TABLE OF CONTENTS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐ Check the appropriate box: ☐ Preliminary Proxy Statement ☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) ☒ Definitive Proxy Statement ☐ Definitive Additional Materials ☐ Soliciting Material under §240.14a-12 Bristol-Myers Squibb Company (Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): ☒ No fee required. ☐ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: ☐ Fee paid previously with preliminary materials. ☐ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed:
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TABLE OF CONTENTS
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14AProxyStatementPursuanttoSection14(a)of
theSecuritiesExchangeActof1934(AmendmentNo. )
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Checktheappropriatebox:
☐ PreliminaryProxyStatement
☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒ DefinitiveProxyStatement
☐ DefinitiveAdditionalMaterials
☐ SolicitingMaterialunder§240.14a-12
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2020AnnualMeetingofShareholders
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BristolMyersSquibb:TheStory
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WhoWeAre:2020DirectorNominees
4
HowWeAreSelectedandElected
MajorityVoteStandardandMandatoryResignationPolicy 10CriteriaforBoardMembership 11DirectorIndependence 11DirectorSuccessionPlanningandIdentificationofBoardCandidates 12AnnualEvaluationProcess 13
HowWeGovernandAreGoverned
ActiveBoardOversightofOurGovernance 14Board’sRoleinStrategicPlanningandRiskOversight 14RiskAssessmentofCompensationPoliciesandPractices 15MeetingsofOurBoard 16AnnualMeetingofShareholders 16CodesofConduct 16RelatedPartyTransactions 17DisclosureRegardingPoliticalActivities 18GlobalCorporateCitizenship&Sustainability 18ResponsibleDrugPricingStrategy&Transparency 19
HowWeAreOrganized
BoardLeadershipStructure 20CommitteesofOurBoard 22
HowtoCommunicateWithUs
WrittenCommunication 26ProactiveShareholderEngagement 26ResponsivenesstoShareholderFeedback 27
HowWeArePaid CompensationofDirectors 28
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ExecutiveCompensation
MessagefromtheCompensationandManagementDevelopmentCommitteeChair
32
CompensationDiscussionandAnalysis 33CompensationandManagementDevelopmentCommitteeReport 63TaxImplicationsofExecutiveCompensationProgram 63SummaryCompensationTable 64GrantsofPlan-BasedAwards 66OutstandingEquityAwardsatFiscalYear-End 68OptionExercisesandStockVesting 71PresentValueofAccumulatedPensionBenefits 73Non-QualifiedDeferredCompensationPlan 75Post-TerminationBenefits 75TerminationofEmploymentObligations(ExcludingVestedBenefits) 81PayRatio 83
ItemsToBeVotedUpon
Item1–ElectionofDirectors 4Item2–AdvisoryVotetoApprovetheCompensationofourNamedExecutiveOfficers
83
EquityCompensationPlanInformation 84Item3–RatificationoftheAppointmentofIndependentRegisteredPublicAccountingFirm 84AuditandNon-AuditFees 85Pre-ApprovalPolicyforServicesProvidedbyourIndependentRegisteredPublicAccountingFirm 85AuditCommitteeReport 86Item4–ShareholderProposalonSeparateChair&CEO 87Item5–ShareholderProposalonShareholderRighttoActbyWrittenConsent 89
VotingSecuritiesandPrincipalHolders
CommonStockOwnershipbyDirectorsandExecutiveOfficers 92PrincipalHoldersofVotingSecurities 93DelinquentSection16(a)Reports 93PolicyonHedgingandPledging 93
OtherMatters AdvanceNoticeProcedures 942021ShareholderProposals 94CompensationCommitteeInterlocksandInsiderParticipation 94AvailabilityofCorporateGovernanceDocuments 94
FrequentlyAskedQuestions
95
ExhibitA CategoricalStandardsofIndependence A-1
ExhibitB DirectionstoourLawrenceTownshipOffice B-1
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430E.29thStreet,14thFloorNewYork,NewYork10016
Notice of Annual Meeting of Shareholders
Notice is hereby given that the 2020 Annual Meeting of Shareholders will be held at Bristol-Myers SquibbCompany,3401PrincetonPike,LawrenceTownship,NewJersey,onMay5,2020,at10:00a.m.forthefollowingpurposesassetforthintheaccompanyingProxyStatement:
• toelecttotheBoardofDirectorsthe12personsnominatedbytheBoard,eachforatermofoneyear;• toconductanadvisoryvotetoapprovethecompensationofourNamedExecutiveOfficers;• to ratify the appointment of Deloitte & Touche LLP as the company’s independent registered public
accountingfirmfor2020;• toconsidertwoshareholderproposals,ifpresentedatthemeeting;and• totransactsuchotherbusinessasmayproperlycomebeforethemeetingoranyadjournmentsthereof.
HoldersofrecordofourcommonandpreferredstockatthecloseofbusinessonMarch16,2020willbeentitledtovoteatthemeeting.
Weare monitoring developments regarding the coronavirus or COVID-19, including protocols that federal, stateandlocalgovernmentshaveimposed.Wearesensitivetothehealthandsafetyconcernsrelatedtothisongoingpandemic and our top priority is to protect the health and well-being of our shareholders, employees and thegeneral public. In the event we determine it is necessary or appropriate to hold the meeting by remotecommunication,wewillannouncethisdecisioninadvance,anddetailswillbepostedonourcompanywebsiteandfiledwiththeSecuritiesandExchangeCommission.
ByOrderoftheBoardofDirectors
Katherine R. KellyVice President, Associate General Counsel and Corporate Secretary
Dated:March25,2020
YOUR VOTE IS IMPORTANT
Regardlessofthenumberofsharesyouown,yourvoteisimportant.IfyoudonotattendtheAnnualMeetingtovoteinperson,yourvotewillnotbecountedunlessaproxyrepresentingyoursharesispresentedatthemeeting.Toensurethatyourshareswillbevotedatthemeeting,pleasevoteinoneoftheseways:
(1) Gotowww.proxyvote.comandvoteviatheInternet;(2) Callthetollfreetelephonenumber(800)690-6903(thiscallistoll-freeintheUnitedStates);or(3) Mark,sign,dateandpromptlyreturntheenclosedproxycardinthepostage-paidenvelope.
IfyoudoattendtheAnnualMeeting,youmayrevokeyourproxyandvotebyballot.
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DearBMSshareholders,
AtthetimethatweareissuingthisProxyStatement,weareinthemidstofaglobalpandemic.COVID-19istakingasignificanthumantoll,andourheartsgoouttothosewhohavebeenimpactedandeveryonemanagingthroughthisdifficultanduncertaintime.Asaresponsibleglobalcitizen,wearetakingstepstoprotectthehealthandsafetyofthepublicandourglobalworkforce,contributetoreliefeffortsincommunitiesdeeplyaffectedbythevirus,andcarryoutourmissionofprovidinglife-savingmedicinestothepatientswhodependonus.
At Bristol Myers Squibb (“BMS”), our vision is to transform patients’ lives through science. To do this, we mustcontinuallyinnovate–wemustfindnovelwaystotreatsomeofthemostcomplexanddevastatingdiseases,likecancer.AfterwelcomingournewcolleaguesfromCelgeneCorporation(“Celgene”),weareinabetterplacethanevertodoso.Overthelastyear,wehaveachieved:
• ExcellentinitialresultsfromourCelgeneintegrationefforts;• Strongbusinessperformanceacrossourportfolio;• A16%increaseinTotalRevenues,with10%attributabletothelegacyBMSbusiness;• A(33%)decreaseinGAAPdilutedearningspershare(EPS)andan18%increaseinnon-GAAPdiluted
EPS;• One-yeartotalshareholderreturnof28%;• Implementationofa10%increaseinourdividend,markinganincreaseindividendsforthe11thyearina
row;and• Strongexternalrecognitionoftheexcellenceofourgovernance,environmental,andsocialprograms.
We demonstrate ethics, integrity and quality in everything we do.Wehaveevolvedourcompanybehaviorsfor2020intosixcompanyvalues:passion,innovation,urgency,accountability,integrityandinclusion.Thesecorevalues align with our new culture and aspirational ways of working, engaging employees and strengtheningperformance. Our ability to innovate is amplified by our talent, passion for science, curiosity for discovery,commitment to quality, and determination to translate scientific and technological advances into new medicinesthat make a difference for patients and their families. Through company-wide programs, we foster a culture ofdiversityandinclusion.It is only through the diverse experiences and perspectives of our employees that weelicit the best ideas, drive innovation, and achieve transformative business results.Forexample,wehaveeightPeopleandBusinessResourceGroups(PBRGs),eachfocusedonaspecificelementof diversity, whichempower employeesto apply their perspectives andexperiencesto driveour patient-focusedmissionwithinBMSandinthecommunitieswhereweliveandwork.Ourmorethan15,000PBRGmembershavehelpedto improvehealth outcomesacrossseveral diseaseareasandpopulationsthroughworkbothinsideandoutsidethecompany,andinspiredandworkedwithyoungpeoplefromdiversebackgroundsonSTEMeducationandinitiatives.Weinviteyoutoreadour2019AnnualReportonourwebsiteforadditionalstoriesontheimpactofthesegroups.
Theresult of our efforts, andthemilestones weachievedin 2019, reinforce thevalueof our investments in thebusiness and our culture. I am proud of all that we have accomplished in 2019 and am excited as we furtherexpandtheimportant work wedofor patients, embedanewculture andbuild a leadingbiopharmacompanyin2020andbeyond.
Weaskforyoursupportforourdirectorsandourpayplansthathavecarefullydesignedfeaturesgoverningeachof our distinct integration timeframes as well as our long-termoperations and sustainability. Wealso invite yourfeedback,yourparticipationinourannualmeeting,andyourfutureinvestment.Thankyouforhelpingtoenableourwork and supporting our patients and all our people. We hope you and your loved ones stay safe and healthyduringthisuncertaintime.
Sincerely,
GiovanniCaforio,M.D.ChairmanoftheBoardandChiefExecutiveOfficer
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Dear Fellow shareholders and stakeholders,In the letter from our Chairman and CEO Giovanni Caforio, you read about how we at BristolMyers Squibb(“BMS”)successfully managed a momentous and transformative year, including our approximately $80.3 billionacquisitionofCelgeneCorporation,andoursteadyintegrationofthetwocompanies.
AsBMS’sLeadIndependentDirector,Iwanttothankeveryonefrombothcompanieswhohelpedmakeour2019possible.Ialsowanttothankmyfellowdirectors:eachofus,aswellaseverycommitteeoftheBoard,wasactivelyinvolvedintheCelgenetransactionandourongoingintegration.
Westartedtheyearwithastronggovernancefoundationthatwebelievehelpedsupporttheseactions:wehavemajorityvoting;3/3/20/20proxyaccess;annualdirectorelections;oneshare,onevote;specialmeetingrights;nosuper majority voting provisions; proactive shareholder engagement; and emphasis on board refreshment andeffectiveness.Ourenvironmentalandsocialprogramsfocusonourcriticalrisksandopportunities,withtargetstoaccelerate innovation, enhance patient access to medicines, be an employer of choice, and reduce ourenvironmental footprint. Our Board will continue to provide critical oversight of our management team as theyexecuteourstrategytocreatelong-termshareholdervalueandsupportthepursuitofourMission.
But these facts tell only part of our governance story. No governance structure is as important as the people itsurrounds,soIwanttodrawyourattentioninthisshortlettertothecaliberofthepeoplewhoservedontheBMSBoardin2019.
First, we will use this opportunity to thank Michael Grobstein and Alan Lacy for their many years of dedicatedservicetotheBristolMyersSquibbBoardofDirectorsandourshareholders.TheBoardisextremelygratefultoMr.GrobsteinandMr. Lacyfortheir contributions. Mr. GrobsteinandMr. Lacywill retirefromtheBoardofDirectorseffectiveafterthisAnnualMeeting.
Consistentwithourfocusonbringingtogetherthebestinbiotechwiththebestofpharma,wehavebeenfortunatewith our new directors, Julia Haller, M.D., Michael Bonney and Phyllis Yale, to further enhance our board’sexpertiseingenetherapy, biotechandcritically important payormatters. Overathirdof ourBoardisdiversebygender or race, and represents the diverse skills and experiences most relevant to our future. Our steadyrefreshment reflects our commitment to anticipating, leading, and benefitting from evolving science, an ever-changingenvironment, andsimplythevalueof fresheyes.Wewill continueourpro-activeengagementwithourshareholdersaswefocusonexecutingasuccessfulintegrationanddeliveringthevalueofthecombinedcompany.
Youwill readinthecompensationsectionsof thisProxyStatement howwehavecreatedplansthat arealignedwiththecompletionofourintegration,theuniqueneedsof2020,andouropportunitiesfrom2021onward.
Ourpayplans,ourprinciples,ourgovernance,andourbroadervaluingofgoodenvironmentalandsocialpracticesreflectourbeliefthatifwetakecareofourpeople,theywilltakecareofourpatients,whichenablesustodowellforyou,ourshareholders.
IaskforyoursupportfortheitemsourcompanyhasputforthinthisProxyStatementandencourageyoutoreadthefollowingpagestoinformyourvote.Thankyouforyourfaithandinvestmentinus,whichweworkhardtoearn.
VickiL.Sato,Ph.D.LeadIndependentDirectorChair,CommitteeonDirectorsandCorporateGovernance
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BristolMyersSquibb:TheStory
Our vision is to transform patients’ lives through science. AtBristolMyersSquibb,weareinthebusinessofbreakthroughs.Eachday,ouremployeesstrivetodiscover,develop,anddeliverinnovativemedicinesthathelppatientsprevailoverseriousdiseases.Patientsareatthecenterofeverythingwedo.Theyinspireus.Theyarethereasonwecometoworkeachday. Patientsdependonourmedicinestohelpbattleseriousdiseasessuchascancer,cardiovasculardisease,andrheumatoidarthritis.Andthroughourscience,wearepursuingnewtreatmentsfordiseasesincludingmoreformsofcancer,heartfailure,fibrosis,multiplesclerosis,psoriasis,IBDandneurologicaldisease.Ourgoalistotransformpatients'livesthroughscience. We are a biopharma leader. Wecombinetheagilityofabiotechcompanywiththereachandresourcesofanestablishedpharmaceuticalcompanytocreateagloballeadingbiopharmacompany.Weareadifferentiatedbiopharmacompanyfocusedoninnovativemedicines.Forus,thatmeansbeingacompanythatleadsscientificinnovation,collaboratesatthecenterofthebiotechecosystem,leveragesourglobalscaleandagility,andisdrivenbythebestemployeesintheindustry. We are committed to quality, integrity, and ethics in everything we do. Aboveallelse,wevalueourintegrityandweholdourselvesaccountabletothehighestethicalstandards.Ourpeople,patients,andcommunitiesareatthecenterofeverythingthatwedo.Westrivetodelivertransformativemedicines,increaseaccesstotreatment,andcreateapositiveimpactinthecommunitieswherewelive,work,andservepatients. Ourpatientsdependonus.Theyneedourverybestineverytreatment-everydose,everyday.Wefocusonqualityandaccountabilityacrosstheentirecompany:inourlaboratorypractices,clinicalpractices,manufacturingprocesses,anddistributionnetworks. We value diversity and inclusion. Weembraceadiverseworkforceandpromoteaninclusiveculture.Webelievethatthediverseexperiencesandperspectivesofallouremployeeshelptobringoutourbestideas,driveinnovationandachievetransformativebusinessresults.Thehealth,safety,professionaldevelopment,work-lifebalance,andequitableandrespectfultreatmentofourworkforceareamongourhighestpriorities. We touch the lives of those you love. You,oroneofyourlovedones,likelyknowusthroughthemedicineswemake.OurtopmedicinesincludeRevlimid,usedtotreatpatientswithaformofcancercalledmultiplemyeloma;Eliquis,usedtotreatandpreventbloodclotsandstroke;Opdivo,usedtotreatmultipleformsofcancer;andOrencia,atreatmentforrheumatoidarthritis. Wearemorethanjustourmedicines.Wearemorethan30,000dedicatedemployeeswhocometoworkeachdaywithonemission:Todiscover,develop,anddeliverinnovativemedicinesthathelppatientsprevailoverseriousdiseases.
We Made Great Progress in 20192019wasatransformativeyearforBristolMyersSquibb,asweacquiredCelgeneinoneofthelargestmergerseverinoursector.Thoughwehaveonlybeenworkingtogetherforafewmonths,wearealreadyrealizingbenefitsfromthetransaction.Thosebenefitsinclude: • Anevenstrongercommercialpresencein
keydiseasefranchisesofoncology,hematology,immunologyandcardiovasculardisease,ledbyhigh-performingcommercialteams;
• Multiplenear-termopportunitiestolaunchexcitingnewmedicinesforpatients;
• Asignificantlyenhancedearly-stagepipelineandnewscientificplatforms;
• Abroaderrangeofdiscoverymodalitiesthatfurtherstrengthenthepipeline;
• Opportunitiestoimprovecollaborationandscaleamongresearchanddevelopmentteams;and
• Improvedglobalmanufacturinganddistribution.
Asacombinedcompany,wecontinuetoinnovate.Amongotherachievements,in2019,welaunchedINREBIC®(fedratinib)andREBLOZYL®(luspatercept-aamt)forthetreatmentofcertainblooddisordersintheU.S.,continuedtostrengthentheprofileofEliquisthroughmultiple,robustreal-worldstudies,submittedregulatoryfilingsforluspaterceptandozanimodintheU.S.andEurope,completedtwopositivefirst-linelungcancertrials,andlaidthegroundworkforregulatorysubmissionforCC-486,whichshowedasignificantimprovementinoverallsurvivalforsomeleukemiapatients. Financially,itwasalsoastrongyear.Wedeliveredstrongbusinessperformanceacrosstheportfolio.WestrengthenedourbalancesheetthroughthesaleofOtezla.Weincreasedourdividendfortheeleventhyearinarowandimplementedarobustacceleratedsharerepurchaseprogram.AndwemadegreatstridesintegratingCelgene. Bristol Myers Squibb has never beenstronger.
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WhoWeAre:2020DirectorNomineesOur Board of DirectorsOurBoardofDirectorshasnominated12currentdirectors,PeterJ.Arduini,RobertBertolini,MichaelW.Bonney,Giovanni Caforio, M.D., Matthew W. Emmens, Julia A. Haller, M.D., Dinesh C. Paliwal, Theodore R. Samuels,Vicki L. Sato, Ph.D., Gerald L. Storch, Karen H. Vousden, Ph.D., and Phyllis R. Yale, to serve as directors ofBristol Myers Squibb. Thedirectors will holdofficefromelectionuntil the2021Annual Meeting. Webelievethattoneissetatthetop—notjustforintegrity,butforexcellence,soweopenthissectiononourBoardofDirectorsbyintroducingyoutowhoweare.Wefollowthatwithsectionsonhowweareselectedandelected,howwegovernandaregoverned,howweareorganized,howyoucancommunicatewithusandhowwearepaid.WeaskinItem1foryourvotingsupportsowecancontinueourimportantworkandbuildonoursignificantsuccessesin2020.
Item 1—Election of the Board of Directors
2020 Director Nominees
ThefollowingbiographiesofourdirectornomineesreflecttheirBoardCommitteemembershipandChairpositionsasofthedateofthisyear’sAnnualMeeting.
Giovanni Caforio, M.D.ChairmanandChiefExecutiveOfficeroftheCompany Director Since:2014Age: 55 Board Committees• IntegrationCommittee
Experience • BristolMyersSquibbChiefExecutiveOfficer(May2015-present);ChairmanoftheBoard(May2017-present);ChiefOperatingOfficer(June2014-May2015);ExecutiveVicePresidentandChiefCommercialOfficer(November2013-June2014);President,U.S.(October2011-November2013);SeniorVicePresident,GlobalCommercializationandImmunology(May2010-October2011);SeniorVicePresident,Oncology,U.S.andGlobalCommercialization(March2009-May2010):SeniorVicePresident,U.S.Oncology(January2007-March2009):SeniorVicePresident,EuropeanMarketingandBrandCommercialization(May2004-January2007)
Key Skills and Experience • Healthcare • International • Financial Education • UniversityofRome,M.D. Other • Member,BoardofTrusteesofHunSchoolofPrinceton • Member,BusinessRoundtable • Member,CEORoundtableonCancer • Chairman,PharmaceuticalResearchandManufacturersofAmerica• Member,ThePrium
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Vicki L. Sato, Ph.D.LeadIndependentDirector Director Since: 2006Age: 71 Board Committees• CommitteeonDirectorsandCorporateGovernance(Chair)
• Science&TechnologyCommittee Other Public Boards• DenaliTherapeutics,Inc.(Chair)• BorgWarner,Inc.• ChairmanofVIRBiotechnology,Inc.(Chair) Former• PerkinElmerCorporation• SyrosPharmaceuticals
Experience • PresidentofVertexPharmaceuticalsIncorporated(2000-2005);ChiefScientificOfficer,SeniorVicePresidentofResearchandDevelopmentandChairoftheScientificAdvisoryBoard
• ProfessorofmanagementpracticeattheHarvardBusinessSchool(July2005-June2017)
• ProfessorofthepracticeofmolecularandcellbiologyatHarvardUniversity(July2005-October2014)
Key Skills and Experience • Academia/Non-Profit • Science/Technology/Innovation • Healthcare • RiskManagement • International
Education • HarvardandRadcliffeColleges,A.B.,Biology • HarvardUniversity,A.M.andPh.D.,Biology
Other • Co-ChairontheTaskForceonScienceandEngineeringatHarvardUniversity • Co-ChairontheAdvisoryCouncilofLifeSciNYC
Peter J. Arduini Director Since:2016Age:55 Board Committees• AuditCommittee• CompensationandManagementDevelopmentCommittee
• IntegrationCommittee Other Public Boards• IntegraLifeSciencesHoldingCorporation
Experience • PresidentandChiefExecutiveOfficeratIntegraLifeSciencesHoldingsCorporation,aglobalmedicaltechnologycompany(January2012-present),PresidentandChiefOperatingOfficer(November2010-January2012)
• CorporateVicePresidentandPresidentofMedicationDelivery,BaxterHealthcare(2005-2010)
• Spent15yearsatGeneralElectricHealthcareinavarietyofmanagementrolesfordomesticandglobalbusinesses,culminatinginleadingtheglobalfunctionalimagingbusiness
Key Skills and Experience • PublicCompanyCEO/CFO • Healthcare • Financial • Sales&Marketing • Science/Technology/Innovation • RiskManagement • International
Education • SusquehannaUniversity,B.S.,BusinessManagement • NorthwesternUniversity,KelloggSchoolofManagement,M.B.A.
Other • BoardofDirectorsofADVAMED(theAdvancedMedicalTechnologyAssociation) • BoardofDirectorsofMDIC(theMedicalDeviceInnovationConsortium) • BoardofDirectorsoftheNationalItalianAmericanFoundation • BoardofTrusteesofSusquehannaUniversity
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Robert Bertolini Director Since:2017Age:58 Board Committees• AuditCommittee(Chair)• CommitteeonDirectorsandCorporateGovernance
Other Public Boards• CharlesRiverLaboratoriesInternational,Inc.• IdorsiaLtd.
Experience • PresidentandChiefFinancialOfficerofBausch&LombIncorporateduntilitsacquisitionbyValeantPharmaceuticals(February2013-August2013)
• ExecutiveVicePresidentandChiefFinancialOfficeratScheringPloughCorp.throughitsmergerwithMerck&Co.,Inc.(November2003-November2009)withresponsibilityfortax,accountingandfinancialassetmanagement
• Spent20yearsatPricewaterhouseCoopersLLP,ultimatelyleadingitsglobalpharmaceuticalindustrypractice
Key Skills and Experience • PublicCompanyCEO/CFO • Financial • Science/Technology/Innovation • Sales&Marketing • RiskManagement • Healthcare • International
Education • Rutgers,B.A.,Economics
Michael W. Bonney Director Since:2019Age:61 Board Committees• AuditCommittee• Science&TechnologyCommittee Other Public Boards• KaleidoBiosciences,Inc.(Chair)• AlnylamPharmaceuticals(Chair)• MagentaTherapeutics(Chair)
Former• CelgeneCorporation• GlobalBloodTherapeutics,Inc.• NPSPharmaceuticals,Inc.• SareptaTherapeuticsInc.• SyrosPharmaceuticals
Experience • ExecutiveChairoftheBoardofKaleidoBiosciences,Inc.(August2018-present);ChiefExecutiveOfficerandChairman(June2017-August2018)
• PartnerofThirdRockVentures,LLC.(January-July2016) • ChiefExecutiveOfficerandamemberoftheBoardofDirectorsofCubistPharmaceuticalsInc.untilacquiredbyMerck&Co.,Inc.(June2003-December2014)
• VicePresident,SalesandMarketingatBiogen,Inc. • SpentelevenyearsatZenecaPharmaceuticals • ChairoftheBoardofTrusteesofBatesCollege(2010-2019)
Key Skills and Experience • PublicCompanyCEO/CFO • Healthcare • Financial • Science/Technology/Innovation • Sales&Marketing • RiskManagement • Academia/Non-Profit
Education • BatesCollege,B.A.,Economics
Other • DirectorofLifeSciencesCares• DirectorofGulfofMaineResearchInstitute • Boardmemberofthenon-profitRare
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Matthew W. Emmens Director Since:2017Age:68 Board Committees• CompensationandManagementDevelopmentCommittee
• IntegrationCommittee• Science&TechnologyCommittee
Other Public Boards Former• VertexPharmaceuticals
Experience • ChiefExecutiveOfficerofShirePLC(2003-2008);ChairmanoftheBoard(2008-2014) • Chairman,PresidentandChiefExecutiveOfficerofVertexPharmaceuticalsIncorporated(2009-2012)
• President,WorldwidePharmaceuticalsofMerckKGaA(1999-2003) • ChiefExecutiveOfficer,CommercialOperationsofAstraMerckInc.(1992-1999) Sales,MarketingandAdministrationpositionsforMerck&Co.,Inc.(1974-1991)
Key Skills and Experience • PublicCompanyCEO/CFO • Science/Technology/Innovation • Healthcare • Financial • RiskManagement • Sales&Marketing • International
Education • FairleighDickinsonUniversity,B.S.,BusinessAdministration
Julia A. Haller, M.D. Director Since:2019Age:65 Board Committees• Science&TechnologyCommittee• IntegrationCommittee
Other Public Boards Former• CelgeneCorporation
Experience • Ophthalmologist-in-ChiefofWillsEyeHospitalinPhiladelphia,PA,wheresheholdstheWilliamTasman,M.D.EndowedChair(2007-present)
• ProfessorandChairoftheDepartmentofOphthalmologyatSidneyKimmelMedicalCollegeatThomasJeffersonUniversityandThomasJeffersonUniversityHospitals(present)
• MemberoftheJohnsHopkinsfaculty,wheresheheldtheKatharineGrahamChairinOphthalmology(until2007)
• TrainedattheWilmerEyeInstituteatJohnsHopkinswheresheservedasthefirstfemaleChiefResident
Key Skills and Experience • Academia/Non-Profit • Healthcare • Science/Technology/Innovation • Financial • RiskManagement
Education • PrincetonUniversity,A.B.,Philosophy • HarvardMedicalSchool,M.D.
Other • Director(formerPresident),AssociationofUniversityProfessorsofOphthalmology • BoardofGovernors,ARVOFoundationforEyeResearch(AFER) • ViceChairofBoardofTrustees,TheCollegeofPhysiciansofPhiladelphia
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Dinesh C. Paliwal Director Since:2013Age:62 Board Committees• IntegrationCommittee(Chair)• CommitteeonDirectorsandCorporateGovernance
• CompensationandManagementDevelopmentCommittee
Other Public Boards• NestléS.A.• RaytheonCompany
Former• ADTCorporation
Experience • PresidentandChiefExecutiveOfficeratHarmanInternational(2007-April2020);ChairmanuntilitsacquisitionbySamsung(July2008-March2017)
• MemberoftheGroupExecutiveCommitteeofABBLtd.(January2001-June2007);PresidentofGlobalMarketsandTechnology(January2006-June2007),ChairmanandChiefExecutiveOfficerofABBNorthAmerica(January2004-June2007),PresidentandChiefExecutiveOfficerofABBAutomationTechnologiesDivision(October2002-December2005)
Key Skills and Experience • PublicCompanyCEO/CFO • International • Financial • Science/Technology/Innovation • RiskManagement • Sales&Marketing
Education • St.JohnsCollege,AgraUniversity,India,B.S.,PhysicsandChemistry • IndianInstituteofTechnologyatRoorkee,Roorkee,India,M.S.,Engineering • MiamiUniversity,Oxford,Ohio,M.S.,AppliedScienceandEngineering,M.B.A.
