persons from any liability for such claims including, but not limited to, all employment discrimination claims. In addition, Mr. Mazelsky’s entitlement to the severance benefits described above are subject to his ongoing compliance with a standard inventionnon-competition, non-solicitation and non-disclosure agreement and a non-compete agreement providing for non-competition and non-solicitation restrictionsother restrictive covenants for a period of two years following termination of Mr. Mazelsky’s employment for any reason. The Mazelsky Employment Agreement also includes change in control provisions pursuant to which, if the employment of Mr. Mazelsky is terminated either by the Company other than for cause or by Mr. Mazelsky for good reason (as defined in the Mazelsky Employment Agreement) within two years following a change in control, he will receive certain payments and benefits, as described below under the heading “Change in Control Agreements.Control.” The following table describes potential paymentsOur other NEOs are not entitled to Mr. Mazelsky under the Mazelsky Employment Agreement described above, assuming he was terminated without cause on December 31, 2020 and notany severance benefits in connection with or afteran involuntary termination outside of a change in control. The actual amountsof control, other than post-termination continued exercisability of vested stock option awards within three months after ceasing to be paid out can only be determined in the event of and at the time of its actual termination.an employee, which is generally available to all stock option award holders.
Potential Termination Payments
| | | | | | | | | | | | | | | Name | Salary (1) ($) | Benefits (2) ($) | Continued Vesting of Equity Awards (3) ($) | Total ($) | Jonathan J. Mazelsky | 1,700,000 | | 42,616 | | 24,380,505 | | 26,123,121 | |
(2) Retirement(1)Mr. Mazelsky’s salary will be paid by theThe Company for two years following termination. Amount shown is calculated by multiplying by two the annual base salary in effect on December 31, 2020.
(2)Amount shown represents the aggregate estimated amount of the employer portion of the costs of continued healthdoes not offer supplemental retirement benefits for Mr. Mazelsky and his covered dependents for the 24-month period following termination, based on the level of coverage in effect as of December 31, 2020, consisting of the following: (a) medical and dental coverage ($33,314), and (b) premiums paid on behalf of Mr. Mazelsky under the Company’s accidental death and dismemberment, disability and life insurance plans ($9,302).
(3)Mr. Mazelsky’s stockto executive officers. Our currently outstanding options and RSUs would continue to vestinclude certain post-retirement vesting and, in accordance with their terms for two years following termination. This amount representsthe case of options, exercisability provisions as discussed under “Stock Incentive Plans” beginning on page 110. The amounts in Retirement column in the table above represent the intrinsic value of unvested stock options and RSUs as of December 31, 20202023 that would continue to vest for two years following termination on December 31, 20202023 using the closing sale price of the Company’s common stock as ofon December 31, 20202023 to illustrate the potential value at termination. As of December 31, 2023, Dr. Hunt and Mr. Lane did not satisfy the age element of the age and service requirement to be eligible for continued vesting of their equity awards.88 | 2021 Proxy Statement
Except as described aboveIn the event the employment of our executive officers, including our NEOs, terminates in connection with respectdeath or disability, they are entitled to Mr. Mazelsky and the change in control agreements described below, the Company does not have anycertain benefits under certain contracts, agreements, plans or arrangements with any other NEOs providingarrangements. Specifically, upon death or disability, outstanding unvested RSUs vest immediately and outstanding unvested options become immediately exercisable. For more information regarding these terms of our equity awards, refer to the discussion under “Stock Incentive Plans” beginning on page 110. The amounts shown for accelerated vesting of equity awards in the paymentDeath or Disability column in the table above represent the intrinsic value of severance or other benefitsthe accelerated equity using the closing sale price of the Company’s common stock on December 31, 2023. | | | | | | IDEXX 2024 PROXY STATEMENT | 115 |
+ + + EXECUTIVE COMPENSATION Our executive officers may elect to such NEOs uponpurchase Company-funded individual disability insurance for additional financial security in the case of disability. If a participating NEO suffered a covered disability resulting in a termination of employment, withsuch NEO would receive a $5,000 per month benefit until age 65. These monthly payments are reflected as benefits in the Company for any reason, other than arrangements that are generally available to all salaried employees.Death or Disability column in the table above. (4) Change in Control Agreements The Company hasWe have entered into executive employment agreements (or change in control agreements) with itsour senior executives, including each of the NEOs. With respect to Mr. Mazelsky, the terms of his change in control agreement are included in the Mazelsky Employment Agreement. The amounts set forth in the table above represent potential payments to each of our NEOs under the change in control agreements that were in effect as of December 31, 2023. The table assumes a change in control occurred and the NEO’s employment was terminated either by the Company without cause or by the NEO for good reason on December 31, 2023.
The existing change in control agreements for all of the NEOs are identical except as described below. Each change in control agreement, other than the Mazelsky Employment Agreement, has an initial term that automatically renews for successive periods of one year, unless the Company provides notice of nonrenewal to the senior executive within 120 days prior to the renewal date. The change in control agreements provide for the Company to make certain payments and provide certain benefits to the NEOs upon a qualifying termination of employment that follows a change in control of the Company, as described further below. For a further discussion of the Company’s reasons for having change in control agreements, refer to the discussion of change in control agreements under “How We Manage Risk and Governance” beginning on page 7694. The change in control agreements define a change in control of the Company as any of the following events (provided,(provided, in each case, that with respect to any payments or benefits subject to Section 409A of the Code, the following events must constitute a “change in control event” within the meaning of the applicable Treasury regulation): •+The acquisition by any person of 35% or more of the shares of common stock or combined voting power of the Company’s outstanding securities;
•+A change in the composition of the Company’s Board such that a majority of the Board no longer consists of incumbent directors, or directors nominated or elected by incumbent directors, who had been directors of the Company during the 24 months prior to the change in composition;
•+Approval by the shareholders of a complete liquidation or dissolution of the Company or sale of substantially all of the assets of the Company; or
+A reorganization, merger, consolidation or sale or other disposition of all or substantially all of the assets of the Company (business combination), unless immediately following such business combination: •◦The shareholders of the Company immediately prior to such business combination own more than a majority of the outstanding shares of common stock and the combined voting power of the Company’s outstanding voting securities of the corporation resulting in the business combination in substantially the same proportion as their ownership immediately prior to the transaction;
•◦No person owns 20% or more of the stock of the corporation resulting from the business combination; and
•◦At least half of the members of the board of the corporation resulting from the business combination were members of the Board at the time of the agreement providing for such business combination; andcombination.
•Approval by the shareholders of a complete liquidation or dissolution of the Company or sale of substantially all of the assets of the Company. | | | | | | 116 | IDEXX 2024 PROXY STATEMENT |
EXECUTIVE COMPENSATION + + + Under each of the change in control agreements (other than the Mazelsky Employment Agreement), for a period of two years following a change in control, the Company may not generally reduce the senior executive’s annual base salary or target bonus, or the aggregate benefits to which the senior executive is entitled under incentive plans and welfare benefit plans, below the level to which the senior executive was entitled prior to the change in control. If the employment of ana senior executive is terminated either by the Company without “cause,” as defined below, or by the senior executive for “good reason,” as defined below, within the period of two years following a change in control, then the Company shall provide the following payments and benefits to the senior executive: •+For each senior executive other than Mr. Mazelsky, a prorated payment of the senior executive’s target bonus for the portion of the year of termination prior to the date of termination;
•+An amount equal to two times (or three times in the case of Mr. Mazelsky) the sum of the senior executive’s annual base salary plus the average bonus received by the senior executive for the three full fiscal years preceding the change in control;
•+The continuation of all benefits under welfare, benefit, savings and retirement plans (including, without limitation, medical, dental and life insurance plans) for a period of two years, or, in the case of Mr. Mazelsky, a lump sum cash payment equal to three years of the employer portion of medical coverage for Mr. Mazelsky and his covered dependents to the same extent as was paid immediately prior to termination; and
•+Any other amounts or benefits required to be paid to the senior executive under any plan, program, policy or practice or contract or agreement of the Company.
