INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Amendment No. )
[x]
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☐ | Preliminary Proxy Statement | ||||||
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| Definitive Proxy Statement | ||||||
☐ | Definitive Additional Materials | ||||||
☐ | Soliciting Material | under §240.14a-12 |
THE COOPER COMPANIES, INC.
☒ No fee required.
☐ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Fee paid previously with preliminary |
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2, 2024
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
THE COOPER COMPANIES, INC.
6101 Bollinger Canyon Road, Suite 500
San Ramon, CA 94583
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6101 Bollinger Canyon Road, Suite 500 San Ramon, CA 94583 | |||||||
Meeting Date: | Tuesday, March 19, 2024 | |||||||
Meeting Time: | 8:00 a.m. (Pacific Time) | |||||||
Location: | CooperCompanies Headquarters 6101 Bollinger Canyon Road, Suite 500 San Ramon, California 94583 | |||||||
Admission: | ||||||||
| All stockholders are cordially invited to attend the Annual Meeting in person. | |||||||
Agenda: | ||||||||
| 1.Elect eight directors to our Board to serve for one-year terms expiring at the 2025 annual meeting of stockholders. 2.Ratify the appointment of KPMG LLP as 2024. 3. Officers (“Say on Pay Proposal”). 4.Transact any other business that may properly come before the meeting. |
Mark J. Drury
of
TABLE OF CONTENTS |
2022 ANNUAL MEETING OF STOCKHOLDERS
2024 ANNUAL MEETING OF STOCKHOLDERS |
Date and Time: |
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Location: | ||||||
| 6101 Bollinger Canyon Road, Suite 500 San Ramon, California 94583 | |||||
Notice Mailing Date: | February | |||||
Record Date: | January |
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PROPOSAL 1 – | Page 61 |
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Committee Memberships
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Name
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Director
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Age
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Audit
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Corp.Gov. &
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Org. &
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Indep.
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Other Public
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Robert S. Weiss (Chair)
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1996
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75
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✓
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--
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William A. Kozy (Lead Director)
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2016
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70
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❖ |
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◆
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✓
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1
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Colleen E. Jay
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2016
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59
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◆
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❖ |
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✓
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1
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Jody S. Lindell
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2006
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70
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◆
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◆
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✓
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Teresa S. Madden
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2020
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65
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❖ |
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◆
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✓
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1
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Gary S. Petersmeyer
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2013
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74
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◆
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◆
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✓
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Maria Rivas, M.D.
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2021
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58
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◆
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◆
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✓
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Albert G. White III (CEO)
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2018
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52
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--
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✓ – Independent | ❖– Committee Chair | ◆– Committee Member |
Committee Memberships | ||||||||||||||||||||
Name | Director Since | Age | Audit | Corporate Governance & Nominating | Organization & Compensation | Independent | ||||||||||||||
Robert S. Weiss (Chairman) | 1996 | 77 | ||||||||||||||||||
William A. Kozy (Lead Director) | 2016 | 72 | ❖ | ◆ | ||||||||||||||||
Lawrence E. Kurzius | 2023 | 66 | ◆ | ◆ | ||||||||||||||||
Colleen E. Jay | 2016 | 61 | ◆ | ❖ | ||||||||||||||||
Cynthia L. Lucchese | 2022 | 63 | ◆ | ◆ | ||||||||||||||||
Teresa S. Madden | 2020 | 67 | ❖ | ◆ | ||||||||||||||||
Maria Rivas, M.D. | 2021 | 60 | ◆ | ◆ | ||||||||||||||||
Albert G. White III (CEO) | 2018 | 54 | ||||||||||||||||||
PROPOSAL 2 – RATIFY APPOINTMENT OF KPMG LLP | Page 69 |
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PROPOSAL 3 - ADVISORY VOTE ON EXECUTIVE COMPENSATION (“SAY ON PAY”) | Page 71 |
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You are being asked to vote,approve, on ana non-binding, advisory basis, on the compensation of the followingour Named Executive Officers (“NEOs”). Officers.
Name | Title | |||||
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Albert G. White III | President & Chief Executive Officer | |||||
Brian G. Andrews | Executive Vice President, Chief Financial Officer & Treasurer | |||||
Daniel G. McBride | Executive Vice President & Chief Operating Officer | |||||
Holly R. Sheffield | President, CooperSurgical, Inc. | |||||
Gerard H. Warner III | President, CooperVision, Inc. | |||||
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OUR BOARD OF DIRECTORS |
Current Directors | Director Since | Age | Committee Memberships | Independent | Other Public Boards | ||||||||||||||||||
Audit | Corporate Governance & Nominating | Organization & Compensation | |||||||||||||||||||||
Robert S. Weiss (Chairman) | 1996 | 77 | — | ||||||||||||||||||||
William A. Kozy (Lead Director) | 2016 | 72 | ❖ | ◆ | 1 | ||||||||||||||||||
Lawrence E. Kurzius | 2023 | 66 | ◆ | ◆ | 2 | ||||||||||||||||||
Colleen E. Jay | 2016 | 61 | ◆ | ❖ | 2 | ||||||||||||||||||
Cynthia L. Lucchese | 2022 | 63 | ◆ | ◆ | 1 | ||||||||||||||||||
Teresa S. Madden | 2020 | 67 | ❖ | ◆ | 1 | ||||||||||||||||||
Gary S. Petersmeyer (1) | 2013 | 76 | ◆ | ◆ | — | ||||||||||||||||||
Maria Rivas, M.D. | 2021 | 60 | ◆ | ◆ | — | ||||||||||||||||||
Albert G. White III (CEO) | 2018 | 54 | — | ||||||||||||||||||||
Weiss | Kozy | Jay | Kurzius | Lucchese | Madden | Petersmeyer | Rivas | White | |||||||||||||||||||||
Independent | X | X | X | X | X | X | X | X | |||||||||||||||||||||
Skills / Qualifications | |||||||||||||||||||||||||||||
Executive Leadership Experience | X | X | X | X | X | X | X | X | X | ||||||||||||||||||||
Public Company Board Experience | X | X | X | X | X | X | X | X | X | ||||||||||||||||||||
Finance & Accounting / Risk Management | X | X | X | X | X | X | X | X | X | ||||||||||||||||||||
Investments / Strategic Planning / M&A | X | X | X | X | X | X | X | X | X | ||||||||||||||||||||
Global Business Experience | X | X | X | X | X | X | X | X | X | ||||||||||||||||||||
Healthcare Industry | X | X | X | X | X | X | |||||||||||||||||||||||
Government / Regulatory | X | X | X | X | X | X | X | ||||||||||||||||||||||
Manufacturing / Distribution / Supply Chain | X | X | X | X | X | X | X | ||||||||||||||||||||||
Gender Identity | |||||||||||||||||||||||||||||
Male | ◆ | ◆ | ◆ | ◆ | ◆ | ||||||||||||||||||||||||
Female | ◆ | ◆ | ◆ | ◆ | |||||||||||||||||||||||||
Race/Ethnicity | |||||||||||||||||||||||||||||
Hispanic/Latinx | ◆ | ||||||||||||||||||||||||||||
White/Caucasian | ◆ | ◆ | ◆ | ◆ | ◆ | ◆ | ◆ | ◆ | |||||||||||||||||||||
Tenure (Yrs.) | 27 | 7 | 7 | 0 | 1 | 3 | 11 | 2 | 5 | ||||||||||||||||||||
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Committee Memberships
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Current Directors
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Director
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Age
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Audit
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Corporate
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Organization &
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Independent
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Other
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Robert S. Weiss (Chairman)
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1996
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75
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✓
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--
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William A. Kozy (Lead Director)
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2016
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70
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❖ |
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◆
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✓
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1
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Colleen E. Jay
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2016
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59
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◆
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❖ |
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✓
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1
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Jody S. Lindell
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2006
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70
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◆
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◆
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✓
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--
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Teresa S. Madden
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2020
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65
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❖ |
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◆
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✓
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1
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Gary S. Petersmeyer
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2013
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74
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◆
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◆
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✓
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--
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Maria Rivas, M.D.
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2021
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58
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◆
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◆
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✓
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Albert G. White III (CEO)
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2018
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52
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✓ – Independent❖– Committee Chair ◆ – Committee Member
Number of Meetings | |||||
Board of Directors | 6 | ||||
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Organization & Compensation Committee | |||||
Corporate Governance & Nominating Committee | 4 |
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and professional relationships on a case by casecase-by-case basis to ensure there are no conflicts of interest with the Company or other factors that would impair the relevant Non-Employee Director’snon-employee director’s independence from the Company.
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(1)meet the objective independence requirements set forth by the SEC and Nasdaq (other than executive nominees), (2)exhibit strong personal integrity, character, and ethics, and a commitment to ethical business and accounting practices, (3)demonstrate an understanding of, and commitment to, good governance practices and the fiduciary responsibilities expected of a director, (4)have an appropriate educational background and significant business or professional experience, (5)not serve on more than two other public company boards, (6)not be involved in on-going litigation with Cooper or be employed by an entity which is engaged in such litigation, and (7)not be the subject of any on-going criminal investigations, including investigations for fraud or financial misconduct. In addition to these minimum standards, the |
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The CGNC also considers whether a candidate has any special expertise, skills, characteristics, or backgroundqualifications that would be of particular benefit to the Company and whetheror that address a candidate’s backgroundneed for specific operational, management, or qualifications will strengthen the overall diversity of the Board.other expertise. The CGNC seeks candidates who demonstrate an understanding of financial statements and financial matters, offer business and managerial experience that will complementcomplements the experience of current directors, and provide additional depth of knowledge in areasthat will provide practical insights and diverse perspectives that will benefit the Board in its oversight of our business.
In addition to these minimum standards,
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As of February 1, 2024 | ||||||||||||||
Total Number of Directors | 9 | |||||||||||||
Female | Male | Non-Binary | Did Not Disclose | |||||||||||
Gender Identity: | 4 | 5 | — | — | ||||||||||
Demographic Background: | ||||||||||||||
African American or Black | — | — | — | — | ||||||||||
Alaskan Native or Native American | — | — | — | — | ||||||||||
Asian | — | — | — | — | ||||||||||
Hispanic/Latinx | 1 | — | — | — | ||||||||||
Pacific Islander or Native Hawaiian | — | — | — | — | ||||||||||
White | 3 | 5 | — | — | ||||||||||
Two (or more) Races or Ethnicities | — | — | — | — | ||||||||||
LGBTQIA+ | — | — | — | — | ||||||||||
Did not disclose | — | — | — | — | ||||||||||
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Our
Audit Committee | Members | ||||
The Audit Committee provides advice with respect to our financial matters and assists the Board in fulfilling its oversight responsibilities regarding: (i) the quality and integrity of the Company’s financial statements, (ii) the Company’s compliance with legal and regulatory requirements, (iii) review of our potential risk factors, (iv) our system of internal accounting and financial controls, (v) our enterprise risk management program, (vi) the qualifications and independence of the independent registered public accounting firm (the “Independent Auditors”) and (vii) the oversight and performance of the Company’s internal audit function and the Independent Auditors. The Audit Committee advises and makes recommendations to the Board regarding our financial, investment, and accounting procedures and practices. The Audit Committee also has oversight responsibility for review of any related party transactions (as defined under Item 404 of Regulation S-K), treasury and investment matters, and the Company’s information security programs. Each of Ms. Madden, Mr. Kurzius, and Ms. Lucchese are Audit Committee Financial Experts as defined by the SEC. Additional information regarding the Audit Committee and its responsibilities can be found below in the information on Audit Matters. | Teresa S. Madden (Chair) ___________ Lawrence E. Kurzius Cynthia L. Lucchese Gary S. Petersmeyer Maria Rivas, M.D. | ||||
Organization & Compensation Committee | Members | ||||
The OCC reviews and approves all aspects of the compensation paid to our Chief Executive Officer and our executive officers as defined by Rule 3b-7 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Members of the OCC are not eligible to participate in any of our executive compensation programs. The OCC approves the composition of our peer group for comparative compensation review, the terms of our incentive compensation and equity-based plans (including the allocation and terms of equity awards to employees), corporate goals and objectives for the Chief Executive Officer, and any agreements providing for the payment of benefits following a change in control of the Company. The OCC also advises and makes recommendations to the Board regarding annual compensation of the non-employee directors. The OCC has oversight responsibility for our retirement programs and human capital management practices, including succession planning, diversity & inclusion objectives, and other management development programs designed to strengthen our internal pool of candidates for executive level positions and promote mentoring of senior level employees. | Colleen E. Jay (Chair) ___________ William A. Kozy Lawrence E. Kurzius Teresa S. Madden Gary S. Petersmeyer |
Corporate Governance & Nominating Committee | Members | ||||
The CGNC develops, implements, and maintains our corporate governance standards. It advises and makes recommendations to the Board concerning our primary governance policies, proposed changes to our charter and by-laws, proposed changes to the charters of the Board committees, and procedures for reporting violations of our policies and standards. The CGNC also monitors compliance with our Code of Conduct and other policies by our directors and officers and has responsibility for review of any conflicts of interest (actual or potential). The CGNC performs the functions described below under Director Nomination Process and makes recommendations regarding the composition, function, and size of the Board and its Committees, standards for the Board’s review of its own performance, continuing education for directors, and matters related to Board refreshment and succession planning. The CGNC also oversees our compliance programs and our Environmental, Social and Governance initiatives as discussed in more detail below. | William A. Kozy (Chair) ___________ Colleen E. Jay Cynthia L. Lucchese Maria Rivas, M.D. |
CORPORATE GOVERNANCE |
The Organization & Compensation Committee (the “OCC”) reviews and approves all aspects of the compensation paid to
The OCC also approves the composition of our peer group for comparative compensation review, approves all awards under our equity and non-equity incentive bonus plans, monitors our retirement programs, and has approval authority for agreements providing for the payment of benefits following a change in controlany provision of the Company. The OCC also oversees succession planning, diversityEthics & inclusion objectives, and management development programs designed to strengthen our internal pool of candidates for executive level positions and promote mentoring of senior level employees.