Other • MemberoftheCEOBusinessRoundtable • MemberoftheadvisoryboardoftheWoodrowWilsonCenter • MemberoftheBoardofDirectorsoftheBusinessAdvisoryCouncilofFarmerSchoolofBusiness,MiamiUniversityofOhio
• MemberoftheBoardofDirectorsoftheU.S.IndianBusinessCouncil
Theodore R. Samuels Director Since:2017Age:65 Board Committees• Audit• CompensationandManagementDevelopmentCommittee
Other Public Boards• PerrigoCompanyplc• Stamps.com
Experience • PresidentoftheCapitalGuardianTrustCompany(2010-2016);CapitalGrouprepresentativeforFocusingCapitalontheLongTerm(2014-2015);Boardmember,CapitalGroup(2005-2009);CapitalGroupAuditCommittee;CapitalGroupFinanceCommittee(2013-2016);ChairofCapitalInternational(NorthAmerica)ProxyCommittee;CapitalGuardianTrustCompany(NorthAmerican)ManagementCommitteemember;portfoliomanager1990-2016andanalyst1981-1990
Key Skills and Experience • Financial • Sales&Marketing • RiskManagement • International
Education • HarvardUniversity,A.B.,Economics • HarvardBusinessSchool,M.B.A.
Other • DirectorofBJCHealthcareSystem • DirectorofChildren’sHospitalLosAngeles,whereheservedasCo-chairoftheBoardofTrusteesfrom2012until2015
• DirectoroftheEdwardMallinckrodt,Jr.Foundation • DirectorofTheFundforPartnershipforSuccess!,wherehealsoservesasanadvisor. • Director,ResearchCorporationTechnologies,Inc. • TrusteeoftheJohnBurroughsSchool • ExecutiveCommittee,HarvardCollegeFund
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Gerald L. Storch Director Since:2012Age:63 Board Committees• Audit• CompensationandManagementDevelopmentCommittee(Chair)
Other Public Boards Former• SupervaluInc.
Experience • ChiefExecutiveOfficerofStorchAdvisors(November2017-present)and(November2013-January2015)
• ChiefExecutiveOfficerofHudson’sBayCompany,aleadingownerandoperatorofdepartmentstores,includingSaksFifthAvenue,Lord&Taylor,Hudson’sBayDepartmentStores,HomeOutfitters,SaksOFF5th,Kaufhof,InnoandtheecommercebusinessGilt.(January2015-November2017)
• Toys“R”Us,Inc.,Chairman(February2006-November2013),ChiefExecutiveOfficer(February2006-May2013)
• TargetCorporation(1993-2006);joinedasSeniorVicePresidentofStrategyandservedinrolesofincreasingseniorityuntilViceChairman
• PartneratMcKinsey&Company
Key Skills and Experience • PublicCompanyCEO/CFO • International • Financial • Sales&Marketing • RiskManagement
Education • HarvardUniversity,A.B.,Government&Economics • HarvardUniversity,M.B.A. • HarvardUniversity,J.D.
Other • DirectorofFanatics,Inc.
Karen H. Vousden, Ph.D. Director Since:2018Age:62 Board Committees• Science&TechnologyCommittee(Chair)• CompensationandManagementDevelopmentCommittee
• IntegrationCommittee
Experience • SeniorGroupLeaderattheFrancisCrickInstituteinLondon(February2017-present) • ChiefScientistofCancerResearchUK(July2016-present) • DirectoroftheCancerResearch—UK(CRUK)BeatsonInstituteinGlasgow(2002-2016)
• HeldleadershiprolesattheNationalCancerInstituteinMaryland(1995-2002)
Key Skills and Experience • PublicCompanyCEO/CFO • Academia/Non-Profit • Healthcare • Science/Technology/Innovation • International
Education • QueenMaryCollege-UniversityofLondon,B.Sc.,Genetics&Microbiology • QueenMaryCollege-UniversityofLondon,Ph.D.,Genetics
Other • MemberoftheScienceAdvisoryBoardofOncodeInstitute,theGurdonInstitute,TheNetherlandsCancerInstitute,theUniversityCancerCenterFrankfurt,Grail,Inc.,LudwigInstituteforCancerResearch,PMVPharma,RazeTherapeuticsandSwissInstituteforExperimentalCancerResearch
• CouncilmemberoftheEuropeanMolecularBiologyOrganization • PresidentoftheBritishAssociationofCancerResearch • FellowoftheRoyalSocietyandaForeignAssociateoftheNationalAcademyofSciences
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Phyllis R. Yale Director Since:2019Age:62 Board Committees• CommitteeonDirectorsandCorporateGovernance
Other Public Boards• DaVita,Inc.
Experience • WithBain&Company(1982-present);AdvisoryPartner• HasservedinanumberofleadershiprolesandhasbeenaleaderinbuildingBain'shealthcarepractice
Key Skills and Experience • Financial • RiskManagement • Healthcare • Academia/Non-Profit
Education • HarvardandRadcliffeColleges,A.B.,Economics • HarvardBusinessSchool,M.B.A.
Other • ChairoftheBoardofBlueCrossBlueShieldofMassachusetts • MemberoftheadvisoryboardofHarvardBusinessSchoolHealthcareInitiative• MemberoftheadvisoryboardoftheHealthPolicyandManagementDepartmentattheHarvardChanSchoolofPublicHealth
• MemberoftheboardofTheBridgespanGroup • MemberoftheboardofTheTrusteesofReservations,aconservationandpreservationorganization
HowWeAreSelectedandElected
Our executives and employees put a great deal of thought into talent recruitment and retention, and we at theBoard level are similarly committed to identifying and attracting the best directors for our company. In thesubsectionsthatfollowwedescribeourstandards,policiesandprocessestoachievingthisgoal.
Majority Vote Standard and Mandatory Resignation Policy
Amajorityofthevotescastisrequiredtoelectdirectors.Anycurrentdirectorwhodoesnotreceiveamajorityofvotes cast must tender their resignation as a director within 10 business days after the certification of theshareholder vote. The Committee on Directors and Corporate Governance, without participation by any directortenderingtheir resignation, will consider theresignationoffer andrecommendtotheBoardwhether to accept it.The Board, without participation by any director tendering their resignation, will act on the Committee’srecommendation at its next regularly scheduled meeting to be held within 60 days after the certification of theshareholder vote. Wewill promptly disclose the Board’s decision and the reasons for that decision in a broadlydisseminatedpressreleasethatwillalsobefurnishedtotheU.S.SecuritiesandExchangeCommission(SEC)onForm8-K.Ifanynomineeisunabletoserve,proxieswillbevotedinfavoroftheremainderofthosenominatedandmaybevotedforsubstitutenominees,unlessourBoardofDirectorsprovidesforalessernumberofdirectors.
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Criteria for Board Membership
As specified in our Corporate Governance Guidelines, members of our Board should be persons with broadexperienceinareasimportanttotheoperationandlong-termsuccessofourcompany.Theseincludeareassuchas business, science, medicine, finance/accounting, law, business strategy, crisis management, corporategovernance,educationorgovernment.Boardmembersshouldpossessqualitiesreflectingintegrity,independence,leadership,goodbusinessjudgment,wisdom,aninquiringmind,vision,aprovenrecordofaccomplishmentandanability to work well with others. The Corporate Governance Guidelines also express the Board’s belief that itsmembership should continue to reflect a diversity of gender, race, ethnicity, age, sexual orientation and genderidentity.
All Director Nominees Possess:
Director Independence
11 of our 12 director nominees are currently independent
OurCorporateGovernanceGuidelinesprovidethatasubstantialmajorityofBoardmembersbeindependentfrommanagement,andtheBoardhasadoptedindependencestandardsthatmeetthelistingstandardsoftheNewYorkStockExchange. OurBoardhasdeterminedthat, except for Giovanni Caforio, M.D., whois ourChief ExecutiveOfficer, each of our directors and each director nominee for election at this Annual Meeting is independent ofBristolMyersSquibbanditsmanagement.
Process for Determining Independence
In accordance with our Corporate Governance Guidelines, our Board undertakes an annual review of directorindependence. In February 2020, the Board considered all commercial and charitable relationships of ourindependentdirectorsanddirectornominees,includingthefollowingrelationships,whichweredeemedimmaterialunderourcategoricalstandards(seeExhibitA):
• Messrs. Bertolini, Paliwal and Samuels and Ms. Yale are directors of companies that received paymentfromthecompanyfor property or servicesin anaggregateamount that did not exceedthegreater of $1million or 2% of such other company’s consolidated gross revenues. For each transaction, the Boarddeterminedthatthedirectordidnotinitiateornegotiatethetransactionandthatthetransactionwasenteredintointheordinarycourseofbusiness.
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• Drs. Sato,HallerandVousden,Mr. SamuelsandMs.Yale,oroneoftheir immediatefamilymembers, isemployed by, or servesas a directorof, a businessor educational or medical institutionwith which weengageinordinarycoursebusinesstransactions.Thedirectorsdidnotinitiateornegotiateanytransactionwith such institutions and the payments made did not exceed the greater of $1 million or 2% of suchinstitutions’respectiveconsolidatedgrossrevenues.
• Mr. Samuels is a director of a charitable or nonprofit organization to which the Bristol Myers SquibbFoundationmadecharitablecontributions,which,intheaggregate,didnotexceedthegreaterof$1millionor2%ofsuchorganizations’respectiveconsolidatedgrossrevenues.
TheBoarddeterminedthatnoneoftheserelationshipsimpairtheindependenceofthesedirectorsundertheNewYorkStockExchange’sindependencestandardsorotherwise.
Director Succession Planning and Identification of Board Candidates
Regular Assessment of Our Board Composition
TheCommitteeonDirectorsandCorporateGovernanceregularlyassessestheappropriatesizeandcompositionof our Board. This assessment incorporates the results of the Board’s annual evaluation process, which wasrecentlyenhancedin2017asdescribedmorefullyunder“AnnualEvaluationProcess”beginningonpage13.TheCommitteealsoconsiderssuccessionplanningforitsdirectors.
Identification and Selection of Director Nominees
InconnectionwiththeBoard’songoingdirectoridentificationprocess,theCommitteeonDirectorsandCorporateGovernance,inconsultationwiththeChairman,conductsaninitialevaluationofprospectivenomineesagainsttheestablished Board membership criteria discussed above. The Committee also reviews the skills of the currentdirectors and compares them to the particular skills of potential candidates, keeping in mind the Board’scommitmenttomaintainmembersofdiverseexperienceandbackground.Inparticular,theBoardiscommittedtoidentifying and evaluating highly qualified women andunderrepresented ethnic group candidates as well ascandidates with other diverse backgrounds, industryexperience and other unique characteristics. Candidatesmay cometo the attention of the Committee on Directorsand Corporate Governance through current Boardmembers, third-party search firms, management,shareholders or others. Search firms together withmanagementanddirectorsdevelopacandidateprofilethatincludes the relevant skills and experiences being soughtat that time and incorporates the Board membershipcriteria.Prospectivecandidatesareidentifiedbasedontheprofile. Additionalinformationrelevanttothequalificationsof prospective nominees may be requested from third-party search firms, other directors, management or othersources.Afterthisinitialevaluation,prospectivenomineesmay be interviewed by telephone or in person by themembers of the Committee on Directors and CorporateGovernance,theChairman,theLeadIndependentDirectorand other directors, as applicable. After completing thisevaluation and interview process, the Committee on Directors and Corporate Governance makes arecommendation to thefull Boardasto thepersonswhoshouldbenominatedbyour Board, andthefull Boarddetermines the nominees after considering the recommendation and any additional information it may deemappropriate.InconnectionwiththeCelgeneTransaction,thecompanyagreedtoaddtwomembersoftheCelgeneBoardeffectiveattheclosingofthetransaction.Dr.HallerandMr.BonneywereelectedtojointheBoard,effectiveNovember20,2019,andwereidentifiedasapotentialcandidatesfor
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electiontoourBoardfromamongtheexistingCelgeneboardmembersandwereinterviewedbymembersoftheBoardandvettedbyathirdpartysearchfirmretainedbytheCommitteeonDirectorsandCorporateGovernance.Ms.Yale, whowaselectedto serveontheBoard, effective November 20, 2019, wasidentified andvettedasapotential candidatefor election toourBoardbyathird-party searchfirmretainedbytheCommitteeonDirectorsandCorporateGovernanceandwasinterviewedbymembersoftheBoard.
Shareholder Nominations for Director
TheCommitteeonDirectorsandCorporateGovernanceconsidersandevaluatesshareholderrecommendationsofnominees for election to our Board of Directors in the same manner as other director nominees. Shareholderrecommendations must be accompanied by disclosure, including written information about the recommendednominee’sbusinessexperienceandbackgroundwithconsentinwritingsignedbytherecommendednomineethatheorsheiswillingtobeconsideredasanomineeand,ifnominatedandelected,heorshewillserveasadirector.Shareholdersshouldsendtheirwrittenrecommendationsofnomineesaccompaniedbytherequireddocumentsto:Bristol-Myers Squibb Company, 430 East 29thStreet—14 thFloor, New York, New York 10016, Attention:CorporateSecretary.
Proxy Access Shareholder Right
Following extensive engagement with our shareholders, our Board determined to adopt proxy access in 2016,permittingashareholderorgroupofupto20shareholdersholding3%ofouroutstandingsharesofcommonstockfor at least threeyearstonominateanumberof directorsconstitutingthegreater of twodirectorsor20%ofthenumberofdirectorsonourBoard,assetforthindetailinourBylaws.Ifyouwishtoproposeanyactionpursuanttoourproxyaccessbylawprovision,youmustdeliveranoticetoBMScontainingcertaininformationsetforthinourBylaws,notlessthan120butnotmorethan150daysbeforetheanniversaryoftheprioryear’sfilingoftheproxymaterials.Forour2021AnnualMeeting,wemustreceivethisnoticebetweenOctober27,2020andNovember25,2020.Shareholdersshouldsendtheirnoticesto:Bristol-MyersSquibbCompany,430East29thStreet—14thFloor,NewYork,NewYork10016,Attention:CorporateSecretary.
Annual Evaluation Process
OurBoardrecognizesthecriticalroleBoardandCommitteeevaluationsplayinensuringtheeffectivefunctioningof our Board. It also believes in the importance of continuously improving the functioning of our Board andcommittees.UndertheleadershipandguidanceofourLeadIndependentDirector,theCommitteeonDirectorsandCorporate Governancecontinuously assessestheBoardevaluationprocess. In 2017, followingdiscussionswithandinput fromthefull Boardof Directors, theCommitteeenhancedtheBoardassessment processto includeawrittenquestionnaire. Thisyear, thedirectorscompletedthequestionnaireelectronically. Theformal2019BoardandCommitteeevaluationprocessesareasfollows:
• Board: Directorscompletedanelectronicquestionnaireonanunattributedbasisrespondingtoquestionsabout the Board andCommittee structure and responsibilities, Board culture and dynamics, adequacy ofinformationtotheBoard,Boardskillsandeffectiveness,andCommitteeeffectiveness.TherobustfeedbackandcommentsfromthedirectorswereanonymouslycompiledandthenwerepresentedbytheChairmanandtheLeadIndependentDirectortothefullBoardfordiscussionandaction.The2019BoardevaluationwascompletedinFebruary2020.
• Committees: Committee chairs selected a list of topics for their respective committees to evaluate anddiscuss,coveringbothsubstantiveandprocessaspectsofcommitteeperformance.Thelist ofdiscussiontopicsforeachcommitteewasdistributedtocommitteemembersinadvanceforconsideration.Committeechairsleddiscussionsinexecutivesessionsoftheirrespectivecommittees.CommitteechairsthenreportedtothefullBoardtheresultsoftheirrespectivecommittee’sevaluationandanyfollow-upactions.The2019Committee evaluations were completed in the beginning of 2019 and reported to the Board in February2020.
The formal annual Board and Committee evaluations are supplemented by regular informal one-on-onediscussionsbetweentheChairmanandChiefExecutiveOfficerandeachdirectorthroughouttheyear.TheLeadIndependent Director actively conveys directors’ feedback on an ongoing basis to our Chairman and ChiefExecutiveOfficerandhasregularone-on-onediscussionswiththeothermembersoftheBoard.
In response to feedback received fromthe annual evaluation process, wecompleted rotations in our committeememberships.
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HowWeGovernandAreGoverned
Director Orientation and Continuing Education
Directoreducationisanongoing,year-roundprocess,whichbeginswhenadirectorjoinsourBoard.UponjoiningourBoard,newdirectorsareprovidedwithacomprehensiveorientationtoourcompany,includingourbusiness,strategyandgovernance.Newdirectorsparticipateinanorientationprogramwithseniorbusinessandfunctionalleadersfromall areasof thecompany, duringwhichthereis discussiononstrategic priorities andkeyrisksandopportunities,andparticipateinsitevisitstooneormoreofourlocations.Onanongoingbasis,directorsreceivepresentationsonavarietyoftopicsrelatedtotheirworkontheBoardandwithinthebiopharmaceuticalindustry,bothfromseniormanagementandfromexpertsoutsideofthecompany.Wealsoencouragedirectorstoenrollincontinuingeducationprogramssponsoredbythirdpartiesatourexpense.
Active Board Oversight of Our Governance
Our business is managed under the direction of our Board of Directors pursuant to the Delaware GeneralCorporationLawandourBylaws.TheBoardhasresponsibilityforestablishingbroadcorporatepoliciesandfortheoverallperformanceofourcompany.TheBoardkeepsitselfinformedofcompanybusinessthroughregularwrittenreportsandanalysesanddiscussionswiththeChiefExecutiveOfficerandotherofficersofBristolMyersSquibb;byreviewingmaterialsprovidedtoBoardmembersbymanagementandbyoutsideadvisors;andbyparticipatinginBoardandBoardCommitteemeetings.
TheCommitteeonDirectorsandCorporateGovernancecontinuallyreviewscorporategovernanceissuesandisresponsible for identifying and recommending the adoption of corporate governance initiatives. In addition, ourCompensation and Management Development Committee regularly reviews compensation issues andrecommendsadoptionofpoliciesandproceduresthatstrengthenourcompensationpractices.The“CompensationDiscussionandAnalysis”beginningonpage33discussesmanyofthesepoliciesandprocedures.
The Board of Directors has adopted Corporate Governance Guidelines that govern its operation and that of itsCommittees.OurBoardannuallyreviewstheCorporateGovernanceGuidelinesand,fromtimetotime,ourBoardrevises themin response to changing regulatory requirements, evolving best practices and the concerns of ourshareholders and other constituents. Our Corporate Governance Guidelines may be viewed on our website atwww.bms.com/ourcompany/governance.
Board’s Role in Strategic Planning and Risk Oversight
OurBoardmeetsregularlytodiscussthestrategicdirectionandtheissuesandopportunitiesfacingourcompanyin light of trends and developments in the biopharmaceutical industry and general business environment. OurBoardhasbeeninstrumentalindeterminingournextstepsasacompany.
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TheBoardplaysacritical roleinthedeterminationofthetypesandappropriatelevelsof riskundertakenbythecompany.
• Annual strategy deep-dive. Eachyear,typicallyduringthesecondquarter,theBoardholdsanextensivemeetingwithseniormanagementdedicatedtodiscussingandreviewingourlong-termoperatingplansandoverall corporate strategy. A discussion of key risks to the plans and strategy as well as risk mitigationplansandactivitiesisledbyourChiefExecutiveOfficeraspartofthemeeting.
• Constant focus on strategy. Throughout the year, our Board provides guidance to management onstrategy andhelps to refine operating plans to implement the strategy. This was especially true in 2019.TheBoardwasconsistentlyinvolvedandmet8timesbetweenJune2018andJanuary2019todiscussthemeritsandriskoftheopportunitytoacquireCelgene.
• Dedicated to oversight of risk management. Our Board is responsible for risk oversight as part of itsfiduciarydutyofcaretomonitorbusinessoperationseffectively.
ForfurtherdiscussiononhowourBoardadministersitsstrategicplanningandriskoversightfunctionasawholeand through its Board Committees, please see the discussion under the header “How We Are Organized”beginningonpage20.
Risk Assessment of Compensation Policies and Practices
The Compensation and Management Development Committee annually conducts a worldwide review of ourmaterial compensation policies and practices. Based on this review, we have concluded that our materialcompensationpoliciesandpracticesarenotreasonablylikelytohaveamaterialadverseeffectonthecompany.On a global basis, our compensation programs contain many design features that mitigate the likelihood ofinducingexcessiveorinappropriaterisk-takingbehavior.Thesefeaturesinclude:
✔Balanceoffixedandvariablecompensation,withvariablecompensationtiedbothtoshort-termobjectivesandthelong-termvalueofourstockprice
✔Clawbackandrecoupmentprovisionsandpoliciespertainingtoannualincentivepayoutsandlong-termincentiveawards
✔Multiplemetricsinourincentiveprogramsthatbalancetop-line,bottom-lineandpipelineperformance ✔
Shareownershipandretentionguidelinesapplicabletoourseniorexecutives
✔ Capsinourincentiveprogrampayoutformulas ✔Equityawardpoliciesthatlimitriskbyhavingfixedannualgrantdates
✔Reasonablegoalsandobjectivesinourincentiveprograms ✔
Prohibitionofspeculativeandhedgingtransactionsbyallemployeesanddirectors
✔Payoutsmodifiedbaseduponindividualperformance,inclusiveofassessmentsagainstourBMSBehaviors ✔
Allnon-salesmanagersandexecutivesworldwideparticipateinthesameannualplanprogramthatpertainstoourNamedExecutiveOfficersandthathasbeenapprovedbytheCompensationandManagementDevelopmentCommittee
✔TheCompensationandManagementDevelopmentCommittee’sabilitytoexercisedownwarddiscretionindeterminingincentiveprogrampayouts
✔
MandatorytrainingonourPrinciplesofIntegrity:BMSStandardsofBusinessConductandEthics(thePrinciplesofIntegrity)andotherpoliciesthateducateouremployeesonappropriatebehaviorsandtheconsequencesoftakinginappropriateactions
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Meetings of Our Board
Our Board meets on a regularly scheduled basis during the year to review significant developments affectingBristolMyersSquibbandtoactonmattersrequiringBoardapproval.Italsoholdsspecialmeetingswhenimportantmatters require Board action between scheduled meetings. Members of senior management regularly attendBoard meetings to report on and discuss their areas of responsibility. In 2019, the Board met 12 times. TheaverageaggregateattendanceofdirectorsatBoardandcommitteemeetingswasover99%.Nodirectorattendedfewerthan93%oftheaggregatenumberofBoardandcommitteemeetingsduringtheperiodheorsheserved.Inaddition,ourindependentdirectorsmet10timesduring2019todiscusssuchtopicsasourindependentdirectorsdetermined,includingtheevaluationoftheperformanceofourcurrentChiefExecutiveOfficer.
Annual Meeting of Shareholders
Directorsarestronglyencouraged,butnotrequired,toattendtheAnnualMeetingofShareholders.Allofthe2019nomineesfordirectorattendedour2019AnnualMeetingofShareholdersexceptforMr.Arduini,whohadalong-standingpreviouscommitment.
Codes of Conduct
ThePrinciplesofIntegrityadoptedbyourBoardofDirectorssetforthimportantcompanypoliciesandproceduresinconductingourbusinessinalegal,ethicalandresponsiblemanner.Thesestandardsareapplicabletoallofouremployees,includingtheChiefExecutiveOfficer,theChiefFinancialOfficerandtheController.
Inaddition,theAuditCommitteehasadoptedtheCodeofEthicsforSeniorFinancialOfficersthatsupplementsthePrinciplesofIntegritybyprovidingmorespecificrequirementsandguidanceoncertaintopics.TheCodeofEthicsforSeniorFinancialOfficersappliestotheChiefExecutiveOfficer,theChiefFinancialOfficer,theController,theTreasurerandtheheadsofmajoroperatingunits.
OurBoardhasalsoadoptedtheCodeofBusinessConductandEthicsforDirectorsthatappliestoalldirectorsandsetsforthguidancewithrespecttorecognizingandhandlingareasofethicalissues.
ThePrinciplesofIntegrity,theCodeofEthicsforSeniorFinancialOfficersandtheCodeofBusinessConductandEthics for Directors are available on our website at www.bms.com/ourcompany/governance. We will post anysubstantiveamendmentsto,orwaiversfrom,applicableprovisionsofourPrinciples,ourCodeofEthicsforSeniorFinancial Officers, and our Code of Business Conduct and Ethics for Directors on our website atwww.bms.com/ourcompany/governancewithintwodaysfollowingthedateofsuchamendmentorwaiver.
EmployeesarerequiredtoreportanyconducttheybelieveingoodfaithtobeanactualorapparentviolationofourCodes of Conduct. In addition, as required under the Sarbanes-Oxley Act of 2002, the Audit Committee hasestablishedprocedurestoreceive,retainandtreatcomplaintsreceivedregardingaccounting,internalaccountingcontrols, or auditing matters and the confidential, anonymous submission by company employees of concernsregardingquestionableaccountingorauditingmatters.
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Related Party Transactions
TheBoardhasadoptedawrittenpolicyandproceduresforthereviewandapprovaloftransactionsinvolvingthecompanyandrelatedparties,suchasdirectors,executiveofficersandtheirimmediatefamilymembers.Thepolicycoversanytransactionorseriesoftransactions(an“interestedtransaction”)inwhichtheamountinvolvedexceeds$120,000, thecompanyis a participant, anda related party has a direct or indirect material interest (other thansolelyasaresultofbeingadirectororlessthan10%beneficialownerofanotherentity).Allinterestedtransactionsaresubjecttoapprovalorratificationinaccordancewiththefollowingprocedures:
• Managementwillberesponsiblefordeterminingwhetheratransactionisaninterestedtransactionrequiringreviewunderthispolicy,inwhichcasethetransactionwillbedisclosedtotheCommitteeonDirectorsandCorporateGovernance(the“GovernanceCommittee”).
• The Governance Committee will review the relevant facts and circumstances, including, among otherthings,whethertheinterestedtransactionisontermsnolessfavorablethantermsgenerallyavailabletoanunaffiliated third-party under the same or ordinary circumstances and the related party’s interest in thetransaction.
• If it isimpracticalorundesirabletowaituntil aGovernanceCommitteemeetingtocompleteaninterestedtransaction,theChairoftheGovernanceCommittee,inconsultationwiththeGeneralCounsel,mayreviewand approve the transaction, which approval must be ratified by the Governance Committee at its nextmeeting.
• In the event the company becomes aware of an interested transaction that has not been approved, theGovernanceCommitteewillevaluatealloptionsavailabletothecompany,includingratification,revisionortermination of such transaction and take such course of action as the Governance Committee deemsappropriateunderthecircumstances.
• Nodirectorwillparticipateinanydiscussionorapprovaloftheinterestedtransactionforwhichheorsheisa related party, except that the director will provide all material information concerning the interestedtransactiontotheGovernanceCommittee.
• If an interested transaction is ongoing, the Governance Committee may establish guidelines formanagement to follow in its ongoing dealings with the related party and will review and assess suchongoingrelationshipsonatleastanannualbasis.
• Certain types of interested transactions are deemed to be pre-approved or ratified by the GovernanceCommittee,asapplicable,eveniftheamountinvolvedwillexceed$120,000,includingtheemploymentofexecutive officers, director compensation, certain transactions with other companies or charitablecontributions, transactions where all shareholders receive proportional benefits, transactions involvingcompetitivebids,regulatedtransactionsandcertainbanking-relatedservices.
BlackRock, Inc. (BlackRock) andTheVanguardGroup(Vanguard) areeachconsidereda“RelatedParty” underourrelatedpartytransactionpolicybecausetheyeachbeneficiallyownmorethan5%ofouroutstandingcommonstock. TheGovernance Committee ratified and approved the following related party transactions in accordancewithourpolicyandBylaws:
• Certain of our retirement plans use BlackRock and its affiliates to provide investment managementservices.Inaddition,wehavecertaininvestmentsinBlackRockmanagedinvestmentfunds.Inconnectionwiththeseservices,wepaidBlackRockapproximately$4.5millioninfeesduring2019.
• Vanguardactsasaninvestmentmanagerwithrespecttocertaininvestmentoptionsunderoursavingsandthrift plans. Participants in the plans pay Vanguard’s investment management fees if they invest ininvestment options managed by Vanguard; neither the plans themselves nor the company pays feesdirectlytoVanguard.Inconnectionwiththeseservices,Vanguardreceivedapproximately$594,118infeesduring2019.
TheGovernanceCommitteeratifiedtheaboverelationshipsonthebasisthattheseentities’ownershipofourstockplaysnoroleinthebusinessrelationshipbetweenusandthem,andthattheengagementofeachentitywasontermsnomorefavorabletothemthantermsthatwouldbeavailabletounaffiliatedthirdpartiesunderthesameorsimilarcircumstances.