The amounts associated with these payments and benefits are reflected in the salary, multiple of average bonus, pro-rated bonus and benefits rows for each NEO in the Change in Control column in the table above. With respect to the benefits amounts, Mr. Mazelsky’s amount reflects the lump sum payment associated with the medical coverage entitlement described above and for our other NEOs the amounts reflect the aggregate incremental costs to the Company to continue to provide the benefits for a period of two years following termination as follows: | | | | | | | | | | | | Name | Medical and Dental Coverage ($) | Death, Disability and Life Insurance Premiums ($) | | | | | | Brian P. McKeon | 31,609 | | 2,638 | | | Tina Hunt, PhD | 37,339 | | 7,584 | | | Michael J. Lane | 37,339 | | 7,718 | | | James F. Polewaczyk | 37,339 | | 7,670 | | |
The Company will also reimburse the senior executive up to $12,500 per year (an aggregate of $25,000) for expenses incurred in connection with outplacement services and relocation costs in connection with obtaining new employment outside the State of Maine until the earlier of two years from termination of the senior executive’s employment or the date he or she securesthey secure full-time employment. The amounts are reflected in the outplacement row for each NEO in the Change in Control column in table above. Upon a change in control, each outstanding stock option, RSU or other equity award (each of which is referred to as an equity award) held by ana senior executive shall become immediately exercisable or vested with respect to 25% of the number of shares as to which such equity award otherwise would not then be exercisable or vested. If the senior executive’s employment is terminated without cause, or by the senior executive for good reason, within two years following a change in control, all equity awards held by the senior executive shall become fully vested and exercisable. In addition, the 2018 Plan provides that all equity awards become fully vested and exercisable in the event a successor company in a corporate transaction does not assume or substitute the outstanding awards. The amounts in the accelerated vesting of equity awards row for each NEO in the Change in Control column in | | | | | | IDEXX 2024 PROXY STATEMENT | 117 |
+ + + EXECUTIVE COMPENSATION the table above represent the intrinsic value of accelerated equity awards, calculated based on the exercise price of the underlying awards and the closing sale price of the Company’s common stock as of December 31, 2023 and assumes each NEO was terminated on December 31, 2023 without cause, or by the NEO for good reason, within two years following a change in control. Under the change in control agreements (other than the Mazelsky Employment Agreement), “cause” is defined as the willful failure of the senior executive to substantially perform the senior executive’s duties with the Company, or the willful engaging by the senior executive in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company. The definition of “cause” in the Mazelsky Employment Agreement defines “cause” as (i) willful misconduct or gross negligence inis described above under the performance of his duties; (ii) willful failure or refusal to perform reasonably assigned directives of, or internal investigations conducted by or at the direction of, the Board; (iii) an indictment or conviction for a felony or any other crimes (whether or not a felony) involving fraud, theft, breach of trust, or similar acts; (iv) willful or continued failure to comply with Company rules, regulations, policies or procedures; or (v) abuse of alcohol or another controlled substance that would reasonably be expected to result in a material adverse effectheading “Involuntary Termination without Cause,” beginning on the business, financial condition or reputation of the Company.page 114. Under the change in control agreements, “good reason” is defined as one or more of the following conditions arising without the consent of the senior executive: •+Any material reduction of the senior executive’s annual base salary (or,(and, with respect to Mr. Mazelsky, any material reduction of Mr. Mazelsky’s annual bonus opportunity);
•+Any material reduction of the senior executive’s authority, duties or responsibilities;
•+Any material reduction of the budget over which the senior executive has authority;
•+A material change in the geographic location at which the senior executive is employed; or
•+Certain breaches by the Company of the agreement.
Under the change in control agreements with Mr. Mazelsky, Mr. McKeon and Ms. Underberg, if the executive officer does not hold the same position with the entity surviving any change in control as he or she holdsthey hold with the Company, then good reason will be deemed to exist. In addition, good reason will be deemed to exist under the change in control agreement with Mr. Mazelsky if Mr. Mazelsky is required to report to a corporate officer or employee instead of directly to the Board. Any notice of termination for good reason must be given to the Company (or its successor) within 60 days of the initial existence of one or more of the conditions described above. The Company (or its successor) will then be entitled to a period of 30 days during which it may remedy the condition(s) and not be required to pay benefits under the change in control agreement. Under the change in control agreements, there is no tax “gross-up” provision and the Company is not required to reimburse the senior executives for any tax liabilities resulting from payments received by them under their change in control agreements. As a condition of receipt of any payments or benefits under the change in control agreements, the senior executives will be required to sign a customary release prepared and provided by the Company (or its successor) and to abide by the provisions thereof. The release will contain a release and waiver of any claims the senior executive or his or hertheir representatives may have against the Company (or its successor) and its officers, Directors, affiliates and/or representatives, and will release those entities and persons from any liability for such claims including, but not limited to, all employment discrimination claims. 90 | 2021 Proxy Statement
The Mazelsky Employment Agreement includes, in addition Salary and bonus payments made pursuant to change in control and other provisions, a standard non-compete and non-solicit agreement and invention and non-disclosure agreement, and supersedes prior non-compete, non-solicit and invention and non-disclosure agreements between Mr. Mazelsky and the Company. The other change in control agreements do not supersede the standard non-compete and non-solicit agreements and invention and non-disclosure agreements between each executive and the Company. These non-compete and non-solicit agreements provide that, for a period of two years after either, in the case of Mr. Mazelsky, termination for any reason, or, in the case of the other executives, voluntary termination by the executive or termination by the Company with cause, the executive may not engage in any business enterprise that competes with the Company or recruit, solicit or induce any employee of the Company to terminate their employment with the Company. The invention and non-disclosure agreements include standard provisions that all developments made or conceived by the executive during his or her employment by the Company shall be the sole property of the Company and that the executive will not disclose or use for his or her own benefit or the benefit of others the Company’s proprietary information.
The following table describes potential payments to each of our NEOs under the change in control agreements that were in effect as of December 31, 2020. The table assumes a change in control occurred and the officer’s employment was terminated either by the Company without cause or by the officer for good reason on December 31, 2020. The actual amounts to be paid out can only be determined in the event of and at the time of a change in control and a qualifying termination of each NEO.
Potential Change in Control Payments
| | | | | | | | | | | | | | | | | | | | | | | | Name | Salary (1) ($) | Multiple Average of Bonus (1) ($) | Pro-Rated Bonus (1) ($) | Benefits ($) | Outplacement ($) | Accelerated Vesting of Equity Awards (2) ($) | Total ($) | Jonathan J. Mazelsky | 2,550,000 | | 1,959,022 | | — | | 63,924 | (3) | 25,000 | | 38,890,321 | | 43,488,267 | | Brian P. McKeon | 1,220,000 | | 1,073,017 | | 457,500 | | 35,933 | (4) | 25,000 | | 26,869,736 | | 29,681,186 | | Michael J. Lane | 1,000,000 | | 551,093 | | 375,000 | | 40,897 | (5) | 25,000 | | 9,527,182 | | 11,519,172 | | James F. Polewaczyk | 1,000,000 | | 617,675 | | 375,000 | | 40,868 | (6) | 25,000 | | 8,061,925 | | 10,120,468 | | Sharon E. Underberg | 876,000 | | 544,680 | | 262,800 | | 40,587 | (7) | 25,000 | | 5,121,721 | | 6,870,788 | |
(1)Amounts for Mr. Mazelsky are three times his salary and three times his average annual bonus for the prior three years. Amounts shown for all other NEOs represent two years of such payments. In addition, the NEOs other than Mr. Mazelsky would be entitled to a pro-rated amount of his or her target bonus for the then-current fiscal year. Salary and bonus payments shallwill generally be paid in a lump sum on the 90th day following the date of termination, (or, in the case of Mr. Mazelsky, on the 60th day following the date of termination), provided that the senior executive has signed the required release and the statutory period during which the senior executive is entitled to revoke the release has expired on or before that day. Benefits shall be paid by
| | | | | | 118 | IDEXX 2024 PROXY STATEMENT |
Proposal Four Shareholder Proposal Regarding Simple Majority Vote We received the Company as stated in notes (3) though (7) below. (2)Representsfollowing proposal from John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278, who has advised that he has been the intrinsic valuebeneficial owner of accelerated equity awards (stock options and RSUs), calculated based on the exercise priceat least 15 shares of the underlying awards and the closing sale price of the Company’s common stock as of December 31, 2020.