The Corporate Governance & Nominating Committee (the “CGNC”) develops, implements, and maintains the corporate governance standards by which we conduct business, and advises and makes recommendationsBusiness Conduct Policy in effect prior to the adoption of the Code.
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Meetings
The BoardAlthough we encourage our stockholders to review the information in our ESG Report and its committees met as follows duringon our most recent fiscal year:
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The Non-Employee Directors hold executive sessions in connection with regular meetingswebsite, the contents of the Boardreport and more often as they deem appropriate. Either Mr. Weiss, as Chair, or Mr. Kozy, as Lead Director, presides over executive sessions.
Duringwebsite are not deemed filed with the 2021 fiscal year, each director attended all ofSEC and are not incorporated by reference into any filing by Cooper under the board meetings and meetings of committees on which the director served. Currently we do not maintain a formal policy regarding director attendance at the Annual Meeting. Due to COVID-19 limitations, Mr. White was the only director that attended the 2021 Annual Meeting.
We have adopted the CIS Controls Framework to identify, prioritize, and measure our cybersecurity controls and defenses. Our information security program includes:
Policies and routine security awareness training,
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Identification and remediation of information security risks and vulnerabilities in our IT systems, including regular scanning of both internal and externally facing systems and annual third-party penetration testing,
Implementation of security technologies that are able to identify and assist in containing and remediating malware risks,
Active monitoring of logs and events for our network perimeter and internal systems,
Due diligence of information security programs for third-party vendors that handle sensitive data, and
Testing of incident response procedures.
We also maintain a cyber insurance policy that provides coverage for security breach recovery and response.
Additional information regarding our cybersecurity program can be found in our 2023 Annual Report.
•Oversight of executive compensation by an independent committee of the Board.
•Capped bonus targets for annual incentives and equity grant guidelines to govern the size of grants.
Capped bonus targets and a robust•A compensation recovery (“clawback”) policy to reduce the risk that executives would be motivated to maximize performance in a specific period over long-term goals,goals.
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In keeping with this commitment:
All membersPage 14
All membersin fulfilling its oversight responsibilities regarding: (i) the quality and integrity of the committeesCompany’s financial statements, (ii) the Company’s compliance with legal and regulatory requirements, (iii) review of our Board are independent,
Board members stand for re-election annuallypotential risk factors, (iv) the qualifications and our corporate Bylaws include a majority voting standard forindependence of the electionIndependent Auditors, and (v) the oversight and performance of our directors,
Our Bylaws include proxy access provisions,
The Board is active in oversight of risk and risk management,
We do not maintain a stockholder rights plan (“poison pill”), and
We are committed to corporate social responsibility and sustainability.
Additionally, we maintain various corporate policies, discussed in more detail below, that reflect our dedication to good governance. We believe that the policies and practices currently in place enhance our stockholders’ interests.
Environmental, Social and Governance (“ESG”) Initiatives
We believe that conducting business in a socially and environmentally responsible manner is important to our long-term successCompany’s internal audit function and the future of our planet. Recognizing the significant impact that ESG issues have on our ability to achieve sustainable growth, we are expanding existing initiatives and actively developing new projects to make sustainability and corporate responsibility a key focus of our business.
To better support these initiatives from the top down, our Board has increased the frequency of ESG discussions at its meetings and the Corporate Governance & Nominating Committee has added oversight responsibility for ESG matters to its charter. In this capacity, the Committee has general oversight authority for our overall ESG strategy, but specific topics continue to be overseen by other committees as appropriate, including cybersecurity oversight byIndependent Auditors.
We also launched our inaugural ESG Report in June 2021. The report is designed to provide better transparency regarding our ESG efforts, and it can be found on our public website athttps://www.coopercos.com/esg-report-2020/. We encourage you to read the report for information regarding our ESG initiatives, activities in furtheranceabove, including review of our commitment to the United Nations Sustainable Development Goals, diversityenterprise risk management programs and inclusion effortsoversight of cybersecurity, treasury and human capital management,investment matters, and commitments to data privacy and security.
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Highlights from the report include:
We updated and relaunched our Code of Conduct in June 2021 – more information on the new Code of Conduct is included below and on our website.
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We maintainThe Audit Committee operates under a Global Inclusion Council comprised of senior leaders to advance our culture of diversity and inclusion, and we launched three employee resource groups during fiscal 2021 for employees of African Descent, the Women’s Impact Network, and CooperPride.
We were certified as a Great Place to Work in the U.S. (for the fourth consecutive year) and recognized by Fortune as one of the Top 10 Best Large Workplaces in Manufacturing and Production in the U.S. for a second time.
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We are sourcing 100% renewable electricity in all key facilities in New York and the United Kingdom.
In addition to our ESG Report, additional information regarding our corporate responsibility initiativeswritten charter which can be found on our website at http://www.coopercos.com/corporate-responsibility.
Although we encourage our stockholdersinvestor.coopercos.com/corporate-governance. The Audit Committee regularly reviews its charter to review the information in our ESG Report and on our website, the contentsensure that it is meeting all relevant policy requirements of the reportSEC, the Public Company Accounting Oversight Board, and website are not deemed filed withNasdaq.
Corporate Governance Principles
We maintain a set of Corporate Governance Principles which specify our standards for director qualifications, director responsibilities, Board committees, director access to our executive officers and employees, director orientation and continuing education, and performance evaluationseach of the Chief Executive OfficerNYSE and Nasdaq.
Code of Conduct
Our updated Code of Conduct was adopted in June 2021 and supersedes and replaces our former Ethics & Business Conduct Policy. We designed the Code of Conduct (the “Code”) to reflect current best practices, enhance and expand on the Company’s understanding of ethical business practices, elaborate on certain topics such as human rights, diversity, inclusion, and equality, and promote awareness of ethical issues that may be encountered in carrying out an employee’s or director’s responsibilities.
We have designed the Code to provide guidance regarding compliance with laws, regulations, and Company policies and we regularly communicate with employees regarding the Code to ensure familiarity and awareness. The Code applies to all of our employees, executive officers, and non-employee directors, including our Chief Executive Officer and Chief Financial Officer, and we requireis responsible for, among other things, objectively reviewing and evaluating the adequacy, effectiveness, and quality of the Company’s system of internal controls. To support this work, management has engaged Ernst & Young LLP to assist the Company’s internal audit team. The Audit Committee is responsible for oversight and performance of the Company’s internal audit function.
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Company and its stockholders to retain KPMG to serve as our Independent Auditors for the 2024 fiscal year.
Amendments to the Code, and any waivers from the Code granted to directors or executive officers, will be made available through our website. As of the date of this Proxy Statement, no waivers have been requested or granted, and adoption of the new Code did not result in any explicit or implicit waiver of any provision of the Ethics & Business Conduct Policy that was in effect prior to the adoption of the Code.
Stock Trading Policy: Hedging & Pledging
We have implemented a Stock Trading Policy that applies to senior executives, including our NEOs and all members of the Board of Directors. Under this Policy, trading in Company securities is prohibited except during specifically designated windows. Additionally, executives and members of the Board are prohibited from engaging in various trading practices which would suggest speculation in our securities, including short sales, puts, calls, forward sales, equity swaps, or other hedging transactions. Our policy does permit executives and members of the Board to pledge securities as collateral, but only upon prior notice to, and approval from, the Company.
KPMG.
Related Party Transactions
We
Fiscal Year Ended | ||||||||
October 31, 2023 | October 31, 2022 | |||||||
Audit Fees | $6,090,050 | $5,290,720 | ||||||
Audit Related Fees | $— | $— | ||||||
Tax Fees | $19,500 | $20,000 | ||||||
All Other Fees | $— | $5,000 | ||||||
Page | 11
Management reports related party transactions to the Corporate Governance & Nominating Committee in accordance with written policy and the Committee reviews and approves (or ratifies) all transactions between the Company and related parties that are required to be disclosed under SEC rules.
Under this policy, certain transactions have been deemed by the Committee to be pre-approved or ratified even if the aggregate amount involved exceeds thresholds that would otherwise require disclosure as follows:
Compensation paid for service as a Non-Employee Director or executive officer of the Company,
Transactions with other companies where the related person’s only relationship is as a director and/or beneficial owner of less than 10% of that company’s equity interests,
Transactions where the related person’s only interest arises from the ownership of the Company’s common stock and all holders of the Company’s common stock received the same benefit on a pro rata basis (such as payment of regular dividends or stock splits),
Transactions between parent and subsidiary entities within the Company’s subsidiary structure, joint ventures, equity investments, and limited liability entities,
Transactions where the rates or charges are regulated by law or government authority, and
Transactions involving services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture, or similar services.
KPMG LLP, as our independent registered public accounting firm, reviews our controls around the identification and reporting of related party transactions as required by current accounting and auditing standards.
We have determined that there were no material related party transactions during the 2021 fiscal year.
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Principal Securityholders
The following table contains information regarding all individuals or groups who have advised us that they own more than five percent (5%) of the outstanding shares of our common stock. Information is presented as of the Record Date.
Name & Address of Beneficial Owner | Aggregate # of Shares Beneficially Held | Percentage of Shares | ||||||
The Vanguard Group, Inc. (1) 100 Vanguard Blvd. Malvern, PA 19355 | 5,556,008 | 11.310% | ||||||
T. Rowe Price Associates, Inc. (2) 100 E. Pratt Street Baltimore, MD 21202 | 3,949,277 | 8.000% | ||||||
BlackRock, Inc. (3) 55 East 52nd Street New York, NY 10022 | 3,854,015 | 7.800% | ||||||
Generation Investment Management (4) 20 Air Street, 7th Floor London, United Kingdom W1B 5AN | 3,107,403 | 6.300% | ||||||
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Securities Held by Insiders
The following table contains information regarding ownership of our common stock by each of our directors, the executives named in the Summary Compensation Table, and all of the current directors and executive officers as a group. The figures in this table represent sole voting and investment power except where otherwise indicated.
| Common Stock Beneficially |
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Name of Beneficial Owner | Number of Shares | Percentage of Shares |
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Brian G. Andrews (1) | 37,618 | * |
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Colleen E. Jay (2) | 6,413 | * |
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William A. Kozy (3) | 6,683 | * |
| |||||
Jody S. Lindell (4) | 28,884 | * |
| |||||
Teresa S. Madden | 356 | * |
| |||||
Daniel G. McBride (5) | 133,261 | * |
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Gary S. Petersmeyer (6) | 4,536 | * |
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Agostino Ricupati (7) | 16,117 | * |
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Maria Rivas, M.D. | - | * |
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Holly R. Sheffield (8) | 32,700 | * |
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Robert S. Weiss (9) | 321,247 | * |
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Albert G. White III (10) | 227,139 | * |
| |||||
All current directors and executive officers as a group | 817,151 | 1.7% |
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Page | 14
its subsidiaries. The Audit Committee operates undermaintains a written charter adoptedPre-Approval Policy for this purpose.