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Disclosure Regarding Political Activities
Weprovidesemi-annualdisclosureonourwebsiteatthelinknotedbelowofall political contributionstopoliticalcommittees,partiesorcandidatesonbothstateandfederallevelsthataremadebyouremployeepoliticalactioncommittee,aswellasannualdisclosureoftheportionofourduesorotherpaymentsmadetotradeassociationstowhichwegive$50,000ormorethatcanbeattributedtolobbyingexpenditures.Pleaseseethecompany'swebsiteat:https://www.bms.com/about-us/sustainability/economic-responsibility/political-contributions.htmlunder “PoliticalContributions.”
Global Corporate Citizenship & Sustainability
Patients are at the center of everything we do. Our work is focused on the discovery and development ofmedicines that transform patients’ lives in a way that incorporates good corporate citizenship, environmentalstewardship and social responsibility. This year, we celebrate our 10th year as a member of the UN GlobalCompact and 20 years’ of setting global Sustainability Goals. These commitments reflect our comprehensiveapproach toward protecting humanand natural resources, nowand in the future. For us, Sustainability is muchmorethanmeetingtargets–itisintegratedintoourcultureandispartofourdailythoughtprocess.Thisincludesensuringourclinicaltrialsreflectrealworldpatientpopulationsandtheincorporationofinnovativetechnologiestodrive our R&D and manufacturing operations. We continue to bring hope to patients with serious disease bybuildingcapacityandstrengtheningcommunityservicestoensurenopatientisleftbehind.OurSustainability2020Goalsare:
• Accelerate innovation to develop transformative medicines—By 2020, enable Speed to Patients byoptimizingdevelopmenttimelinessuchasR&Dprocesses,regulatoryreviewanddatapackaging.Thegoalalso focuses on improving clinical trial patient diversity and satisfaction. For example, by 2020, we willrecruit clinical trial patientsrepresentingthereal worldpatientpopulationandwill conductR&Dprogramswith transparency, through public disclosure of all ongoing clinical trials and trial results for approvedproducts.
• Enhance patient access to medicines—Use existing approaches such as tiered pricing, voluntarylicensing, reimbursement support, patient assistance programs and our Bristol-Myers Squibb Foundationpartnerships to provide greater access to our medicines in global markets. For example, by 2020 allmarketedproductswillhaveaccessplans.
• Be the employer of choice and the champion of safety—Empowerandengageourpeoplebyimprovingsafebehaviorsandbuildingamoregloballydiverseandinclusiveworkforce;beingarecognizedemployerofchoice.Forexample,by2020,wewillengageourpeopleinacultureofdiversityandinclusionthatdrivesbusinessperformancethroughthevaluechain,andleveragestheirinsightstobettermeetpatientneeds.
• Drive supply chain leadership on quality and integrity—Ensure reliable supply, engaging with ourcritical suppliers and assessing those in high-risk countries for conformance with labor and integritystandards.Asanexample,all critical manufacturingsupplierswill beassessedforriskandriskmitigationperformance,withresultsincorporatedinsourcingdecisions.
• Innovate to support a green, healthy planet—Continue to improve our environmental footprint withgreenhousegasandwater reduction goals andintegrate greendesignandreducewastethroughout ourproductportfolio.AmongBristolMyersSquibb’sSustainability2020Goaltargetsistoreducewateruseandgreenhouse gas emissions by 5 percent (absolute) or more from the 2015 baseline and integrate greendesignandreducewastethroughoutourportfolio.
Whilewearepleasedwiththeprogresswehavemadetodate, weknowthereis still muchmoreworktodotoensure the health of the planet and its people. We are actively engaged with our shareholders and other keystakeholdersonourenvironmental,socialandgovernanceperformancerelativetoourfinancialresultsandonthedevelopment of our next generation sustainability strategy and goals for the integrated company. Our Boardremains actively engaged on these issues with direct oversight by our Committee on Directors and CorporateGovernance. For more information and to provide feedback, please see the company’s website athttps://www.bms.com/about-us/sustainability.htmlunder“Sustainability.”
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Responsible Drug Pricing Strategy & Transparency
Our CommitmentWefirmlybelievethatprescriptionmedicinesaresuchavitalpartofhumanhealthcarethateveryonewhoneedsthemshouldhaveaccesstothem.Wehavebeen,andremain,committedtofacilitatingaccesstoourmedicines,andtofurtheringourMissiontohelppatientsprevail overseriousdiseases.Wepriceourmedicinesbasedonanumberoffactors,including,amongothers,thevalueofscientificinnovationforpatientsandsocietyinthecontextofoverallhealthcarespend;economicfactorsimpactingthehealthcaresystems’capacitytoprovideappropriate,rapid and sustainable access to patients; and the necessity to sustain our research and development (R&D)investment in innovative, high-qualitymedicines that address the unmet medical needs of patients with seriousdiseasesandimprovetheirlifeneeds.At Bristol Myers Squibb, we believe in the value our medicines bring to patients and society and our role intransforming care to help patients live longer, healthier and more productive lives. We focus on medicines thatmeaningfully change patient outcomes and improve quality of life, and over the last 30 years, we have madesignificant contributions in areas such as HIV, hepatitis, cardiovascular disease and, most recently, immuno-oncology. After our acquisition of Celgene Corporation, we arenowmoving to the next generation of treatmentoptions, suchasCAR-T. Wearepursuingmedicineswithtransformationalpotential indiseasessuchascancer,hematology, heart failure, fibrosis, multiple sclerosis, psoriasis and neuroscience. Many of our medicines arebreakthroughs in innovation, truly differentiated medicines that have changed the standard of care and helppatients live longer and healthier lives. For example, in melanoma, prior to the availability of immuno-oncologytreatmentoptions,25%ofpatientsdiagnosedwithmetastaticmelanomasurvivedone(1)year.Thisincreasedto74%withimmuno-oncologytherapies.ThroughRevlimidandPomalyst,wetransformedthetreatmentofmultiplemyeloma. Advances like these have transformed the treatment of certain cancers and changed survivalexpectationsforpatients.Collectively,wehavedeliverednine(9)newproductsinthepastfive(5)years,including18 major market approvals in 2019. These breakthrough medicines are possible because of our consistentinvestment inresearchanddevelopment. WehaveemergedasanindustryleaderinR&Dinvestment, investingapproximately$6billionannuallyoverthelastthreeyears,roughly27%ofourrevenue.Therefore,ourgoalistoensure access to currently approved medicines while continuing to fuel the development of medicines for thefuture.
Governance/TransparencyWetakeathoughtfulapproachtopricingourproductsandhaveinternalprocessesandcontrolsinplacetoensurethatpricing decisions are thoroughly and appropriately vetted prior to implementation with involvement fromthehighestlevelsofmanagement.ThisprocessincludesroutinepresentationstotheBoardondrugpricingstrategies.Inaddition,onbalance,overthelastfewyears, ourrevenuegrowthhasbeenprimarily attributabletoincreasedvolume arising from increased demand for our products rather than price increases. We have and continue todiscloseinourannualreportonForm10-KandourquarterlyreportsonForm10-Q,theaveragenetsellingpriceincreaseforourlegacyBMSproducts.Ouraveragenetsellingpriceincreasefor2015,2016,2017,2018and2019was approximately, 3%, 5%, 2%, 0% and 0%, respectively. We believe we have the appropriate governancemechanismsandinternalcontrolsandprocessesinplacetoensurethatpricingdecisionsaremadeinlinewithourvaluesandcommitment.In addition, the Compensation Management and Development Committee (“Committee”) annually completes athoughtful andrigorousevaluationofourexecutivecompensationprogramtoensurethattheprogramisalignedwithourMissionanddeliversshareholdervalue,whilenotencouragingexcessiveorinappropriaterisk-takingbyourexecutives.Whensettingincentiveplantargetseachyear,theCommitteeisawareoftherisksassociatedwithdrugpricing,amongotherthings,andensuresourplansdonotincentivizeriskybehaviorinordertomeettargets.
Access/Regulatory ReformWeremaincommittedtoworkingwithpolicymakers,thoughtleaders,patientadvocatesandotherstakeholderstoshape a comprehensive system that provides accessible and affordable health care with the goal of achievinguniversal coverage and quality patient care, while continuing to fuel innovation. We support efforts to makemedicinesmoreaffordable,fromaccessassistancetoinnovativewaystoaddresscostsmoredirectly.Individualswhocannotaffordourmedicinesandhavenoothermeansof coverage, publicor private, maybeeligibletobeprovided with our medicines, at no charge, through a number of programs, including various independentcharitable organizations, including the Bristol-Myers Squibb Patient Assistance Program Foundation, Inc., anindependent 501(c)(3) charitable organization,and other company sponsored patient assistance programs. Weestimate that in 2019alone, wedonatedmore than$1.3 billion worth of medicines to assist more than100,000patientsintheUnitedStatesatnocosttothesepatients.
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We promote health equity globally and strive to increase access to life-saving medicines for populationsdisproportionatelyaffectedbyseriousdiseasesandconditions,givingnewhopeandhelptosomeoftheworld’smostvulnerablepeople.Indeed,increasingaccesstopatientsisoneofour2020SustainabilityGoals.InadditiontoourpatientassistanceprogramsintheU.S.andoutsideoftheU.S.,wehavedifferentmechanismsofpatientassistanceprograms,rebatesandco-payassistanceprogramsineachcountry.Forexample,wesupporttheuseoftieredpricingbetweendistinctgroupsofcountries,ininstancesofdisproportionatediseaseimpact.Forinstance,for over adecade, Bristol Myers Squibbhasmaintainedapolicy of tieredpricingandvoluntarylicensingfor ourHIVandHCVmedicinesinanattempttoreducebarriersthatdelaybroadandacceleratedaccesstotreatmentforpatientsaroundtheworld.Inaddition,aspartofourcommitmenttohelpingpatientsprevailoverseriousdiseases,wealso drive and support a number of programs designedto build capacity, raise patient awareness, includingprevention and diagnosis and access to treatment and care. Through the Bristol-Myers Squibb Foundation, anindependent 501(c)(3) charitable organization, we support community-based programs that promote cancerawareness,screening,careandsupportamonghigh-riskpopulationsintheUnitedStates,aswellasChina,Brazilandsub-SaharanAfrica.Severalexamplesare:SECURETHEFUTUREandDelivering Hope.
Asacompany,wehavemaderemarkableimprovementsindeliveringlife-savingmedicinestopatientsandofferingcreative solutions for access; however, we understand concerns that our healthcare system as a whole is tooexpensive,andweareinterestedinfindingwaystoimproveoursystem.Therefore,were-assertourcommitmenttoproactively workwith governments, payers, health care providers andother stakeholders aroundtheworld todevelopsustainablesolutionsthatwillbetterassistpatientsinneed.
HowWeAreOrganized
Board Leadership Structure
The company’s governance documents provide the Board with flexibility to select the appropriate leadershipstructure for the company. They establish well-defined responsibilities with respect to the Chairman and LeadIndependent Director roles, including the requirement that the Board have a Lead Independent Director if theChairman is not an independent director. This information is set forth in more detail on our website atwww.bms.com/ourcompany/governance.
Our Board has dedicated significant consideration to our leadership structure, particularly in connection with theelection of Dr. Caforio as the Chairman of the Board at the 2017 Annual Meeting. The Board’s analysis of ourleadershipstructuretookintoaccountmanyfactors, includingthespecificneedsoftheBoardandthecompany,thestrongroleofourLeadIndependentDirector,ourCorporateGovernanceGuidelines(includingourgovernancepractices that provide for independent oversight of management), the acquisition of Celgene and integration ofCelgene businesses into our company, the challenges specific to our company, and the best interests of ourshareholders.Afterthoughtfulandrigorousconsideration,theBoarddeterminedthatcombiningtheChairmanandChiefExecutiveOfficerpositionsandelectingDr.CaforioastheChairmanoftheBoardcontinuestobeinthebestinterestofthecompanyandourshareholders,andisthebestleadershipforthecompanyanditsshareholdersatthis time. Specifically, our Board believes that to have Dr. Caforio serve in the combined role of Chairman andChiefExecutiveOfficerconfersdistinctadvantagesatthistime,including:
• having a Chairman who can draw on detailed institutional knowledge of the company and industryexperience from serving as Chief Executive Officer, providing the Board with focused leadership,particularlyindiscussionsaboutthecompany’sstrategy;
• acombinedroleensuresthatthecompanypresentsitsmessageandstrategytoallstakeholders,includingshareholders,employeesandpatients,withaunifiedvoice;and
• thestructureallowsforefficientdecision-makingandfocusedaccountability.
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The Board recognizes the importance of appointing a strong Lead Independent Director to maintain acounterbalancingstructuretoensurethattheBoardfunctionsinanappropriatelyindependentmanner.TheLeadIndependent Director is selectedannually by theindependent directors. Theindependent directors haveelectedDr.VickiSatotoserveinthatposition.
TheLeadIndependentDirector’sresponsibilitiesinclude,amongothers:
✔ServingasliaisonbetweentheindependentdirectorsandtheChairmanandChiefExecutiveOfficer ✔
Approvingthequality,quantityandtimelinessofinformationsenttotheBoard
✔Reviewingandapprovingmeetingagendasandsufficiencyoftime ✔
ServingakeyroleinBoardandChiefExecutiveOfficerevaluations
✔ Callingmeetingsoftheindependentdirectors ✔Respondingdirectlytoshareholderandstakeholderquestions,asappropriate
✔
PresidingatallmeetingsoftheindependentdirectorsandanyBoardmeetingwhentheChairmanandChiefExecutiveOfficerisnotpresent,includingexecutivesessionsoftheindependentdirectors
✔ProvidingfeedbackfromexecutivesessionsoftheindependentdirectorstotheChairmanandChiefExecutiveOfficerandotherseniormanagement
✔ Engagingwithmajorshareholders,asappropriate ✔ Recommendingadvisorsandconsultants
TheBoardbelievesthisstructureprovidesaneffective,high-functioningBoard,aswellasappropriatesafeguardsandoversight.OurBoardwillcontinuetoevaluateitsleadershipstructureinlightofchangingcircumstancesandwill evaluatetheBoard’sleadershipstructureonatleastanannualbasisandmakechangesatsuchtimesasitdeemsappropriate.
Our Board administers its strategic planning and risk oversight function as a whole and through its BoardCommittees.ThefollowingareexamplesofhowourBoardCommitteesareinvolvedinthisprocess:
Audit CommitteeRegularlyreviewsanddiscusseswithmanagementourprocesstoassessandmanageenterpriserisks,includingthoserelatedtomarket/environmental,strategic,financial,operational,legal,compliance,cybersecurityandreputation.
Compensation and Management Development Committee
Annuallyevaluatesourincentivecompensationprogramstodeterminewhetherincentivepayencouragesexcessiveorinappropriaterisk-taking.Inparticular,theCommitteeevaluatesthecomponentsofourexecutivecompensationprogramthatworktominimizeexcessiveorinappropriaterisk-taking,including,theuseofdifferentformsoflong-termequityincentives,linkingpayouttoeachexecutive’sdemonstrationofourBMSBehaviors,placingcapsonourincentiveawardpayoutopportunities,followingequitygrantpracticesthatlimitpotentialfortimingawardsandhavingstockownershipandretentionrequirements.
Committee onDirectors and Corporate Governance
RegularlyconsidersandmakesrecommendationstotheBoardconcerningtheappropriatesize,functionandneedsoftheBoard,determinesthecriteriaforBoardmembership,providesoversightofourcorporategovernanceaffairsandreviewscorporategovernancepracticesandpolicies.Overseesthecompany’spoliticalactivitiesandroutinelyconsidersmattersrelatingtothecompany’sresponsibilitiesasaglobalcorporatecitizenpertainingtocorporatesocialresponsibilityandcorporatepublicpolicyandtheimpactonthecompany’semployeesandshareholders.
Science and TechnologyCommittee
Regularlyreviewsourpipelineandpotentialbusinessdevelopmentopportunitiestoevaluateourprogressinachievingournear-termandlong-termstrategicresearchanddevelopmentgoalsandobjectives,andassuresthatwemakewell-informedchoicesintheinvestmentofourresearchanddevelopmentresources,amongotherthings.
IntegrationCommittee
RegularlyoverseestheoverallintegrationoftherespectivebusinessesandoperationsofBMSandCelgene,includingintegrationplanningpriortoClosingandprovidingregularreportstotheBoardontheprogressoftheIntegration.Servesasanadvisorycommitteetocompanymanagementtoprovideinputinconnectionwiththeintegration.Overseesandmonitorsmanagement’splansforintegration,includingkeymilestones,timelines,organization,costsynergiesandthebudgetforachievingsuchsynergies,aswellasthecompany’sprogressinachievingitsintegrationplans.CollaborateswiththeAuditCommittee,CompensationandManagementDevelopmentCommitteeandScienceandTechnologyCommitteetooverseeandassessprogressagainstkeyintegrationitemsrelatingtointegrationofsystems,processesandcontrols,ourpipeline,andourcompensationprogramsandtalentcapabilities,respectively.
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Committees of Our Board
Our Bylaws specifically provide for an Audit Committee, Compensation and Management DevelopmentCommittee, and Committee on Directors and Corporate Governance, all of which are composed entirely ofindependent directors. Our Bylaws also authorize the establishment of additional committees of the Board and,under this authorization, our Board of Directors establishedthe ScienceandTechnology Committee. Our Boardhas appointed individuals from among its members to serve on these four standing committees and eachcommitteeoperatesunderawrittencharteradoptedbytheBoard,asamendedfromtimetotime.Thesechartersarepublishedonourwebsiteathttp://bms.com/ourcompany/governance/Pages/board_committees_charters.aspx.Each of these Board Committees has the necessary resources and authority to discharge its responsibilities,includingtheauthoritytoretainconsultantsorexpertstoadvisethecommittee.
ThetablebelowindicatesthecurrentmembersofourstandingBoardCommitteesandtheIntegrationCommitteeandthenumberofmeetingsheldin2019:
Director Audit(1)
Committeeon
Directors and
Corporate Governance
Compensationand
Management Development
Science and
TechnologyIntegration
PeterJ.Arduini X X X
RobertBertolini C X
MichaelW.Bonney(2) X X
GiovanniCaforio,M.D. X
MatthewW.Emmens X X X
MichaelGrobstein(3) X C
JuliaA.Haller,M.D.(2) X
AlanJ.Lacy(3) X X
DineshC.Paliwal X X C
TheodoreR.Samuels(4) X X
VickiL.Sato,Ph.D. C X
GeraldL.Storch(4) X X
KarenH.Vousden,Ph.D.(5) X C X
PhyllisR.Yale(2) X
Numberof2019Meetings 10 5 10 10 4
“C” indicatesChairofthecommittee.1) OurBoardofDirectorshasdetermined,initsjudgment,thatallmembersoftheAuditCommitteearefinanciallyliterateandthatall
members of the Audit Committee meet additional, heightened independence criteria applicable to directors serving on auditcommittees under the NewYork Stock Exchange listing standards. In addition, our Board has determined that Messrs. Arduini,Bertolini,Bonney,Grobstein,Lacy,SamuelsandStorcheachqualifyasan“auditcommitteefinancialexpert”undertheapplicableSECrules.
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2) Mr.Bonney,Dr.HallerandMs.Yale,eachjoinedtheBoardonNovember20,2019.OnJanuary1,2020,Mr.Bonneybecameamember of our Audit Committee and our Integration Committee, Dr. Haller became a member of our Science & TechnologyCommitteeandMs.YalebecameamemberofourCommitteeonDirectorsandCorporateGovernance.EffectiveMay5,2020,Mr.BonneywillrotatefromourIntegrationCommitteetotheScience&TechnologyCommitteeandDr.HallerwillbecomeamemberofourIntegrationCommittee.
3) Mr.GrobsteinandMr.LacywillretirefromourBoardeffectiveafterthe2020AnnualMeeting.4) Effective May 5, 2020, Mr. Storch will become Chair of our Compensation and Management Development Committee and
Mr. Samuels will rotate from our Committee on Directors and Corporate Governance to our Compensation and ManagementDevelopmentCommittee.
5) Dr.KarenH.VousdenbecameamemberoftheCompensationandManagementDevelopmentCommitteeeffectiveMay29,2019.
ThefollowingdescriptionsreflecteachstandingBoardCommittee’smembershipandChaireffectiveasofMay5,2020.
Audit Committee
Committee ChairRobertBertolini Additional MembersPeterJ.ArduiniMichaelW.BonneyTheodoreR.SamuelsGeraldL.Storch
Key Responsibilities • Overseeingandmonitoringthequalityofouraccountingandauditingpractices,including,amongothers,reviewingandapprovingtheinternalauditcharter,auditplan,auditbudgetanddecisionsregardingappointmentandreplacementofChiefAuditOfficer
• Appointing,compensatingandprovidingoversightoftheperformanceofourindependentregisteredpublicaccountingfirmforthepurposeofpreparingorissuingauditreportsandrelatedworkregardingourfinancialstatementsandtheeffectivenessofourinternalcontroloverfinancialreporting
• AssistingtheBoardinfulfillingitsresponsibilitiesforgeneraloversightof(i)compliancewithlegalandregulatoryrequirements,(ii)theperformanceofourinternalauditfunctionand(iii)enterpriseriskassessmentandriskmanagementpoliciesandguidelines
• Reviewingourdisclosurecontrolsandprocedures,periodicfilingswiththeSEC,earningsreleasesandearningsguidance
• ProducingtherequiredAuditCommitteeReportforinclusioninourProxyStatement • Overseeingtheimplementationandeffectivenessofourcomplianceandethicsprogram
• Reviewingourinformationsecurityanddataprotectionprogram
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Committee on Directors and Corporate Governance
Committee ChairVickiL.Sato,Ph.D. Additional MembersRobertBertoliniDineshC.PaliwalPhyllisR.Yale
Key Responsibilities • Providingoversightofourcorporategovernanceaffairsandreviewingcorporategovernancepracticesandpolicies,includingannuallyreviewingtheCorporateGovernanceGuidelinesandrecommendinganychangestotheBoard
• IdentifyingindividualsqualifiedtobecomeBoardmembersandrecommendingthatourBoardselectthedirectornomineesforthenextannualmeetingofshareholders
• ReviewingandrecommendingannuallytoourBoardthecompensationofnon-employeedirectors
• Consideringquestionsofpotentialconflictsofinterestinvolvingdirectorsandseniormanagementandestablishing,maintainingandoverseeingrelatedpartytransactionpoliciesandprocedures
• EvaluatingandmakingrecommendationstotheBoardconcerningdirectorindependenceanddefiningspecificcategoricalstandardsfordirectorindependence
• Providingoversightofthecompany’spoliticalactivities • Consideringmattersrelatingtothecompany’sresponsibilitiesasaglobalcorporatecitizenpertainingtocorporatesocialresponsibilityandcorporatepublicpolicyandtheimpactonthecompany’semployeesandshareholders
• OverseeingtheannualevaluationprocessoftheBoardanditsCommittees
Compensation and Management Development Committee
Committee ChairGeraldL.Storch Additional MembersPeterJ.ArduiniMathewW.EmmensDineshC.PaliwalTheodoreR.SamuelsKarenH.Vousden
Key Responsibilities • Reviewing,approvingandreportingtoourBoardonourmajorcompensationandbenefitsplans,policiesandprograms
• ReviewingcorporategoalsandobjectivesrelevanttoCEOcompensation,evaluatingtheCEO’sperformanceinlightofthosegoalsandobjectivesandrecommendingforapprovalbyatleastthree-fourthsoftheindependentdirectorsofourBoardtheCEO’scompensationbasedonthisevaluation
• Reviewingandevaluatingtheperformanceofseniormanagement;approvingthecompensationofexecutiveofficersandcertainseniormanagement
• Overseeingourmanagementdevelopmentprograms,performanceassessmentofourmostseniorexecutivesandsuccessionplanning
• ReviewinganddiscussingwithmanagementtheCompensationDiscussionandAnalysisandrelateddisclosuresrequiredforinclusioninourProxyStatement,recommendingtotheBoardwhethertheCompensationDiscussionandAnalysisshouldbeincludedinourProxyStatement,andproducingtheCompensationandManagementDevelopmentCommitteeReportrequiredforinclusioninourProxyStatement
• Establishingandoverseeingourcompensationrecoupmentpolicies • Reviewingincentivecompensationprogramstodeterminewhetherincentivepayencouragesinappropriaterisk-takingthroughoutourbusiness
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Science and Technology Committee
Committee ChairKarenH.Vousden,Ph.D. Additional MembersMichaelW.BonneyMatthewW.EmmensJuliaA.Haller,M.D.VickiL.Sato,Ph.D.
Key Responsibilities • ReviewingandadvisingourBoardonthestrategicdirectionofourresearchanddevelopment(R&D)programsandourprogressinachievingneartermandlongtermR&Dobjectives
• ReviewingandadvisingourBoardonourinternalandexternalinvestmentsinscienceandtechnology
• Identifyinganddiscussingsignificantemergingtrendsandissuesinscienceandtechnologyandconsideringtheirpotentialimpactonourcompany
• ProvidingassistancetotheCompensationandManagementDevelopmentCommitteeinsettinganypipelineperformancemetricunderthecompany’sincentivecompensationprogramsandreviewingtheperformanceresults
Integration Committee
Committee ChairDineshC.Paliwal Additional MembersPeterJ.ArduiniGiovanniCaforio,M.D.MatthewW.EmmensJuliaA.Haller,M.D.KarenH.Vousden,Ph.D.
Key Responsibilities • OverseeingtheoverallintegrationoftherespectivebusinessesandoperationsoftheBMSandCelgene,includingintegrationplanningpriortoClosing
• Servingasanadvisorycommitteetocompanymanagementtoprovideinputinconnectionwiththeintegration
• Overseeingandmonitoringmanagement’splansforintegration,includingkeymilestones,timelines,organization,costsynergiesandthebudgetforachievingsuchsynergies,aswellasthecompany’sprogressinachievingitsintegrationplans
• Overseeingthecompany’sprogressinachievinglaunchreadinessandcommercialexecutionforthenear-termproductlaunchopportunities
• TogetherwiththeScienceandTechnologyCommitteeoftheBoard,overseeingthecompany’sprogresstowardsintegratingthecompany’sandCelgene’spipelinesandalliancesintoacombinedportfolio,andmonitoringportfolioprioritizationandexecution
• TogetherwiththeCompensationandManagementDevelopmentCommittee,overseeingandmonitoringtheretentionofcriticaltalentandcapabilitiesandapprovinganyintegrationperformancemetricunderthecompany’sincentivecompensationprogramsandreviewingtheperformanceresults
• TogetherwiththeAuditCommittee,overseeingandmonitoringthecompany’sprogressonintegratingsystems,processes,andcontrols
• ProvidingregularreportstotheBoardontheprogressoftheIntegration
Inaddition,in2019,theBoardestablishedanadhocBoardFinanceCommitteetooverseeandapproveadditionalacquisition finance-related matters, including, final terms of the notes issuance and debt exchange transactionsthat were contemplated by the Celgene transaction as well as future debt exchanges or other related financingtransactions,amongotherthings.ThemembersoftheBoardFinanceCommitteewerePeterJ.Arduini,GiovanniCaforio, M.D., TheodoreR.SamuelsandGeraldL.Storch.TheBoardFinanceCommitteemettwotimesduring2019.
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HowtoCommunicateWithUs
We value input and offer many means to provide it.
We, members of the Board of Directors, know that we must actively seek information from a wide variety ofsources—andnotjustfromindividualsandentitiesthatworkforus—todoourjobsoptimally.Wethereforecreatemultiplemeanstohearfromshareholders,employeesatalllevels,patients,medicalprofessionals,policyexpertsandotherstoinformourwork.
Youcancommunicatewithusviamanyofthesemeans.Youcanprovideuscommentsonyourproxywhenyouarevoting.Youcanattendourannualmeetingandspeakwithus.Youcanacceptourinvitationstoengageoraskusforameetingwhenthatisofvaluetoyou.YoucanparticipateinourvariousInvestorRelationsfunctionswhichwelistentobothdirectlyandindirectly.Youcanwritetousviamailoruseanyofourreportingfunctionssuchasso-calledWhistleBlowerhotlines.And,ofcourse,wepaycloseattentiontoyourvotingandinvestmentdecisionsaswell.
Written Communication
OurBoardhascreatedaprocessforanyonetocommunicatedirectlywithourBoard,anycommitteeoftheBoard,thenon-employeedirectorsof theBoardcollectively oranyindividual director, includingourChairmanandLeadIndependentDirector.AnyinterestedpartywishingtocontactourBoardmaydosoinwritingbysendingalettertoBristol-Myers Squibb Company, 430 East 29th Street—14th Floor, New York, New York 10016, Attention:CorporateSecretary.