(3)Amount shown represents the aggregate incremental cost to the Companyfor at least three years and intends to continue to provide benefitshold the requisite amount of common stock through the date of the 2024 Annual Meeting.
In accordance with SEC rules, we are reprinting the proposal and supporting statement in this proxy statement as they were submitted to Mr. Mazelskyus. The shareholder proposal is required to be voted upon at the 2024 Annual Meeting only if properly presented at the 2024 Annual Meeting. As explained below, the Board of Directors makes no voting recommendation with respect to the shareholder proposal. Proposal 4 — Simple Majority Vote Shareholders request that our board take each step necessary so that each voting requirement in our charter and bylaws (that is explicit or implicit due to default to state law) that calls for a period of three years following termination, consistinggreater than simple majority vote be replaced by a requirement for a majority of the following: (a) medicalvotes cast for and dental coverage ($49,971), and (b) premiums paid on behalf of Mr. Mazelsky underagainst applicable proposals, or a simple majority in compliance with applicable laws. If necessary this means the Company’s accidental death and dismemberment, disability and life insurance plans ($13,953). (4)Amount shown represents the aggregate incremental costclosest standard to the Company to continue to provide benefits to Mr. McKeon for a period of two years following termination, consistingmajority of the following: (a) medicalvotes cast for and dental coverage ($33,314),against such proposals consistent with applicable laws. This includes making the necessary changes in plain English.
Shareholders are willing to pay a premium for shares of companies that have excellent corporate governance. Supermajority voting requirements have been found to be one of 6 entrenching mechanisms that are negatively related to company performance according to “What Matters in Corporate Governance” by Lucien Bebchuk, Alma Cohen and (b) premiums paid on behalf of Mr. McKeon under the Company’s accidental death and dismemberment, disability and life insurance plans ($2,619). (5)Amount shown represents the aggregate incremental cost to the Company to continue to provide benefits to Mr. Lane for a period of two years following termination, consistingAllen Ferrell of the following: (a) medicalHarvard Law School. Supermajority requirements are used to block initiatives supported by most shareowners but opposed by a status quo management.
This proposal topic won from 74% to 88% support at Weyerhaeuser, Alcoa, Waste Management, Goldman Sachs, FirstEnergy, McGraw-Hill and dental coverage ($33,314),Macy’s. These votes would have been higher than 74% to 88% if more shareholders had access to independent proxy voting advice. This proposal topic also received overwhelming 98%-support each at the 2023 annual meetings of American Airlines (AAL) and (b) premiums paid on behalfThe Carlyle Group (CG). The overwhelming shareholder support for this proposal topic at hundreds of Mr. Lane undermajor companies raises the Company’s accidental death and dismemberment, disability and life insurance plans ($7,583).question of why IDEXX Laboratories has not initiated this proposal topic earlier. (6)Amount shown represents the aggregate incremental cost to the Company to continue to provide benefits to Mr. Polewaczyk for a period of two years following termination, consisting of the following: (a) medical and dental coverage ($33,314), and (b) premiums paid on behalf of Mr. Polewaczyk under the Company’s accidental death and dismemberment, disability and life insurance plans ($7,554).Please vote yes:
(7)Amount shown represents the aggregate incremental cost to the Company to continue to provide benefits to Ms. Underberg for a period of two years following termination, consisting of the following: (a) medical and dental coverage ($31,028), and (b) premiums paid on behalf of Ms. Underberg under the Company’s accidental death and dismemberment, disability and life insurance plans ($9,559).
Simple Majority Vote — Proposal 4
2021 Proxy Statement| 91
| | | | | | IDEXX 2024 PROXY STATEMENT | 119 |
Statement of the Board of Directors in Response to the Shareholder Proposal The Board of Directors has considered the shareholder proposal set forth above relating to the removal of supermajority voting standards in our certificate of incorporation and amended and restated bylaws. The Board has determined to make no voting recommendation to our shareholders on this proposal. The Board considers this to be an opportunity for our shareholders to express their views on this topic without being influenced by any recommendation by the Board and welcomes shareholder input on the shareholder proposal. | | | | | | - | The Board of Directors makes no voting recommendation with respect to the shareholder proposal. |
| | | | | | 120 | IDEXX 2024 PROXY STATEMENT |
General Information about the 20212024 Annual Meeting and Voting TheThis Proxy Statement and How Proxies Work
As an IDEXX shareholder as of the close of business on March 8, 2024 (Record Date), you are entitled to vote at the 2024 Annual Meeting. Our Board is asking for your proxy to vote at the 20212024 Annual Meeting because you were a shareholder as of the close of business on March 19, 2021 (Record Date), and are entitled to vote at the 2021 Annual Meeting. This Proxy Statement and the accompanying materials are being provided to you in connection with the solicitation by the Board of proxies to be voted at our 2021 Annual Meeting and at any adjournment or postponement thereof.of the 2024 Annual Meeting. You are receiving this Proxy Statement and accompanying materials in connection with that proxy solicitation. Giving us your proxy means that you authorize us to vote your shares at the 20212024 Annual Meeting in the manner that you direct, or if you do not direct us, in the manner as recommended by the Board in this Proxy Statement. You can vote for or against one or all of the Director nominees or abstain from voting for one or all nominees. You also can vote for or against the other proposals or abstain from voting. If you request a proxy card, and return your signed proxy card, but do not give voting instructions, the shares represented by that proxy will be voted “FOR” each proposalProposals 1, 2 and 3, as recommended by the Board of Directors.Directors, and will “ABSTAIN” with respect to Proposal 4. Who Can Vote As of the Record Date, there were 85,629,73183,054,119 shares of common stock outstanding. Each share of common stock is entitled to one vote on each matter properly brought before the 20212024 Annual Meeting. Most of our shareholders hold their shares through a stockbroker, bank, trustee or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those beneficially owned in street name: •+Shareholder of Record:Record: If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company,EQ, you are considered the shareholder of record of those shares and these proxy materials are being made available directly to you by us. As the shareholder of record, you have the right to grant your voting proxy directly to us or to vote in person at the 20212024 Annual Meeting.
•+Beneficial Owner of Shares Held in Street Name:Name: If your shares are held in a brokerage account through a bank, broker, trustee or other nominee, you are considered the beneficial owner of shares held in “street name” and these proxy materials are being made available to you through your bank, broker, trustee or nominee. As the beneficial owner of shares held in street name, you have the right to direct your bank, broker, trustee or nominee on how to vote and are also invited to attend the 20212024 Annual Meeting. Your bank, broker, trustee or nominee is obligated to provide you with voting instructions for use in instructing the bank, broker, trustee or nominee how to vote these shares. However, since you are not the shareholder of record, you may not vote these shares in person at the meeting unless you have obtained a legal proxy from your bank, broker, trustee or nominee entitling you to vote your shares at the 20212024 Annual Meeting.