Our Board hasCommittee considered and determined that all membersfees for services other than audit and audit-related services paid to KPMG LLP during fiscal year 2023 are compatible with maintaining KPMG LLP’s independence.
The Audit Committee’s primary dutiesprocesses and responsibilities relate to:
The reliability and integrity ofprocedures associated with our accounting policies and financial reporting and financial disclosure practices,
Establishment and maintenance of processes by management to assure that an adequate and effective systemassessment of internal controls exists withinover financial reporting, including management’s assessment of the Company, and
Engagement, retention, and termination of our independent registered public accounting firm.
The Audit Committee provides advice with respect to our financial matters and assists the Board in fulfilling its oversight responsibilities regarding: (i)also reviewed the quality and integrity of ourthe Company’s consolidated financial statements, (ii) ourits compliance with legal and regulatory requirements, (iii) review of our potential risk factors, (iv) the qualifications and independence and performance of KPMG LLP (“KPMG”), in its role as our independent registered public accounting firm, (v) retention and engagement of KPMG, (vi) the performance of our internal audit function,KPMG, and (vii) review of our internal controls and risk management procedures.
other significant financial matters.
Management is responsible for our internal controls and financial reporting processes. To support this work, management has engaged Ernst & Young LLP as a co-source partner in providing audit support to assist the Company’s internal audit team.
KPMG, as our independent registered public accounting firm, is responsible for performing an independent audit of the Company’s consolidated financial statements, as well as our internal controls over financial reporting, in accordance with the standards of the Public Company Accounting Oversight Board (United States) and to issue a report. The Audit Committee’s responsibility is to monitor and oversee these processes. In this context, the Audit Committee has met and held discussions with management and KPMG regarding the fair and complete presentation of the Company’s financial results.
The Audit Committee held 7telephonic and/or videoconference meetings, during the 20212023 fiscal year, including regular meetings in conjunction with the close of each fiscal quarter, during which the Audit Committee reviewed and discussed the Company’s financial statements with management and KPMG. These Audit Committee meetings routinely include executive sessions of the committee, as well as private sessions with each of KPMG, Internal Audit, and management.
year.
Page | 15
matters required to be discussed by the Public Company Accounting Oversight BoardPCAOB Auditing Standard No. 1301 “Communication“Communication with Audit Committees.”
The Audit Committee also reviewedCommittees” and discussed with KPMG, Internal Audit, and management the processes and procedures associated with our assessment of internal controls over financial reporting, including management’s assessment of such controls.
The Audit Committee maintains policies and procedures for the pre-approval of work performed by KPMG. Under its charter, the Audit Committee must approve all engagements in advance. All engagements with estimated fees above $150,000 require consideration and approval by the full Audit Committee. The Chair of the Audit Committee has the authority to approve on behalf of the full Audit Committee all engagements with fees estimated to be below $150,000. Management recommendations are considered in connection with such engagements, but management has no authority to approve engagements.
In the 2021 fiscal year, the Audit Committee received both the written disclosures and the letter from KPMG that are mandated by applicable requirements regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and the Audit Committee discussed KPMG’s independence from the Company with the lead engagement partner. The Audit Committee or its Chair approved all audit services provided by KPMG for the fiscal year ended October 31, 2021 prior to the work being performed. The total fees paid or payable to KPMG for the last two fiscal years are as follows:
| Fiscal Year Ended | |||
| October 31, 2021 | October 31, 2020 | ||
Audit Fees | $4,552,450 | $4,120,350 | ||
Audit Related Fees | $-0- | $-0- | ||
Tax Fees | $6,000 | $-0- | ||
All Other Fees (1) | $-0- | $2,500 |
|
THE
Member)
Gary S. Petersmeyer
| 1619
OWNERSHIP OF THE COMPANY |
Name & Address of Beneficial Owner | Aggregate # of Shares Beneficially Held | Percentage of Shares | ||||||
The Vanguard Group, Inc. (1) 100 Vanguard Blvd. Malvern, PA 19355 | 5,583,124 | 11.31% | ||||||
BlackRock, Inc. (2) 55 East 52nd Street New York, NY 10022 | 4,357,742 | 8.80% | ||||||
T. Rowe Price Investment Management, Inc. (3) 100 E. Pratt Street Baltimore, MD 21202 | 2,473,414 | 5.00% | ||||||
Common Stock Beneficially Owned as of Dec. 31, 2023 | ||||||||
Name of Beneficial Owner | Number of Shares | Percentage of Shares | ||||||
Brian G. Andrews (1) | 70,522 | * | ||||||
Colleen E. Jay (2) | 7,743 | * | ||||||
William A. Kozy (3) | 8,080 | * | ||||||
Lawrence E. Kurzius | — | * | ||||||
Cynthia L. Lucchese | 512 | * | ||||||
Teresa S. Madden | 1,686 | * | ||||||
Daniel G. McBride (4) | 177,827 | * | ||||||
Gary S. Petersmeyer (5) | 4,446 | * | ||||||
Maria Rivas, M.D. | 1,132 | * | ||||||
Holly R. Sheffield (6) | 70,412 | * | ||||||
Gerard H. Warner III (7) | 14,645 | * | ||||||
Robert S. Weiss (8) | 204,855 | * | ||||||
Albert G. White III (9) | 398,033 | * | ||||||
All current directors and executive officers as a group (15 persons) | 986,966 | 2.0% |
EXECUTIVE OFFICERS OF THE COMPANY |
Daniel G. McBride | Age: 59 | ||||||
| |||||||
Executive Vice President & Chief Operating Officer |
Brian G. Andrews | Age: 45 | ||||
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Executive Vice President, Chief Financial Officer & Treasurer |
Holly R. Sheffield | Age: 53 | ||||
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President, CooperSurgical, Inc. |
Gerard H. Warner III | Age: 59 | ||||
President, CooperVision, Inc. |
Nicholas S. Khadder | Age: 50 | ||||
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Page | 17
| ||
Vice President, General Counsel & Secretary |
Agostino Ricupati | Age: 57 | ||||
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Senior Vice President, Finance & Tax / Chief Accounting Officer |
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Page | 18
COMPENSATION DISCUSSION AND ANALYSIS
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This Compensation Discussion and Analysis (“CD&A”) describes our compensation program and the compensation decisions made by the Organization & Compensation Committee (“OCC”) with regardOCC related to the compensation of our CEO, CFOChief Executive Officer, Chief Financial Officer, and our three other most highly compensated persons serving as executive officers serving as of October 31, 20212023 (collectively, our named executive officers,Named Executive Officers, or NEOs)“NEOs”) in the following roles:
Name | Title | |||||
Albert G. White III | President & Chief Executive Officer | |||||
Brian G. Andrews | Executive Vice President, Chief Financial Officer & Treasurer | |||||
Daniel G. McBride | Executive Vice President & Chief Operating Officer | |||||
Holly R. Sheffield | President, CooperSurgical, Inc. | |||||
Gerard H. Warner III | President, CooperVision, Inc. | |||||
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Page | 19
2023 Financial Highlights | ||||||||||||||
Budget Target | FY2023 Results (Constant Currency) (1) | FY2023 Results | Change YoY (Constant Currency) (2) | |||||||||||
Revenue: | $3.51 billion | $3.60 billion | $3.59 billion | 11% | ||||||||||
CooperVision: | $2.36 billion | $2.43 billion | $2.42 billion | 11% | ||||||||||
CooperSurgical: | $1.15 billion | $1.17 billion | $1.17 billion | 11% | ||||||||||
Non-GAAP EPS: (3) | $12.34 | $13.02 | $12.81 | 3% | ||||||||||
Stock Price (10/31/2023): | $311.75 | 14% | ||||||||||||
2021 Financial Highlights | ||||||
Budget Target | FY2021 Results | Change YoY | ||||
Revenue: | $2.717 billion | $2.923 billion | 20% | |||
CooperVision: | $2.032 billion | $2.152 billion | 17% | |||
CooperSurgical: | $685 million | $770.5 million | 31% | |||
Non-GAAP (1) EPS: | $12.10 | $13.24 | 37% | |||
Stock Price (10/29/2021): |
| $416.92 | 31% | |||
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In additionMind & Body Well-being employee resource group (“ERG”) to our existing ERG programs providing resources to a robust recoveryvariety of areas, including better access to mental health support.
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Throughout fiscal 2021 we maintained our focus on keeping our customers and employees safe and healthy as the COVID-19 pandemic continued. We continued initiatives started in fiscal 2020, including robust health and safety programs within our facilities to ensure employees could complete their responsibilities safely, and supported our customers by offering online training and virtual meetings.
Although the COVID-19 pandemic continues to impact our return to normal business practices,Overall, we are proud of theour successes achieved during the 20212023 fiscal year and theour momentum we are carrying intoentering fiscal 2022.2024. The OCC took these efforts, and the resulting achievements, into consideration with regard toin its executive compensation decisions for both fiscal 2021 and fiscal 2022.2023.
5 Year Trends | ||
5 Year Trends | ||
Page | 21
long-term performance-based equity grantedincentives provided as a combination of performance-based awards, granted as performance share awards ("PSUs"), and time-vested stock options andand/or restricted stock units.
In light of the ongoing pandemic and its impact on our business, the OCC elected to hold salaries flat for fiscal 2021. Instead, modest adjustments to target bonus and equity grant value were provided to the NEOs. These increases recognize the achievements of the NEOs in leading the company through a complicated and difficult year while tying increased compensation to continued performance and achievement of goals for recovery in fiscal 2021.
Messrs. Andrews and Ricupati also received special, one-time equity grants of time-vested RSUs during the 2021 fiscal year. These grants were designed to encourage retention and will vest in equal portions in the third and fourth years after the date of grant, rather than our usual structure of annual vesting starting on the first anniversary.
In the 2021 fiscal year, approximately 91%units (“RSUs”)
Target Total Compensation Fiscal 2023 | |||||
The 20212023 Incentive Payment Plan (“2021 IPP”) followed the design of prior year plans, with 75% of target bonuses dependentResult
In considering these potential bonus payments underfiscal 2023 financial results and assessment of achievement against the 2021 IPP,designated non-financial goals, the OCC evaluated our performance against budgeted goals in the contextcertified overall achievement of our overall company results as well as the general uncertainty we faced
Page | 22
throughout the year duebetween 120% to ongoing impact of the COVID-19 pandemic. Based on this assessment, the OCC determined to exercise negative discretion in finalizing the fiscal year 2021 IPP results and approved funding equal to a total of 130%140% of target for each of Cooper, CooperVisionthe NEOs. This included the OCC’s determination that the NEOs had met the objectives set for the non-financial goals, resulting in achievement at 100% of target for the portion of annual bonuses based on those measures.
These adjustments were considered to reduce the quantitative portion of awards as calculated. The discretionary component of the IPP, which is not tied to quantitative criteria and was weightedconfirmed achievement at 25% of target awards, was considered paid at 100%200% of target. The OCC noted that the performance of the NEOs during the year warranted the full discretionary payment and the adjustments should not be considered a reflection on individual performance. Target payments, achievement as calculated, and adjusted payouts are presentedThis determination is discussed in more detail below in the discussionbelow.