Anymatter relatingto our financial statements, accountingpractices or internal controls shouldbeaddressedtothe Chair of the Audit Committee. All other matters should be addressed to the Chair of the GovernanceCommittee.
Our Corporate Secretary or her designee reviews all correspondence and forwards to the addressee allcorrespondence determined to be appropriate for delivery. Our Corporate Secretary periodically forwards to theGovernanceCommitteeasummaryofallcorrespondencereceived.Directorsmayatanytimereviewalogofthecorrespondence we receive that is addressed to members of the Board as well as copies of any suchcorrespondence.OurprocessforhandlingcommunicationstoourBoardhasbeenapprovedbytheindependentdirectors.
Proactive Shareholder Engagement
Wecontinuedtoplaceahighpriorityonourproactiveengagementwithourshareholdersin2019,reachingouttoover 50of our topshareholders, representing nearly 58%of our sharesoutstanding. In 2019, management andmembers of the Board, includingour LeadIndependent Director, met with manyof our shareholders andhadaproductive dialogue on a number of topics, including board composition, company strategy and execution,sustainabilityandriskoversight,aswellasexecutivecompensation.
The feedback received was generally positive and was shared with the entire Board and members of seniormanagement. In addition, we continued to engage with shareholders, seeking active feedback and offeringadditionalinsightsonshareholderproposalsincludedinourmostrecentProxyStatements,includingthoserelatedtodrugpricingandexecutivecompensationandthethresholdtocallspecialshareholdermeetings.
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We encourage our registered shareholders to use the space provided on the proxy card to let us know yourthoughtsaboutBMSortobringaparticularmattertoourattention.Ifyouholdyoursharesthroughanintermediaryorreceivedtheproxymaterialselectronically,pleasefeelfreetowritedirectlytous.
Responsiveness to Shareholder Feedback
Throughouroutreachefforts, weactivelysolicitedfeedbackfromshareholdersandofferedadditionalinsightsonshareholderproposalsthatwereincludedinourrecentProxyStatements, includingthoserelatedtodrugpricingand executive compensation and the threshold to call special shareholder meetings. The results of thesediscussionsarenotedbelow:
Proposal Proponent Shareholder Outreach Feedback Company Response
Lower threshold tocall a specialmeeting ofshareholders from25% to 15%
JamesMcRitchie
MostshareholdersdeferredtoBoard’sdeterminationofanappropriatethreshold
TheBoardbelievesthecurrent25%thresholdisreasonable,appropriateandalignedwithourshareholders’interests
SomeshareholdersinquiredwhetherBoardwouldconsiderloweringthresholdifproposalreceivedsubstantialsupport
Thecurrentthresholdisdesignedtostrikeabalancebetweenassuringthatshareholdershavetheabilitytocallaspecialmeetingandprotectingagainsttheriskthatasmallminorityofshareholderscouldtriggertheexpenseanddistractionofaspecialmeetingtopursuemattersthatdonotneedimmediateattention
Boardcontinuestoevaluatetheappropriatenessofthecurrentthreshold,takingintoaccount:(i)shareholder’sinterest,(ii)shareholdersupportfortheproposal,and(iii)continuedfeedbackfromourshareholders
How risks related topublic concern overdrug pricingstrategies areintegrated into theCompany’s incentivecompensationpolicies, plans andprograms for seniorexecutives
UAWRetireeMedicalBenefitsTrust,TrinityHealthandmultipleotherco-filers
Robustengagementwithproponentsandothershareholders;proponentsrequestedadditionaldisclosure,includingrelatedto(i)keydriversforpricingand(ii)governancearoundpriceincreasesandBoard’soversightofpricing
Companycollaboratedwiththeproponentstoincludeadditionaldisclosurethatwasresponsivetotheproponents’feedbackandconsistentwithourshareddesiredoutcome,whichisincludedinthisProxyStatementbeginningonpage19.
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HowWeArePaid
Compensation of Directors
Director Compensation ProgramWeaimtoprovideacompetitivecompensationprogramtoattractandretainhighqualitydirectors.TheCommitteeonDirectorsandCorporateGovernance(whenusedinthisCompensationofDirectors’section,the“Committee”)annuallyreviewsourdirectors’compensationprogram,includingareviewofthedirectorcompensationprogramsat our executive compensation peer groups. Furthermore, for 2019 planning, we again engaged an outsideconsultant, FredericW.Cook&Co., Inc. (“FWC”), toreviewmarketdataandcompetitiveinformationondirectorcompensation.FWCrecommended,andtheCommitteedetermined,thatourexecutivecompensationpeergroupsshouldbetheprimarysourcefordeterminingdirectorcompensation.
UponreviewingFWC’sanalysisinDecember2018,theCommitteedeterminedtomakenochangestothedirectorcompensationprogramforserviceasadirectorin2019.However,inJune2019,inlightofthesubstantialeffortsofcertain directors related to the acquisition andintegration of CelgeneCorporation, the Committee determined toincreasetheLeadIndependentDirectorannualretainerby$15,000andtoestablishcommitteechairandmemberannual retainers for the Celgene Integration Committee at $25,000 for the committee chair and $15,000 for theothercommitteemembers.
The Committee also engaged FWC to conduct an updated market assessment of our director compensationprograminDecember2019.Inlightofthefactthatourcoredirectorcompensationprogramhadbeenunchangedsince 2018 and was between the 25th percentile and median of our peer groups, among other reasons, theCommitteedeterminedtoincreasetheannual equityawardfor serviceasadirector for 2020by$5,000andthemember annual retainer for service on the Committee on Directors and Corporate Governance by $7,500. TheCommittee submitted its recommendations for director compensation to the full Board for approval. GiovanniCaforio,M.D.doesnotreceiveanyadditionalcompensationforservingasadirector.
The Committee believes the total compensation package for directors we offered in 2019 was reasonable, andappropriatelyalignedtheinterestsofdirectorswiththeinterestsofourshareholdersbyensuringdirectorshaveaproprietarystakeinourcompany.
The Components of Our Director Compensation ProgramIn2019,non-employeedirectorswhoservedfortheentiretyof2019received:
Component Value of Award
Annual Retainer $100,000
Annual Equity Award DeferredShareUnitsvaluedat$185,000
Lead Independent Director Annual Retainer $35,000,withincreaseto$50,000inJune2019
Committee Chair Annual Retainer $25,000
Committee Member (not Chair) Annual Retainer – Audit, Compensationand Management Development, Science and Technology and IntegrationCommittees $15,000
Committee Member (not Chair) Annual Retainer – Committee onDirectors and Corporate Governance $7,500
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Annual Equity AwardOnFebruary1, 2019,all non-employeedirectorsservingontheBoardat that timereceivedanannual awardofdeferredshareunitsvaluedat$185,000underthe1987DeferredCompensationPlanforNon-EmployeeDirectors.Thesedeferredshareunitsarenon-forfeitableatgrantandaresettleablesolelyinsharesofourcommonstock.Anew member of the Board who is eligible to participate in the Plan receives, on the date the director joins theBoard,apro-ratanumberofdeferredshareunitsbasedonthenumberofshareunitspayabletoparticipantsasofthepriorFebruary1.
Compensation of our Lead Independent DirectorOurLeadIndependentDirectorreceivedanadditionalannualretainerof$35,000,whichwasincreasedto$50,000inJune2019.OurBoardhasdeterminedtoawardthisretainerinlightoftheincreaseddutiesandresponsibilitiesdemandedbythisrole,whichdutiesandresponsibilitiesaredescribedinfurtherdetailonpage21.
Share Retention RequirementsAllnon-employeedirectorsarerequiredtoacquireaminimumofsharesand/orunitsofcompanystockvaluedatnot less than five times their annual cash retainer within five years of joining the Board and to maintain thisownership level throughout their service as a Director. We require that at least 25% of the annual retainer bedeferredandcreditedtoadeferredcompensationaccount, thevalueof whichisdeterminedbythevalueof ourcommonstock,untilanon-managementdirectorhasattainedourshareretentionrequirements.
Deferral ProgramA non-management director may elect to defer payment of all or part of the cash compensation received as adirector under our company’s 1987 Deferred Compensation Plan for Non-Employee Directors. The election todefer is madein the year preceding the calendar year in which the compensation is earned. Deferred funds forcompensation received in connection with service as a director in 2019 were credited to one or more of thefollowingfunds:aUnitedStatestotalbondindex,ashorttermfund,atotalmarketindexfundorafundbasedonthe return on our common stock. Deferred portions are payable in a lump sum or in a maximum of 10 annualinstallments. Payments under the Plan begin when a participant ceases to be a director or at a future datepreviouslyspecifiedbythedirector.
Charitable Contribution ProgramsEachdirectorwhojoinedtheBoardpriortoDecember2009participatesinourDirectors’ CharitableContributionProgram. Upon the death of a director, we will donate up to an aggregate of $500,000 to up to five qualifyingcharitableorganizationsdesignatedbythedirector.Individualdirectorsderivenofinancialortaxbenefitfromthisprogram since the tax benefit of all charitable deductions relating to the contributions accrues solely to thecompany.InDecember2009,theBoardeliminatedtheCharitableContributionsProgramforallnewdirectors.
Inaddition,eachdirectorwasabletoparticipateinourcompany-widematchinggiftprogramin2019.Wematcheddollar for dollar adirector’s contributiontoqualifiedcharitableandeducational organizationsupto$30,000. Thisbenefit was also available to all company employees. In 2019, each of the following non-employee directorsparticipatedinourmatchinggiftprogramsasindicatedintheDirectorCompensationTablebelow:Drs.Haller,SatoandVousden,Messrs.Arduini,Bertolini,Emmens,Grobstein,Lacy,Paliwal,SamuelsandMs.Yale.
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Director Compensation TableThefollowingtablesetsforthinformationregardingthecompensationearnedbyournon-employeedirectorsin2019.
Name
Fees Earnedor
Paid inCash(1)
Stock Awards(2)
Option Awards(3)
All Other Compensation(4) Total
P. J. Arduini $139,808 $185,000 $0 $30,000 $354,808
R. Bertolini $132,500 $185,000 $0 $15,000 $332,500
M. W. Bonney $11,413 $37,000 $0 $0 $48,413
M. W. Emmens $139,808 $185,000 $0 $30,000 $354,808
M. Grobstein(5) $140,000 $185,000 $0 $30,000 $355,000
J.A. Haller, M.D. $11,413 $37,000 $0 $30,000 $78,413
A. J. Lacy(5) $122,500 $185,000 $0 $30,000 $337,500
D. C. Paliwal $138,846 $185,000 $0 $30,000 $353,846
T. R. Samuels $122,500 $185,000 $0 $30,000 $337,500
V. L. Sato, Ph.D. $183,241 $185,000 $0 $25,000 $393,241
G. L. Storch $130,000 $185,000 $0 $0 $315,000
K.H. Vousden, Ph.D. $143,668 $185,000 $0 $6,500 $335,168
P. R. Yale $11,413 $37,000 $0 $30,000 $78,413
1) Includestheannualretainer,committeechairretainers,committeemembershipretainersandLeadIndependentDirectorretainer,asapplicable.Alloraportionofthecashcompensationmaybedeferreduntilretirementoradatespecifiedbythedirector,attheelectionofthedirector.Thedirectorslistedinthebelowtabledeferredthefollowingamountsin2019,whichamountsareincludedinthefiguresabove.Mr.Bonney,Dr.HallerandMs.YalejoinedtheBoardeffectiveNovember20,2019.
Name
DollarAmount Deferred
Percentageof Deferred
Amount Allocated
to U.S.Total
Bond Index
Percentageof Deferred
Amount Allocated to Short
Term Fund
Percentage of Deferred
Amount Allocated
to TotalMarket
Index Fund
Percentageof
Company Deferred Amount
Allocated to Deferred
ShareUnits
Number of Company
Deferred Share Units Acquired
P. J. Arduini $139,808 0% 0% 0% 100% 2,728
R. Bertolini $132,500 0% 0% 0% 100% 2,594
M. W. Bonney $8,103 0% 0% 0% 71% 126
M. W. Emmens $139,808 0% 0% 0% 100% 2,728
M. Grobstein $70,000 0% 0% 0% 50% 1,370
J.A. Haller, M.D. $11,413 0% 0% 0% 100% 178
A. J. Lacy $122,500 0% 0% 0% 100% 2,398
D. C. Paliwal $138,846 0% 0% 0% 100% 2,703
T. R. Samuels $122,500 0% 0% 0% 100% 2,398
G. L. Storch $130,000 0% 0% 0% 100% 2,545
K.H. Vousden,Ph.D. $143,668 0% 0% 0% 100% 2,792
P. R. Yale $11,413 0% 0% 0% 100% 178
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2) RepresentsaggregategrantdatefairvalueunderFASBASCTopic718ofdeferredshareunitandcommonstockawardsgrantedduring2019. OnFebruary1, 2019, eachof thenon-employeedirectorsthenservingasadirector receivedagrant of 3,708.158deferredshareunitsvaluedat$185,000basedonthefair marketvalueonthegrant dateof $49.89. OnNovember20, 2019,inconnectionwiththeirappointmenttotheBoardeffectiveupontheclosingoftheCelgenetransaction,Mr.Bonney,Dr.HallerandMs.Yalereceivedapro-ratedgrantof655.913deferredshareunitsvaluedat$37,000basedonthefairmarketvalueonthegrantdateof$56.41.TheaggregatenumberofdeferredshareunitsheldbyeachofthesedirectorsasofDecember31,2019,issetforthbelow.Insomecases,thesefiguresincludedeferredshareunitsacquiredthroughelectivedeferralsofcashcompensation.
Name # of Deferred Share Units
P. J. Arduini 22,030
R. Bertolini 16,870
M. W. Bonney 782
M. W. Emmens 17,105
M. Grobstein 83,212
J.A. Haller, M.D. 834
A. J. Lacy 74,031
D. C. Paliwal 29,907
T. R. Samuels 15,640
V. L. Sato, Ph.D. 66,968
G. L. Storch 52,630
K.H. Vousden, Ph.D. 10,543
P. R. Yale 834
3) Therehavebeennostockoptionsgrantedtodirectorssince2006andnonon-employeeDirectorhadstockoptionsoutstandingasofDecember31,2019.OnNovember20,2019inconnectionwiththeirappointmenttotheBoardeffectiveupontheclosingoftheCelgenetransaction, Mr.BonneyandDr.Haller’sstockoptionsfromCelgenehavebeenconvertedintoBMSstockoptions. TheaggregatenumberofallstockoptionsheldbyMr.BonneyandDr.HallerasofDecember31,2019aresetforthbelow:
Name # of Stock Options
M. W. Bonney 102,269
J.A. Haller, M.D. 83,469
4) Amountsincludecompanymatchesofcharitablecontributionsunderourmatchinggiftprogram.5) Mr.GrobsteinandMr.LacywillretirefromourBoardeffectiveafterthe2020AnnualMeeting.
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MessagefromtheCompensationandManagementDevelopmentCommitteeChair
2019 was an exciting year for Bristol Myers Squibb. The acquisition of Celgene Corporation has been atransformative event for our company, an important next step in our biopharma strategy. We believe that thiscombinationwillleadtogreatoutcomesforourshareholders,patients,andemployees.Managingexecutive compensationthroughsuchatransaction is complex. TheCompensation andManagementDevelopment Committee (when used in this CD&A, the “Committee” or “CMDC”) has been deeply involved inensuringthattheexecutivecompensationprograms,particularlyduringthesetransitionyears,align,supportandreinforce thecompany’s business andpeople strategy. For our NamedExecutive Officers (or “NEOs”), our goaleachyearistocreateanexecutivecompensationframeworkthatprovidesclearlines-of-sight intothekeyvaluedriversthatwebelievewillcreatelong-termvalueforourshareholdersandpatients.Fromanexecutivecompensationperspective,wehadfourdistinctfocusareasoverthepastyearandthesewillalsoguideusinourworkin2020.AsyoureadourCompensationDiscussion&Analysis(“CD&A”), youwill seethesedistinctfocusareasreflectedthroughout.Theyinclude:
• Formulating an effective and efficient compensation program for our legacy BMS executives for 2019,includingadjustingtheweightingofperformancegoalsandmeasurementperiodsforoutstandinglong-termandannualincentiveawardsfortheseexecutives;
• HonoringourcommitmentsundertheCelgeneTransactionmergeragreement;
• Settingour2020compensationtomotivateourexecutiveteamtocontinuetodeliveronourcorestrategywhileefficientlyintegratingCelgene.Toachieveoursynergygoals,thiswillrequirebalancinginvestmentsinourpipelineandpeople;and
• Planning for 2021 and beyond to unify compensation and benefit programs to be both competitive andsustainableacrossnotonlyourNEOsbutalsoourbroaderglobalemployeepopulation.
OurCommitteealsofocusesonthedevelopmentmandateoutlinedinourcharter. Inthisregard, theCommitteecontinued its longstanding practice of reviewing with the CEO the performance, potential and developmentopportunitiesfortheseniorexecutiveswhomakeuptheleadershipteam,withaviewtowardprudentsuccessionplanning.Aspartofthiseffort,membersoftheCommitteewereinvolvedintheinterviewsandonboardingofkeyCelgeneexecutiveswhojoinedtheBMSleadershipteam.TwooftheseexecutivesarenowNEOs.
During 2019 and into 2020, we have engaged with a large number of our shareholders on a variety of topics,includingexecutivecompensationaswellastheimpactoftheCelgeneTransaction.Aswecreatetheblueprintforthe2021post-integrationexecutivecompensationprogram,wewillcontinuetoengagewithshareholdersandgivefullconsiderationtotheirfeedback.
Finally,ithasbeenanhonortoserveasChairofthisCommitteeandasamemberofyourBoard,advancingourmission for patients. It has been a pleasure to serve with such a dedicated and talented group of individuals,includingGeraldStorch,whowillsucceedmeasChairoftheCommittee.
Wewelcomeyourinput.
MichaelGrobstein,Chair.
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CompensationDiscussionandAnalysis
Business Overview and Evolution
BMSdeliveredstrongfinancialresultsforourshareholdersin2019;themostdirectsignofthiswasourtotalreturntoshareholders,whichwas28%.Ourstrongperformanceallowedustoincreaseourdividendby10%.
2019 was an exciting year for the company. In January, we entered into an agreement to acquire CelgeneCorporation (as usedin this CD&A, “Celgene,” andthe acquisition, the “CelgeneTransaction” or “Transaction”),whichwasapprovedbyBMSandCelgeneshareholders in April andclosedin November, bringingtogether twoinnovative companies to create a leading biopharmaceutical company focused on transforming patients’ livesthroughscience.OurnewcompanyleadershipincludesexecutivesfrombothBMSandCelgeneandwewelcomedtwoCelgenedirectorstoourBoardupontheclosingoftheTransaction(asusedinthisCD&A,the“Closing”orthe“Close”).MoreinformationontheTransactionisavailableinthe“CelgeneTransaction”sectionbeginningonpage36.
Following the Closing, we have a stronger portfolio of marketed medicines, a broader and deeper pipeline, andsignificant freecashflowgenerationpotential, whichwill further increaseour financial flexibility. Wealreadyseethat happening; in2019, our revenuesgrewby16%,10%of whichcamefromour legacyBMSbusinessledbyEliquisandOpdivo,and6%ofwhichcamefromnetsalesofCelgeneproductsfromNovember20throughtheendoftheyearledbyRevlimid.
Overtime,thatpotentialtodriveincreasedfreecashflowwillallowustodeliveronourcommitmentstoreduceourdebt, and continue to invest in future innovation to do what we do best: find ways to transform patients’ livesthroughscience.
Ourmissiontohelppatientsisfueledbyourabilitytodevelopinnovativenewmedicines,andeachyearwefocusonbuildingandrenewingourrobust developmentpipeline. Wearefocusedoninnovativemedicinesfor patientswith cancer and other serious diseases. As a combined company, our pipeline is considerably broader, withplatforms and technologies that provide significant opportunities for newapproaches to the treatment of seriousdiseases.
Guided by our continued vision of transforming patients’ lives through science, during 2019 we redesigned theR&D and Commercialization organizations to drive the continued growth of our highly successful marketedportfolio,maximizethemultiplenear-termlaunchopportunitiesanddeliverthevalueofthecombinedpipeline.
Pay Program
2019wasabusyexecutivecompensationyearatBMS.TheCelgeneTransactionandtheassociatedchangesinthecompositionofourexecutiveteam,demandedextensiveattentionfromtheCommittee.Thatattentionincludedbroad transaction-related shareholder outreach (in addition to our robust annual engagement program).Collectively, the Committee reviewed and approved: (i) adjustments to in-progress short-term and long-termawardstoaccountfortheTransactionand(ii)developmentofatransitionpayprogramtofocusexecutivesonourpeopleandrealizing thesynergy in thenewcombinedentity, while ensuring focusonexecutingthecore of ourstrategy.Inaddition,theCommitteereviewedinitialplansforunifiedcompensationandbenefitsarrangementsforouremployeepopulation,includingourNamedExecutiveOfficers(or“NEOs”).
2019isthefirstyearinamulti-yearintegrationjourneytobringourNEOstogetherunderacommoncompensationandbenefitsframework.Thefollowingisahigh-levelroadmaponourplantoexecuteonexecutivecompensationintegrationfortheCelgeneTransaction.
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This Compensation Discussion and Analysisdescribes the actions taken by the Committee to develop the pre-acquisition BMS executive compensation program, including the adjustments to that program in light of theCelgeneTransaction,thetreatment of compensationfor ournewNEOsfromCelgene,andtheunifiedexecutivecompensationprogramthatwehaveputinplaceforourexecutiveofficersfor2020.
Overthenexttwoyears,weanticipatethatyouwill continuetoseetheevolutionofourexecutivecompensationandbenefitsprograms.
Named Executive Officers for 2019
ThisCD&Aisintendedtoexplainhowourexecutivecompensationprogramisdesignedandhowit operatesforourNamedExecutiveOfficers. Thetablebelowlistsour2019NEOs,includingbothlegacyBMSexecutivesandformerCelgeneexecutiveswhojoinedourcompanyonNovember20,2019,uponClosing.
Name Principal Position
Giovanni Caforio, M.D. Chairman&ChiefExecutiveOfficer
Charles A. Bancroft EVP,HeadofIntegrationandStrategy&BusinessDevelopment(effective,November20,2019,formerChiefFinancialOfficer)
David V. Elkins EVPandChiefFinancialOfficer(effectiveNovember20,2019)
Christopher Boerner, Ph.D. EVPandChiefCommercializationOfficer
Sandra Leung EVPandGeneralCounsel
Rupert Vessey M.A, B.M., B.Ch.,F.R.C.P., D.Phil.
EVPandPresident,ResearchandEarlyDevelopment(effectiveNovember20,2019)
Thomas J. Lynch, Jr., M.D. EVPandChiefScientificOfficer(throughOctober1,2019)
In connection with the redesign of our R&D and Commercialization organizations as described above, weannouncedonJune5,2019thatourthen-ChiefScientificOfficer,ThomasJ.Lynch,Jr.,M.D.,wouldtransitionoutof the company by October 1, 2019. At that time, we also announced that Rupert Vessey, M.A., B.M., B.Ch.,F.R.C.P.,D.Phil.,wasappointedEVPandPresident,Research&EarlyDevelopment(“R&ED”)toleadR&EDasacohesive unit across Discovery, Early Development and Translational Medicine to advance promising programsand assets from discovery through proof-of-concept. Samit Hirawat, M.D., joined BMS in June 2019 as EVP &ChiefMedicalOfficer,GlobalDrugDevelopmenttoleadlate-stageproduct
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development,GlobalRegulatorySafety&Biometrics,GlobalClinicalOperationsandR&DStrategyandPlanningacrossalltherapeuticareas.OurGlobalDrugDevelopmentorganizationistaskedwithensuringtheprogressionofpipelineassetsfromproof-of-concepttocommercializationthroughworld-classclinicaltrialdesignandoperations.In the commercialization organization, effective as of the Closing, Dr. Boerner assumed an expanded role,overseeing the combined company’s Oncology, Immunology and Cardiovascular global businesses, WorldwideValue, Access and Pricing, and Worldwide Commercial Operations. The Global Medical organization is alsoreporting to Dr. Boerner. In addition, Mr. Nadim Ahmed was appointed EVP and President, Hematology,overseeingthecompany’sHematologybusiness,includingCellTherapy.
Wealsoannouncedthatourthen-ChiefFinancialOfficer,CharlesA.BancroftwouldtransitionfromhisroleasCFOtoExecutive Lead for Integration. On March 16, 2020, after 35 years of service, Mr. Bancroft retired from thecompany.DavidV.ElkinsassumedtheroleofCFO,upontheClosing.
2019 Business Results
2019wasatransformativeyearforthecompany.Wemadegreatprogressagainsttheexecutionofourstrategy,deliveringstrongoperationalandfinancialperformanceinkeyareas,includingcontinuedgrowthacrossourin-lineportfolio,whilealsocompletingtheCelgeneTransactionandbeginningtointegratethelegacyBMSandCelgenebusinesses.
Completed Celgene Transaction and Advanced Integration• Createdanewcompany,wellpositionedtobecometheleadingbiopharmaceuticalcompany,withmultiple
near-termlaunchopportunities,abroadanddiversifiedearly-stagepipelinetogetherwithfinancialflexibilitytocontinuetoinvestinresearchanddevelopment
• Completed swift divestiture of Otezla, securing regulatory approval with minimal delay and attainingsignificantvalueat$13.4billion
• Accomplished,priortoClosing,importantprogressonintegration,includingfinalizingthetopthreelayersofleadership and identifying key geographic business sites, and maintained high level of employeeengagement
Delivered Strong Business Performance Across In-line Portfolio in 2019• NetsalesofEliquisreached$7.9billionandOpdivoreached$7.2billion,23%and7%higherthan2018,
respectively• Orencia,YervoyandEmplicitinetsalesalsogrewbydoubledigits,10%,12%and45%,respectively• Revlimid salesfromNovember20ththroughDecember31stwere$1.3billion
Achieved Positive Clinical and Regulatory Achievements• Received eight approvals for new medicines and additional indications and formulations of currently
marketedmedicines,includingapprovalof(i)Opdivo+Yervoyinrenalcellcarcinoma(RCC)intheEU;(ii)Opdivo+Yervoyinfirst-linemetastaticmelanomainU.S.;(iii)Empliciti+Pomalystinsecond-linemultiplemyelomaintheEUandJapan;(iv)Sprycel+chemotherapyforpediatricpatientswithacutelymphoblasticleukemiainEU;(v)Opdivofor second-linehead&neckcancerinChina; and(vi) BreakthroughTherapyDesignations in the U.S.for: Opdivo+ Yervoyfor advanced hepatocellular carcinoma (HCC) and forOrenciaformoderatetosevereacutegraft-versus-hostdiseaseinhematopoieticstemcelltransplantsfromunrelateddonors
• Pre-closing, CelgenereceivedU.S.approval ofRebloyzyl(luspatercept) and Inrebic(fedratinib), realizingtwoofthenear-termlaunchopportunitiesinourcombinedpipeline
• Reported positive clinical trial results, including a number of late-stage clinical trials and submittedregulatoryapplicationsforinitialindicationsforozanimodandliso-celaswellasforadditionalindicationsforOpdivo+Yervoy,Reblozyl,andRevlimid
• Increasednumberofpotentialnear-termlaunchopportunities;thecompany’soverallpipelineperformanceandkeypipelinemilestonesaredescribedinmoredetailonpage46
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Key 2019 Financial Performance Highlights• Totalrevenuesincreasedby16%,with10%attributabletothelegacyBMSbusiness
• GAAP diluted earnings per share decreased by (33%),primarily due to taxes resulting from the Otezladivestiture, amortization of acquired intangible assets, the unwinding of inventory fair value adjustmentsandothercostsandexpensesresultingfromtheCelgeneacquisition, partially offset byhigherrevenues;andnon-GAAPdilutedearningspershareincreasedby18%,primarilyasaresultofhigherrevenues
• Ourstrongoperationalandfinancialperformancein2019continuedtodelivervaluetoourshareholders,assupported by our 28%one-year total shareholder return, which exceeded our primary peer group, whileincreasingourdividendby10%,markinganincreaseindividendsforthe11thyearinarow
Celgene Transaction
Under thetermsof the merger agreement with Celgene(as usedin this CD&A, the“Merger Agreement”), eachoutstanding Celgene share of common stock was exchanged for: one share of Bristol-Myers Squibb Companycommon stock; $50 cash; and one tradeable Contingent Value Right (“CVR”). The CVR entitles its holder toreceiveaone-timepayment of $9.00in cashuponapproval by theU.S. Federal DrugAdministration (“FDA”) inspecifiedindicationsofallthreeofthefollowingmilestones:ozanimod(byDecember31,2020);liso-cel(JCAR017)(byDecember31,2020);andide-cel(bb2121)(byMarch31,2021).