Notice of Internet Availability (Notice and Access) Instead of mailing a printed copycopies of our proxy materials to each shareholder, we are furnishing our proxy materials via the Internet. This reduces both the costs and the environmental impact of sending our proxy materials to our shareholders.distributing these materials. If you received a Notice of Internet Availability, you will not receive a printed copy of the proxy materials unless you specifically request a printed copy.one. The Notice of Internet Availability will instructinstructs you how to access and review all of the important information contained in the proxy materials. The Notice of Internet Availability also instructs youmaterials, how to submit your proxy on the Internet and how to vote by telephone. | | | | | | IDEXX 2024 PROXY STATEMENT | 121 |
+ + + GENERAL INFORMATION ABOUT THE 2023 ANNUAL MEETING AND VOTING If you would like to receive a printed or emailed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice of Internet Availability. In addition, if you received paper copiesa printed copy of our proxy materials and wish to receive all future proxy materials, proxy cards and annual reports electronically, please follow the electronic delivery instructions on www.proxyvote.com. We encourage shareholders to take advantage of the availability of the proxy materials on the Internet to help reduce the cost and environmental impact of our annual shareholder meetings. 92 | 2021 Proxy Statement
| | | ANNUAL MEETING AND VOTING |
The Notice of Internet Availability is first being sent to shareholders on or about March 31, 2021.27, 2024. Also on or about March 31, 2021,27, 2024, we will first make available to our shareholders this Proxy Statement and the form of proxy relating to the 20212024 Annual Meeting, as well as our 20202023 Annual Report on Form 10-K filed with the SEC on February 12, 2021.Report. How to Vote You can vote online at the virtual 20212024 Annual Meeting or by proxy. We recommend that you submit a proxy even if you plan to attend the virtual 20212024 Annual Meeting. This will ensure that your vote will be counted if you are unable to, or later decide not to, participate in the virtual meeting. You can revoke your proxy and change your vote at the 20212024 Annual Meeting in one of the ways described below. All shares represented by proxies that have been properly voted and not revoked will be voted at the 20212024 Annual Meeting. We are offering shareholders four methods of voting: •+You may vote over the Internet;
•+You may vote by telephone;
•+If you are a registered holder of our shares, you may request a paper proxy card from us, and indicate your vote by completing, signing and dating the card where indicated and by mailing or otherwise returning the card in the prepaid envelope accompanying the paper proxy card; or
•+You may vote online at the virtual 20212024 Annual Meeting. If you attend the 20212024 Annual Meeting over the Internet, you will be able to vote your shares online, even if you already voted by Internet, telephone or mail. You will need to enter your control number (included in your Notice of Internet Availability, your proxy card or the voting instructions that accompanied your proxy materials) to vote your shares at the 20212024 Annual Meeting.
See “HowRefer to Vote”the bottom of the “Notice of 2024 Annual Meeting of Shareholders” beginning on page 8iii to determine how to vote your shares by mail, telephone or Internet.Revoking a Proxy You can revoke your proxy, whether it was given by Internet, telephone or mail, before it is voted by: •+Submitting a new proxy with a later date, including a proxy given via the Internet or by telephone;
•+Providing written notice to our SeniorExecutive Vice President, General Counsel and Corporate Secretary before or at the 20212024 Annual Meeting prior to the voting on any proposal, if you are a registered holder of our shares; or
•+Voting online at the virtual 20212024 Annual Meeting.
The last vote you submit chronologically (by any means) will supersede your prior vote(s). Your attendance at the virtual 20212024 Annual Meeting over the Internet will not, by itself, revoke your proxy. | | | | | | 122 | IDEXX 2024 PROXY STATEMENT |
GENERAL INFORMATION ABOUT THE 2024 ANNUAL MEETING AND VOTING + + + Quorum In orderWe need a quorum to transact business at the 20212024 Annual Meeting, we must have a quorum.Meeting. This means that at least a majority of the issued and outstanding shares entitled to vote as of the Record Date must be represented at the 20212024 Annual Meeting, either by proxy or in person. Abstentions and broker non-votes (which are described below) are counted as present and entitled to vote for purposes of determining a quorum. Treasury shares, which are shares owned by us, are not voted and do not count towards establishing a quorum. If a quorum is not present, the meeting will be adjourned until a quorum is obtained.
Votes Needed Approval of Proposals One, Two, Three and Four each of the proposals requires the favorable vote of a majority of the votes cast. Only votes for or against a proposal count as votes cast. Abstentions and broker non-votes (which are described below) are not counted as votes cast and therefore, willso have no effect on the outcome of the mattersproposal. For details regarding our Director Resignation Policy applicable in the event that an incumbent Director is not re-elected, please refer to be votedthe information under “Majority Voting and Director Resignation” on at the 2021 Annual Meeting.page 34. Votes will be tabulated by anAn independent inspector of elections appointed for the 20212024 Annual Meeting who will separately tabulate affirmative and negative votes, abstentions and broker non-votes. The preliminaryPreliminary voting results will be announced at the 20212024 Annual Meeting. The finalFinal voting results will be tallied by the inspector of elections and reported in a Current Report on Form 8-K, which will be filed with the SEC within four business days after the 20212024 Annual Meeting.
Broker Non-Votes If you are a beneficial owner of shares held in “street name” and do not give voting instructions to your bank or brokerage firm, your bank or brokerage firm will be able to vote your shares with respect to certain “discretionary” items, but will not be allowed to vote your shares with respect to certain “non-discretionary” items. The following are non-discretionary items on which your bank or brokerage firm may not vote without voting instructions from you: •+Election of Directors (Proposal One)
•+The Advisory Vote to Approve Executive Compensation (Proposal Three)
In the case of+Shareholder Proposal Regarding Simple Majority Vote (Proposal Four)
For these non-discretionary items, for whichif your bank or brokerage firm does not have voting instructions, the bank or brokerage firm is required tomust indicate on its proxy that it does not have discretionary authority to vote on these matters on your behalf, and your shares will be treated as “broker non-votes” with respect to these proposals. Ratification of the appointment of our independent registered public accounting firm (Proposal Two) is considered to be a discretionary item on which banks and brokerage firms may vote. Conduct of the 20212024 Annual Meeting Pursuant to our Amended and Restated By-Laws, the independent Non-Executive Board Chair adopted rules and procedures that he believes are appropriate to ensure that the 20212024 Annual Meeting is conducted properly. These Rules of Conduct and Procedures are currently available at our online pre-meeting forum that beneficial owners can enter at www.proxyvote.com and registered shareholders can enter at www.proxyvote.com/idxx. In addition, these Rules of Conduct and Procedures will also be available at the 20212024 Annual Meeting at www.virtualshareholdermeeting.com/IDXX2021IDXX2024. | | | | | | IDEXX 2024 PROXY STATEMENT | 123 |