In particular, with support from Compensia, the OCC considered the effectiveness of stock options at supporting
We noted the intention to make this change to grant practices in our Proxy Statement filed in February 2021, and at our 20212022 Annual Meeting of Stockholders, approximately 89%91% of the votes cast on our Say-on-Pay proposal were voted in favor of the compensation program for our NEOs. The OCC takesviewed this as an indication of support for the change to our NEO compensation.
Page | 23
THINGS WE DO: | THINGS WE DON’T DO: | |||||||||||||
✓ | Entirely independent OCC | ❖ |
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✓ | Assessment by OCC of link between compensation and performance at least annually | ❖ |
| |||||||||||
✓ | Review by OCC of executive compensation program and individual compensation packages at least annually | ❖ |
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THINGS WE DO: | THINGS WE DON’T DO: | ||||||||||||
✓ | Use of independent compensation consultants | ❖ |
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| “Double-trigger” (change in control accompanied by an involuntary loss of employment) requirements for receipt of payments and benefits under employment agreements | ❖ |
| ||||||||||
✓ | Annual review of management succession planning process | ❖ |
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✓ | Robust stock ownership guidelines applicable to our executive officers | ❖ |
| ||||||||||
| Limited perquisites based on specific business rationale | ||||||||||||
✓ | Compensation recovery (“clawback”) policy applicable to executive officer incentive compensation | ||||||||||||
| Exercise | ||||||||||||
•Regular updates from management on our business results,
•Review of our quarterly financial statements, management projections, and long-range plans,
•Review of management reports on continued progress towards long termon long-term strategies,
•Review of performance and market information regarding our peer group, and
•Review of broader industry compensation data relative to our market and other companies of comparable size.
Page | 24
The OCC considers management input, the advice of its compensation consultant, and publicly available peer information to be valuable tools in its evaluation ofevaluating the relationship between executive compensation and Company performance.
•Aligning compensation with performance by connecting executive compensation to financial measures that correlate strongly with stockholder returns,
•Balancing short-term financial results with long-term strategic objectives,
•Rewarding achievement of challenging corporate objectives, without encouraging inappropriate risk-taking,
Page 30
•Maintaining sufficient flexibility to allow recognition of significant individual achievements by our executive officers.
Page | 25
•Selection of companies for our compensation peer group (as described further below),
•Appropriate structure for our annual incentive payment plan, including financial performance measures, non-financial objectives, target performance levels, and calculation or determination of achievement levels,
•Long-term incentive plan design and annual award allocations,
•Employment terms and arrangements, and
•Stock trading and incentive compensation recovery policies and ownership guidelines.
Page | 26
Our compensation peer group for fiscal 2021 was2023 comprised of the following companies:
Agilent Technologies, Inc. | Illumina, Inc. | |||||
Align Technology, Inc. | ||||||
Masimo Corporation | ||||||
Revvity, Inc. (formerly PerkinElmer, Inc.) | ||||||
Bio-Rad Laboratories, Inc. | ResMed Inc. | |||||
Charles River Laboratories International, Inc. | STERIS PLC | |||||
DENTSPLY SIRONA Inc. | ||||||
DexCom, Inc. | ||||||
Edwards Lifesciences Corporation | ||||||
Hologic, Inc. |
•A compensation analysis of competitive market data performed by Compensia,
•Each executive officer’s scope of responsibilities,
Each executive officer’s skill set,
Each executive officer’s prior experience,
Executive’s and time in his or hertheir position,
•The recommendations of our Chief Executive Officer, and
•General market conditions.
Page | 27
Base Salary | Provides a minimum level of competitive compensation for our executives | |||||
Annual Cash Incentive | Encourages achievement of short-term business goals as reflected in our annual operating budget | |||||
Long-Term Equity Incentives | Connects equity incentives to strategic objectives and priorities linked to long-term success, supports alignment between executives and stockholders, and encourages executive retention |
For
EXECUTIVE | 2022 BASE SALARY (1) | 2023 BASE SALARY (1) | % CHANGE | ||||||||||||||
Albert G. White III | $925,000 | $1,080,000 | 16.8% | ||||||||||||||
Brian G. Andrews | $550,000 | $600,000 | 9.1% | ||||||||||||||
Daniel G. McBride | $725,060 | $750,000 | 3.4% | ||||||||||||||
Holly R. Sheffield | $550,043 | $575,000 | 4.5% | ||||||||||||||
Gerard H. Warner III | $450,000 | $500,000 | 11.1% | ||||||||||||||
Executive | 2020 Base Salary | 2021 Base Salary | % Change | |||||||||
Albert G. White III | $ | 925,000 | $ | 925,000 | No change | |||||||
Brian G. Andrews | $ | 500,000 | $ | 500,000 | No change | |||||||
Daniel G. McBride | $ | 700,000 | $ | 700,000 | No change | |||||||
Holly R. Sheffield | $ | 525,000 | $ | 525,000 | No change | |||||||
Agostino Ricupati | $ | 381,754 | $ | 381,754 | No change | |||||||
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approved in the context of salary levels that were meaningfully below the median of competitive market data provided by Compensia.
Page | 28
Each NEO’s annual performance-based cash incentive opportunity under the IPP is allocated into two components:
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Participation
Total Bonus Paid ($) | = | Base Salary ($) | X | IPP Participation Level (%) | X | Financial Metric and Non-Financial Goal Achievement (%) |
Taken together, the IPP encourages our executive officers, including our NEOs, to focus on both our immediate business objectives and short-term financial performance, as well as other factors that support longer-term performance.
Achievement for Mr. McBride was based equally on our overall revenue and non-GAAP EPS and on revenue and operating income achievement for CooperVision. Weighting for each of these financial metrics is described below under “Financial Objective Achievement.”
The achievement levels required for payout under the quantitative performance component of the 2021 IPP were as follows.
Performance Measure |
Threshold |
Target |
Maximum | |||||||||
Revenue (Constant Currency) |
|
95 |
% |
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100 |
% |
|
105 |
% | |||
Non-GAAP EPS (Constant Currency) |
|
90 |
% |
|
100 |
% |
|
110 |
% | |||
Operating Income |
|
90 |
% |
|
100 |
% |
|
110 |
% | |||
|
Performance Measure | Threshold | Target | Maximum | ||||||||
Revenue (Constant Currency) | 95% | 100% | 105% | ||||||||
Non-GAAP EPS (Constant Currency) | 90% | 100% | 110% | ||||||||
Operating Income | 90% | 100% | 110% | ||||||||
Page | 29
financial metrics.
Discretionary2023.
As discussed above,
The discretionary component of individual IPP awards is based entirelydesignated non-financial goals depended on the OCC’s assessment of individual NEO performance duringby the fiscal year. The discretionary component allowsNEOs against the agreed objectives, subject to a cap on maximum achievement at 200%.
The personal contributions
NEO | Participation Level | Financial Metrics | Non-Financial Goals | Award Payout (1) | |||||||||||||||||||||||||
Target Bonus ($) | (% of Base Salary) | Weighted Achievement (2) | Goal Weighting | Weighted Achievement (2) | Goal Weighting | ($) | (% of Target) | (% of Base Salary) | |||||||||||||||||||||
A. White | $1,317,708 | 125% | 114.5% | 75% | 100% | 25% | $1,838,203 | 139.5% | 174.4% | ||||||||||||||||||||
B. Andrews | $439,167 | 75% | 114.5% | 75% | 100% | 25% | $612,637 | 139.5% | 103.5% | ||||||||||||||||||||
D. McBride (1) | $596,678 | 80% | 113.7% | 75% | 100% | 25% | $827,592 | 138.7% | 111.0% | ||||||||||||||||||||
H. Sheffield (1) | $428,121 | 75% | 95.0% | 75% | 100% | 25% | $513,746 | 120.0% | 90.0% | ||||||||||||||||||||
G. Warner (1) | $340,418 | 70% | 112.9% | 75% | 100% | 25% | $469,436 | 137.9% | 95.5% | ||||||||||||||||||||
LeadershipPage 36
Financial Metric (Constant Currency) | Budget Target ($ in Millions; except EPS) | Metric Weighting | Achievement ($ in Millions, except EPS) (% of Target) | Weighted Achievement Under 2023 IPP (% of Target) | ||||||||||
Revenue (1) | $3,511.90 | 50% | $3,601.5 (102.6%) | 75.5% (151.0%) | ||||||||||
Non-GAAP EPS (2) | $12.34 | 25% | $13.02 (105.6%) | 39% (155.8%) | ||||||||||
Total Achievement: | 75% | 114.5% (152.7%) |
Strategic business achievements that may not be fully reflected$2,361.70 50% Operating Income $617.50 25% Total Achievement: 75%
Financial Metric (Constant Currency) | Budget Target ($ in Millions; except EPS) | Metric Weighting | Achievement ($ in Millions, except EPS) (% of Target) | Weighted Achievement Under 2023 IPP (% of Target) | ||||||||||
Revenue (1) | $1,150.20 | 50% | $1,168.6 (101.6%) | 66.0% (132.0%) | ||||||||||
Operating Income | $276.40 | 25% | $280.8 (101.6%) | 29.0% (116.0%) | ||||||||||
Total Achievement: | 75% | 95.0% (126.7%) |
Special circumstances that may have impacted the determination of the quantitative portion of the annual performance-based cash incentive.
The OCC believes this flexibility, which can account adjustments for factors that impact our results either positively or negatively, is important to align these annual performance-based cash incentive awards with its assessment of executive achievement in individual roles.
2021 IPP Results
As described above, in December 2021, we confirmed that our performance against the financial goals of the 2021 IPP significantly exceeded the target achievement set under the plan. As shown below, we ended the year with robust results well in excess of the goals we set at the beginning of the year. Total potential
Page | 30
payout under the 2021 IPP ranged from 161% to 170% of target, when including the discretionary component earned at 100% of target.
Following the end of fiscal 2021, the OCC evaluated our performance against budgeted goalsacquisitions in the context of our overall company results as well as2023 fiscal year. The foreign exchange rate used to compute the general uncertainty we faced throughoutbudget target was the year due to ongoing impact ofsame rate used for the COVID-19 pandemic. As described above, the OCC exercised negative discretion and approved funding equal to 130% of target, reduced from calculated results. In making this determination, the OCC considered the actual impact of COVID-19 in the context of our results in fiscal 2020 and expectations at the time goals were established in early 2021, as well as the historical context of adjusting the earned2023 IPP in fiscal 2020 due to the unanticipated impact of COVID-19. The OCC considered a 130% payout for fiscal 2021, following a 75% of target payout in fiscal 2020, a balanced outcome recognizing our strong performance as a company throughout the COVID-19 pandemic, including strong stockholder return and effective execution by our leadership team in navigating through a highly uncertain and challenging environment.
These adjustments were considered to reduce the quantitative portion of awards as calculated. The discretionary component of the IPP, which is not tied to quantitative criteria and was weighted at 25% of target awards, was considered paid at 100% of target. The OCC noted that the performance of the NEOs during the year warranted the full discretionary payment and the adjustments should not be considered a reflection on individual performance. Target payments, achievement as calculated, and adjusted payouts are presented in more detail below in the discussion of annual cash incentives.calculation.
Named Executive Officer Awards UnderMeasures.