OutstandingCelgeneequitycompensationawardsheldbycurrentandformerCelgeneemployeeswereassumedbyBMSatthetimeoftheTransaction.Ingeneral,service-basedawards(i.e., optionsandrestrictedstockunits)were converted to BMS awards on a value-for-value basis while retaining their original vesting schedule.Performance-basedCelgeneawardswereconvertedtoservice-basedBMSrestrictedstockunitawards,withthenumberofsharesconverteddeterminedbyactualCelgeneperformance(thegreaterofeithertargetperformanceoractualachievementabovetarget)asofthecloseofthethirdquarterof2019andavalue-for-valueconversionratio.Holdersofcertainoutstandingequitycompensationawardsweregrantedand/orareeligibletoreceiveCVRsuponthefuturevestingofsuchawards.
There was no single-trigger acceleration of vesting of outstanding equity awards held by continuing CelgeneemployeesasaresultoftheCelgeneTransaction.Asnoted,awardsthatwereassumedandconvertedintoBMSawardshavecontinuingservice-basedvestingrestrictionsthatmatchtheoriginaltimevestingperiods.Foramoredetaileddiscussionofthespecificconversionelementsforeachaward,shareholdersareencouragedtoreadtheRegistrationStatementonFormS-4filedwiththeSecuritiesandExchangeCommissiononFebruary20,2019.
Shareholder Engagement
In2019,wereachedouttomorethan50ofourtopshareholders,representingmorethan58%ofourtotalsharesoutstanding. Asinpreviousyears, weengagedonmanyimportant topicsrelatedtoourexecutivecompensationandcorporategovernanceprograms,includingboardcomposition,tenure,boardassessment,riskoversight,andboard and company-wide diversity and other sustainability and social responsibility topics. The feedback wereceived from shareholders was generally positive and supportive of our intended compensation adjustmentsrelatedtotheCelgeneTransaction(seethediscussionunder“2019 Executive Compensation Program Overview”and “2020 Executive Compensation Program Overview,”beginningonpage 37). Our 2019say-on-pay proposalwasapprovedby92%ofourshareholders,confirmingcontinuedsupportforourexecutivecompensationprogram.
In addition to our annual engagement efforts, in March andApril 2019, weengagedshareholders regarding theCelgeneTransaction,andsolicitedshareholderfeedbackonthetreatmentofexecutivecompensationbothduringtheTransactionyear andover theexpectedintegrationperiod. Later in 2019, weengagedwith shareholders onappropriateperformance-basedpaymetricstouseduringtheintegrationperiod,andwhattimeperiodstoevaluatethosemetricsover.
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We used the feedback from these engagement conversations as vital input into Committee discussions. Thefeedback from these discussions helped shape the Key Integration metrics discussed below, which focus onhumancapitalmanagementandsynergyrealizationandreemphasizetheneedtokeepmanagementfocusedondeliveringonourstrategy.
TheCommittee remainscommitted to ongoingshareholder engagement, andtheyactively consider shareholderfeedbackastheyevaluateandadjustourexecutivecompensationprogram.
2019 Executive Compensation Program Overview
Inlate2018andintoearly2019,theCMDCdesignedandapprovedanexecutivecompensationprogramthatwaslargelyinlinewithour2018executivecompensationprogram.TheCommitteecontinuestobelievethisstructurealignswithourongoingcommitment to emphasize variable, or “at risk,” compensation for our NamedExecutiveOfficers.Certainmodifications,highlightedbelow,describeupdatestothe2019executivecompensationprogramforthecompanygenerally. Updatesnotedwith thedottedlinesare thosemadein consideration of theCelgeneTransaction. Of note, Operating Margin going forward remains an important measure of the success of theintegration,asitservesasaproxyforlong-termsynergycapture.MoredetailsonthisprogramarediscussedlaterinthisProxyStatement.
2019 Compensation Plan: Changes Reflect Integration Planning and Execution
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2020 Executive Compensation Program Overview
Developinganintegrated executive compensation programis a top priority for the Committee. Our engagementwithshareholdershasprovidedinputintothedesignofourpost-TransactioncompensationprogramforourNamedExecutiveOfficers. With that feedbackin mind, theCommittee designedaninterimcompensation program. The2020designincludescorefinancial,operationalandintegrationmetricsaswellasapipelinemetricthatrepresentsthe Committee’s ongoing commitment to creating a balanced approach to metrics, encouraging thoughtful,enterprisefocusandlong-termdecision-making.
In2020,allofourNamedExecutiveOfficerswillhavethesameincentiveawarddesigns,andallemployeesattheVice President level and above will have Key Integration metrics, including human capital management andsynergyrealizationfactors,intheannualincentiveplan.
InadditiontoourfinancialmetricsandKeyIntegrationmetrics,ourpipelinemetriccontinuestoplayacriticalroleinourannualincentiveplan.Solidifyingthedirectlineofsightintotangiblepipelineobjectivesalignsourexecutives’interests with our shareholders’ outcomes, including those shareholders holding CVRs. In particular, the 2020pipeline goal will take into account the specific milestones associated with the CVR, namely, FDA approval inspecifiedindicationsofozanimod(byDecember31,2020),liso-cel(JCAR017)(byDecember31,2020)andide-cel(bb2121)(byMarch31,2021).
Certain modifications, highlighted below with the dotted lines, describe updates to the 2020 executivecompensationprogramthathavebeenmadeinconsiderationoftheCelgeneTransactionandtoencourageandreward our executives’ ongoing commitment to continue to successfully integrate the Celgene business andexecuteonourcorestrategy.
2020 Compensation Plan: Design Supports Successful Integration
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Executive Compensation Philosophy and Principles
AtBristolMyersSquibb,thecornerstoneofourcompensationphilosophyandprogramstructureisaligningpaytotheachievementof bothourshort-termandlong-termgoals, engagementof ouremployees,theachievementofourMissionandthedeliveryofvaluetoourshareholders.
Each year, when evaluating company and senior management performance and making its compensationdecisions, the Committee considers our compensation philosophy and program structure, which underscorescompetitive compensation and pay for performance, with the goal of striking the appropriate balance among(i) directly aligning executives’ compensation with the fulfillment of our Mission and the delivery of shareholdervalue;(ii)makingasubstantialportionofourexecutives’compensationvariableandatriskbasedonoperational,financial, strategic andshare price performance;and (iii) attracting, retaining and engaging executives who arecapableofleadingourbusinessinahighlycompetitive,complex,anddynamicbusinessenvironment.
After reviewing our financial and operational performance, our share price performance, and the individualperformance of our executives, the Committee determined that the compensation of our executives under theprogramdesigncontinuestobeappropriate.
In 2019, theCommittee reviewedhowall theelements of our compensationprogramdesignworkedtogether,notingthebalancebetweenshort-termandlong-termcompensationandperformance, top-lineandbottom-lineresults, absolute and relative factors, and internal and market-based performance metrics. In evaluating 2019performance,theCommitteedeterminedthatthecompensationofourexecutivesappropriatelyreflects: • ourfinancialandoperationalresults;• theexecutionandadvancementofthecompany’slong-termstrategyin2019;• theCommittee’sholisticassessmentoftheindividualperformanceofourexecutives;and• theClosingoftheCelgeneTransactionandtheexecutionandplanningofintegration. Webelievethattheexecutionofourstrategywillcontinuetocreatesustainablelong-termvalueforshareholders.
Our Executive Compensation Philosophy Focuses on Two Core Elements:
Competitive Compensation
• Weoperateinahighlycomplexandcompetitivebusinessenvironmentthatrequiresthatweattract,retainandengageexecutivescapableofleadingourbusiness.
• Byprovidingcompensationthatiscompetitivewithourpeercompanies,wereducetheriskthatourcompetitorscansuccessfullyrecruitourexecutives.Wearealsoabletomaintainthehighestongoinglevelsofengagementofthesetalentedexecutivestofacilitateandsustainhighperformance.
Pay for Performance
• Westructureourcompensationprogramtocloselyaligntheinterestsofourexecutiveswiththoseofourshareholders.
• Webelievethatanexecutive’scompensationshouldbedirectlytiedtohelpingusachieveourmissionanddelivervaluetoourshareholders.Therefore,asubstantialportionofourexecutives’compensationisvariableandatriskbasedonoperational,financial,strategicandsharepriceperformance.
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Basedonthisphilosophy,ourcompensationprogramisdesignedwiththefollowingprinciplesinmind:
✔ topayouremployeesequitablybasedontheworktheydo,thecapabilitiesandexperiencetheypossess,andthe performance and behaviors they demonstrate (including, in 2019, passion, innovation, speed andaccountability);
✔ topromoteanon-discriminatoryandinclusiveworkenvironmentthatenablesustobenefitfromandtouseasacompetitiveadvantagethediversityofthoughtthatcomeswithadiverseandinclusiveworkforce;
✔ tomotivateourexecutivesandallouremployeestodeliverhighperformancewiththehighestintegrity;and✔ to implement best practices in compensation governance, including risk management and promotion of
effectivecorporatepolicies.
Benchmarking Analysis and Compensation Peer Groups
Benchmarking ApproachIngeneral,ourexecutivecompensationprogramseekstoprovidetotaldirectcompensationatthemedianofourprimary peer group (as defined below) when targeted levels of performance are achieved. In any given year,however, we may target total direct compensation for a particular executive above or below the median of ourprimary peer group due to multiple factors. These factors include competencies, qualifications, experience,responsibilities, contribution, individual performance, role criticality and/or potential as well as attracting andretaining talent within the highly competitive biopharmaceutical industry marketplace. We define total directcompensationasbasesalaryplustargetannualincentiveawardplusthegrantdatefairvalueofannuallong-termequityincentiveawards.
Payingatcompetitivelevelswhentargetedlevelsofperformanceareachievedallowsustoattractandretainthetalentweneedtocontinuedrivingperformance,whileenablingustomaintainacompetitivecostbasewithrespecttocompensationexpense.
Benchmarking ProcessTheCommittee’sindependentcompensationconsultant, CompensationAdvisoryPartners, LLC(“CAP”)annuallyconductsandshareswiththeCommitteeareviewofthecompensationforourNamedExecutiveOfficers,includingcompensationinformationcompiledfrompubliclyfileddisclosuresofourprimaryandextendedpeergroups.Paylevelsofourpeers,amongotherfactors,areusedasareferencepointwhendeterminingindividualpaydecisions(i.e.,basesalarylevels,thesizeofsalaryadjustments,ifany,targetannualincentivelevelsandlong-termequityincentiveawardsize).
2019 Peer GroupsWe regularly monitor the composition of our peer groups and make changes when appropriate. Prior to theCelgeneTransaction, the Committee, with the help of CAP, reviewedour peer groups for 2019anddeterminedthatallofthepeercompaniescontinuedtobeappropriateandthatwewouldnotmakeanychangestothepeergroups. In connection with the Celgene Transaction, the Committee reviewed the peer groups again anddeterminedthattheonlychangethatwouldbemadepost-ClosingwasremovingCelgenefromthepeergroups.WiththeexceptionofremovingCelgenefromourpeergroupsfollowingClosing,ourpeergroupsin2019remainedunchangedandconsistedofthefollowingcompanies:
Primary Peer Group Extended Peer Group(1)
AbbVie Inc. GileadSciencesInc. AstraZenecaPLC
Amgen Inc. Johnson&Johnson GlaxoSmithKlinePLC
Biogen Inc. Merck&Co. RocheHoldingAG
Celgene Corporation Pfizer,Inc. NovartisAG
Eli Lilly and Company Sanofi
1) OurextendedpeergroupincludestheprimarypeergroupplusthesefivecompaniesbasedoutsidetheU.S.FollowingtheClosing,Celgenewasremovedfromthelistofpeercompanies.
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rimary Peer Group: The Committee believes the companies included in our 2019 primary peer group areappropriategiven the unique nature of the biopharmaceutical industry. These companies represent our primarycompetitorsforexecutivetalentandoperateinasimilarlycomplexregulatoryandresearch-drivenenvironment.
Indeterminingourprimarypeergroup,webelieveemphasisshouldbeplacedonwhetheracompanycompetesdirectly with us for the specialized talent necessary to further drive our success in creating the leading globalbiopharmaceuticalcompany.Wealsoconsidercompanysizeindeterminingourpeergroup.Thecompaniesinourprimarypeergroupallhadannualrevenuesofatleast$10billion.
Extended Peer Group: Wealso review an extended peer group, which comprises the nine companies in ourprimary peer group (eight following the removal of Celgene) plus five companies based outside the U.S. Thisextendedpeergroupservesasanadditionalreferencepointforcompensationpractices,includingbyprovidinganunderstandingofthecompetitivepayenvironmentasit relatestotheglobalnatureofbothourbusinessandthecompetitionfortalent.
2019 Compensation Program – Legacy BMS Named Executive Officers
2019 Target Compensation BenchmarksTarget compensation for Dr. Caforio was at approximately the median of Chief Executive Officers within ourprimary peer group. The Committee believes Dr. Caforio’s compensation package positions him appropriatelyamonghispeerswhentakingmultiplefactorsintoconsideration.Onaverage,ourotherNamedExecutiveOfficerswerealsoatapproximatelythemedianofourprimarypeergroup,withsomevariationbyposition.
Thefollowingchartsprovideanoverviewofthe2019executivecompensationcomponentsfortheCEOandotherlegacyBMSNEOs,asoriginallygranted,andhighlightsthepercentageoftargetcompensationthatisvariableandatrisk.
Thistargetmixsupportsthecoreelementsofourexecutivecompensationphilosophybyemphasizinglong-term,stock-based incentives while providing competitive annual cash components, thus aligning our executivecompensationprogramwithourbusinessstrategy. The following sections discuss the primary components of our executive compensation program and providedetailonhowspecificpaydecisionsweremadeforeachNEOin2019.
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Components of Our 2019 Compensation Program
Corecomponentsofour2019executivecompensationprogramforlegacyBMSNEOs:
• BaseSalary• AnnualIncentiveAward• Long-TermEquityIncentives,comprising: – PerformanceShareUnits – MarketShareUnits
Base SalaryBasesalariesareusedtohelpusattracttalentinahighlycompetitivelabormarket.Thesalariesofourexecutivesareprimarilybasedonthespecializedqualifications,experienceandcriticalityoftheindividualexecutiveand/orhisor her role and the pay levels of comparable positions within our primary peer group. Salary increases for ourexecutives are determined based on both the performance of an individual and the size of our annual salaryincreasebudgetinagivenyear,whichisbasedinpartonanassessmentofmarketmovementrelatedtosalarybudgetsforourpeercompaniesandbroadergeneralindustrytrends.Therefore,wetypicallysetourannualsalaryincreasebudgetsbasedonthemedianofsuchforecasts.Theremaybeadjustmentstosalaryfromtimetotimetorecognize, among other things, when an executive assumes significant increases in responsibility and/or ispromoted,andtoreflectcompetitivepaybasedonmarketdataforindividualexecutiveroles.
In2019,inaccordancewithourcompany-widemeritreviewprocess,employees,includingtheNamedExecutiveOfficers,wereeligibleforameritincreaseprovidedthattheirperformancefullymetorexceededexpectationsonbothResultsandBehaviors(asdefinedbelow).Employeeswhoaredeterminedtobebelowthefullyperformingleveltypicallyreceiveeitherareducedmeritincreaseornosalaryincreasedependingontheextenttowhichtheyare below the fully performing level. In addition, the position of total compensation relative to market is alsoconsidered in determining whether to provide a salary increase to each employee. Effective April 1, 2019,Mr. Bancroft, Dr. Boerner, Ms. LeungandDr. Lynchreceivedanincreaseof 3%.Dr. Caforio didnot receiveanincreasebecausetheCommitteedeterminedthathisbasesalaryrelativetomarketwasappropriatelyaligned.
Inaddition,inconnectionwiththeCelgeneTransaction, theCommitteereviewedthecompensationforall of ourlegacy BMSNEOs. This was done in an attempt to ensure that we continue to pay competitively in light of theincreased complexity of, and changes to, our business, including the incorporation of the Hematology franchiseand the new reporting structure of our R&D function into Research and Early Development and Global DrugDevelopment.Asaresultofthisreview,theCommitteemadenoadditionalchangestoourCEO’sbasesalary.Dr.Boernerreceivedanincreaseof7.6%,effectiveasofJune1,2019,andMs.Leungreceivedanincreaseof3.2%,effectiveasof theClosing. Thecompensationpackagesfor thelegacyCelgeneNEOs,includingtheir newbasesalary levels following the Closing, are discussed on page 55under “ 2019 Compensation Program – LegacyCelgene Named Executive Officers.”
Annual Incentive PlanOurannualincentiveplanisdesignedtorewardperformancethatsupportsourbusinessstrategyofcreatingtheleading biopharmaceutical company and our Mission to help patients prevail over serious diseases. The annualplan aligns with our business strategy and Mission by sharpening management’s focus on key financial andpipelinegoals, aswell asbyrewardingindividualperformance(bothResultsandBehaviors), consistent withourpay-for-performancephilosophy.
EachNEO’stargetannualincentiveisexpressedasapercentageofbasesalary,whichissetataleveltoensurecompetitivetotaldirectcompensation.AnnualincentiveawardsforeachNEOaredeterminedbyevaluatingbothcompany performance (as measured by the Company Performance Factor) and individual performance (asmeasured by the Individual Performance Factor (“IPF”)). The maximum incentive opportunity for each NEO is200%oftarget.
The Company Performance Factor can range from 0%to 152%, based on financial achievements and pipelineresults,andtheIPFcanrangefrom0%to165%,basedonindividualperformance(bothResultsandBehaviors),subject to a 200%of target maximumpayout. For 2019, the IPFwasalso basedontransaction-relatedfactors,suchasdealexecution,integrationplanningactivities,humancapitalmanagement,andsynergyidentificationandplanning.Thegraphicbelowillustratesthecalculationusedtodetermineannualincentiveplanawards.
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Annual Incentive Award Calculation for Named Executive Officers
Target annual bonus
(AspercentageofNEObasesalary)
X
CompanyPerformance Factor
(Basedonachievementoffinancialandpipeline
metrics)
X
IndividualPerformance Factor(Basedonachievementofpre-definedobjectivesthatalignwithstrategicgoalsandconsider
actionstakentowardssuccessfulintegrationplanningandexecution)
= Annual Bonus
The target annual incentive for each legacy BMS NEO is expressed as a percentage of the executive’s basesalary.Ifmid-yearsalaryadjustmentsaremade,thetargetannualincentiveawardwillincludethepro-ratedimpactoftheadjustments.
Performance Metrics Underlying the Company Performance FactorOur2019annualincentiveplandesignhasthefollowingcorporate-widemeasures,whichapplytoalllegacyBMSemployeeseligibletoparticipateintheplan,includingourlegacyBMSNamedExecutiveOfficers:
2019 Metric and Weighting What It Is Why It’s Important
Earnings Per Share (EPS) (50%)
Non-GAAP Diluted EPS (NetIncomedividedbyoutstandingsharesofcommonstock,asadjustedtoreflecttheCelgeneTransaction)
Acriticalmeasure of annual profitabilityaligningouremployees’interestswiththoseofourshareholders
Total Revenues (25%)
Total Revenues, Net of Foreign Exchange (Totalrevenuesminusreservesforreturns,discounts,rebatesandotheradjustments)
A measure of topline growththatcreatesafoundationoflong-termsustainablegrowthandcompetitivesuperiority
Pipeline (25%)
• Near-Term Value(Submissionsandapprovals)
• Long-Term Growth Potential
Increases BMS-wide focus on delivery of ourlate-stage pipeline and continueddevelopment of a robust pipelinethroughbothinternaleffortsandbusinessdevelopment
Our pipeline metric highlights the importance of pipeline delivery to the near-term and long-term success of thecompany. This metric measures the sustainability and output of our R&D pipeline portfolio and is comprised ofgoalsintwocategories,Near-TermValueandLong-TermGrowthPotentialwithaQualitativeOverlayontheentiremetric:
Metric What It Is Why It’s Important
Near-Term Value (50%)
RegulatorysubmissionsandapprovalsfornewmedicinesandnewindicationsandformulationsofkeymarketedproductsintheU.S.,EU,ChinaandJapan
Recognizes delivery of the late-stagepipeline,whichdrivesnear-termvalue
Long-Term GrowthPotential (50%)
• DevelopmentCandidates• FirstinHuman• RegistrationalStudyStarts
Recognizes the progression and successesof the R&D pipelineatvariousstagesofdevelopment,includinginternallyandexternallysourcedcompounds
Qualitative Overlay Reflectsmanagement’s,theScience&TechnologyCommittee’s(“S&TCommittee”)andCMDC’sholisticevaluationofourpipelineperformance,includingsuchconsiderationsastheperformanceofhighvalueassetsandtheintegrationofacquiredassets,amongotherfactors.Inparticular,thisconsidersactionstakentowardsuccessfulintegrationplanningandexecution.
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Adjustments Made to Legacy BMS NEO Annual Incentive Program due to the Celgene TransactionUpontheClosingoftheCelgeneTransaction,theCommitteemadeadjustmentstothe2019annualincentiveplantoensureappropriatetreatmentforalllegacyBMSemployees,includingourNEOs.Thoseadjustmentsincluded:
Adjustment Details Rationale
Limit Earnings Per Share(EPS) measurement to thequarter immediatelypreceding the Closing (orQ3)
• “Lockin”EPSactualperformance throughthree quarters(themostrecentpubliclyavailableearningsmeasurementpriortoClose)
• PayoutbasedonactualEPSachievementthroughthreequarterscomparedtogoalthroughthreequarters
• EnsuretheappropriaterewardforBMSemployees,includingNEOs,basedonEPSgeneratedorganically
• Prevent windfall payoutsduetocombinedcompanyEPS,whichwaslikelytobehigherthanlegacyBMS
Include CelgeneTransaction- related factorsin qualitative IPF evaluation
• Evaluatecertainfactors,suchasdealexecution,integrationplanningactivities,human capital management, and synergyidentificationandplanningaspartofIPF
• RetainIPFpayoutparameters;IPFmayrangefrom0-165%,andmaximum bonuscapped at 200%oftarget
• Immediatelybegintotie executivecompensation to integration planningsuccessandfocus
• Rewardexecutivesforintegrationsuccessthroughqualitativemechanismin2019duetoshortpost-Closingperiod;movetoembeddedmetricin2020
TheCommittee believes that it is appropriate to continueto evaluate the revenueandpipeline measures in theCompanyPerformanceFactor for 2019bymeasuring theperformanceof the legacyBMSbusinessthroughtheclose of the relevant performance period (calendar year), as there were fewer than six weeks remaining in thefiscal yearfor thebusinesstooperatepost Closing. Maintainingthis structurewasimportant tohelpensurethatmanagement and the broader employee base who participate in the annual incentive plan, stayed focused onexecutionofcriticalbusinesspriorities.Accordingly,therevenuegoalremainedunchangedaftertheClosing,butrevenues contributing to the achievement of legacy BMS executive Company Performance Factor achievementonlyincludesrevenuesattributedtothelegacyBMSbusiness,andexcludesanyrevenuecontributedbytheformerCelgenebusiness.
Similarly,thepipelinemetricremainedfocusedsolelyontheperformanceofthelegacyBMSbusinesspipeline.
Financial and Pipeline Metric Target Setting ConsiderationsAtthebeginningofeachyear,theCommitteeundertakesanincentivetargetsettingprocesstoestablishtargetsthatit believeswill motivateourexecutivesappropriatelytodeliverthehighperformancethatdrivesshareholdervaluecreationinboththeshort-andlong-term.
Financialandstrategicperformancetargetsare:
• Predefined;
• Stretchgoalsthatarealignedwithearningsguidance;
• Tiedtothekeyfinancialobjectivesofthecompany;and
• Alignedwithindustrybenchmarksonspeedofcommerciallaunchandexpectedmarketadoption.
Pipelineperformancetargetsare:
• SetincollaborationwiththeS&TCommittee;
• Alignedwiththecompany’sstrategicplanandkeyvaluedrivers;
• Alignedwithindustrybenchmarksontypicalclinicalstudydurationandregulatoryapprovaltimelines;
• Separatedintotwoperformancecategories,“Near-TermValue”and“Long-TermGrowthPotential”,subjecttoaqualitativeoverlay;and
• Reflective of annual milestones that link short-term outcomes to long-term strategic R&D priorities(milestonesfor higher-valueassetsareemphasizedingoal settingtoprovideaframeworkthat assessesnotonlyquantity,butalsoqualityandimpactofmilestones).
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TheS&TCommitteealsoidentifiesthosehighest-valueassetsandtheintegrationofacquiredassets,amongotherfactors,theimportanceofwhichwillinformtheapplicationofaqualitativeoverlay.
In establishing targets and goals each year, the Committee considers budget, operational priorities, long-termstrategic plans, historical performance, product pipeline and external factors, including external expectations,competitivedevelopments,andtheregulatoryenvironment,amongotherthings.Threshold,target,andmaximumperformance goals are evaluated independently and are set to provide appropriate awards across a wide butreasonablesetofperformanceoutcomes.
TheCommitteesetincentivetargetsinthefirstquarterof2019inconsiderationofanticipatedperformance,inlinewithguidanceprovidedtothemarketinearly2019andinlinewithcommercialandpipelineexpectations.Laterinthe year, we met or exceeded financial and operational goals in certain key areas, including growth of bothrevenues and non-GAAP earnings, positive regulatory and development milestones, important businessdevelopmentactivities,anddisciplinedexpensemanagement,resultinginarevisionofguidancetothemarketfortheyear.
Annual Incentive Plan Program Outcome CalculationsThe payouts for the 2019 annual incentive plan were based on the combination of an executive’s target bonusamount,theCompanyPerformanceFactor,andtheIndividualPerformanceFactorforeachexecutive.
CompanyperformanceresultsfortheyearledtoaCompanyPerformanceFactorof116.29%for2019.Thecalculationwasbasedonthefollowingperformanceagainstgoals:
Performance Measure Target Actual% of
TargetResulting Payout
Percentage
Non-GAAPDilutedEarningsPerShare(1)(2)(3) $3.16 $3.42 108.3% 125.95%
TotalRevenues,NetofForeignExchange($=MM)(1)(2) $24,009 $24,413 101.7% 113.25%
PipelineScore 3 3 100.0% 100.00%
Total — — 104.6% 116.29%
1) Consistent with the company’s past practice, non-GAAP diluted earnings per share (for the nine months ended September 30,2019) andtotal revenues (full year), net of foreign exchange, were eachadjusted ($0.03) and$102million, respectively, duetounanticipatedfavorablebudgetvarianceforSprycelperformanceinEuropeduetochangesintimingof thegeneric competition.TheCommitteedeterminedthatitwasappropriatetoexcludetheimpactofthisunanticipatedfavorablebudgetvariancebecausethiseventfavorablyimpactedperformanceinanamountthatwasnotdeterminablewhenthetargetwassetinthefirstquarterof2019.
2) Consistent with the company’s past practice, non-GAAP diluted earnings per share (for the nine months ended September 30,2019) andtotal revenues (full year), net of foreign exchange, were eachadjusted ($0.02) and$145million, respectively, duetounanticipated favorable budget variancedueto changesin timingof theUPSAbusinessdivestiture. TheCommitteedeterminedthatitwasappropriatetoexcludetheimpactofthisunanticipatedfavorablebudgetvariancebecausethiseventfavorablyimpactedperformanceinanamountthatwasnotdeterminablewhenthetargetwassetinthefirstquarterof2019.
3) Non-GAAP diluted earnings per share target reflects the first three fiscal quarters because this metric was measured as of thequarterimmediatelyprecedingtheClosing(orQ3).
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For the pipeline metric, the S&T Committee reviews performance in the near-term value and long-term growthpotentialcategoriesandholisticallyassessesthequalityoftheresultstodetermineaperformancescoreusingascaleofonetofive,withthreebeingtarget.For2019,wemetourtargetgoalrangefornear-termvalue,butdidnotmeet the target goal range for long-term growth potential. We advanced a number of important programs andachieved several high value milestones. The S&T Committee considered the specific milestones that wereachievedandthosethatwerenotachievedanddetermined,basedonaholisticreviewofnotonlythequantityofthe milestones achieved, but the impact andimportof those milestones, to recommend a pipeline score of 3.0,which the Committee approved. The following results were among the inputs considered in determining thatpipelinescore.
Near-Term Value• 27regulatorysubmissionsandapprovals(targetrangeof23-34).• OpdivocombinationwithYervoy approvedforfirst-linekidneycancerintheEU;EmplicitiapprovedincombinationwithPomalyst forsecond-linemultiplemyelomaintheEUandJapan.