+ + + GENERAL INFORMATION ABOUT THE 2023 ANNUAL MEETING AND VOTING Pre-Meeting Forum and Submitting Questions The virtual format for our 20212024 Annual Meeting will allow us to implement a pre-meeting forum to communicate more effectively with you. You can access the pre-meeting forum and submit written questions in advance of our 20212024 Annual Meeting, vote, and also access copies of the 20212024 Annual Meeting’s Rules of Conduct and Procedures, as well as our proxy statement and annual report, by visiting www.proxyvote.com for beneficial owners and www.proxyvote.com/idxx for registered shareholders.. Virtual 20212024 Annual Meeting We are excitedpleased to embrace the latest technology to provide ease of access, real-time communication and cost savings for our shareholders and the Company. Hosting our 20212024 Annual Meeting as a completely virtual meeting will provide easy access for shareholders, facilitate shareholder participation and reduce the environmental impact of our 20212024 Annual Meeting. For more information regarding the virtual format, seerefer to the discussion under “Virtual Shareholder Meeting” beginning on page 4555. | | | | | | | | | | | | | | | The 20212024 Annual Meeting will be conducted over the Internet via live audio webcast at 10:00 a.m.4:30 p.m., Eastern Time, on Wednesday,Monday, May 12, 2021.6, 2024. Shareholders of record as of March 19, 2021, will be able to8, 2024, may attend, vote and submit questions during the virtual 20212024 Annual Meeting by visiting www.virtualshareholdermeeting.com/IDXX2021IDXX2024. To participate in the virtual annual meeting, you will need the control number included on your Notice of Internet Availability, on your proxy card or on the instructions that accompanied your proxy materials. The audio webcast will begin promptly at 10:00 a.m.4:30 p.m., Eastern Time. Online check-in will begin at 9:30 a.m.4:00 p.m., Eastern Time, and you should allow ample time for the online check-in procedures. | | | | | | | Technical Difficulties Accessing the Virtual Meeting If you encounter any difficulties accessing the virtual meeting or during the meeting time, please call: 1-855-449-0991 (Toll-free)
1-720-378-5962 (Toll line) | | | | | |
The audio webcast will include consideration of the proposals and a live question-and-answer session. During the live question-and-answer session, we will answer questions as they come in and address those submitted in advance at the pre-meeting forum, as time permits. Shareholders accessing the audio webcast will be able to submit questions in writing or, by following instructions on our online pre-meeting forum or at www.virtualshareholdermeeting.com/IDXX2021IDXX2024, dial in to a toll-free number and verbally ask live questions during the meeting. 94 | 2021 Proxy Statement
| | | ANNUAL MEETING AND VOTING |
Voting on Other Matters If other matters are properly presented for consideration at the 20212024 Annual Meeting, the persons named in the proxy will have the discretion to vote on those matters for you. As of the date of this Proxy Statement, we do not know of any other matters to be raised at the 20212024 Annual Meeting and the dates by which other matters to be voted on at the 20212024 Annual Meeting must have been submitted by our shareholders pursuant to Rule 14a-8 of the Exchange Act or our Amended and Restated By-Laws have passed. | | | | | | 124 | IDEXX 2024 PROXY STATEMENT |
GENERAL INFORMATION ABOUT THE 2024 ANNUAL MEETING AND VOTING + + + Solicitation of Proxies This proxy statement is furnished to our shareholders in connection with the solicitation by our Board of proxies for use at the 2024 Annual Meeting. We will pay the expenses of the solicitation of proxies by our Board. Proxies can be solicited on our behalf by Directors, officers or employees, without additional remuneration, in person or by telephone, by mail, electronic transmission and facsimile transmission. We have hired MacKenzie Partners, Inc. to distribute and solicit proxies and will pay MacKenzie Partners, Inc. a fee of approximately $15,000, plus reasonable out-of-pocket expenses, for its services. Brokers, banks, trustees and other nominees will be requested to make available proxy-soliciting material to the owners of our common stock held in their names and, as required by law, we will reimburse them for their reasonable out-of-pocket expenses for this service. Householding of Annual Meeting Materials Some of our shareholders may be participating in the practice of “householding” proxy statements, annual reports and the Notice of Internet Availability. This means that only one copy of such documents may have been sent to multiple shareholders in your household. This reduces printing costs, postage fees and the environmental impact. We will promptly deliver a separate copy of the Notice of Internet Availability, proxy statement or annual report if you call or write us at the following address or telephone number: Investor Relations
IDEXX Laboratories, Inc.
One IDEXX Drive
Westbrook, Maine, 04092
Telephone: 207-556-8155 If you want to receive separate copies of the Notice of Internet Availability, proxy statement and annual report in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker or other nominee record holder, or you may contact us at the above address and telephone number. 2021 Proxy Statement| 95
| | | | | | IDEXX 2024 PROXY STATEMENT | 125 |
Requirements for Submission of Proxy Proposals, Nomination of Directors and Other Business of Shareholders Proposals Submitted Under Rule 14a-8 In orderThe deadline to submit a proposal for inclusion in our proxy materials for the 2024 Annual Meeting has passed.
To be considered for inclusion in next year’s proxy statement,materials, shareholder proposals submitted pursuant to Rule 14a-8 must be submitted in writing and addressed to and be received by our SeniorExecutive Vice President, General Counsel and Corporate Secretary at IDEXX Laboratories, Inc., One IDEXX Drive, Westbrook, Maine 04092 and received by December 1, 2021. The deadline to submit a proposal for inclusion in our proxy materials for the 2021 Annual Meeting has passed.November 27, 2024. Proposals Submitted Outside of Rule 14a-8 Our Amended and Restated By-Laws also establish advance notice procedures, summarized below, that a shareholdershareholders must follow to nominate persons for election as Directors or to introduce an item of business at an Annual Meeting outside of the process under Rule 14a-8. These procedures provide that nominations Nominations for Director and/or an item of business to be introduced at an Annual Meeting must be submitted in writing to our SeniorExecutive Vice President, General Counsel and Corporate Secretary and received by the deadline indicated below at IDEXX Laboratories, Inc., One IDEXX Drive, Westbrook, Maine 04092.04092 and received by the applicable deadline indicated below. Our Amended and Restated By-Laws provide that shareholderShareholder nominations or other proposals must include certain information regarding:
•+The shareholder submitting the nomination or proposal;
•+Any nominee for Director; and/or
•+The item of business.