Based on the above determination regarding appropriate funding of annual incentivesOCC in December 2022 for fiscal 2021,2023 are summarized as follows:
Category | Goals | ||||
Operational | •Gain market share in contact lenses and fertility. •Further advance CooperVision's global myopia management business. •Complete strategic capital investment and expansion projects for CooperVision. •Complete key IT implementations for both CooperVision and CooperSurgical. | ||||
Organizational | •Successfully transition key leadership roles and continue to advance executive development and succession planning. •Advance “OneCooper” initiatives to expand cross-division support and improve standardization and efficiency. | ||||
Business | •Complete strategic analysis of CooperSurgical business to support continued initiatives and return on investments. •Execute strategic M&A activity to support growth for both CooperVision and CooperSurgical. •Continue advancing ESG initiatives. | ||||
Named Executive Officer
| Target Award | Actual Award Paid(1) | ||||||||||||||
($)
| (% of Base Salary)
| ($)
| (% of Base
| |||||||||||||
Albert G. White III
|
|
$1,156,250
|
|
|
125%
|
|
|
$1,503,125
|
|
|
162.5%
|
| ||||
Brian G. Andrews
|
|
$350,000
|
|
|
70%
|
|
|
$455,000
|
|
|
91.0%
|
| ||||
Daniel G. McBride
|
|
$560,000
|
|
|
80%
|
|
|
$728,000
|
|
|
104.0%
|
| ||||
Holly R. Sheffield
|
|
$367,500
|
|
|
70%
|
|
|
$477,750
|
|
|
91.0%
|
| ||||
Agostino Ricupati
|
|
$209,965
|
|
|
55%
|
|
|
$272,954
|
|
|
71.5%
|
| ||||
|
Goals | ||||||
Operational: | ||||||
Market Share | •CooperVision grew market share across all regions in revenue and | patients. •CooperSurgical gained market share in fertility on a global basis led by growth in consumables. |
| 3138
Achievement by Division
(Basis of Awards Paid to NEOs)
Corporate:
Award Factor | Budget Target ($ in Millions; | Achievement ($ in Millions; except EPS) (% of Target) | Achievement 2021 IPP | Target Achievement/ Weighting | Weighted Achievement | Adjusted Achievement | ||||||||||||
Revenue (1) (Constant Currency)
|
|
$2,716.6
|
|
|
$2,892.1 (106.5%)
|
|
|
200%
|
|
50%
|
100%
|
105%
| ||||||
Non-GAAP EPS (2) (Constant Currency)
|
|
$12.10
|
|
|
$13.07 (108%)
|
|
|
180.1%
|
|
25%
|
45%
| |||||||
Total Achievement:
|
75%
|
145%
|
105%
|
Goals |
| ||||
Myopia Management Business | •The myopia management business grew 35% in constant currency with record revenues reported •Substantially completed integration of •Continued to •Increased distribution of MiSight® through expanding in key accounts and launching in new markets. | ||||
Capacity Expansion Projects | •Completed expansion of distribution and packaging facilities at CooperVision's primary U.S. distribution center. •Added significant manufacturing and packaging capacity at facilities globally, including key expansions in Costa Rica and Puerto Rico. | ||||
Key IT Implementations | •Completed key ERP implementation work for CooperVision’s primary European distribution operations and transitioned warehouse management systems in other key locations. Also advanced or completed additional important IT initiatives at CooperVision. •Completed data management systems upgrades for the | ||||
Organizational: | |||||
Executive Development / Succession Planning | •CooperVision completed organizational and leadership transitions in several key functional areas, including restructuring activity in connection with the integration of the specialty eyecare business into the core organization. •CooperSurgical transitioned responsibilities for key functions to respond to planned retirements and improve leadership efficiencies within global operations. •Developed and launched new training and succession planning tools throughout the organization. | ||||
“OneCooper” Initiatives | •Advanced IT, Human Resources, Finance, and Legal operations, to leverage resources across the business and support operational efficiencies. •Implemented IT systems to support global standards, eliminate complexities, and improve transparency. •Continued to expand OneCooper Employee Resource Groups (“ERGs”) and Inclusion & Diversity initiatives with the addition of a Mind & Body Wellbeing ERG and the launch of internal programs to support development of employees from underrepresented groups. | ||||
Business: |
Goals | Key Achievements | ||||
Strategy / Business Assessment | •Conducted an in-depth review of the CooperSurgical business, including analysis of operations and organizational structure and benchmarking against peers. •Evaluated long-term strategic considerations, including opportunities for expansion and growth, organizational development, and continued investment. | ||||
Strategic M&A Activities | •Acquired SynergEyes, Inc., a specialty contact lens business, to support expansion of the CooperVision myopia management business. •Made strategic equity investments to support both the CooperVision and CooperSurgical businesses. | ||||
Advance ESG Efforts | •Implemented new IT systems to support the ESG function and operations. •Increased the use of the autonomous power plant at our •Expanded the plastic neutrality program to •Obtained LEED/Breeam Certification for the •Advanced plans to obtain zero-waste-to-landfill certifications for key facilities. | ||||
CooperVision:
Award Factor | Budget Target ($ in Millions; | Achievement ($ in Millions; except EPS) (% of Target) | Achievement 2021 IPP | Target Achievement/ Weighting | Weighted Achievement | Adjusted Achievement | ||||||||||||
Revenue (1) (Constant Currency)
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|
$2,031.6
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|
$2,139.2 (105.3%)
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|
|
200%
|
|
50%
|
100%
|
105%
| ||||||
Operating Income (2) (Constant Currency)
|
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$564.2
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|
|
$594.1 (105.3%)
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153%
|
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25%
|
38.3%
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Total Achievement:
|
75%
|
138.3%
|
105%
|
|
CooperSurgical:
Award Factor | Budget Target ($ in Millions; | Achievement ($ in Millions; except EPS) (% of Target) | Achievement 2021 IPP | Target Achievement/ Weighting | Weighted Achievement | Adjusted Achievement | ||||||||||||
Revenue (1) (Constant Currency)
|
|
$685.0
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|
|
$752.9 (109.9%)
|
|
|
200%
|
|
50%
|
100%
|
105%
| ||||||
Operating Income (2) (Constant Currency)
|
|
$205.8
|
|
|
$214.9 (104.4%)
|
|
|
144%
|
|
25%
|
36%
| |||||||
Total Achievement:
|
75%
|
136%
|
105%
|
|
Page | 32
receive their time-vested award as stock options, RSUs, or a 50/50 combination of the two award types. The OCC retains the authority to set awards as it determines appropriate, regardless of such elections, but it believes that soliciting input from our executive officers enhances the retention value of long-term equity compensation.
Grants to NEOs in 2021 Fiscal Year
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Name | Stock Options | RSUs | Performance Share Awards | |||||||||||||||||||||
Grant Date Fair Value (1) | Options Granted (2) | Grant Date Fair Value (1) | RSUs Granted (3) | Grant Date Fair Value (1) | PSUs Granted (4) | |||||||||||||||||||
Albert G. White III | $4,250,000 | 50,545 | $-0- | -0- | $4,250,000 | 12,292 | ||||||||||||||||||
Brian G. Andrews | $825,000 | 9,812 | $500,000 | 1,446 | $825,000 | 2,386 | ||||||||||||||||||
Daniel G. McBride | $1,175,000 | 13,974 | $-0- | -0- | $1,175,000 | 3,399 | ||||||||||||||||||
Holly R. Sheffield | $875,000 | 10,406 | $-0- | -0- | $875,000 | 2,531 | ||||||||||||||||||
Agostino Ricupati | $650,000 | 7,730 | $400,000 | 1,038 | $-0- | -0- | ||||||||||||||||||
Grants to NEOs in 2023 Fiscal Year | ||||||||||||||||||||
NEO | Stock Options | RSUs | PSUs | |||||||||||||||||
Grant Date Fair Value (1) | Shares Underlying Options Granted (2) | Grant Date Fair Value (1) | RSUs Granted (3) | Grant Date Fair Value (1) | PSUs Granted (4) | |||||||||||||||
A. White | $5,285,000 | 51,226 | $— | — | $5,285,000 | 16,023 | ||||||||||||||
B. Andrews | $1,125,000 | 10,904 | $— | — | $1,125,000 | 3,411 | ||||||||||||||
D. McBride | $— | — | $1,375,000 | 4,169 | $1,375,000 | 4,169 | ||||||||||||||
H. Sheffield | $525,000 | 5,089 | $525,000 | 1,592 | $1,050,000 | 3,183 | ||||||||||||||
G. Warner | $— | — | $875,000 | 2,653 | $875,000 | 2,653 | ||||||||||||||
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RSUs)
Before the date of grant, each executive officer, including the NEOs, can choose to receive their
In addition to the annual grants made at the beginning of fiscal 2021, both Messrs. Andrews and Ricupati received additional grants in the year. These grants were made in the form of RSUs which willgenerally vest annually in equal portions on the third and fourth anniversariesover a four-year period, but awards outside of the date of grant. These grantsregular grant cycle or for special purposes may have different vesting. There were approved with consideration givenno out-of-cycle or special awards to the market positioning of total compensation for both executives as well as an objective of supporting long-term retention.
Performance Share Awards
NEOs in fiscal 2023.
Achievement below threshold will result in zero payout. The target number of shares to be received on vesting of PSUs is set based on the grant value of the award and the share price on the date of grant.
Page | 34
Additionally, the OCC decided to exercise its discretion to settle these awards in cash. Therefore, the NEOs will receive a cash payment equivalent to the value of 200% of the target number of shares under their awards as detailed below. Such payment shall be based on the average closing price of our common stock on the five trading days ending on February 2, 2024 and will be made on February 9, 2024.
Achievement under 2021 PSUs | ||||||||||||||
(Performance Cycle: November 1, 2020 to October 31, 2023) | ||||||||||||||
Threshold (5% growth) | Target (8% growth) | Maximum (11% growth) | Actual (14.8% growth) | |||||||||||
NEO | Possible Shares | Actual Shares | ||||||||||||
A. White | 6,146 | 12,292 | 24,584 | 24,584 | ||||||||||
B. Andrews | 1,193 | 2,386 | 4,772 | 4,772 | ||||||||||
D. McBride | 1,700 | 3,399 | 6,798 | 6,798 | ||||||||||
H. Sheffield | 1,266 | 2,531 | 5,062 | 5,062 | ||||||||||
Table.
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In addition to directly held shares, the potential value of vested stock options and unvested restricted stock unitsRSUs are credited in consideration of whether ownership requirements have been met.
GUIDELINE (AS MULTIPLE OF BASE SALARY) | |||||
5x base | |||||
salary – Chief Executive Officer | |||||
Must hold 75% of the shares acquired from equity awards, net of taxes and any exercise cost, until guidelines are met. | |||||
Other Executive Officers | Must hold 50% of the shares acquired from equity awards, net of taxes and any exercise cost, until guidelines are met. |
As of October 31, 2021, all of our NEOs were in compliance with the applicable stock guidelines.
Compensation Committee
2023.