Long-Term GrowthPotential
• Metgoalinoneofthreecategories,with19pipelineprojectsmeetingtransitionmilestones(targetrangefortransitionmilestoneswas22-34).
• Achievedhigh-valuedevelopmentcandidateCCR8(fortreatmentofdifferentformsofcancer,includingbreast,colonandlung).
• InitiatedaPhase1clinicaltrialforSTINGagonist(fortreatmentofdifferentformsofcancer);initiatedregistrationalstudiesforOpdivoinfirst-linelivercancerandhigh-riskbreastcancer;achievedsignificantprogressintheTYK2inhibitorregistrationalprogram(targetingmoderate-to-severepsoriasis).
Individual Performance FactorOurexecutivecompensationprogramisdesignedtorewardexecutivesforfinancial,operational, strategic,sharepriceandindividualperformancewhiledemonstratinghighintegrityandethicalstandards.Webelievethisstructureappropriately incentivizes our executives to focus on our long-termbusiness strategy, to achieve our Mission tohelppatientsprevailoverseriousdiseases,andtoattainsustainedlong-termvaluecreationforourshareholders.
2019 BMS Behaviors ✔ Passion ✔ Innovation ✔ Speed ✔ Accountability
When determining individual award levels, the Committee considers (i) individualperformance against strategic, financial and operational objectives that support ourlong-term business strategy and shareholder value creation (“Results”) and (ii) anexecutive’sdemonstrationofthebehaviorsdefinedintheBMSBehaviors(“Behaviors”)identifiedintheboxtotheleft.
The Role of Risk Assessment in Our Incentive ProgramAlso embedded in the determination of individual award levels is the ongoing assessment of enterprise risk,includingreputationalriskstemmingfromthedynamicexternalenvironment.Inparticular,weevaluatehoweachofourexecutivesdemonstrateourBMSBehaviorsintheexecutionoftheirday-to-daydecisions.Thisevaluationisone input into the determination of payouts under both the annual incentive and long-term equity incentiveprograms.Therefore,giventhedirectlinkbetweenBehaviorsthatimpactpayoutandourexecutivecompensationprogram’s emphasis on sustainable long-term value, we attempt to minimize and appropriately reduce thepossibilitythatourexecutiveofficerswill makeexcessivelyorinappropriatelyriskydecisionsthatcouldmaximizeshort-termresultsattheexpenseofsustainablelong-termvaluecreationforourshareholders.
2019 Individual Performance AssessmentWhen determining the individual component of the annual incentive awards, the Committee considered eachexecutive’s contributions to our company’s strategic achievements and financial and operational performance,includingfactors relatedtotheCelgeneTransaction, aswell ashisor herdemonstrationof ourBMSBehaviors.The Committee evaluated our NEOs’ performance against clear and pre-defined objectives established at thebeginningoftheyearandtiedtothecompany’skeystrategicobjectives.
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For the CEO, the Committee evaluated the following in determining his IPF:
2019 CEO Performance Evaluation
Strategic Objective Evaluation
Drive enterprise performance:Achievebudgetedfinancialtargetsestablishedatthebeginningoftheyear,includingrevenues,non-GAAPEPSandoperatingmargin,achievepredefinedcustomerservicemetricsandensuresupplychainreliability. Continuetoimprovetheoperatingmodel,includingexecutingon-timecompletionof2019deliverablesagainstcompanytransformationplan,strengtheningpipelinegovernanceandexecution,andensurereadinessforintegrationofCelgene. Demonstrateethics,integrityandqualityineverythingwedo,includingsettingafirm“toneatthetop”onacultureofrespect,businessintegrity,quality,complianceanduncompromisingethics.
• Metorexceededtargetsforrevenues(excludingCelgene),operatingmargin(throughSeptember30,2019)andnon-GAAPEPS(throughSeptember30,2019),asaresultofstrongcommercialexecution.
• Exceededallcustomerservicemetricsandsupplychainreliabilitytarget.• Achievedtransformationsavingsgoalin2019andimplementedstrengthenedportfoliogovernanceprocesswithoutcompromisingtimelines.
• Significantintegrationplanningandexecutionprogressachievedin2019,including,butnotlimitedto,pre-closingannouncementoftheorganizationaldesignandtopthreelevelsofleadership,aswellasgeneralmanagersandkeyleadershipteamappointmentsforinternationalmarkets,businesscontinuity,synergycaptureandemployeeengagement.
• Launchedinternalcampaignfocusedonintegrity,includedintegrityanduncompromisingethicsinkeymessagesattownhalls,andcontinuedmandatoryglobalcompliancetrainings.
Maximize the value of the marketed portfolio anddevelop the next generation of medicines for long-term growth:Achievebudgetedrevenuetargetsforcoremarketedproducts,advancekeyproductregulatoryapprovals,regulatorysubmissions,registrationalstudystarts,andotherkeypipelinemilestones.
• MetorexceededrevenuetargetsforEliquis,Orencia,SprycelandYervoyandgrewnetsalesofprioritizedbrandscomparedto2018.
• MetorexceededmostU.S.newpatientshareobjectivesforOpdivo,includinginfirst-linekidneycancer,first-linemelanoma,adjuvantmelanoma,second-lineheadandneckcancer,second-linehepatocellularcarcinoma,andthird-linesmall-celllungcancer,amongotherindications.
• AdditionalindicationsapprovedforOpdivo,includingfirst-linekidneycancerintheEUandachievedpositiveclinicaltrialresultsfromCheckmate227Part1andCheckmate9LA.
• Overallpipelineperformanceandkeymilestonesaredescribedinmoredetailonpage46.
Evolve our culture and execute our PeopleStrategy:Continuetocultivategreatmanagersandleaders,driveglobaldiversityandinclusion,andbuildtalent.
• Continuedcomprehensiveapproachtodeepenengagementofgloballeadershipteamandcultivategreatmanagers.
• Improvedmanagercapabilityindexonemployeeengagementsurvey.
• ProgressmadeondiversityandinclusionwithrepresentationofwomengloballyandunderrepresentedethnicgroupsintheU.S.;identifiedopportunitiestoincreasediversityandinclusionwith2020aspirationalgoals.
• Significantprogressmadeonbuildinganewcultureforthecombinedcompanybasedonsharedvaluesandastrongpatientfocus,whichwillfurtherenablethelong-termvalueofthetransactiontoberealized.
• Successfullymanagedsuccessionforcertainkeyrolesandcontinuedrobustmanagementdevelopmentandsuccessionplanningforcriticalpositions.
IndividualPerformanceModifierBasedonCMDCEvaluation:135%
Inaddition,theCommitteenotedthefollowingwithrespecttoeachofourotherNEOs:
For Mr. Bancroft, the Committee considered: (i) his significant leadership in the achievement of the Company’sstrong financial results; (ii) his proactive leadership in all aspects of the Celgene Transaction and integrationplanning,includingshareholderandemployeeengagement,financingarrangements,divestingtheOtezlabusinessfor$13.4billionwithminimaldelaytotheoveralltimeline,financialplanning,synergycapture,andminimizingrisksofbusinessdisruption
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following the Closing; (iii) his continued leadership through the Closing in driving the evolution of our operatingmodelwhileensuringabalancedapproachtocapitalallocation,enablingtheCompanytoincreasethedividendforthe 11th year in row and maintaining a strong balance sheet and strong investment grade credit ratings withfinancial flexibility; (iv) his critical support of other significant business development activities, including thedivestituresoftheUPSAbusiness,thecompletionofthede-riskingoftheU.S.PensionPlanandamanufacturingplant in Anagni, Italy; and (v) the successful transition of his CFO responsibilities to David V. Elkins upon theClosing.After35yearsofservicewithourCompany,Mr.BancroftisretiredeffectiveMarch16,2020.
For Mr. Elkins, the Committee considered: (i) his leadership in the achievement of very strong financialperformanceatCelgenethroughtheClosing;(ii)hiscriticalroleinexecutingtheCelgenetransactionandplanningforintegrationwithafocusonsynergycaptureandminimizingbusinessdisruption;(iii)hiscriticalroleindivestingthe Otezla business for $13.4 billion; and (iv) his leadership in building the new Finance organization, retainingcriticaltalent,andmaintainingappropriatebusinessandfinancialcontrols.
ForMs.Leung,theCommitteeconsidered:(i)hercriticalroleinprovidingstrategicandtacticaladvicetoourBoardandseniormanagementinallaspectsoftheCelgeneTransaction,includingattainingshareholderapprovaloftheTransaction, successfully negotiating and executing the Otezla divestiture and consent agreement with the U.S.FederalTradeCommission,andprovidinglegaladvicegenerallywithrespecttosecuritiesandfinancing,corporategovernanceand executive compensation matters; (ii) her leadership in protecting and defending our intellectualpropertypositionandproactivemanagementofsignificantlegalissues;(iii)herroleinsupportingothersignificanttransactions,includinginnovativepartnershipsandthedivestituresoftheUPSAbusinessandmanufacturingplantinAnagni,Italy;and(iv)hercontributionsandperformanceasatrustedandrespectedseniorleaderwhoprovidesvaluablestrategicadviceandwhoseimpactspansacrossallteamsandfunctions.
ForDr.Boerner,theCommitteeconsidered:(i)hisleadershipoftheCommercializationorganizationandfocusonstrongcommercialexecution,resultingina10%increaseinrevenuesattributedtothelegacyBMSproducts(withno increase in U.S. average net selling prices for legacy BMS products); (ii) his critical role engaging withshareholdersandemployeesinconnectionwiththeCelgenetransaction;(iii)hiscriticalroleinintegrationplanning,includingorganizationaldesign,synergycapture,andtalentmanagement,includingthepre-Closingappointmentofgeneralmanagersandkeyleadershipteamappointmentsforinternationalmarketsamongotherthings;and(iv)hisactive,visiblecommitmenttoethicsandintegrityanddrivingacultureofcomplianceacrossallmarkets.
ForDr.Vessey,theCommitteeconsidered(i)thesignificantmilestonesanddevelopmentsachievedbythelegacyCelgene pipeline assets through the Closing; (ii) his critical role in integration planning, including relating toorganizational design, the combined pipeline portfolio, synergy capture and talent management, among otherthings;(iii)hisleadershipofResearch&EarlyDevelopmentandsuccessfulstabilizationofthebroaderResearchandDevelopmentorganization;and(iv)hissuccessfuldevelopmentandmanagementofexternalpartnershipsandotherkeyresearchrelationships.
2019 Annual Incentive Award PaymentsThe actual annual incentive awards paid to our legacy BMS Named Executive Officers are shown in the tablebelow and can also be found in the Summary Compensation Table under the Non-Equity Incentive PlanCompensationcolumn:
ExecutiveTarget Incentive
AwardApplying Company
Performance Factor(1)Actual
Payout(2)
Giovanni Caforio, M.D. $2,475,000 $2,878,178 $3,885,540
Charles A. Bancroft $1,269,634 $1,476,457 $1,993,217
Sandra Leung $1,010,553 $1,175,172 $1,586,482
Christopher Boerner, Ph.D. $891,766 $1,037,035 $1,399,997
Thomas J. Lynch, Jr., M.D.(3) $1,051,588 $1,222,892 $1,222,892
1) AdjustedtoreflectCompanyPerformanceFactor(financialandpipelineperformance)earnedat116.29%.2) AdjustedtoreflectIndividualPerformanceFactors.3) Bonusamountisproratedtoreflecttimespentinrolein2019.
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Asset forth in thetable above, theCompanyPerformanceFactor of 116.29%wasappliedto eachlegacyBMSNamed Executive Officer’s target incentive award. Then, an Individual Performance Factor was applied todetermine the actual payout. The Committee can approve an Individual Performance Factor up to 165%of theadjustedincentive,subjectto200%oftargetmaximumpayout.BasedontheperformanceofeachNEOdescribedabove,theCommitteeapprovedIndividualPerformanceFactorsrangingbetween100%and135%forourNamedExecutiveOfficers.
Long-Term Incentive ProgramOurlong-termincentiveprogramemploysonlyperformance-basedequity,andisdesignedtopromotecreationofsustainable long-term value for shareholders by focusing on strong year-to-year financial and operationalperformance,andonthedevelopmentandadvancementofourpipelineoverthelong-term.
The Committee’s Annual Process for Granting Annual Long-Term Incentive AwardsLong-term incentive awards are typically approved each year on the date the Committee and full Board meetduringthefirstweekofMarchwithagranteffectivedateofMarch10.Webelievethatconsistenttimingofequityawardgrantsisgoodcorporategovernanceandreducestheriskofselectingagrantdatewithapreferentialstockprice.
Since March 2014, the Committee has established annual equity award guidelines for all of our executives,including ourNamed Executive Officers, other than the CEO, as a percentage of salary. The CEO’s long-termequity incentive award level is assessed by the Committee annually. Based upon individual performance, anexecutive other than the CEOmay receivea long-termequity incentive award ranging from0%to 150%of thetarget award. Once the grant value is established for each executive, 60% of the value is converted intoPerformanceShareUnits(or“PSUs”)and40%intoMarketShareUnits(or“MSUs”).
Indeterminingthesizeoftheindividuallong-termequityincentiveawardsgrantedtoourNamedExecutiveOfficersinMarch 2019, the Committee considered the prior year’s performance (both Results and Behaviors) of eachexecutive as well as ways to motivate our Named Executive Officers to focus on the company’s long-termperformance.Giveneachyear’sawardshaveanoverlappingperformanceperiodfromtheprioryear,webelievetheseawardsprovidetherightbalancebetweenshort-termandlong-termfocus.EachNamedExecutiveOfficer,otherthantheCEO,hadatargetvalueforhisorherlong-termequityincentiveawardgrantedinMarch2019.TheCommittee approved individual awards ranging between 125%and 135%of that target value for these NamedExecutiveOfficers.TheCEO’slong-termequityincentiveawardisnotbasedonatargetvalueandisdeterminedannually bytheCommittee basedoncompetitivebenchmarks andindividual performance andcontributions. Dr.Caforio’s awardtookintoaccount his strongperformanceasCEOduring2018andalong-termequity incentiveopportunitythatwascommensuratewithhisroleasCEOandthecompetitivemarketpayforthatposition.
2019 Long-Term Incentive Program GrantsLike our annual incentive plan, our long-term equity incentive program is designed to reward performance thatsupportsourstrategic objectivesandcreatesvaluefor ourshareholders. Asignificant percentageof ourNamedExecutiveOfficers’compensationisintheformofequitythatvestsoverseveralyears,whichisdesignedtocloselytie the interests of our Named Executives Officers’ to the interests of our shareholders. Our long-term equityincentiveprogramalsoisdesignedtopromoteretentionthroughmulti-yearvesting.
In2019,wecontinuedtooffertwolong-termawardvehicles,eachofwhichservedadifferentpurpose:
• Performance Share Unit Awards: rewardstheachievementofkeyfinancialgoalsandthevaluecreatedfor shareholders as measured by relative total shareholder return (or “TSR”) over a three-year periodendinginthefirstquarteroftheapplicableyear.
• Market Share Unit Awards: rewardsthecreationofincrementalshareholdervalueoveralong-termperiod.
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Webelieveourlong-termequityincentiveprogramservesthebestinterestsofourshareholdersbyfocusingtheefforts of our executives on key drivers of both short- and long-term success and on shareholder value. Keyaspectsofthelong-termequityincentiveprogramincludethat:
• 100%ofexecutives’long-termequityincentiveawardsareperformance-based;
• Thedesignofourlong-termequityincentiveprogramappliestoallourexecutives,notjustourmostsenior,thuspromotingorganizationalalignmentwithourrecruitmentandbusinessstrategy;and
• Our long-term equity incentive program serves as a retention lever, through vesting and payout overseveralyears.
2019 Equity Incentive Program Summary
Performance Share Units Market Share Units
Proportion of Annual Grant 60% 40%
Metrics & Weighting Non-GAAPOperatingMargin:33%TotalRevenues(ex-fx):33%3-YearRelativeTSR:34%
Numberofsharesearned,basedonincreaseordecreaseinourcommonstocksharepricefromthegrantdate*
Min / Max Payout (% of Target Units)
0%/200% 0%/200%*
Vesting 3-year,cliffvesting 4-year,ratablevesting
* ThenumberofsharesearnedfromMSUscanincreaseordecrease,inproportiontothechangeinoursharepriceovertheone-,two-,three-andfour-yearperformanceperiods.TheminimumsharepriceachievementrequiredtoearnanysharesfromMSUsis60%ofthegrantdatestockprice.Accordingly,if60%isnotachieved,zeroMSUswillvest.
2019 Performance Share Unit AwardsThePerformanceShareUnit(PSU)Awardsmadein2019werefocusedonmotivatingexecutivestodeliverlong-termtop- linegrowthandimprovedmargins, whilealsofocusingondeliveringshareholdervalueat aratefasterthanourindustrypeers.Forthe2019PSUawards,thefollowingmetricsandgoalswereapplied.
2019-2021 PSU Payout Schedule
2019-2021 Cumulative Operating Margin (33%)
2019-2021 Cumulative Total Revenues (ex-fx) (33%)
3-Year Relative TSR (34%)
Achievement Payout Achievement Payout TSR Percentile Payout
Maximum 115% 200% 110% 200% 80%ile 200%
Target 100% 100% 100% 100% 50%ile 100%
Threshold 85% 50% 90% 50% 35%ile 50%
Below Threshold <85% 0% <90% 0% <35%ile 0%
For the Operating Margin and Revenue awards, the targets were set using the board-approved three-yearbusinessplan.OurBoardassessedtherigorofthetargetsandfoundthattheywereappropriate.Inaddition,ourBoard assessed the maximumand threshold achievement levels for each of these metrics and found that theywereappropriaterelativetotheintendedmotivationaleffectofPSUs.
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2019 Market Share Unit AwardsMSUsmakeup40%ofourexecutives’targetlong-termequityincentives.EachgrantofMSUsvests25%oneachofthefirstfouranniversariesofthegrantdate,andthenumberofsharesreceivedbyanexecutiveuponpayoutincreasesor decreasesdependingontheperformanceof our stockpriceduringtheone-, two-, three- andfour-yearperformanceperiods.
Uponvesting, apayoutfactorisappliedtothetargetnumberofMSUsvestingonagivendatetodeterminethetotalnumberofunitspaidout.Ifourstockpriceincreasesduringtheperformanceperiod,boththenumberofunitsandvalueofsharesthatvestincreases.Ifourstockpricedeclinesduringtheperformanceperiod,boththenumberof units andvalueof shares that are eligible to vest will be reduced. The payout factor is a ratio of the 10-dayaverage closing price on themeasurement date divided by the 10-day average closing price on the grant date.Beginning with our 2013 annual MSU award grant, the measurement date is the February 28 immediatelyprecedingthevestingdate.Theminimumpayoutperformancefactorthatmustbeachievedtoearnanypayoutis60%andthemaximumpayoutfactoris200%.Ifourstockpriceperformanceisbelow60%,thentheportionoftheawardscheduledtovestwillbeforfeited.ThefollowingchartshowstheperformanceperiodsfortheMSUawardsgrantedtoourexecutivesinMarch2019:
Transaction-Related Adjustments to 2018 and 2019 PSUs.TheCommittee modified theoutstanding2018and2019PSUsto beeffective asof theClosingof theCelgeneTransaction.Thesemodificationswereintendedto:(i)avoidanunintendedwindfallthatcouldhaveoccurredduetothelargerRevenueandhigherOperatingMarginbasisresultingfromtheCelgeneTransaction,(ii)adjustgoalstofullyaccountforthescaleofthenewcombinedentityand(iii)motivateandholdaccountablethemanagementteamtosuccessfullycompletetheCelgeneintegration.
Themodificationstothe2018and2019programconsistedof:• Replacingthethree-yearRevenuegoaltoaccountfornewcombinedcompanyrevenueinbothtargetand
achievementofRevenue,toappropriatelyeliminateawindfallopportunityforourNEOs.• Reducing the weight on Operating Margin and “locking in” the resulting operating margin as of the third
quarter of 2019 (the quarter ending immediately prior to the Closing); this resulted in a reduction inoperatingmarginto22%weightingforthe2018awardand11%forthe2019award;
• Reallocating the remaining weighting of 11% for 2018 PSUs and 22% for 2019 PSUs to the new KeyIntegrationMetric,whichreplacestheOperatingMarginmetric.TheKeyIntegrationMetriccomprises:
• Human Capital Management, an assessment of both voluntary attrition management and employeeexperience/engagement;and
• Synergy Realization, objectively measured as progress towards acquisition synergy cost avoidance andcostsavingstargets.
Consistent with the plan methodology, we removed Celgene from the peer group comparators for measuringRelativeTotalShareholderReturn.
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Transaction-Related Modifications to 2017 PSUsUpon Closing of the Celgene Transaction, the Committee modified the outstanding PSUs granted in 2017. Forthese awards, the Operating Margin metric was adjusted to reduce the measurement period by one quarter,“locking in” the Operating Margin result as of the financial statements produced for the period endingSeptember30,2019.ThisadjustmentwasmadetopreventanydistortionintheOperatingMarginresultingfromtheCelgeneTransactionfromaffectingthepayout. NoadjustmentsweremadetotheTotal Revenues(ex-fx) orRelativeTSRmetric(exceptfortheexclusionof Celgenefromourprimarypeergroup). FortheTotal Revenues(ex-fx) measure, revenues measured over the period will contain only legacy BMS business revenue (and willspecificallyexcluderevenuesassociatedwiththeCelgeneTransaction).
ThebelowchartprovidesagraphicalpresentationoftheadjustmentstotheoutstandingPSUsdescribedearlier.
Adjustments to Outstanding PSU Awards
“StubPeriod”referstotheremainingperformanceperiodofanapplicableawardfollowingtheClosing.
Outcomes of the 2016 PSUsThe 2016 PSUs, granted on March 10, 2016 and having a three-year performance cycle, were evaluated andcertifiedinMarch2019.Thebelowtablesummarizestheoutcomesfor eachof themetricsincludedinthe2016PSUsandtheassociatedpayoutlevelintermsofpercentageoftargetshares.
Performance Measure Target Actual(2)% of
Target
ResultingPayout
Percentage
Cumulative 3-Year Total Revenues, Net ofForeign Exchange ($=MM)(1)(2)(3) $56,920 $62,968 110.6% 200.00%
Cumulative 3-Year Operating Margin(1)(2)(3) 27.30% 27.31% 100.0% 100.03%
3-Year Relative TSR (TSR%ile) 50.00% 5.0% (45.0%) 0.00%
Total — — — 99.01%
1) Actual 2016-2018 Total Revenues for all three years are restated to our 2016 Budget Rate. Includes net adjustments 0.2% toOperatingMarginfortheimpactofachangeindefinedbenefitplanaccountingrules(ASU2017-07).
2) Includesnetadjustmentsof$200millionfortotalrevenuesnetofforeignexchangeand0.2%toOperatingMarginfortheimpactofachangeinrevenuerecognitionaccountingrules(ASC606).
3) Includesnetadjustmentsof($128)millionfortotalrevenues,netofforeignexchangeand(0.1%)OperatingMarginforSprycellossofexclusivityinEurope.
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MSU Performance ResultsThe following table summarizes the payout factors relating to the tranches that vested in 2019 for MSUsoutstandingatthattime:
Grant Date Vesting Date # of Years in Performance Period Payout Factor
March 10, 2015 March10,2019 4 80.07%
May 5, 2015* May5,2019 4 70.16%
March 10, 2016 March10,2019 3 78.88%
April 3, 2017** April3,2019 2 87.26%
March 10, 2017 March10,2019 2 89.22%
March 10, 2018 March10,2019 1 76.35%
* ReflectsCEOgrantonpromotiontoCEO.** ReflectsgranttoDr.LynchonhireasChiefScientificOfficer.
Restricted Stock Units and Stock OptionsRestrictedstockunitsmaybegrantedselectivelytoexecutivesatothertimesoftheyeargenerally,asinducementgrants as part of an offer in attracting candidates to BMS, for retaining employees, or for providing specialrecognition, such as when an employee assumes significant increases in responsibility. On December 2, 2019,BMS granted a special restricted stock unit award to Dr. Boerner in connection with the expansion of his role.During 2019, BMS also granted inducement awards that consisted of restricted stock units to legacy Celgeneexecutives, Mr. Elkins and Dr. Vessey, as described in more detail in the section titled “2019 CompensationProgram–LegacyCelgeneNamedExecutiveOfficers”beginningonpage55.NootherNamedExecutiveOfficersreceivedrestrictedstockunitsin2019.OtherthanconversionofoutstandingCelgenecompensatoryequityawardsas a result of the CelgeneTransaction, wehave not granted any stock options to our executives or employeessince2009.
Other Elements of 2019 CompensationIn additionto thecomponents set forth above, our senior executives, includingall of our NEOs, wereentitledtoparticipateinthefollowingplansorarrangementsin2019:
OtherElementsof2019NEOCompensation
• Post-Employment Benefits – Change-in-Control Arrangements – Severance Plan – Qualified and Nonqualified- Pension Plans (Frozen; applicable only to Mr. Bancroft and Ms.
Leung. The qualified Pension Plan was terminated on February 1, 2019) – Qualified and Nonqualified Savings Plans • Other Compensation
Post-Employment BenefitsWe offer certain plans which provide compensation and benefits to employees who have terminated theiremployment. These plans are periodically reviewed by the Committee in an attempt to ensure that they areconsistentwithcompetitivepractice.Theplansofferedareintendedtoenhanceourabilitytoattractandretainkeytalent.
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Change-in-Control ArrangementsWehaveenteredintochange-in-control agreementswithcertainexecutivesincludingtheCEOandotherNEOs.Theseagreementsenablemanagementtoevaluateandsupportpotentialtransactionsthatmightbebeneficialtoshareholderseventhoughtheresultwouldbeachange-in-controlofBMS.Additionally,theagreementsprovideforcontinuity of management in the event of a change-in-control. It is our policy that our agreements require a“double-trigger”beforeanypaymentsaremadetoanexecutive.Thismeansthatpaymentsareonlymadeintheevent of a change-in-control and subsequent involuntary termination or termination for good reason by theemployeewithineither36monthsor24monthsafterachange-in-control.
Wedonotgrossupcompensationonexcessparachutepaymentsforanyofourexecutives,includingourNamedExecutiveOfficers,exceptthatMr.ElkinsandDr.Vesseyremaineligibleforgross-uppaymentssolelyrelatedtotheCelgeneTransactionundercertainlegacyCelgenearrangementsapprovedpriortotheTransaction,whichthecompany is required to honor, the value of which is provided in the tables in the “Post-Termination Benefits”sectionofthisProxyStatementbeginningonpage75.DespitehavingassumedthelegacyCelgenearrangementsforMr.ElkinsandDr.VesseyintheTransaction,itwillcontinuetobeourpolicyonago-forwardbasisnottoenterintoanynewgross-uparrangementswithanyofourNamedExecutiveOfficers.
Ifachange-in-controloccursduringthetermoftheagreement,theagreementwillcontinueineffectforeither36monthsor24monthsbeyondthemonthinwhichsuchchange-in-controloccurrs,asapplicable.ThevalueofthisbenefitforourNamedExecutiveOfficersisprovidedinthe“Post-TerminationBenefits”sectionbeginningonpage75.
Severance PlanTheBristolMyersSquibbSeniorExecutiveSeverancePlanisintendedtoprovideacompetitivelevelofseveranceprotectionforcertainseniorexecutives(includingourNamedExecutiveOfficers)tohelpusattractandretainkeytalentnecessarytorunourcompany.Thevalueofthisbenefit forourNamedExecutiveOfficersisshowninthe“Post-TerminationBenefits”sectionbeginningonpage75.
Defined Benefit Pension PlansOurfrozendefinedbenefitpensionplansprovideretirementincomeforU.S.employeeswhojoinedthecompanyandwere U.S. employees prior to December 31, 2009. The Retirement Income Plan is a tax-qualified plan, asdefined under IRS regulations, and the Benefit Equalization Plan relating to the Retirement Income Plan is anonqualifiedplanthatprovidespensionbenefitsabovethoseallowedunderthecontributionlimitsfortax-qualifiedplans. The Summary CompensationTable reflects the annual increase in the actuarial value of these benefits.Current accrued benefits for each of the participating Named Executive Officers are provided in the PensionBenefit Table. As of December 31, 2009, wediscontinuedservice accruals under our qualifiedandnonqualifiedpension plans in the U.S. and Puerto Rico for active plan participants, including all of our Named ExecutiveOfficers,andclosedtheplanstonewparticipants.Foractiveplanparticipantsatyear-end2009,weallowedfiveadditionalyearsofpaygrowthinourpensionplans.Accordingly,2014wasthelastyearofpaygrowthunderourpensionplans.Theseactionsweretakentoalignourretirementprogramwithournewbiopharmaceuticalbusinessstrategy and culture, to mitigate volatility risk to the company, to respond to thecompetitiveness of a changingindustry,andtomeetthemobilityandcareerexpectationsofanevolvingworkforce.