Proxy Access Nominations. In order to properly bring before the 2022 Annual Meeting a shareholder’sFor your nomination of one or more Director candidates to be properly brought before the 2025 Annual Meeting and included in our proxy statement and ballotmaterials pursuant to Section 2.8 of our Amended and Restated By-Laws (proxy access nomination), we must receive written notice in writing of your intention to introduce a proxy access nomination at our 20222025 Annual Meeting, and all supporting information required by our Amended and Restated By-Laws, no earlier than November 1, 2021October 28, 2024 and no later than December 1, 2021November 27, 2024 (i.e., not less than 120 days or more than 150 days before the first anniversary of the date this Proxy Statement was first released to shareholders in connection with the 20212024 Annual Meeting). The adjournment or postponement of the 20212025 Annual Meeting (or the public notice thereof) shall not affect the time period required to give notice of a proxy access nomination with respect to the 20222025 Annual Meeting. Other Nominations or Items of Business. In order to properly bring before the 2022 Annual Meeting anyFor your nomination of one or more Director nominationcandidates or any other item of business other than a matter brought pursuant to Rule 14a-8 or a(excluding proxy access nomination,nominations and proposals submitted under Rule 14a-8) to be properly brought before the 2025 Annual Meeting, we must receive written notice in writing of your intention to introduce such nomination or proposed item of business at our 20222025 Annual Meeting, and all supporting information required by our Amended and Restated By-Laws, not less than 90 days or more than 120 days before the first anniversary of the 20212024 Annual Meeting. However, if the date of our 20222025 Annual Meeting is advanced by more than 20 days, or delayed by more than 60 days, from the date of the 20212024 Annual Meeting, then we must receive such notice | | | | | | 126 | IDEXX 2024 PROXY STATEMENT |
REQUIREMENTS FOR SUBMISSION OF PROXY PROPOSALS, NOMINATION OF DIRECTORS AND OTHER BUSINESS OF SHAREHOLDERS + + + at the address noted above not earlier than the 120th day before such Annual Meeting; and not later than the close of business on the later of the 90th day before such Annual Meeting or the 10th day after the day on which notice of the meeting date was mailed or public disclosure was made, whichever occurs first. Assuming that our 20222025 Annual Meeting is held between April 22, 202216, 2025 and July 11, 2022,5, 2025, as is currently expected, we must receive the written notice of your intention to introduce a nomination or proposed item of business at our 20222025 Annual Meeting, and all supporting information, no earlier than January 12, 20226, 2025 and no later than February 11, 2022.5, 2025. Shareholders who intend to solicit proxies in reliance on the SEC’s universal proxy rule for Director nominees submitted under the advance notice requirements of our Amended and Restated By-Laws must also comply with the additional notice and other requirements of Rule 14a-19. A written notice providing any additional information required by Rule 14a-19 must be postmarked or electronically submitted to our Executive Vice President, General Counsel and Corporate Secretary at IDEXX Laboratories, Inc., One IDEXX Drive, Westbrook, Maine 04092 no later than March 7, 2025. 96 | 2021 Proxy Statement
| | | | | | IDEXX 2024 PROXY STATEMENT | 127 |
Forward-Looking Statements This Proxy Statement and the accompanying materials contain “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and involve significant risks and uncertainties, which may cause actual results to differ materially from those set forth in, or implied by, the forward-looking statements. The forward-looking Forward-looking statements may be identified by the use of words such as “anticipate,” “could,” “continue,” “expect,” “intend,” “objective,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” comparable words or phrases, the negative version of those words or phrases, or by using future dates in connection with any discussion of future performance, actions or events. Forward-looking statements contained in this Proxy Statement include statementsour belief that we are well positioned to address the significant opportunities ahead; our expectations and beliefs about our attractive, long-term opportunities to grow our business; our plans regarding product development, new product potential orlaunches and future menu expansion, including our plans to launch and begin shipments of the IDEXX inVue Dx Cellular Analyzer in the fourth quarter of 2024 and to expand the menu options for that point-of-care platform over time; our corporate responsibility plans, goals and commitments, including expected contributions of the virtual purchase power agreement we signed in January 2024 toward our achievement of our renewable electricity and greenhouse gas emission reduction targets and our belief that we are on track to achieve our renewable electricity and greenhouse gas emission reduction goals; and our future financial performance. performance, including our model of our long-term financial potential. No forward-looking statement can be guaranteed and actual results may differ materially from those projected.projected or implied. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Proxy Statement. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Forward-looking statements should be carefully evaluated together with the many risks and uncertainties that affect our business, particularly the matters described under the headings “Business,” “Risk Factors,” “Legal Proceedings,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Quantitative and Qualitative Disclosures About Market Risk” in our 20202023 Annual Report on Form 10-K, and that are otherwise described or updated from time to time in our Quarterly Reports on Form 10-Qsubsequent filings with the Securities and Current Reports on Form 8-K, if any, which we incorporate herein by reference.Exchange Commission. | | | | | | 128 | IDEXX 2024 PROXY STATEMENT |
Other Matters The Board knows of no other matters to be presented for shareholder action at the 20212024 Annual Meeting. If, however, other matters do properly come before the 20212024 Annual Meeting or any adjournments or postponements thereof,of the 2024 Annual Meeting, the Board intends that the persons named in the proxies will vote upon such matters in accordance with their best judgment. The Board hopes that you will attend the 20212024 Annual Meeting. Whether or not you plan to attend the 20212024 Annual Meeting, you are urged to vote at your earliest convenience in the manner and method set forth underdescribed at the section entitled “How to Vote”bottom of the “Notice of 2024 Annual Meeting of Shareholders” beginning on page 8iii. By order of the Board of Directors, Sharon E. Underberg
Senior Executive Vice President,
General Counsel and Corporate Secretary March 31, 202127, 2024 2021 Proxy Statement| 97
| | | | | | IDEXX 2024 PROXY STATEMENT | 129 |
Appendix A – Reconciliation of Non-GAAP Financial Measures We report our results in conformityaccordance with U.S. generally accepted accounting principles (GAAP).in the United States, or GAAP. We use certain non-GAAP financial measures in this Proxy Statement that exclude or adjust certain items to supplement our consolidated results presented in accordance with GAAP or as part of our executive compensation program. Our reconciliation of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP is included in this Appendix. While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies. After-Tax Return on Invested Capital, Excluding Cash and Investments (ROIC) After-tax return on invested capital, excluding cash and investments (ROIC), is a non-GAAP financial measure that represents our after-tax income from operations, for the year ended December 31, 2020, divided by our average invested capital, excluding cash and investments, using the beginning and ending balance sheet values. After-tax return on invested capital, excluding cash and investments,ROIC, after-tax income from operations and average invested capital, excluding cash and investments, are not measures of financial performance under GAAP and should be considered in addition to, and not as replacements of or superior measures to, return on assets, net income, total assets or other financial measures reported in accordance with GAAP. We believe that reporting after-tax return on invested capital, excluding cash and investments,ROIC provides useful information to investors for evaluating the efficiency and effectiveness of our use of capital. It is also a metric used in our Executive Incentive Plan.
| | | | | | 130 | IDEXX 2024 PROXY STATEMENT |
In this Proxy Statement, we report our after-tax return on invested capital, excluding cash and investments,ROIC for 2020.2023. The reconciliation of this non-GAAP financial measure is as follows: | | | | | | | | | | | | Numerator (amounts in thousands) | For the Year Ended December 31, 2020 | | | Income from operations (as reported) | $ | 694,524 | | | | After-tax income from operations (1) | $ | 610,745 | | | | | | | | Denominator (dollar amounts in thousands) | As of December 31, 2020 | | As of December 31, 2019 | Total shareholders’ equity (deficit) | $ | 632,088 | | | $ | 177,473 | | Noncontrolling interest | 707 | | | 352 | | Line of credit | — | | | 288,765 | | Long-term debt, current and long-term | 908,480 | | | 698,910 | | Deferred income tax assets | (31,549) | | | (8,100) | | Deferred income tax liabilities | 11,707 | | | 33,024 | | Total invested capital | $ | 1,521,433 | | | $ | 1,190,424 | | Less cash and cash equivalents | 383,928 | | | 90,326 | | Total invested capital, excluding cash and investments | $ | 1,137,505 | | | $ | 1,100,098 | | Average invested capital, excluding cash and investments (2) | $ | 1,118,802 | | | | After-tax return on invested capital, excluding cash and investments | 54.6 | % | | |
| | | | | | | | | | | | Numerator (amounts in thousands) | For the Year Ended December 31, 2023 | | | | | | | Income from operations (as reported) | $1,097,128 | | | | After-tax income from operations(1) | $873,672 | | | |
(1) | | | | | | | | | | | | Denominator (dollar amounts in thousands) | As of December 31, 2023 | As of December 31, 2022 | | | | | | Total shareholders’ equity | $1,484,530 | | $608,737 | | | Credit facility | $250,000 | | $579,000 | | | Long-term debt, current and long-term | $697,880 | | $769,369 | | | Deferred income tax assets | ($107,364) | | ($55,215) | | | Deferred income tax liabilities | $7,235 | | $8,150 | | | Total invested capital | $2,332,281 | | $1,910,041 | | | Less cash and cash equivalents | $453,932 | | $112,546 | | | Total invested capital, excluding cash and investments | $1,878,349 | | $1,797,495 | | | Average invested capital, excluding cash and investments(2) | $1,837,922 | | | | After-tax return on invested capital, excluding cash and investments (ROIC) | 47.5 | % | | |
1.After-tax income from operations represents income from operations reduced by our reported effective tax rate of 12.1%20.4% for the year ended December 31, 2020 excluding the impact of non-recurring tax items. See2023. Refer to Note 1314 to our consolidated financial statements included in our 20202023 Annual Report on Form 10-K for information on the impact of these items on our effective tax rate. (2)2.Average invested capital, excluding cash and investments, represents the average of the amount of total invested capital, excluding cash and investments, as of December 31, 20192023 and December 31, 2020.2023.