| 3644
EXECUTIVE COMPENSATION TABLES |
Name and Principal Position | Year | Salary ($) | Bonus (1) ($) | Stock ($) | Option ($) | Non-Equity Incentive Plan Compensation (1) ($) | Change ($) | All Other ($) | Total ($) | |||||||||||||||||||||||||||
Albert G. White III
President & Chief Executive Officer | 2021 | $925,000 | $375,781 | $4,249,836 | $4,249,824 | $1,127,344 | $51,121 | $16,000 | $10,994,906 | |||||||||||||||||||||||||||
2020 | $925,000 | $867,188 | $0 | $7,700,008 | $0 | $73,576 | $18,255 | $9,584,027 | ||||||||||||||||||||||||||||
2019 | $925,000 | $288,600 | $0 | $5,499,840 | $865,800 | $126,711 | $18,794 | $7,724,746 | ||||||||||||||||||||||||||||
Brian G. Andrews
Executive Vice President, Chief Financial Officer & Treasurer | 2021 | $500,000 | $113,750 | $824,936 | $824,993 | $341,250 | $39,503 | $16,000 | $2,660,432 | |||||||||||||||||||||||||||
2020 | $500,000 | $243,750 | $0 | $1,475,014 | $0 | $61,739 | $18,259 | $2,298,762 | ||||||||||||||||||||||||||||
2019 | $425,000 | $86,190 | $0 | $1,099,944 | $258,570 | $102,243 | $19,324 | $1,991,271 | ||||||||||||||||||||||||||||
Daniel G. McBride
Executive Vice President & Chief Operating Officer | 2021 | $700,000 | $182,000 | $1,175,170 | $1,174,934 | $546,000 | $59,569 | $16,000 | $3,853,673 | |||||||||||||||||||||||||||
2020 | $700,000 | $420,000 | $0 | $2,159,972 | $0 | $80,289 | $16,997 | $3,377,259 | ||||||||||||||||||||||||||||
2019 | $700,000 | $175,280 | $0 | $1,999,970 | $525,840 | $138,853 | $41,363 | $3,581,305 | ||||||||||||||||||||||||||||
Holly R. Sheffield
President, CooperSurgical, Inc. | 2021 | $525,000 | $119,438 | $875,068 | $874,936 | $358,313 | $39,851 | $16,000 | $2,808,605 | |||||||||||||||||||||||||||
2020 | $525,000 | $255,937 | $0 | $1,694,012 | $0 | $37,303 | $34,465 | $2,546,717 | ||||||||||||||||||||||||||||
2019 | $525,000 | $106,470 | $750,043 | $749,951 | $319,410 | $10,554 | $44,146 | $2,505,573 | ||||||||||||||||||||||||||||
Agostino Ricupati
Chief Accounting Officer / Senior Vice President, Finance & Tax | 2021 | $381,754 | $68,239 | $400,139 | $649,938 | $204,716 | $46,907 | $16,000 | $1,767,692 | |||||||||||||||||||||||||||
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Year Albert G. White III 2023 $1,054,167 $— $5,284,866 $5,284,986 $1,838,203 $12,647 $16,054 $13,490,923 2022 $925,000 $— $4,625,058 $4,625,156 $1,544,750 $— $16,000 $11,735,964 2021 $925,000 $375,781 $4,249,836 $4,249,824 $1,127,344 $51,121 $16,000 $10,994,906 Brian G. Andrews 2023 $591,667 $— $1,125,050 $1,124,966 $612,637 $1,635 $16,054 $3,472,009 2022 $541,667 $— $924,849 $925,049 $506,567 $— $16,000 $2,914,132 2021 $500,000 $113,750 $824,936 $824,993 $341,250 $39,503 $16,000 $2,660,432 Daniel G. McBride 2023 $745,847 $— $2,750,123 $— $827,592 $25,932 $28,624 $4,378,118 2022 $720,886 $— $1,250,191 $1,250,027 $796,435 $— $16,000 $4,033,539 2021 $700,000 $182,000 $1,175,170 $1,174,934 $546,000 $59,569 $16,000 $3,853,673 Holly R. Sheffield 2023 $570,840 $— $1,574,938 $525,032 $513,746 $19,040 $16,000 $3,219,596 2022 $545,869 $— $950,032 $949,992 $468,755 $— $15,850 $2,930,497 2021 $525,000 $119,438 $875,068 $874,936 $358,313 $39,851 $16,000 $2,808,605 Gerard H. Warner III 2023 $491,670 $— $1,750,078 $— $469,436 $27,288 $41,657 $2,780,129 President, CooperVision, Inc. 2022 $437,671 $— $875,296 $874,983 $391,595 $— $32,511 $2,612,056
Albert G. White III | $10,569,732 | ||||
Brian G. Andrews | $2,250,100 | ||||
Daniel G. McBride | $2,750,123 | ||||
Holly R. Sheffield | $2,099,698 | ||||
Gerard H. Warner III | $1,750,078 |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Other Stock Awards: Number of Shares of Stock or Units (3) (#) | All Other Option Awards: Number of Securities Underlying Options (4) (#) | Exercise or Base Price of Option Awards ($/share) | Grant Date Fair Value of Stock and Option Awards (5) ($) | ||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||||
Albert G. White III | 12/13/2022 | $164,714 | $1,317,708 | $2,635,417 | |||||||||||||||||||||||||||||||
12/13/2022 | 51,226 | $329.83 | $5,284,986 | ||||||||||||||||||||||||||||||||
12/13/2022 | 8,012 | 16,023 | 32,046 | $5,284,866 | |||||||||||||||||||||||||||||||
Brian G. Andrews | 12/13/2022 | $55,469 | $439,167 | $887,500 | |||||||||||||||||||||||||||||||
12/13/2022 | 10,904 | $329.83 | $1,124,966 | ||||||||||||||||||||||||||||||||
12/13/2022 | 1,706 | 3,411 | 6,822 | $1,125,050 | |||||||||||||||||||||||||||||||
Daniel G. McBride | 12/13/2022 | $74,585 | $596,678 | $1,193,355 | |||||||||||||||||||||||||||||||
12/13/2022 | 4,169 | $1,375,061 | |||||||||||||||||||||||||||||||||
12/13/2022 | 2,085 | 4,169 | 8,338 | $1,375,061 | |||||||||||||||||||||||||||||||
Holly R. Sheffield | 12/13/2022 | $53,515 | $428,121 | $856,243 | |||||||||||||||||||||||||||||||
12/13/2022 | 5,089 | $329.83 | $525,032 | ||||||||||||||||||||||||||||||||
12/13/2022 | 1,592 | $525,089 | |||||||||||||||||||||||||||||||||
12/13/2022 | 1,592 | 3,183 | 6,366 | $1,049,849 | |||||||||||||||||||||||||||||||
Gerard H. Warner III | 12/13/2022 | $43,021 | $340,418 | $688,335 | |||||||||||||||||||||||||||||||
12/13/2022 | 2,653 | $875,039 | |||||||||||||||||||||||||||||||||
12/13/2022 | 1,327 | 2,653 | 5,306 | $875,039 | |||||||||||||||||||||||||||||||
Estimated Future Payouts Under |
Estimated Future Payouts Under | All Other Stock Awards: Number of Shares of Stock or Units (3) | All Other Option Awards: Number of Securities Underlying Options (4) | Exercise or Base Price of Option Awards ($/share) | Grant Date Fair Value of Stock and Option Awards (5) | |||||||||||||||||||
Name | Grant Date | Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||
Albert G. White III | 12/8/2020 | $144,531 | $1,156,250 | $2,312,500 | - | |||||||||||||||||||
12/8/2020 | 6,146 | 12,292 | 24,584 | $4,249,836 | ||||||||||||||||||||
12/8/2020 | - | - | 50,545 | $345.74 | $4,249,824 | |||||||||||||||||||
Brian G. Andrews | 12/8/2020 | $43,750 | $350,000 | $700,000 | - | - | ||||||||||||||||||
12/8/2020 | 1,193 | 2,386 | 4,772 | $824,936 | ||||||||||||||||||||
12/8/2020 | - | - | 1,446 | $499,940 | ||||||||||||||||||||
12/8/2020 | - | - | 9,812 | $345.74 | $824,993 | |||||||||||||||||||
Daniel G. McBride | 12/8/2020 | $70,000 | $560,000 | $1,120,000 | - | - | ||||||||||||||||||
12/8/2020 | 1,700 | 3,399 | 6,798 | $1,175,170 | ||||||||||||||||||||
12/8/2020 | - | - | 13,974 | $345.74 | $1,174,934 | |||||||||||||||||||
Holly R. Sheffield | 12/8/2020 | $45,938 | $367,500 | $735,000 | - | - | ||||||||||||||||||
12/8/2020 | 1,266 | 2,531 | 5,062 | $875,068 | ||||||||||||||||||||
12/8/2020 | - | - | 10,406 | $345.74 | $874,936 | |||||||||||||||||||
Agostino Ricupati | 12/8/2020 | $26,246 | $209,965 | $419,929 | - | - | - | |||||||||||||||||
12/8/2020 | - | - | - | 7,730 | $345.74 | $649,938 | ||||||||||||||||||
4/1/2021 | - | - | - | 1,038 | $400,139 |
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Name | Award Grant Date | Option Awards | Stock Awards | |||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options (Exercisable) (#) | Number of Securities Underlying Unexercised Options (Unexercisable) (1) (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that have not Vested (#) | Market Value of Shares or Units of Stock that have not Vested (2) ($) | Equity Incentive Plan Awards | ||||||||||||||||||||||||||
Number of Unearned Shares, Units or Other Rights that have not Vested (#) | Market or Payout Value of Unearned Shares, Units or Other Rights that have not Vested (2) ($) | |||||||||||||||||||||||||||||||
A. White | 12/13/2016 | 28,748 | — | $175.31 | $46,369 | $— | $— | — | $— | |||||||||||||||||||||||
12/12/2017 | 39,121 | — | $229.66 | $46,733 | $— | $— | — | $— | ||||||||||||||||||||||||
5/1/2018 | 34,479 | — | $230.09 | $46,874 | $— | $— | — | $— | ||||||||||||||||||||||||
12/11/2018 | 72,474 | 18,118 | $254.77 | $47,098 | (3) | $— | $— | — | $— | |||||||||||||||||||||||
12/10/2019 | 65,588 | 43,725 | $304.54 | $47,462 | (3) | $— | $— | — | $— | |||||||||||||||||||||||
12/8/2020 | 25,273 | 25,272 | $345.74 | $47,825 | $— | $— | — | $— | ||||||||||||||||||||||||
12/7/2021 | 12,749 | 38,245 | $406.17 | $48,189 | $— | $— | — | $— | ||||||||||||||||||||||||
12/13/2022 | — | 51,226 | $329.83 | $48,561 | $— | $— | — | $— | ||||||||||||||||||||||||
12/8/2020 | — | — | $— | $47,825 | (4) | $— | $— | 12,292 | $3,832,031 | |||||||||||||||||||||||
12/7/2021 | — | — | $— | $48,189 | (5) | $— | $— | 11,387 | $3,549,897 | |||||||||||||||||||||||
12/13/2022 | — | — | $— | $48,561 | (6) | $— | $— | 16,023 | $4,995,170 | |||||||||||||||||||||||
B. Andrews | 12/9/2015 | 3,356 | — | $131.60 | $46,000 | $— | $— | — | $— | |||||||||||||||||||||||
12/13/2016 | 2,841 | — | $175.31 | $46,369 | $— | $— | — | $— | ||||||||||||||||||||||||
12/12/2017 | 5,665 | — | $229.66 | $46,733 | $— | $— | — | $— | ||||||||||||||||||||||||
5/1/2018 | 4,310 | — | $230.09 | $46,874 | $— | $— | — | $— | ||||||||||||||||||||||||
12/11/2018 | 14,495 | 3,623 | $254.77 | $47,098 | (3) | $— | $— | — | $— | |||||||||||||||||||||||
12/10/2019 | 12,564 | 8,376 | $304.54 | $47,462 | (3) | $— | $— | — | $— | |||||||||||||||||||||||
12/8/2020 | 4,906 | 4,906 | $345.74 | $47,825 | $— | $— | — | $— | ||||||||||||||||||||||||
12/7/2021 | 2,550 | 7,649 | $406.17 | $48,189 | $— | $— | — | $— | ||||||||||||||||||||||||
12/13/2022 | — | 10,904 | $329.83 | $48,561 | $— | $— | — | $— | ||||||||||||||||||||||||
12/8/2020 | — | — | $— | $47,825 | (4) | $— | $— | 2,386 | $743,836 | |||||||||||||||||||||||
12/7/2021 | — | — | $— | $48,189 | (5) | $— | $— | 2,277 | $709,855 | |||||||||||||||||||||||
12/13/2022 | — | — | $— | $48,561 | (6) | $— | $— | 3,411 | $1,063,379 | |||||||||||||||||||||||
12/8/2020 | — | — | $— | $47,825 | (7) | $1,446 | $450,791 | — | $— | |||||||||||||||||||||||
D. McBride | 12/13/2016 | 28,748 | — | $175.31 | $46,369 | $— | $— | — | $— | |||||||||||||||||||||||
12/12/2017 | 39,121 | — | $229.66 | $46,733 | $— | $— | — | $— | ||||||||||||||||||||||||
12/11/2018 | 26,355 | 6,588 | $254.77 | $47,098 | (3) | $— | $— | — | $— | |||||||||||||||||||||||
12/10/2019 | 18,398 | 12,266 | $304.54 | $47,462 | (3) | $— | $— | — | $— | |||||||||||||||||||||||
12/8/2020 | 6,987 | 6,987 | $345.74 | $47,825 | $— | $— | — | $— | ||||||||||||||||||||||||
12/7/2021 | 3,446 | 10,336 | $406.17 | $48,189 | $— | $— | — | $— | ||||||||||||||||||||||||
12/8/2020 | — | — | $— | 12/8/2030 | (4) | — | $— | 3,399 | $1,059,638 |
Name | Number of Securities Underlying Unexercised Options (Exercisable) | Number of Securities Underlying Unexercised Options (Unexercisable) | Option Exercise Price | Option Expiration Date |
| Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | |||||||||
Albert G. White III | 22,999 | 5,749 | $175.31 | 12/13/2026 | (3) |
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| 13,110 | 8,739 | $229.66 | 12/12/2027 | (6) |
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| 17,272 | 0 | $229.66 | 12/12/2027 | (7) |
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| 11,492 | 22,987 | $230.09 | 5/1/2028 | (10) |
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| 36,237 | 54,355 | $254.77 | 12/11/2028 | (11) |
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| 21,863 | 87,450 | $304.54 | 12/10/2029 | (15) |
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| 0 | 50,545 | $345.74 | 12/8/2030 | (16) |
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| (17) | 0 | $0 | 6,146 | $2,562,390 | |||||||||
Brian G. Andrews | 3,356 | 0 | $131.60 | 12/9/2025 | (2) |
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| (4) | 142 | $59,203 | 0 | $0 | ||||||||||
| 2,273 | 568 | $175.31 | 12/13/2026 | (3) |
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| (9) | 217 | $90,472 | 0 | $0 | |||||||||
| 2,333 | 1,553 | $229.66 | 12/12/2027 | (6) |
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| 1,779 | 0 | $229.66 | 12/12/2027 | (8) |
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| 1,437 | 2,873 | $230.09 | 5/1/2028 | (10) |
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| 7,248 | 10,870 | $254.77 | 12/11/2028 | (11) |
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|
|
| |||||||||
| 4,188 | 16,752 | $304.54 | 12/10/2029 | (15) |
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|
|
| |||||||||
| 0 | 9,812 | $345.74 | 12/8/2030 | (16) |
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|