In 2019, the company terminated the U.S. Retirement Income Plan (“US-RIP” or the “Plan”) and transferredapproximately $3.8billionof U.S. pensionobligations. TheobligationsweredistributedthroughacombinationoflumpsumpaymentstoPlanparticipantswhoelectedsuchpayments,andthepurchaseofagroupannuitycontractfromAthene Annuity and Life Company, a wholly owned insurance subsidiary of Athene Holding, Ltd, for allremaining liabilities. For a further discussion on the termination of the US-RIP, please see “Retirement Plan”beginningonpage72.
Savings PlansOursavingsplansallowemployeestoreceivematchingcontributionsfromBMStosupplementtheirsavingsandretirement income. The Savings and Investment Program is a tax-qualified 401(k) plan, as defined under IRSregulations,andtheBenefitEqualizationPlanfortheSavingsandInvestmentProgramisanonqualifieddeferredcompensation plan that allows a select group of management and highly compensated employees to defer aportionoftheirtotaleligiblecashcompensationandtoreceivematchingcontributionsfromBMSinexcessofthecontributionsallowedundertheSavingsandInvestmentProgram.
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The savings plans are designed to allow employees to accumulate savings for retirement on a tax-advantagedbasis.Thecompanymatchingcontributionunderoursavingsplansequals100%oftheemployee’scontributiononthe first 6%of eligible compensation (base salary and annual incentive) that an employee elects to contribute.Employees are eligible for an additional automatic company contribution that is based on a point system of anemployee’sageplusserviceasfollows:below40points,theautomaticcontributionisanadditional3%ofeligiblecompensation;between40and59points,thecontributionis4.5%;andat60pointsandabove,thecontributionis6%.
As of December 31, 2019, all legacy BMS NEOs had accrued a 6% contribution, except for Dr. Boerner whoaccrued a 4.5%contribution. All U.S. employees are eligible to participate in the savings plans. The SummaryCompensationTablereflectscompanycontributionsto theseplansduring2019inthe“All Other Compensation”column.TheNonqualifiedDeferredCompensationTableprovidesmoredetailontheBenefitEqualizationPlanfortheSavingsandInvestmentProgram.
Other CompensationWe typically provide what we consider to be minimal perquisites and other personal benefits to our NamedExecutiveOfficers. In 2019, these benefits included Company-paid use of HeliFlite, an on-demand helicoptercharterservice.Thisbenefitwasprimarilyintendedforbusinesspurposes,butincertainexigentcircumstances,itwasusedforpersonaluse.AnypersonaluseofthisbenefitisreflectedintheapplicableNamedExecutiveOfficer’stotal compensation for 2019 in the “Summary Compensation Table” beginning on page 64and was treated astaxableincomeunderapplicabletaxlaws.WedidnotreimburseanyNamedExecutiveOfficersforanytaxespaidon such income. Please see “All Other Compensation” in the “Summary Compensation Table” for furtherdiscussionofallperquisitesandotherpersonalbenefitsprovidedtoourNamedExecutiveOfficers.
2019 Compensation Program – Legacy Celgene Named Executive Officers
Key Considerations Related to Legacy Celgene Executive CompensationIn connectionwiththeCelgeneTransaction, effectiveontheClosing, wesuccessfully retainedMr. DavidElkins,theCFOofCelgene,toserveournewcompanyasExecutiveVicePresidentandChiefFinancialOfficer,andDr.RupertVessey,theEVPofResearch&EarlyDevelopmentofCelgene,toserveasHeadofResearchandEarlyDevelopment.Whenconstructingthecompensationpackagesfor Mr. ElkinsandDr. Vessey, weconsideredourcommitments under the Merger Agreement, the pre-Closing compensation packages for Mr. Elkins and Dr.Vessey, and how best to integrate Mr. Elkins and Dr. Vessey into BMS’s compensation policies, plans, andprogramsforourNEOs.
Wecommittedpursuant totheMergerAgreement, (i) throughthefirst anniversaryof theClosingto(a) maintainbasesalary;(b)maintainannualcashbonusopportunitiesandannualequitybonusopportunities,withthesetwocomponentsbeingconsideredintheaggregate(e.g.,cashbonusopportunitymaybeincreasedandequitybonusopportunitydecreased);and(c)provideseverancebenefitsnolessfavorablethanthoseprovidedpriortoClosing,and (ii) through the end of 2019, employee benefits no less favorable than those provided prior to Closing. Inaddition, the Merger Agreement provided that (x) 2019 annual incentive awards would be paid at the higher oftarget or actual achievement; (y) outstanding service-based long-term equity awards would be converted toservice-basedBMSequityawardsandCVRswithmatchingservice-basedvestingrestrictions;and(z)outstandingperformance-based equity awards would be converted at the higher of target or actual achievement as of thequarter-end prior to the Closing, and converted to service-based BMS equity awards and CVRs with matchingservice-basedvestingrestrictions.
Mr. Elkins and Dr. Vessey were both participants in the Celgene Corporation Executive Severance Plan(the”CelgeneESP”)priortoClosing.TheCelgeneESPprovidedthatuponaqualifyingterminationwithintwoyearsfollowingtheClosing,theexecutivewasentitledto:(i)alump-sumcashamountequalto2.5multipliedbythesumofbasesalary andtarget bonus; (ii) if atimelyelectionwasmade,either theelectedlevel of coverageat activeemployeeratesunderCOBRAfor30monthsoramonthlycashpaymentinlieuofsubsidizedcoverage;(iii)inkindoutplacementservicesfor18months;(iv)alump-sumcashamountequaltothegreaterofthetargetandactualbonus for the year of termination, prorated for the number of days of employment in the applicable year; and(v)vestingofanyoutstandingservice-basedequityawards.Mr.Elkins
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andDr. Vesseyagreedtowaivetheir continuedparticipationintheCelgeneESP,andasaresult, arecurrentlycovered by the applicable BMS severance and change-in-control plans. For a discussion of the current BMSbenefit planscoveringpost-employment benefits, change-in-control arrangements andseverance plans, seethe“Post-TerminationBenefits”sectionofthisProxyStatementbeginningonpage75.
Compensation of Our New Chief Financial Officer and EVP of Research and Early DevelopmentAfter a robust process conducted by the Committee together with its independent compensation consultant, Mr.ElkinsandDr.Vesseywereprovidedwithcompensationpackagesthattookintoconsiderationcompetitivemarket,peer compensation data consistent with the process taken for reviews of all of our NEOs’ compensation, ourcommitmentsunder the Merger Agreement and the pre-Closing compensation packages for Mr. Elkins and Dr.Vessey.
ThepackagesforeachofMr.ElkinsandDr.Vesseyconsistedof:
• Anannualbasesalaryof$1,000,000withatargetbonusopportunityof100%ofbasesalarysubjecttotheattainment of one or more pre-established performance goals established by our Board or a BoardCommittee,resultinginatotaltargetcashcompensationopportunityof$2,000,000;
• Eligibilitytoparticipateinourlong-termequityincentiveplanaspartofannualcompensationandconsistentwithourotherNEOs.Mr.ElkinsandDr.VesseywillfirstbeeligibleforanannualequitygrantonourunifiedgrantdateofMarch10,2020;
• Accelerated vesting of legacy Celgene equity awards only in the event of a termination due to death,disability,without“Cause”oruponaresignationfor“GoodReason”.Thedefinitionsof“Cause”and“GoodReason”fortheseawardsaredescribedinthe“Post-TerminationBenefits”sectionofthisProxyStatementbeginningonpage75;
• Eligibility to participate in our Senior Executive Severance Plan and the Change-in-Control AgreementconsistentwithourotherNEOs;and
• Legalfeesincurredinnegotiatingthecompensationpackages,upto$25,000.
Mr. Elkins and Dr. Vessey also received one time, sign-on awards (each, an “Inducement Award”) in order toinduceMr.ElkinsandDr.VesseytojoinBMS,andtohelpretainthemandensuretheyfeltproperlyincentivizedgoingforward.ThefollowingdescribesgenerallythetermsoftheInducementAwards:
• The cash portion of the Inducement Award is equal to $2,100,000 for Mr. Elkins and $2,000,000 for Dr.Vessey.Ineachcase,thecashportionispayable50%assoonaspracticablefollowingtheClosing,25%ontheone-yearanniversaryoftheClosingand25%onthetwo-yearanniversaryoftheClosingandsubjecttoacceleratedvestinguponaterminationduetodeath,ordisability,without“Cause”oruponaresignationfor“GoodReason”.Thedefinitionsof“Cause”and“GoodReason”fortheInducementAwardaredescribedbelowinthe“Post-TerminationBenefits”sectionofthisProxyStatementbeginningonpage75.
• Therestrictedstockunitawardisvaluedat$2,000,000forbothMr.ElkinsandDr.Vessey,vesting25%oneachofthefirst,second,thirdandfourthanniversariesofthegrantdateandsubjecttoacceleratedvestinguponaterminationduetodeath,disability,without“Cause”oruponaresignationfor“GoodReason.”TherestrictedstockunitawardcomponentwasgrantedonDecember2,2019.
Mr. Elkins and Dr. Vessey did not enter into an individual employment contract.For a further discussiononthespecificelementsofcompensationfortheseexecutives,pleasesee“SummaryCompensationTable”beginningonpage64.
Other Elements of Legacy Celgene Executive Compensation
401(k) Plan
• During2019,Mr.ElkinsandDr.VesseycontinuedtoparticipateintheCelgene401(k)Plan,atax-qualifiedretirement savings plan available to all U.S. Celgene eligible employees. Prior to the Closing, bothMr. Elkins andDr. Vessey received companymatching contributions under the planequal to 6%of theireligible earnings (subject to applicable IRS limits). Because these matching contributions were made byCelgenepriortoClosing,theyarenotreflectedintheSummaryCompensationTablebeloworelsewhereinthis Proxy Statement. Matching contributions for all employees under the Celgene401(k) Plan, includingMr. Elkins and Dr. Vessey, vest 20% per year for the first five years of employment, after which allcontributionsare100%vested.
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Health & Welfare Benefits
• Along with other legacy Celgene employees, Mr. Elkins and Dr. Vessey will continue to be covered byCelgene health and welfare benefits through January 1, 2021. The arrangements for Mr. Elkins and Dr.Vesseyareconsistentwiththeplans,programsandeligibilityprovidedtootherlegacyCelgeneemployees.In addition, an excess liability insurance policy is provided to certain senior-level legacy Celgene eligibleemployees.
Professional Tax and Financial Counseling
• Mr. Elkins and Dr. Vessey continue to be eligible for reimbursement of reasonable expenses incurred inobtaining professional tax and financial counseling, up to a maximum of $15,000 annually, throughJanuary1,2021,ineachcasepursuanttolegacyCelgenearrangements.
Legacy Celgene 2019 Annual Bonus Calculation and PaymentTheperformancemeasuresundertheCelgeneManagementIncentivePlan(“CelgeneMIP”),asapprovedbytheCelgeneCompensationCommitteeforfiscal2019,includedaCompanyPerformanceFactor(“CPF”)consistingoffinancial objectives (total revenues and adjusted EPS) and non-financial objectives (selected strategic keyperformanceindicators(“KPI”))withamaximumof200%achievementfortheCPF,whichwasthenmultipliedbyanIndividualPerformanceModifier(“IPM”),whichcouldrangeupto130%.TheCPFwasproratedbasedonactualperformance during the pre-Close period and awarded at no less than target for the post-Close period. Inparticular, after Closing through the end of 2019, the CPF continued to be measured and scored according toperformance against the pre-established revenue, EPS, and KPI goals. The IPM was assessed in the ordinarycourseandinthecaseofMr.ElkinsandMr.Vessey,considerationofintegrationplanningactivitieswereincludedindeterminingtheirIPM.
Thefull-yearpayoutwasthencalculatedasfollows:
As noted, the payouts under the Celgene MIP were based on the combination of an executive’s target bonusamount,theCompanyPerformanceFactor,andtheIndividualPerformanceModifierforeachexecutive.
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The blended company performance results for the year led to a performance factor of 143.10% for 2019. Thecalculationwasbasedonthefollowingperformanceagainstgoalsbothpre-Closeandpost-Close:
Pre-Close Performance
Performance Measure Target Actual Resulting Pre-Close Payout Percentage(1)
AdjustedEPS $10.60-$10.80 $11.08 56.00%
TotalRevenues,($=B) $17.0-$17.2 $17.39 32.00%
Project-BasedKPIs 40Points 59Points 59.00%
Total 147.00%
1) Certified bythe CelgeneCompensation Committee onNovember 15, 2019. Per theMerger Agreement, payout factor basedonperformancethroughtheClosingapplicabletothepre-closeperformanceperiod.
Post-Close Performance
Performance Measure Target Actual Resulting Full Year Payout Percentage(3)
AdjustedEPS(1) $10.60-$10.80 Target 28.00%
TotalRevenues,($=B)(2) $15.1-$15.3 $15.57 34.00%
Project-BasedKPIs 40Points 51Points 51.00%
Total 113.00%
1) PertheMergerAgreement,adjustedEPSdeemedachievedattarget.2) TotalRevenuesexcludeOtezladuetoitsdivestitureonNovember21,2019.3) PertheMergerAgreement,payoutfactorbasedonfullyearresultsapplicabletothepost-Closeperformanceperiod.
TheactualannualbonusforeachlegacyCelgeneexecutivewhoisanNEOisshowninthetablebelowandcanalsobefoundintheSummaryCompensationTableundertheNon-EquityIncentivePlanCompensationcolumn.
Executive Target Bonus Amount
Applying BlendedCompany
Performance Factor(1)Actual
Payout(2)
David Elkins $770,861 $1,103,102 $1,323,722
Rupert Vessey M.A, B.M., B.Ch.,F.R.C.P., D.Phil. $694,118 $993,283 $1,241,604
1) AdjustedtoreflectblendedCompanyPerformanceFactorearnedat143.10%,whichiscalculatedbasedontheweightedaverageofapre-CloseCompanyPerformanceFactorof147%andapost-CloseCompanyPerformanceFactorof113%.
2) AdjustedtoreflectIndividualPerformanceModifier.
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BMS Compensation Program Design Process
Compensation and Management Development CommitteeThe Committee is responsible for providing oversight of our executive compensation program for the NamedExecutiveOfficersaswellasothermembersofseniormanagement.TheCommitteeisresponsibleforsettingthecompensationoftheChiefExecutiveOfficerandapprovingthecompensationofalloftheotherNamedExecutiveOfficersandcertainothermembersofseniormanagement.
TheCommitteeannuallyreviewsandevaluatestheexecutivecompensationprogramwiththeintenttoensurethattheprogramisalignedwithourcompensationphilosophyandwithourperformance.Seepage24foradiscussionofthedutiesandresponsibilitiesoftheCommitteeinmoredetail.
Role of the Independent Compensation ConsultantThe Committee has retained CAP on an annual basis as its independent compensation consultant to provideexecutivecompensation services to the Committee. CAP reports directly to the Committee, and the CommitteedirectlyoverseesthefeespaidforservicesprovidedbyCAP.TheCommitteeinstructsCAPtogiveadvicetotheCommittee independent of management and to provide such advice for the benefit of our company andshareholders. CAP does not provide any consulting services to BMS beyond its role as consultant to theCommittee.
In2019,CAPprovidedthefollowingservices:
• reviewedandadvisedonthecompositionofthepeergroupusedforcompetitivebenchmarking;
• participatedinthereviewofourexecutivecompensationprogram;
• provided an assessment of BMS senior executive pay levels and practices relative to peers and othercompetitivemarketdata;
• providedanannualanalysisofindustrytrendsamongthepeersandbestpracticesrelatedtopayprogramdesignandotherprogramelements;
• consulted on incentive plan design and compensation packages for senior executives in light of theCelgeneTransaction;
• reviewedandadvisedonallmaterialsprovidedtotheCommitteefordiscussionandapproval;and
• attended all of the Committee’s regularly scheduled and special meetings in 2019 at the request of theCommittee,andalsometwiththeCommitteechairmanwithoutmanagementpresent.
TheCommittee reviewstheindependenceof CAPannually in accordancewith its charter, applicableSECrulesandNYSElistingrequirements.AfterreviewandconsultationwithCAP,theCommitteehasdeterminedthatCAPisindependent,andthereisnoconflictofinterestresultingfromretainingCAPcurrentlyorduringtheyearendedDecember31,2019.
Role of Company ManagementTheCEOmakesrecommendationstotheCommitteeconcerningthecompensationofNamedExecutiveOfficersotherthantheCEO,aswellasothermembersofseniormanagement.Inaddition,theCEO,CFOand,inthecaseofourpipelineperformancemetric,theHeadofResearchandEarlyDevelopment(andformerlytheChiefScientificOfficer)are involved in recommending for the Committee’s approval the performance goals for the annual andlong-termincentiveplans,asapplicable.TheChiefHumanResourcesOfficerworkscloselywiththeCommittee,itsindependent compensation consultant and management to (i) ensure that the Committee is provided with theappropriate information to make its decisions, (ii) propose recommendations for Committee consideration, and(iii)communicatethosedecisionstomanagementforimplementation.
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Executive Compensation Governance Practices
Best Practice Compensation GovernanceWemaintainanumberofcompensationgovernancebestpracticeswhichsupportouroverarchingcompensationphilosophy and are fully aligned with our compensation principles, as discussed in the following section. Ourcompensationpracticesalsoalignwithinputwehavereceivedfromshareholders.
What We Do: What We Don’t Do:
100%performance-basedannualandlong-termincentives NoguaranteedincentiveswithourNamedExecutiveOfficers
Capsonthepayoutsunderourannualandlong-termincentiveawardprograms
Prohibitiononspeculativeandhedgingtransactions
Robustshareownershipandshareretentionguidelines Prohibitiononpledgingsharesandholdingtheminamarginaccount
Neutralizesharebuybackimpactonshare-denominatedcompensationmetrics
Proactivelyeliminatewindfallgainpotential
Robustrecoupmentandclawbackpolicies NoemploymentcontractswithourNamedExecutiveOfficers
Proactiveshareholderengagement Prohibitiononre-pricingorbackdatingofequityawards
“Double-trigger”change-in-controlagreements MinimalperquisitestoourNamedExecutiveOfficers
Share Ownership and Retention PolicyIn order to preserve the link between the interests of our NamedExecutive Officers and those of shareholders,executives are expected to use the shares acquired upon the vesting of (i) Performance Share Unit awards,(ii)MarketShareUnitawardsand(iii)RestrictedStockUnitawards,ifany,aftersatisfyingtheapplicabletaxes,toestablish and maintain a significant level of direct ownership. This sameexpectation applies to shares acquiredupontheexerciseofanypreviouslygrantedstockoptions.Wecontinuetomaintainlong-standingshareownershipexpectationsforourseniorexecutives.OurcurrentNamedExecutiveOfficersallcomplywiththeirownershipandretentionrequirements,asdetailedinthefollowingtable:
Share Retention Policy—applied to allshares acquired, net of taxes
Executive
StockOwnership
guideline as a Multiple of
Salary
Prior to Achieving Guideline
After Achieving Guideline
2018 Compliance withShare Ownership and
Retention Policy
Giovanni Caforio, M.D. 6x 100% 75%for1year Yes
Charles Bancroft 3x 100% 75%for1year Yes
David Elkins 3x 100% 75%for1year Yes
Sandra Leung 3x 100% 75%for1year Yes
Christopher Boerner, Ph.D. 3x 100% 75%for1year Yes
Rupert Vessey M.A, B.M.,B.Ch., F.R.C.P., D.Phil. 3x 100% 75%for1year Yes
Thomas J. Lynch, Jr., M.D. 3x 100% 75%for1year Yes
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Recoupment of CompensationWemaintainclawbackprovisionsrelatingtostockoptions,RestrictedStockUnits,PerformanceShareUnitsandMarket ShareUnits. Undertheseclawbackprovisions, executivesthat violatenon-competitionor non-solicitationagreements, or otherwise act in a manner detrimental to our interests, forfeit anyoutstanding awards, as of thedatesuchviolationisdiscoveredandhavetoreturnanygainsrealizedinthetwelvemonthspriortotheviolation.Theseprovisionsservetoprotectourintellectualpropertyandhumancapital,andhelpensurethatexecutivesactinthebestinterestofBMSandourshareholders.
In2005,ourBoardadoptedapolicywhereinourBoardwillseekreimbursementofannualincentiveawardspaidtoanexecutiveif suchexecutiveengagedinmisconduct that causedor partially causedarestatement of financialresults.Insuchanevent,wewillseektoclawbacktheexecutive’sentireannualincentivefortherelevantperiod,plusareasonablerateofinterest.
In December 2012, our Board adopted a policy that BMS will seek recoupment of any incentive and/or othercompensationpaidtoexecutivesandcertainotheremployeeswhere:
• theexecutiveorotheremployeeengagedinmisconduct,orfailedtoappropriatelysuperviseanemployeewhoengagedinmisconduct, thatresultedinamaterial violationofaBMSpolicyrelatingtotheresearch,development,manufacturing,salesormarketingofpharmaceuticalproducts;and
• the Committee determines that this material violation of a BMS policy resulted in a significant negativeimpactonourresultsofoperationsormarketcapitalization.
In anyinstancewheretheemployeemisconduct occurredin a prior year, theCommittee mayelect to reduceacurrent or future incentive and/or other compensation award in lieu of requiring reimbursement of pastcompensationpreviouslypaidtosuchexecutiveorotheremployee.Inaddition,inMarch2020,ourBoardrevisedthepolicytoprovidethat,iflegallypermissible,thecompanywillpubliclydisclosewheneveradecisionhasbeenmade to use the clawback policy, so long as the underlying event has already been publicly disclosed with theSEC.
Thefullclawbackpolicymaybeviewedonourwebsiteatwww.bms.com.
Equity Grant PolicyTheCommittee’spolicycoveringequitygrantsforourNamedExecutiveOfficersisasfollows:
Approval of Awards
• AwardsgrantedtotheCEOmustbeapprovedbytheCommitteeandrecommendedbytheCommitteeto,andapprovedbyatleast75%of,theindependentdirectorsofourBoard.
• TheCommitteemustapproveawardstoallNamedExecutiveOfficers.
Grant Effective Date
Annual Awards
• OurregularlyscheduledannualequityawardsareapprovedonthedatetheCommitteeandfullBoardmeetduringthefirstweekofMarch,withagranteffectivedateofMarch10.
All Other Awards
• Forawardsgrantedtocurrentemployeesatanyothertimeduringtheyear,thegranteffectivedateisthefirstbusinessdayofthemonthfollowingtheapprovaldate,exceptthatiftheapprovaldatefallsonthefirstbusinessdayofagivenmonth,thegranteffectivedateistheapprovaldate.
• Forawardsgrantedtonewhires,thegranteffectivedateisthefirstbusinessdayofthemonthfollowingtheemployee’s hire date, except that if the employee’s hire date falls on the first business day of a givenmonth,thegranteffectivedateistheemployee’shiredate.
Innocasewhatsoeverwillthegranteffectivedateprecedetheapprovaldateofagivenaward.
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Grant Price• Thegrant price of awardsis a10-day averageclosing price (i.e., an averageof the closing price onthe
grant date plus the 9prior trading days). For stock options that may be granted under specialcircumstances(nonehavebeengrantedsince2009),thegrantpricewillbetheclosingpriceonthedateofgrant.
Policy Prohibiting Hedging and PledgingWe consider it improper and inappropriate for our directors, officers, and other employees to engage in anytransactionsthathedgeoroffset,oraredesignedtohedgeoroffset,anydecreaseinthevalueofoursecurities.As such, our insider trading policy prohibits all employees, including directors and executive officers, fromengaging in any speculative or hedging transactions or any other transactions that are designed to offset anydecreaseinthevalueofoursecurities.Ourinsidertradingpolicyalsoprohibitsallemployees,includingdirectorsandexecutiveofficers,fromholdingoursecuritiesinamarginaccountorpledgingoursecuritiesascollateralforaloanexcept in certain limitedcircumstances pre-approvedbyour Corporate Secretary whenapersonwishestopledgeoursecuritiesascollateralforaloanandclearlydemonstratestheabilitytorepaytheloanwithoutsellingsuchsecurities.Noneofourdirectorsorexecutiveofficershaspledgedsharesofourstockascollateralforaloanorholdssharesofourstockinamarginaccount.
Policy Prohibiting the Repricing of Stock Options Without Shareholder ConsentWehavealwaysmaintainedaconsistentpolicyagainsttherepricingofstockoptions.Webelievethisisacriticalelement in maintaining the integrity of the equity compensation program and ensuring alignment of seniorexecutives’ interests with the interests of shareholders. Our Board has adopted a formal policy prohibiting therepricingofstockoptions.Thispolicymaybeviewedonourwebsiteatwww.bms.com.
Policy Regarding Shareholder Approval of SeveranceOur Board has approved a policy that requires shareholder approval of any future agreements that provide forcash severance payments in excess of 2.99 times the sumof an executive’s base salary plus annual incentiveaward.“Cashseverancepayments”excludeaccruedincentivepayments,thevalueofequityacceleration,benefitscontinuation or the increase in retirement benefits triggered by severance provisions or tax gross-up payments.Thispolicymaybeviewedonourwebsiteatwww.bms.com.
Risk Assessment of Executive CompensationTheCommitteeannuallyreviewsthecompensationprogramsfromariskperspective.Basedonthatreviewoftheexecutive compensation arrangements for legacy BMS executives as detailed beginning on page 41, theCommittee believes that our compensation program does not encourage executives to take excessive orinappropriaterisksthatcouldmaximizeshort-termresultsattheexpenseofsustainablelong-termvaluecreationthat may harmshareholder value. Beginning with the 2020 compensation year, this risk assessment reviewwillalsoincludelegacyCelgeneexecutives.
TheCommittee’songoingreviewofourbusinessstrategyandourextensiveshareholderengagementeffortshaveallowed our executive compensation program to maintain close alignment with our strategic focus and theperspectivesofourshareholders.
Ourcompensationprogramisintendedtoachievethisbystrikinganappropriatebalancebetweenshort-termandlong-termincentives,usingadiversityofmetricstoassessperformanceandpayoutunderourincentiveprograms,placing caps on our incentive award payout opportunities, following equity grant practices that limit potential fortimingawardsandhavingstockownershipandretentionrequirements.Forexample,ourcurrentlong-termequityincentiveprogram(60%PerformanceShareUnitsand40%MarketShareUnits)incorporatesthecompany’sstockpriceintoitsperformancemeasuresandgenerallymagnifiestheimpactofchangesinourstockpriceaswell asrelativetotalshareholderreturnperformanceoverthemidandlonger-term.
Also embedded in the Committee’s annual review is the ongoing assessment of enterprise risk, includingreputational risksstemmingfromthedynamicexternal environment. Inaddition, weevaluatetheperformanceofeachofourexecutivesbasedonanumberoffactors,includinghowtheydemonstrateourBMSBehaviorsintheexecutionoftheirday-to-daydecisions.Thosebehaviorsinclude,amongothers,accountability.Thisevaluationisone input into the determination of payouts under both the annual incentive and long-term equity incentiveprograms.Therefore,given
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the direct link between payout and our executive compensation program’s emphasis on sustainable long-termvalue, we attempt to minimize and appropriately reduce the possibility that our executive officers will makeexcessivelyorinappropriatelyriskydecisionsthatcouldmaximizeshort-termresultsattheexpenseofsustainablelong-termvaluecreationforourshareholders.
Compensation and Management Development Committee Report
The Compensation and Management Development Committee of Bristol Myers Squibb has reviewed anddiscussed with management the “Compensation Discussion and Analysis” on pages 33to 82of this ProxyStatement as required under Item 402(b) of Regulation S-K. Based on its review and discussions withmanagement,theCommitteerecommendedtothefull BoardthattheCompensationDiscussionandAnalysisbeincludedinthisProxyStatement.
Compensation and Management Development Committee
MichaelGrobstein,ChairPeterJ.ArduiniMathewW.EmmensDineshC.PaliwalGeraldL.Storch,Chair-electKarenH.Vousden,Ph.D.