98 | 2021 Proxy Statement
Comparable Constant Currency EPS Growth Comparable constant currency EPS growth is a non-GAAP financial measure that represents the percentage change in earnings per share (diluted), as compared to the same period for the prior year, net of the impact of changes in foreign currency exchange rates and excluding the impact of the Company’s adoptiontax benefits of share-based compensation accounting changeactivity under ASU 2016-09, “Compensation“Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (ASU 2016-09) for the periods after its adoption on January 1, 2017 and non-recurring or unusual items.items (if any). Comparable constant currency EPS growth should be considered in addition to, and not as a replacement of or a superior measure to, earnings per share (diluted) growth reported in accordance with GAAP. We believe that reporting comparable constant currency EPS growth provides useful information to investors by facilitating better period-over-period comparisons of our fundamental earnings per share performance by excluding items that vary independent of performance and providing greater transparency regarding a key metric used by management. | | | | | | IDEXX 2024 PROXY STATEMENT | 131 |
In this Proxy Statement, we report the comparable constant currency EPS growth for 2020,2023, which excludes the impact of tax benefits of share-based compensation activity under ASU 2016-09 and changes in foreign currency exchange rates, the Company’s adoption of ASU 2016-09 and CEO transition charges.rates. We estimate the net impact of changes in foreign currency exchange rates on adjusted EPS results by restating results to the average exchange rates or exchange rate assumptions for the comparative period, which includes adjusting for the estimated impacts of foreign currency hedging transactions and certain impacts on our effective tax rates. The reconciliation of this non-GAAP financial measure is as follows: | | | | | | | | | | | | | For the Year Ended December 31, 2020 ($) | For the Year Ended December 31, 2019 ($) | Year-over-Year Growth | Earnings per share (diluted) | 6.71 | | 4.89 | | 37 | % | Impact of adoption of ASU 2016-09 | (0.45) | | (0.22) | | | CEO transition charges (1) | — | | 0.14 | | | Expired royalty litigation matter (2) | 0.24 | | — | | | Swiss tax reform impact (3) | (0.25) | | — | | | Comparable EPS | 6.25 | | 4.81 | | 30 | % | Change from currency | 0.06 | | — | | | Comparable constant currency EPS | 6.31 | | 4.81 | | 31 | % |
| | | | | | | | | | | | | For the Year Ended December 31, 2023 ($) | For the Year Ended December 31, 2022 ($) | Year-over-Year Growth | | | | | Earnings per share (diluted) | 10.06 | 8.03 | 25% | Less: comparability adjustments | | | | Share-based compensation activity | 0.16 | 0.15 | | Change from currency | (0.24) | — | | Comparable EPS Growth | 10.14 | 7.88 | 29% |
(1)We entered in a Mutual Separation Agreement with Mr. Ayers, who is our former President, CEO and Board Chair, effective November 1, 2019, and we recognized a chargeAmounts presented may not recalculate due to operating income of approximately $13.4 million in the fourth quarter of 2019, representing the cost of severance payments and an acceleration of the cost of equity awards.rounding.
(2)The Company established an accrual of $27.5 million in the third quarter of 2020 related to an ongoing matter involving an alleged break of contract for underpayment of royalty payments made from 2004 through 2017 under an expired patent license agreement. The accrual amount represents the amount of a possible loss that we have determined to be probably and estimable, and the actual cost of resolving this matter may be higher or lower than the amount accrued.
(3)Swiss tax reform refers to a one-time positive income tax impact related to the enactment of tax reform in Switzerland reflected in the fourth quarter of 2020, when the Company recorded an approximately $22 million deferred tax asset related to transitional benefits
Comparable Constant Currency Operating Margin Improvement Comparable constant currency operating margin improvement is a non-GAAP financial measure that represents the percentage change in operating margin, as compared to the same period for the prior year, net ofand excludes the impact of changes in foreign currency exchange rates and excluding non-recurring or unusual items.items (if any). Comparable constant currency operating margin improvement should be considered in addition to, and not as a replacement of or a superior measure to, operating margin improvement reported in accordance with GAAP. We believe that reporting comparable constant currency operating margin improvement provides useful information to investors by facilitating better period-over-period comparisons of our fundamental operating margin performance by excluding items that vary independent of performance and providing greater transparency regarding a key metric used by management. In this Proxy Statement, we report the comparable constant currency operating margin improvement for 2020,2023, which excludes the impact of changes in foreign currency exchange rates CEO transition charges, and an expired royalty litigation matter.in 2023. We estimate the net impact of changes in foreign currency exchange rates on operating margin results by restating results to the average exchange rates or exchange rate assumptions for the comparative period, which includes adjusting for the estimated impacts of foreign currency hedging transactions and certain impacts on our effective tax rates. | | | | | | 132 | IDEXX 2024 PROXY STATEMENT |
The reconciliation of this non-GAAP financial measure is as follows: | Dollar amounts in thousands | Dollar amounts in thousands | For the Year Ended December 31, 2020 | For the Year Ended December 31, 2019 | Year-over-Year Change (basis points) | Dollar amounts in thousands | For the Year Ended December 31, 2023 | For the Year Ended December 31, 2022 | Year-over-Year Change (basis points) | | Income from operations | | Income from operations | | Income from operations | Income from operations | $ | 694,524 | | $ | 552,846 | | | Operating margin | Operating margin | 25.7 | % | 23.0 | % | 270 bps | CEO transition charges (1) | $ | — | | $ | 13,400 | | | Expired royalty litigation matter (2) | $ | 27,500 | | $ | — | | | Operating margin | | Operating margin | | 30.0% | 26.7% | 330 bps | Less: comparability adjustments | | Change from currency | Change from currency | $ | 7,097 | | $ | — | | | Comparable constant currency income from operations | $ | 729,121 | | $ | 566,246 | | | Comparable constant currency operating margin (3) | 27.0 | % | 23.5 | % | 340 bps | Change from currency | | Change from currency | | Comparable income from operations | | Comparable income from operations | | Comparable income from operations | | Comparable operating margin(1) | | Comparable operating margin(1) | | Comparable operating margin(1) | | 30.6% | 26.7% | 390 bps |
(1)We entered in a Mutual Separation Agreement with Mr. Ayers, who is our former President, CEO and Board Chair, effective November 1, 2019, and we recognized a charge to operating income of approximately $13.4 million in the fourth quarter of 2019, representing the cost of severance payments and an acceleration of the cost of equity awards.
(2)The Company established an accrual of $27.5 million in the third quarter of 2020 related to an ongoing matter involving an alleged break of contract for underpayment of royalty payments made from 2004 through 2017 under an expired patent license agreement. The accrual amount represents the amount of a possible loss that we have determined to be probably and estimable, and the actual cost of resolving this matter may be higher or lower than the amount accrued.
(3)1.Amounts presented may not recalculate to constant currency operating margin or constant currency margin improvement due to rounding.