|
| |||||||||
|
|
|
|
| (18) | 1,446 | $602,866 | 0 | $0 | |||||||||
|
|
|
|
| (17) | 0 | $0 | 1,193 | $497,386 | |||||||||
Daniel G. McBride | 22,999 | 5,749 | $175.31 | 12/13/2026 | (3) |
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|
|
| |||||||||
| 13,110 | 8,739 | $229.66 | 12/12/2027 | (6) |
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|
|
| |||||||||
| 17,272 | 0 | $229.66 | 12/12/2027 | (7) |
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|
|
| |||||||||
| 13,178 | 19,765 | $254.77 | 12/11/2028 | (13) |
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|
|
| |||||||||
| 6,133 | 24,531 | $304.54 | 12/10/2029 | (15) |
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|
|
| |||||||||
| 0 | 13,974 | $345.74 | 12/8/2030 | (16) |
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|
|
| |||||||||
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|
|
| (17) | 0 | $0 | 1,700 | $708,764 | |||||||||
Holly R. Sheffield | 8,764 | 8,764 | $226.30 | 6/4/2028 | (11) |
|
|
|
| |||||||||
|
|
|
|
| (12) | 2,209 | $920,976 | 0 | $0 | |||||||||
| 4,942 | 7,411 | $254.77 | 12/11/2028 | (13) |
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|
|
| |||||||||
|
|
|
|
| (14) | 1,766 | $736,281 | 0 | $0 | |||||||||
| 4,810 | 19,239 | $304.54 | 12/10/2029 | (15) |
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|
|
| |||||||||
| 0 | 10,406 | $345.74 | 12/8/2030 | (16) |
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|
|
| |||||||||
|
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|
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| (17) | 0 | $0 | 1,266 | $527,821 |
| 3947
Name | Award Grant Date | Option Awards | Stock Awards | |||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options (Exercisable) (#) | Number of Securities Underlying Unexercised Options (Unexercisable) (1) (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that have not Vested (#) | Market Value of Shares or Units of Stock that have not Vested (2) ($) | Equity Incentive Plan Awards | ||||||||||||||||||||||||||
Number of Unearned Shares, Units or Other Rights that have not Vested (#) | Market or Payout Value of Unearned Shares, Units or Other Rights that have not Vested (2) ($) | |||||||||||||||||||||||||||||||
12/7/2021 | — | — | $— | 12/7/2031 | (5) | — | $— | 3,078 | $959,567 | |||||||||||||||||||||||
12/13/2022 | — | — | $— | 12/13/2032 | (6) | — | $— | 4,169 | $1,299,686 | |||||||||||||||||||||||
12/13/2022 | — | — | $— | 12/13/2032 | (8) | 4,169 | $1,299,686 | — | $— | |||||||||||||||||||||||
H. Sheffield | 6/4/2018 | 17,528 | — | $226.30 | 6/4/2028 | — | $— | — | $— | |||||||||||||||||||||||
12/11/2018 | 9,883 | 2,470 | $254.77 | 12/11/2028 | (3) | — | $— | — | $— | |||||||||||||||||||||||
12/10/2019 | 14,429 | 9,620 | $304.54 | 12/10/2029 | (3) | — | $— | — | $— | |||||||||||||||||||||||
12/8/2020 | 5,203 | 5,203 | $345.74 | 12/8/2030 | — | $— | — | $— | ||||||||||||||||||||||||
12/7/2021 | 2,619 | 7,855 | $406.17 | 12/7/2031 | — | $— | — | $— | ||||||||||||||||||||||||
12/13/2022 | — | 5,089 | $329.83 | 12/13/2032 | — | $— | — | $— | ||||||||||||||||||||||||
12/8/2020 | — | — | $— | 12/8/2030 | (4) | — | $— | 2,531 | $789,039 | |||||||||||||||||||||||
12/7/2021 | — | — | $— | 12/7/2031 | (5) | — | $— | 2,339 | $729,183 | |||||||||||||||||||||||
12/13/2022 | — | — | $— | 12/13/2032 | (6) | — | $— | 3,183 | $992,300 | |||||||||||||||||||||||
12/11/2018 | — | — | $— | 12/11/2028 | (9) | 588 | $183,309 | — | $— | |||||||||||||||||||||||
12/13/2022 | — | — | $— | 12/13/2032 | (8) | 1,592 | $496,306 | — | $— | |||||||||||||||||||||||
G. Warner | 12/12/2017 | 535 | — | $229.66 | 12/12/2027 | — | $— | — | $— | |||||||||||||||||||||||
12/11/2018 | 4,989 | 1,647 | $254.77 | 12/11/2028 | (3) | — | $— | — | $— | |||||||||||||||||||||||
12/7/2021 | 1,723 | 5,168 | $406.17 | 12/7/2031 | — | $— | — | $— | ||||||||||||||||||||||||
12/7/2021 | — | 2,756 | $406.17 | 12/7/2031 | (10) | — | $— | — | $— | |||||||||||||||||||||||
12/13/2022 | — | — | $— | 12/13/2032 | (6) | — | $— | 2,653 | $827,073 | |||||||||||||||||||||||
12/11/2018 | — | — | $— | 12/11/2028 | (9) | 451 | $140,599 | — | $— | |||||||||||||||||||||||
12/10/2019 | — | — | $— | 12/10/2029 | (11) | 1,215 | $378,776 | — | $— | |||||||||||||||||||||||
12/8/2020 | — | — | $— | 12/8/2030 | (12) | 1,265 | $394,364 | — | $— | |||||||||||||||||||||||
12/7/2021 | — | — | $— | 12/7/2031 | (13) | 1,154 | $359,760 | — | $— | |||||||||||||||||||||||
12/7/2021 | — | — | $— | 12/7/2031 | (14) | 616 | $192,038 | — | $— | |||||||||||||||||||||||
12/13/2022 | — | — | $— | 12/13/2032 | (8) | 2,653 | $827,073 | — | $— | |||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (Exercisable) | Number of Securities Underlying Unexercised Options (Unexercisable) | Option Exercise Price | Option Expiration Date |
| Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | |||||||||
Agostino Ricupati | 13 | 0 | $162.28 | 12/9/2024 | (1) |
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| |||||||||
| 122 | 0 | $131.60 | 12/9/2025 | (2) |
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| |||||||||
| 132 | 704 | $175.31 | 12/13/2026 | (3) |
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| |||||||||
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| (4) | 176 | $73,378 | 0 | $0 | |||||||||
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| (5) | 348 | $145,088 | 0 | $0 | |||||||||
| 2,436 | 1,623 | $229.66 | 12/12/2027 | (6) |
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| |||||||||
| 1,523 | 0 | $229.66 | 12/12/2027 | (8) |
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| |||||||||
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| (9) | 409 | $170,520 | 0 | $0 | |||||||||
| 2,142 | 3,211 | $254.77 | 12/11/2028 | (13) |
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| |||||||||
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| (14) | 765 | $318,944 | 0 | $0 | |||||||||
| 1,846 | 7,382 | $304.54 | 12/10/2029 | (15) |
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|
| |||||||||
| 0 | 7,730 | $345.74 | 12/8/2030 | (16) |
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| |||||||||
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| (19) | 1,038 | $432,763 | 0 | $0 | |||||||||
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Page | 40
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| Option Awards | Stock Awards | ||||||||||||||
Name | Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting | ||||||||||||
Albert G. White III | 79,745 | $20,730,555 | - | $- | ||||||||||||
Brian G. Andrews | 4,963 | $1,545,001 | 442 | $160,548 | ||||||||||||
Daniel G. McBride | 72,624 | $22,770,806 | - | $- | ||||||||||||
Holly R. Sheffield | - | $- | 1,694 | $636,008 | ||||||||||||
Agostino Ricupati | 4,054 | $917,720 | 1,219 | $456,617 | ||||||||||||
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Page | 41
Name Stock Awards Number of Shares Acquired on Vesting Value Realized on Vesting Albert G. White III — $— Brian G. Andrews 108 $37,278 Daniel G. McBride — $— Holly R. Sheffield 1,693 $596,848 Gerard H. Warner III 2,467 $851,534
Name | Plan Name | Years of Credited Service | Present Value of Accumulated Benefit (1) | Payments During Last Fiscal Year | ||||||||||
Albert G. White III | Retirement Income Plan | 16.50 | $290,449 | $— | ||||||||||
Brian G. Andrews | Retirement Income Plan | 16.50 | $154,255 | $— | ||||||||||
Daniel G. McBride | Retirement Income Plan | 17.67 | $415,902 | $— | ||||||||||
Holly R. Sheffield (2) | Retirement Income Plan | 4.33 | $86,087 | $— |
Name | Plan Name | Years of Credited Service | Present Value of Benefit (1) | Payments During | ||||
Albert G. White III | Retirement Income Plan | 14.5 | $467,140 | $-0- | ||||
Brian G. Andrews | Retirement Income Plan | 14.5 | $330,915 | $-0- | ||||
Daniel G. McBride | Retirement Income Plan | 15.67 | $568,743 | $-0- | ||||
Holly R. Sheffield (2) | Retirement Income Plan | 2.33 | $87,708 | $-0- | ||||
Agostino Ricupati | Retirement Income Plan | 7.25 | $267,396 | $-0- | ||||
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|
Name | Plan Name | Years of Credited Service | Present Value of Accumulated Benefit (1) | Payments During Last Fiscal Year | ||||||||||
Gerard H. Warner III | Retirement Income Plan | 10.42 | $258,531 | $— | ||||||||||
|
Officer | Estimated Annual Benefits Payable | |||||||
Albert G. White III | $ | 95,861 | ||||||
Brian G. Andrews | $ | 126,752 | ||||||
Daniel G. McBride | $ | 79,169 | ||||||
Holly R. Sheffield (1) | $ | 64,550 | ||||||
Gerard H. Warner III | $59,484 |
|
Page | 42
| Termination without Cause / Resignation with Good Reason | Change in Control | Death / Disability | |||
Albert G. White III | $45,476,648 | $61,187,788 | $44,805,324 | |||
Brian G. Andrews | $7,876,455 | $12,603,052 | $8,917,302 | |||
Daniel G. McBride | $23,828,409 | $28,900,401 | $23,233,349 | |||
Holly R. Sheffield | $7,317,471 | $12,617,814 | $8,716,696 | |||
Agostino Ricupati | $2,011,636 | $4,448,574 | $1,906,503 | |||
|
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|
|
Termination without Cause / Resignation with Good Reason | Termination without Cause / Resignation with Good Reason in connection with a Change in Control | Death / Disability | |||||||||
Albert G. White III | $19,917,691 | $40,766,735 | $21,382,028 | ||||||||
Brian G. Andrews | $5,020,416 | $5,886,024 | $6,368,689 | ||||||||
Daniel G. McBride | $12,229,625 | $18,977,424 | $14,329,169 | ||||||||
Holly R. Sheffield | $4,331,520 | $5,323,447 | $4,880,057 | ||||||||
Gerard H. Warner III | $1,009,435 | $3,684,670 | $2,397,627 | ||||||||
Termination Without Cause or Resignation for Good Reason | •Severance payment equal to 24 months of base salary (paid in continuing installments on our ordinary payroll schedule) •Target value of annual cash bonus earned under our •Reimbursement of monthly COBRA premiums for up to 24 months •
•One year to exercise any outstanding and exercisable stock options, including accelerated options | |||||
Termination Without Cause or Resignation for Good Reason in Connection with a Change in Control | •Severance payment equal to 36 months of base salary (paid in continuing installments on our ordinary payroll schedule) •Target value of annual cash bonus under our IPP for the year in which employment terminates (paid in a lump sum) •Reimbursement of monthly COBRA premiums for up to 36 months •All outstanding equity awards will be accelerated, with any PSUs to be paid at the target value (unless otherwise specified in the underlying award agreement) •One year to exercise any outstanding and exercisable stock options, including accelerated options | |||||
Termination on Death or Disability (4) | •Target value of annual cash bonus under our IPP, prorated based on the period of service in the IPP plan year prior to executive’s termination date. •Outstanding equity awards accelerated on a monthly pro-rata basis, based on the period of service in the vesting term of the award prior to executive’s termination date. •One year to exercise any outstanding and exercisable stock options, including accelerated options | ||||
Termination Without Cause (2) | •Severance payment of approximately 5 months of base salary (paid in continuing installments on our ordinary payroll schedule) •Value of annual cash bonus earned under our Incentive Payment Plan for the year in which employment terminates (paid in a lump sum) •Three months to exercise any currently outstanding and exercisable stock options; outstanding RSUs are forfeited on termination | ||||
Termination in Connection with a Change in Control (3) | •Severance payment equal to 12 months of base salary (paid in continuing installments on the Company’s ordinary payroll schedule) •Pro rata portion of target value of annual cash bonus earned under our IPP for the year in which employment terminates (paid in a lump sum) •Reimbursement of monthly COBRA premiums for up to •
| ||||
Termination on Death or Disability (2) | •Target value of annual cash bonus
date. •
|
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| 4353
CEO PAY RATIO |
|
Mr. Ricupati
|
|
|
|
CEO Pay Ratio
As permitted by Item 402(u) of Regulation S-K, for fiscal year 2023, we used the same median employee for the pay ratio as was used for the pay ratio in the Proxy Statement for fiscal year 2022.