Free Cash Flow and the Ratio of Free Cash Flow to Net Income Free cash flow is a non-GAAP financial measure and means, with respect to a measurement period, the cash generated from operations during that period, including tax benefits attributable to share-based compensation, reduced by the Company’s investments in property and equipment. The ratio of free cash flow to net income is a non-GAAP financial measure that is defined as free cash flow, with respect to a measurement period, divided by net income for the same period. Free cash flow and the ratio of free cash flow to net income should each be considered in addition to, and not as a replacement of or a superior measure to, net cash provided by operating activities. We believe that reporting free cash flow provides useful information to investors because free cash flow indicates the cash the operations of the business are generating after appropriate reinvestment for recurring investments in property and equipment that are required to operate the business. We believe that reporting the ratio of free cash flow to net income provides useful information to investors because it provides a useful way for investors to compare free cash flow over time. In this Proxy Statement, we report our free cash flow and the ratio of free cash flow to net income for 2020.2023. The reconciliation of these non-GAAP financial measures is as follows: | | | | | | Dollar amounts in thousands | For the Year Ended
December 31, 20202023 | | | Net cash provided by operating activities | $ | 648,063 | 906,510 | Investing cash flows attributable to purchases of property and equipment | $ | (106,958) | (133,631) | Free cash flow | $ | 541,105 | 772,879 | Net income | $ | 582,131 | 845,042 | Ratio of free cash flow to net income (expressed as a percentage) | 93 | %91% |
100 | 2021 Proxy Statement
| | | | | |
IDEXX 2024 PROXY STATEMENT
| 133 |
| | | |
Organic Revenue Growth Organic revenue growth is a non-GAAP financial measure that represents the percentage change in revenue, as compared to the same period for the prior year, net of the impact of changes in foreign currency exchange rates, certain business acquisitions and divestitures. Organic revenue growth should be considered in addition to, and not as a replacement of or a superior measure to, revenue growth reported in accordance with GAAP. We believe that reporting organic revenue growth provides useful information to investors by facilitating easier comparisons of our revenue performance with prior and future periods and to the performance of our peers. We exclude from organic revenue growth the effect of changes in foreign currency exchange rates because these changes are not under management’s control, are subject to volatility and can obscure underlying business trends. We calculate the impact on revenue resulting from changes in foreign currency exchange rates by applying the difference between weighted average exchange rates dung 2020during 2023 and 20182022 to foreign-currency-denominated revenues for 2018.2022. We also exclude from organic revenue growth the effect of certain business acquisitions and divestitures because the nature, size and number of these transactions can vary dramatically from period to period, and because they either require or generate cash as an inherent consequence of the transaction, and therefore can also obscure underlying business and operating trends. Prior to January 1, 2020, we excluded all acquisitions from organic revenue growth. Effective January 1, 2020, we exclude only acquisitions that are considered to be a business from organic revenue growth. We consider acquisitions to be a business when all three elements of inputs, processes and outputs are present, consistent with ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.Business.”In a business combination, if substantially all the fair value of the assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, we do not consider these assets to be a business, and effective January 1, 2020, we include these acquisitions in organic revenue growth.business. A typical acquisition that we do not consider a business is a customer list asset acquisition, which does not have all elements necessary to operate a business, such as employees or infrastructure. We believe that the efforts required to convert and retain these acquired customers are similar in nature to our existing customer base and therefore are included in organic revenue growth. ThisThe percentage change did not have a material impact on organicin revenue growthresulting from acquisitions represents revenues during 2020.the current year period, limited to the initial twelve months from the date of acquisition, that are directly attributable to business acquisitions. In this Proxy Statement, we report the Company’s organic revenue growth and CAG Diagnostics recurring revenue organic growth in 2020.2023. The reconciliation of these non-GAAP financial measures is as follows: | Dollar amounts in thousands | Dollar amounts in thousands | Net Revenue For the Year Ended December 31, 2020 ($) | Net Revenue For the Year Ended December 31, 2019 ($) | Dollar Change ($) | Percentage Change | Change from Currency | Change from Acquisitions | Organic Revenue Growth(1) | Dollar amounts in thousands | Net Revenue For the Year Ended December 31, 2023 ($) | Net Revenue For the Year Ended December 31, 2022 ($) | Dollar Change ($) | Percentage Change | Change from Currency | Change from Acquisitions | Organic Revenue Growth(1) | | Total Company | | Total Company | | Total Company | Total Company | 2,706,655 | | 2,406,908 | | 299,747 | | 12.5 | % | — | % | 0.5 | % | 12.0 | % | 3,660,953 | | 3,367,324 | 3,367,324 | | 293,629 | 293,629 | | 8.7% | 8.7% | (0.2)% | 0.1% | 8.8% | CAG Diagnostics recurring revenue | CAG Diagnostics recurring revenue | 2,113,839 | | 1,828,329 | | 285,510 | | 15.6 | % | 0.1 | % | 0.6 | % | 14.8 | % | CAG Diagnostics recurring revenue | 2,935,425 | | 2,660,280 | 2,660,280 | | 275,145 | 275,145 | | 10.3% | 10.3% | (0.2)% | — | 10.5% |
(1)1.Amounts presented may not recalculate due to rounding.
2021 Proxy Statement| 101 | | | | | | 134 | IDEXX 2024 PROXY STATEMENT |
| | | | | | | | | | | VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com | IDEXX LABORATORIES, INC.
ONE IDEXX DRIVE
WESTBROOK, ME 04092 | | | | Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. 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/IDXX2021IDXX2024 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 up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. 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: | | E58088-P19475 | E58088-P19475 | KEEP THIS PORTION FOR YOUR RECORDS | | | DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | IDEXX LABORATORIES, INC. | | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote FOR each of the following nominees listed in Proposal One below: | | | | | | | | | | | 1. | | 1. | Election of Directors (Proposal One). | | | | | | | Nominees | | For | | Against | | NomineesAbstain | | | For | | Against | | Abstain | | | | | | | | | | | | | 1a. | Irene Chang Britt | | ☐ | | 1a.☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1b. | Bruce L. Claflin | | ☐ | | ☐ | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1c. | | | 1b. | Asha S. Collins, PhD | | ☐ | | ☐ | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1d. | Sam Samad | | ☐ | | 1c.☐ | | Daniel M. Junius☐ | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1d. | Sam Samad | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | The Board of Directors recommends you vote FOR the following proposals: | | | For | | Against | | ForAbstain | | Against | | Abstain | | | | | | | | | | | | | | | | 2. | | 2. | Ratification of Appointment of Independent Registered Public Accounting Firm. To ratify the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the current fiscal year (Proposal Two). | | | ☐ | | ☐ | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | 3. | | 3. | Advisory Vote on Executive Compensation. To approve a nonbinding advisory resolution on the Company’s executive compensation (Proposal Three). | | | ☐ | | ☐ | | ☐ | | ☐ | | ☐ | | | | The Board of Directors makes no voting recommendation on the following proposal: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For | | Against | | Abstain | | | | 4. | Shareholder proposal regarding simple majority vote (Proposal Four). | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | 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 | | Date | | | | | Signature (Joint Owners) | | Date | | Date | | | | | | | | | | | | | | | | | | | | | | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.idexxproxymaterials.com.
| | | | | | | | | | | | |
IDEXX LABORATORIES, INC. Proxy for the 20212024 Annual Meeting of Shareholders To Be Held on May 12, 20216, 2024 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY | | |
The undersigned, revoking all prior proxies, hereby appoint(s) Lawrence D. Kingsley and Sharon E. Underberg, and each of them, with full power of substitution, as proxies to represent and vote, as designated on the reverse side of this ballot, all shares of Common Stock of IDEXX Laboratories, Inc. (the “Company”) which the undersigned would be entitled to vote at the 20212024 Annual Meeting to be held at 10:00 AM4:30 PM EDT on Wednesday,Monday, May 12, 20216, 2024 at www.virtualshareholdermeeting.com/IDXX2021.IDXX2024.
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.recommendations and in accordance with the judgment of the proxies upon any other matter that may properly come before the meeting and any adjournment or postponement thereof.
| | | Continued and to be signed on reverse side
| | | | |
|