•The annual total compensation of our median-paid employee for fiscal 2023 was $36,105.
|
•The annual total compensation of our Chief Executive Officer for fiscal 2023 was $13,490,923 (as described above in the Summary Compensation Table).
PAY VERSUS PERFORMANCE |
Fiscal Year | SCT Total Compensation for PEO (1) | Compensation Actually Paid to PEO (1) (3) | Average SCT Total Compensation for Other NEOs (2) | Average Compensation Actually Paid to Other NEOs (2) (3) | Value of Initial Fixed $100 Investment Based On: | Net Income (5) (in millions) | Company Selected Measure: | |||||||||||||||||||
Total Stockholder Return (4) | Peer Group Stockholder Return (4) | Non-GAAP EPS (6) | ||||||||||||||||||||||||
2023 | $13,490,923 | $22,309,137 | $3,462,463 | $4,997,872 | $97.77 | $99.33 | $294.2 | $12.81 | ||||||||||||||||||
2022 | $11,735,964 | $(9,232,263) | $3,122,556 | $(1,008,290) | $85.72 | $102.28 | $385.8 | $12.42 | ||||||||||||||||||
2021 | $10,994,906 | $36,205,083 | $2,772,601 | $7,944,570 | $130.69 | $132.08 | $2,944.7 | $13.24 |
FY 2023 | FY 2022 | FY 2021 | ||||||||||||||||||
CEO ($) | Average for Other NEOs ($) | CEO ($) | Average for Other NEOs ($) | CEO ($) | Average for Other NEOs ($) | |||||||||||||||
SCT Total Compensation: | $13,490,923 | $3,462,463 | $11,735,964 | $3,122,556 | $10,994,906 | $2,772,601 | ||||||||||||||
Adjustments for Equity Fair Value: | ||||||||||||||||||||
Deduct: equity award value reported in the SCT | $(10,569,853) | $(2,212,547) | $(9,250,214) | $(2,000,105) | $(8,499,660) | $(1,700,029) | ||||||||||||||
Add: year-end fair value (FV) of awards granted during the FY and remaining unvested at FY end | $11,289,458 | $2,192,652 | $6,953,597 | $1,503,562 | $18,414,809 | $3,685,523 | ||||||||||||||
Add: vesting date FV of awards granted and vested during the FY | $0 | $0 | $0 | $0 | $0 | $0 | ||||||||||||||
Add/(Deduct): change in year-end FV of prior year awards remaining unvested at FY end | $5,603,219 | $1,074,119 | $(17,482,099) | $(3,405,635) | $13,119,132 | $2,709,109 | ||||||||||||||
Add/(Deduct): change in FV from prior FY end of prior-year awards that vested during FY | $2,487,221 | $477,940 | $(1,224,000) | $(261,639) | $2,193,605 | $493,591 | ||||||||||||||
Adjustments for Pension Value: | ||||||||||||||||||||
(Deduct): aggregate change in actuarial present value of the RIP | $(12,647) | $(18,474) | $0 | $0 | $(51,121) | $(46,458) | ||||||||||||||
Add/(Deduct): prior service cost attributed to benefits under the RIP | $20,816 | $21,719 | $34,489 | $32,971 | $33,412 | $30,233 | ||||||||||||||
Compensation Actually Paid in FY: | $22,309,137 | $4,997,872 | $(9,232,263) | $(1,008,290) | $36,205,083 | $7,944,570 |
| 4455
Financial Measures: | ||
Revenue (Organic or Constant Currency) | ||
Non-GAAP EPS (Constant Currency) | ||
Operating Income (Constant Currency) | ||
DIRECTOR COMPENSATION |
The Non-Employee Directors also received payment for each meeting attended, for time spent on company business, and for one day of travel in connection with meetings. Fees were paid as follows:
Annual Retainer: | |||||||||
| |||||||||
Chairman of the Board | $ | 175,000 | |||||||
Non-Executive Lead Director | $ | 70,000 | |||||||
All | $ | 50,000 | |||||||
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Page | 45
Directors appointed to, or resigning from, the Board mid-year are entitled to a prorated portion of the annual retainer based on the number of months of service provided for the fiscal year in which they enter or leave service, rounded to the nearest whole month.
Changes for Fiscal 2022
As part of its annual review of compensation for the Non-Employee Directors, the Board has decided to simplify the payment structure and remove separate cash payments for meeting attendance, time spent on company business, and travel days. Annual stipends will be adjusted to compensate for meeting fees and to align with peer practices. Starting in November 2021, director fee payments are as follows:
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| ||||||||
Additional Annual Retainer for Service as a Committee Chair: | ||||||||
Audit Committee | $25,000 | |||||||
Organization & Compensation Committee | $20,000 | |||||||
Corporate Governance & Nominating Committee | $15,000 |
| 4658
Name | Fees Earned or Paid in Cash (1) | Stock Awards (2)(3) | Total | |||
Robert S. Weiss (Chairman) | $113,917 | $296,827 | $410,744 | |||
William A. Kozy (Lead Director) | $82,833 | $283,335 | $366,168 | |||
Colleen E. Jay | $69,000 | $269,843 | $338,843 | |||
Jody S. Lindell | $77,500 | $269,843 | $347,343 | |||
Teresa S. Madden | $54,500 | $359,700 | $414,200 | |||
Gary S. Petersmeyer | $64,000 | $269,843 | $333,843 | |||
Maria Rivas, M.D. | $25,000 | $202,306 | $227,306 | |||
A. Thomas Bender (4) | $67,583 | $0 | $67,583 | |||
Allan E. Rubenstein (4) | $20,667 | $0 | $20,667 |
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|
non-employee directors.
Name | Fees Earned or Paid in Cash (1) | Stock Awards (2)(3) | Total | ||||||||
Robert S. Weiss (Chairman) | $175,000 | $296,821 | $471,821 | ||||||||
William A. Kozy (Lead Director) | $85,000 | $283,380 | $368,380 | ||||||||
Colleen E. Jay | $70,000 | $269,939 | $339,939 | ||||||||
Jody S. Lindell (4) | $33,333 | $0 | $33,333 | ||||||||
Cynthia L. Lucchese | $41,667 | $269,939 | $311,606 | ||||||||
Teresa S. Madden | $75,000 | $269,939 | $344,939 | ||||||||
Gary S. Petersmeyer | $50,000 | $269,939 | $319,939 | ||||||||
Maria Rivas, M.D. | $50,000 | $269,939 | $319,939 | ||||||||
Page | 47
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Name Shares Underlying Outstanding Stock Options Number of RSUs Outstanding Robert S. Weiss 139,692 795 William A. Kozy 1,766 759 Colleen E. Jay 1,766 723 Jody S. Lindell 5,864 0 Cynthia L. Lucchese 0 723 Teresa S. Madden 0 723 Gary S. Petersmeyer 1,782 723 Maria Rivas, M.D. 0 723
| 4860
PROPOSAL 1 — ELECTION OF DIRECTORS |
Our
2024 Annual Meeting.
Page | 49
The Nominees
Committee Memberships | Financial Expert | Other Public Boards | Demographics | |||||||||||||||||||||||||||||
Current Directors | Since | Age | Audit | CGNC | OCC | Independent | Gender | Race / Ethnicity | ||||||||||||||||||||||||
Robert S. Weiss (Chairman) | 1996 | 77 | -- | M | White | |||||||||||||||||||||||||||
William A. Kozy (Lead Director) | 2016 | 72 | ❖ | ◆ | 1 | M | White | |||||||||||||||||||||||||
Colleen E. Jay | 2016 | 61 | ◆ | ❖ | 2 | F | White | |||||||||||||||||||||||||
Lawrence E. Kurzius | 2023 | 66 | ◆ | ◆ | 2 | M | White | |||||||||||||||||||||||||
Cynthia L. Lucchese | 2022 | 63 | ◆ | ◆ | 2 | F | White | |||||||||||||||||||||||||
Teresa S. Madden | 2020 | 67 | ❖ | ◆ | 1 | F | White | |||||||||||||||||||||||||
Maria Rivas, M.D. | 2021 | 60 | ◆ | ◆ | -- | F | Hispanic | |||||||||||||||||||||||||
Albert G. White III (CEO) | 2018 | 54 | -- | M | White | |||||||||||||||||||||||||||
Colleen E. Jay | Joined The Board: April 2016 | |||||
| Committees: Organization & Compensation Committee (Chair) Corporate Governance & Nominating Committee |
William A. Kozy |
| |||||
Vice Chairman Independent Lead Director |
Committees:
Corporate Governance & Nominating Committee Organization & Compensation Committee |
| 5062
Lawrence E. Kurzius | Joined The Board: December 2023 | |||||
Independent Director Audit Committee Financial Expert | Committees: Audit Committee Organization & Compensation Committee |
Cynthia L. Lucchese |
| |||||
Independent Director Audit Committee Financial Expert |
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Page | 51