Tax Implications of Executive Compensation Program
Whensettingexecutivecompensation,weconsidermanyfactors,suchasattractingandretainingexecutivesandprovidingappropriateperformanceincentives.Wealsoconsidertheafter-taxcosttothecompanyinestablishingexecutive compensation programs, both individually and in the aggregate, but tax deductibility is not our soleconsideration.Section162(m)oftheInternalRevenueCodegenerallydisallowsafederalincometaxdeductiontopubliccompaniesforannualcompensationover$1million(perindividual)paidtotheirchiefexecutiveofficer,chieffinancialofficer andthenext threemost highly compensatedexecutive officers (as well as certain other officerswhowerecoveredemployeesinyearsafter2016).The2017TaxActeliminatedmostoftheexceptionsfromthe$1milliondeductionlimit,exceptforcertainarrangementsinplaceasofNovember2,2017.Asaresult,mostofthecompensationpayabletoourNamedExecutiveOfficersinexcessof$1millionperpersoninayearwillnotbefullydeductible.
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Summary Compensation Table
for Fiscal Years Ended December 31, 2019, 2018, and 2017
Name and PrincipalPosition Year(1) Salary(2) Bonus(3)
Stock Awards(4)
Non-Equity Incentive Plan
Compensation(5)
Change in Pension Value
and Non-Qualified Deferred
Compensation Earnings(6)
All Other Compensation(7) Total
Giovanni Caforio, M.D. Chairman and ChiefExecutive Officer
2019 $1,650,000 $0 $12,545,754 $3,885,540 $0 $685,959 $18,767,253
2018 $1,637,500 $0 $13,011,542 $4,066,322 $0 $664,391 $19,379,755
2017 $1,587,500 $0 $12,650,528 $3,899,094 $0 $550,001 $18,687,123
Charles Bancroft(8) EVP, Head ofIntegration and Strategy& BusinessDevelopment Former CFO and EVP,Head of GlobalBusiness Operations
2019 $1,058,028 $0 $4,159,181 $1,993,217 $1,932,721 $391,433 $9,534,580
2018 $1,027,212 $0 $4,313,576 $2,203,913 $0 $349,706 $7,894,407
2017 $997,294 $0 $4,321,014 $1,887,005 $1,307,641 $303,354 $8,816,308
David Elkins(8) EVP and Chief FinancialOfficer
2019 $116,667 $1,050,000 $1,865,662 $1,323,722 $0 $15,500 $4,371,551
Sandra Leung EVP and GeneralCounsel
2019 $1,008,635 $0 $3,172,998 $1,586,482 $1,425,687 $322,655 $7,516,457
2018 $975,860 $0 $3,290,794 $1,680,159 $0 $296,370 $6,243,183
2017 $947,436 $0 $3,047,660 $1,493,890 $794,983 $259,448 $6,543,417
Christopher Boerner,Ph.D. EVP and ChiefCommercializationOfficer
2019 $891,259 $0 $3,250,793 $1,399,997 $0 $199,601 $5,741,650
Rupert Vessey, M.A.,B.M., B.Ch., F.R.C.P.,D.Phil.(9) EVP and President,Research and EarlyDevelopment
2019 $116,667 $1,000,000 $1,865,662 $1,241,604 $0 $11,550 $4,235,483
Thomas J. Lynch, Jr.,M.D.(10) Former EVP and ChiefScientific Officer
2019 $796,111 $0 $3,783,765 $1,222,892 $0 $2,485,785 $8,288,553
2018 $1,022,500 $0 $4,075,218 $1,625,039 $0 $311,366 $7,034,123
2017 $796,154 $1,400,000 $4,425,587 $1,576,706 $0 $113,522 $8,311,969
1) Compensationisnotshownfor2017and2018forMr.Elkins,Dr.Boerner,andDr.VesseybecausetheywerenotNamedExecutiveOfficersinthoseyears.
2) Reflectsactualsalaryearned.Dr.Lynch’s2017salarywaspaidfromMarch16,2017,thedatehewashiredasExecutiveVicePresidentandChief Scientific Officer, through the end of the year. Mr. Elkins’ and Dr. Vessey’s 2019 salaries were earned from November 20, 2019, theClosingoftheacquisitionofCelgeneCorporation,throughtheendoftheyear.
3) For2017,representsDr.Lynch’scashsignonbonusgrantedinconnectionwithrecruitinghimtojointhecompany.For2019,forMr.ElkinsandDr.Vessey,representsthe50%portionoftheircashinducementawards.Seepage56oftheCD&Aforfurtherdetails.IneachcasetheywerepayableassoonaspracticableaftertheClosing.
4) Representsaggregategrant datefair valueunderFASBASCTopic718of RSU,MSUandPSUawardsgrantedduringaspecifiedyear. ForMr. Elkins and Dr. Vessey, represents restricted stock units. See page 76of CD&A for further details. These awards were granted onDecember 2, 2019, thefirst grant datefollowingtheClosing. Further information regardingtheseawards, includingtheassumptionsmadeindeterminingtheirvalues,isdisclosedintheGrantsofPlan-BasedAwardsTableintheProxyStatementsforthespecifiedyears.AsapprovedinanticipationoftheClosing,the2018and2019PSUawardsforourLegacyBMSNEOsweremodifiedasdescribedinthefootnotetothe2019Grants of Plan-BasedAwards Table. This modification, which will be a 2020event under the U.S. GAAPaccounting rules, may result in anincremental accounting charge for these awards, and, therefore, the amounts in the 2020 Summary Compensation table may include theseincremental charges. For PSU awards, the following represents the aggregate value based on the maximum number of shares that can beearnedfortheawardsgrantedinthespecifiedyears.
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Performance Share Units
Name 2017 2018 2019
Giovanni Caforio, M.D. $12,037,692 $12,282,168 $12,015,451
Charles Bancroft $4,111,682 $4,071,790 $3,983,342
Christopher Boerner, Ph.D. (1) n.a. n.a. $2,577,347
Sandra Leung $2,899,997 $3,106,319 $3,038,877
Thomas J. Lynch, Jr., M.D. $3,072,610 $3,846,794 $3,623,827
5) Forall NEOs,except Mr. ElkinsandDr. Vessey, represents incentiveawardearnedunderour Company’s annual incentiveplan. Dr. Lynch’s2017targetincentiveawardwasproratedbasedonhisdateofhireandhis2019targetincentivewasproratedbasedonhisseparationdate.For2019,forMr.ElkinsandDr.Vessey,representsactualbonusearnedunderthe2019CelgeneMIPandpaidoutbytheCompany.For2019,thepayments weremadeonMarch13, 2020for Mr. ElkinsandDr. Vessey, andonMarch6, 2020for theother NEOs. For 2018and2017, thepaymentsweremadeonMarch8,2019andMarch9,2018,respectively.
6) Includesincreaseinestimatedvalueof accruedpensionbenefits undertheU.SRetirementIncomePlan("US-RIP") andBEP-RIPduringtheyear. The Company does not pay above-market interest rates on deferred compensation. The Company terminated the US-RIP effectiveFebruary 1, 2019 and transferred approximately $3.8 billion of U.S. pension obligations in connection with the termination. All liabilitiesassociatedwiththeUS-RIPweresettledthroughdirectlumpsumpaymentstoparticipantsorthroughthepurchaseofgroupannuitycontractsinthethirdquarterof2019.ThepresentvalueoftheaccruedpensionbenefitsforMr.BancroftandMs.Leung,theonly2019NEOparticipantsintheCompany’sdefinedbenefitpensionplans,increasedoverthepreviousyearbecauseofadecreaseindiscountratesandattainmentofage60, partially offset by updated lump sum mortality projection scales. The change in pension value with respect to the US-RIP includes thedifferencebetween(i) 2019valueofthelumpsumspaidinJuly2019andthevalueofannuitypremiumspaidinAugust2019tosettletheseexecutives’ benefits under the US-RIP and (ii) Present Value of Accumulated Benefits under the US-RIP as reported in last year’s ProxyStatement.
7) For all NEOs, except Mr. Elkins and Dr. Vessey, the amounts indicated for 2019 represent Company contributions to the qualified and non-qualifiedsavingsplans.During2019Mr.ElkinsandDr.VesseycontinuedtoparticipateintheCelgene401(k)Plan,atax-qualifiedretirementsavingsplanavailabletoallU.S.Celgeneeligibleemployees,andeachreceivedhismaximum2019companycontributionspriortotheClosing.Consequently,noamountsarereportableforthe2019post-Closingperiod.ForDr.Lynchthevalueadditionallyincludes(i)accruedseverancein the amount of $ 2,121,800 and (ii) payout of accrued vacation in the amount of $73,447, both in connection with his separation fromtheCompany.ForMr.ElkinsandDr.Vessey,thevaluesreflectthereimbursementoflegalfeesincurredinnegotiatingtheircompensationpackagesinthevalueof$15,500and$11,550,respectively.Onoccasion,afamilymemberaccompaniedDr.CaforioandDr.Boerner,atnoincrementalcosttotheCompany,whentravelingontheCompany’sHeliFliteaccountonbusiness.Dr.CaforioandDr.BoernerpaidthetaxesontheimputedincomeascalculatedusingtheStandardIndustryFareLevel(SIFL)rate.WedidnotreimburseDr.CaforioorDr.Boernerfortaxestheypaid.
8) Mr.ElkinswasappointedEVPandChiefFinancialOfficereffectiveNovember20,2019and,atthesametime,Mr.BancroftassumedtheroleoftheEVP,HeadofIntegrationandStrategy&BusinessDevelopment.
9) Dr.VesseywasappointedEVPandPresident,ResearchandEarlyDevelopmenteffectiveNovember20,2019.10) Dr.LynchseparatedfromtheCompanyonOctober1,2019.
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Grants of Plan-Based Awards
2019 Fiscal Year
NameAward Type
Grant Date(1)
ApprovalDate
Estimated Future Payouts Under Non Equity Incentive
Plan Awards(2)
Estimated Future Payouts Under Equity Incentive Plan Awards (shares)
All Other Stock
Awards: # of
Shares or Stock
of Units
Grant Date Fair Value
of Stock andOption Awards
Threshold($)
Target ($)
Maximum ($)
Threshold(#)
Target (#)
Maximum(#)
Giovanni Caforio,M.D.
LegacyBMSAIP $287,843 $2,475,000 $4,950,000
PSU 03/10/19 03/01/19 24,545 148,758 297,516(3) $7,436,412(6)
MSU 03/10/19 03/01/19 59,503 99,172 198,344(4) $5,109,341(7)
Charles Bancroft LegacyBMSAIP $147,658 $1,269,634 $2,539,268
PSU 03/10/19 03/01/19 8,137 49,316 98,632(3) $2,465,307(6)
MSU 03/10/19 03/01/19 19,727 32,878 65,756(4) $1,693,875(7)
David Elkins LegacyCelgeneMIP $0 $770,861 $1,541,722
RSU 12/02/19 05/31/19 35,168(5) $1,865,662(8)
Sandra Leung LegacyBMSAIP $117,527 $1,010,553 $2,021,106
PSU 03/10/19 03/01/19 6,208 37,623 75,246(3) $1,880,774(6)
MSU 03/10/19 03/01/19 15,049 25,082 50,164(4) $1,292,225(7)
Christopher Boerner,Ph.D.
LegacyBMSAIP $103,712 $891,766 $1,783,532
PSU 03/10/19 03/01/19 5,265 31,909 63,818 $1,595,131(6)
MSU 03/10/19 03/01/19 12,764 21,273 42,546 $1,095,985(7)
RSU 12/02/19 05/31/19 10,550(5) $559,678(8)
Rupert Vessey, M.A.,B.M., B.Ch., F.R.C.P.,D.Phil.
LegacyCelgeneMIP $0 $694,118 $1,388,236
RSU 12/02/19 05/31/19 35,168(5) $1,865,662(8)
Thomas J. Lynch, Jr.,M.D.(9)
LegacyBMSAIP $146,981 $1,263,810 $2,527,620
PSU 03/10/19 03/01/19 7,403 44,865 89,730(3) $2,242,801(6)
MSU 03/10/19 03/01/19 17,946 29,910 59,820(4) $1,540,963(7)
1) Theseequityawardsweregrantedunderour2012StockAwardandIncentivePlan.2) ExceptforMr.ElkinsandDr.Vessey,targetpayoutsunderthelegacyBMS2019annualincentiveplan("LegacyBMSAIP")arebasedonatargetedpercentage
of annual base salary. The Committee reviews Company and individual performance in determining the actual incentive award as reported in the SummaryCompensationTable.TheLegacyBMSAIPcompanyperformancefor2019wasbased50%onnon-GAAPdilutedearningspershare,25%ontotalrevenues(netofforeignexchange),and25%onpipelineperformance.MaximumrepresentsthemaximumindividualincentiveawardallowableundertheLegacyBMS2019AIPandforourNamedExecutiveOfficersequals200%oftarget.For2019,thresholdpayoutforallthreemeasureswas46.50%oftarget.Thethresholdcolumn above reflects the lowest possible combined payout of 11.63% of target based on the threshold payout on one of the least weighted metrics. AsapprovedinanticipationoftheClosing,themeasurementofEPSmetricwasadjustedtoreflectperformancethroughSeptember30,2019,theendofthequarterimmediately preceding the Closing, and compared to the goal through three quarters. Total Revenues and relative TSR metrics continued to be measuredthroughtheendoftheyear.ForMr.ElkinsandDr.Vessey,targetpayoutsunderthelegacyCelgene2019managementincentiveplan("LegacyCelgeneMIP")arebasedonatargetedpercentageofannualbasesalary.TheLegacyCelgeneMIPcompanyperformancefor2019wasbased28%onadjustedearningspershare,28%ontotalrevenues,and44%onprojectgoals.MaximumrepresentsthemaximumindividualincentiveawardallowableunderLegacyCelgene2019annualincentiveplanandequals200%oftarget.The2019bonusundertheLegacyCelgeneMIPasreportedinthe2019SummaryCompensationTablewasdeterminedinaccordancewiththeMergerAgreementasfollows:(a)pre-Closingpayoutfactor,applicabletothepre-Closingperformanceperiod,wasbasedontheperformancethroughtheClosingandcertifiedbytheCelgeneCompensationCommitteeand(b)post-Closingpayoutfactor,applicabletothepost-Closingperformanceperiod,wasbasedonthefullyearresultswithadjustedEPSdeemedachievedattargetandthefinalpayoutapprovedbytheCompany.Seepages43and57oftheCD&Aforfurtherdetailsregardingbothplans,respectively.
3) Reflects PSUswhich cliff vest on the third anniversary of the grant date. Performance targets under thesePSUsare based33%on3-year cumulative totalrevenues(netofforeignexchange),33%on3-yearcumulativeoperatingmargin, and34%on3-yearrelativeTSRexpressedasapercentilerankversusourpeergroup.Thresholdpayoutforallthreemeasuresis50%oftarget.Thethresholdcolumnabovereflectsthelowestpossiblecombinedpayoutof16.50%oftargetbasedonthethresholdpayoutononeoftheleastweightedmetricsonly.Themaximumperformancewillresultinapayoutof200%oftarget.ThesePSUsdo not accrue dividend equivalents. As approved in anticipation of the Closing, the awards were modified such that the cumulative Legacy BMS revenuesweighted33%werereplacedbythecombinedCompanycumulativetotalrevenues,LegacyBMScumulativeoperatingmarginweighted33%wasreplacedbykeyintegrationmetrics,andthe3-yearrelativeTSRstayedthesameexceptthatCelgenewasremovedfromthepeergroup.ThesamemodificationappliestothePSUsgrantedin2018.Thismodification,whichwillbea2020eventundertheU.S.GAAPaccountingrules,mayresultinanincrementalaccountingchargeforthesePSUs,andifso,itwouldbedisclosedasseparategrantsinthe2020GrantsofPlan-BasedAwardstable.Seepage51oftheCD&Aforfurtherdetailsregardingthismodification.
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4) ReflectsMSUswhichvestinequalannualinstallmentsonthefirst,second,thirdandfourthanniversariesofthegrantdate.EachMSUconvertsintothenumberofsharesofCommonStockdeterminedbyapplyingapayoutfactortothetargetnumberofsharesvestingonagivendate.Thepayoutfactorisaratiooftheaverageof theclosing CommonStock price on the February 28 measurement date immediately preceding the vesting date plus the nine prior trading daysdividedbytheaverageCommonStockpriceonthegrantdate(alsoa10-dayaverage).Theminimumpayoutfactorthatmustbeachievedtoearnapayoutis60%andthemaximumpayoutfactoris200%.TheseMSUsdonotaccruedividendequivalents.
5) ReflectsRSUswhichvestinequalinstallmentsonthefirst,second,third,andfourthanniversariesofthegrantdate.TheseRSUsdonotaccruedividendequivalents.
6) FairvaluefortheportionofthesePSUsrelatedtotherelativeTSRmeasure(34%weighting)isestimatedasofthedateofgrantonMarch10,2019usingaMonteCarlosimulation.Estimatedfairvalueofthisportionwasdeterminedtobe$56.53,whichrepresents110%ofthegrantdateclosingCommonStockpriceof$51.39.TheassumptionsusedinthisMonteCarlosimulationwerebasedonthree-yearhistorical stockpricedataandareasfollows:volatility forBMYof27.5%andtheaveragefor the peers of 21.5%; correlation co-efficient averageof 32.8%; assumeddividendyield of 3.19%basedonthe recent annualizedpaymentof$1.64pershareandthegrantdatestockpriceof$51.39;andBMY’sstartingTSRof(1.0%)andtheaverageforthepeersof(1.4%).Fairvaluefortheremainingportionof thesePSUs,relatedtoCompanyfinancial measures(66%weighting), is calculatedbasedonthegrant dateclosingCommonStockprice of $51.39 on March 8, 2019anda probable outcomeof a 100%payout, discounted for the lack of dividends. Estimated fair value of this portion wasdeterminedtobe$46.63,whichrepresents91%ofthegrantdateclosingCommonStockpriceof$51.39.Therefore,theestimatedgrantdatefairvalueforthewholePSUawardequals$49.99,whichrepresents97%ofthegrantdateclosingCommonStockpriceof$51.93.
7) FairvalueoftheseMSUsisestimatedasofthedateofgrantonMarch10,2019usingaMonteCarlosimulation.Estimatedfairvaluewasdeterminedtobe$51.52,which represents 100.3% of the grant date closing Common Stock price of $51.39. The assumptions used in this Monte Carlo simulation were asfollows:volatilityforBMYof27.0%basedonfour-yearhistoricalstockpricedata;assumeddividendyieldof3.19%basedontherecentannualizedpaymentof$1.64pershareandthegrantdatestockpriceof$51.39;BMY’sstartingperformancewas(1.0%);andrisk-freerateforeachmeasurementperiodof:• Tranche1endingFeb28,2020:2.53%;• Tranche2endingFeb28,2021:2.45%;• Tranche3endingFeb28,2022:2.43%;and• Tranche4endingFeb28,2023:2.43%.
8) Thefair valueof theseRSUsiscalculatedbasedonthegrant dateclosingCommonStockpriceof $57.41onDecember2, 2019,discountedfor thelackofdividends.Estimatedfairvaluewasdeterminedtobe$53.05,whichrepresents92%ofthegrantdateclosingCommonStockpriceof$57.41.
9) Dr.Lynch’s2019equityawardswereforfeiteduponhisseparationfromtheCompanyandhistargetbonusamountwasproratedbasedonhisseparationdateofOctober1,2019.
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Outstanding Equity Awards at Fiscal Year-End
2019 Fiscal Year
Option Awards Stock Awards
Name
Grant Date/ Performance Award Period
Number of Securities Underlying Unexercised
Options (#)(1)
Option Exercise
Price
Option Expiration
Date
Number of Shares or Units of
Stock That Have Not Vested
(#)(2)
Market Value of
Shares or Units of
StockThat
Have Not Vested ($)(2)(3)
EquityIncentive
Plan Awards: Number of Unearned
Shares, Units or Rights That
Have NotVested
(#)
Equity Incentive Plan Awards:
Market or PayoutValue of
Unearned Shares, Units or Rights That
Have Not Vested($)(3)Exercisable Unexercisable
GiovanniCaforio, M.D.
1/1/2017-2/28/2020 128,654(6) $8,258,300
1/1/2018-2/28/2021 112,343(7) $7,211,297
1/1/2019-2/28/2022 148,758(8) $9,548,776
3/10/2016 18,184(9) $1,167,231
3/10/2017 42,885(9) $2,752,788
3/10/2018 56,172(9) $3,605,681
3/10/2019 59,503(10) $3,819,510
Charles Bancroft1/1/2017-2/28/2020 43,944(6) $2,820,765
1/1/2018-2/28/2021 37,244(7) $2,390,692
1/1/2019-2/28/2022 49,316(8) $3,165,594
3/10/2016 6,174(9) $396,309
3/10/2017 14,648(9) $940,255
3/10/2018 18,622(9) $1,195,346
3/10/2019 19,727(10) $1,266,263
David Elkins 8/1/2018 2,060 6,183 $48.49 8/1/2028
8/1/2018 46,258 138,776 $48.49 8/1/2028
8/1/2018 92,805(4)(13) $5,957,153
8/1/2018 20,624(5)(12) $1,323,855
3/1/2019 73,735(4)(13) $4,733,050
3/1/2019 47,401(5)(12) $3,042,670
12/2/2019 35,168(11) $2,257,434
8/1/2018 11,088(14) $33,375
8/1/2018 49,895(14) $150,184
8/1/2018 3,324(14) $10,005
8/1/2018 74,611(14) $224,579
3/1/2019 25,484(14) $76,707
3/1/2019 39,642(14) $119,322
Sandra Leung1/1/2017-2/28/2020 30,994(6) $1,989,505
1/1/2018-2/28/2021 28,413(7) $1,823,830
1/1/2019-2/28/2022 37,623(8) $2,415,020
3/10/2016 4,434(9) $284,618
3/10/2017 10,333(9) $663,275
3/10/2018 14,207(9) $911,947
3/10/2019 15,049(10) $966,008
ChristopherBoerner, Ph.D.
1/1/2017-2/28/2020 10,953(6) $703,073
1/1/2018-2/28/2021 10,568(7) $678,360
1/1/2019-2/28/2022 31,909(8) $2,048,239
3/10/2016 1,569(9) $100,714
3/10/2017 3,652(9) $234,422
3/10/2018 5,284(9) $339,180
3/10/2019 12,764(10) $819,308
12/2/2019 10,550(11) $677,205
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Option Awards Stock Awards
Name
Grant Date/ Performance Award Period
Number of Securities Underlying Unexercised
Options (#)(1)
Option Exercise
Price
Option Expiration
Date
Number of Shares or Units of
Stock That Have Not Vested
(#)(2)
Market Value of
Shares or Units of
StockThat
Have Not Vested ($)(2)(3)
EquityIncentive
Plan Awards: Number of Unearned
Shares, Units or Rights That
Have NotVested
(#)
Equity Incentive Plan Awards:
Market or PayoutValue of
Unearned Shares, Units or Rights That
Have Not Vested($)(3)Exercisable Unexercisable
Rupert Vessey,M.A., B.M.,B.Ch., F.R.C.P.,D.Phil. 2/2/2015 6,305 0 $63.41 2/2/2025
2/2/2015 29,489 0 $63.41 2/2/2025
5/4/2015 5,843 0 $58.78 5/4/2025
7/27/2015 5,843 0 $70.89 7/27/2025
11/9/2015 5,843 0 $61.01 11/9/2025
2/1/2016 0 1,454 $54.20 2/1/2026
2/1/2016 2,905 0 $54.20 2/1/2026
5/2/2016 0 373 $56.44 5/2/2026
5/2/2016 12,002 5,628 $56.44 5/2/2026
8/1/2016 18,098 6,036 $61.34 8/1/2026
10/31/2016 43,535 14,515 $54.94 10/31/2026
1/30/2017 0 1,651 $60.53 1/30/2027
1/30/2017 12,064 10,419 $60.53 1/30/2027
5/1/2017 10,644 10,644 $66.35 5/1/2027
7/31/2017 10,644 10,644 $72.42 7/31/2027
10/30/2017 24,466 24,466 $54.29 10/30/2027
1/29/2018 0 1,800 $55.52 1/29/2028
1/29/2018 5,293 14,080 $55.52 1/29/2028
5/8/2018 8,489 25,469 $44.70 5/8/2028
7/30/2018 8,489 25,469 $47.81 7/30/2028
10/29/2018 0 1 $38.41 10/29/2028
10/29/2018 8,489 25,467 $38.41 10/29/2028
5/1/2017 10,707(4)(13) $687,282
10/30/2017 5,804(4)(13) $372,559
3/1/2018 25,866(5)(12) $1,660,339
5/8/2018 17,245(4)(13) $1,106,957
2/4/2019 10,777(4)(13) $691,776
3/1/2019 45,029(5)(12) $2,890,412
3/1/2019 70,048(4)(13) $4,496,381
12/2/2019 35,168(11) $2,257,434
2/1/2016 782(14) $2,354
5/2/2016 201(14) $605
5/2/2016 3,026(14) $9,108
10/31/2016 7,803(14) $23,487
5/1/2017 5,756(14) $17,326
10/30/2017 3,120(14) $9,391
10/30/2017 13,154(14) $39,594
1/29/2018 968(14) $2,914
1/29/2018 7,570(14) $22,786
3/1/2018 13,906(14) $41,857
5/8/2018 9,271(14) $27,906
5/8/2018 13,693(14) $41,216
7/30/2018 13,693(14) $41,216
10/29/2018 1(14) $3
10/29/2018 13,692(14) $41,213
2/4/2019 5,794(14) $17,440
3/1/2019 24,209(14) $72,869
3/1/2019 37,660(14) $113,357
Thomas J.Lynch, Jr., M.D.
1/1/2017-2/28/2020 31,019(6) $1,991,110
1/1/2018-2/28/2021 18,348(7) $1,177,758
1) AtClosing,CelgenestockoptionswereassumedbytheCompanyandconvertedintooptionsrelatingtoourCommonStockinaccordancewiththemethodologyand exchange ratio set forth in the Merger Agreement. Further, pursuant to the conversion methodology of the Merger Agreement, (a) vested in-the-moneyCelgenestockoptionsasoftheClosingalsoreceivedacontingentvalueright(“CVR”)and(b)unvestedin-the-moneystockoptionswillreceiveeitheraCVRorinsomecases,CVRconsideration,pershareunderlyingeachsuchoptiononcetheunvestedoptionvests.Out-of-the-moneystockoptionsasofClosingwillnotreceiveaCVRorCVRconsideration.PursuanttolegacyCelgeneequityplans,optionsgrantedtoemployeesareimmediatelyexercisable.However,thesharesof Common Stock acquired upon exercise would be subject to the same vesting schedule as the underlying options (i.e., in four equal annual installmentsbeginningonthefirstanniversaryofthegrantdate).UnvestedoptionsareincludedintheUnexercisableColumn.
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2) RepresentsRSUsandCVRs,asapplicable,asofDecember31,2019.3) ValuesforstockoptionsandRSUsarebasedontheclosingCommonStockpriceonDecember31,2019of$64.19.4) AtClosing,eachCelgenetime-basedRSUwasassumedbytheCompanyandconverted,inaccordancewiththemethodologyandexchangeratiosetforthin
theMergerAgreement,into(a)anRSUthatsettlesinanumberofsharesofourCommonStockequalto(i)thenumberofsharesofCelgenecommonstockunderlyingsuchRSUimmediatelypriortoClosingmultipliedby(ii)theexchangeratio,roundeduptothenearestwholenumberofsharesofourCommonStock,and(b)therighttoreceive,immediatelyupon,andsubjectto,thevestingofsuchRSU,oneCVR,orinsomecases,CVRconsideration,pershareunderlyingeachsuchRSUoncetheRSUvests.
5) AtClosing,eachCelgenePSUwasassumedbytheCompanyandconverted,inaccordancewiththemethodologyandexchangeratiosetforthintheMergerAgreement,into(a)anRSUthatsettlesinanumberofsharesofourCommonStockequaltotheproductof(i)thenumberofsharesofCelgenecommonstockunderlyingsuchlegacyCelgenePSUimmediatelypriortoClosing(withsuchnumberofsharesdeterminedbydeemingtheapplicableperformancegoalstobeachievedatthegreaterofthetargetlevelandtheactuallevelofachievementthroughtheendofthecalendarquarterimmediatelyprecedingtheClosing,asdeterminedbytheManagementCompensationandDevelopmentCommitteeoftheboardofdirectorsofCelgenepriortoClosing),multipliedby(ii)theexchangeratiosetforthintheMergerAgreement,and(b)therighttoreceive,immediatelyupon,andsubjectto,thevestingofsuchlegacyCelgenePSU,oneCVR,orinsomecases,CVRconsideration,pershareunderlyingeachsuchlegacyCelgenePSUoncethelegacyPSUvests.
6) RepresentstargetnumberofPSUsgrantedunderthe2017-2019awardattargetpayoutof100%.TheawardvestedandwaspaidoutonMarch10,2020.7) RepresentstargetnumberofPSUsgrantedunderthe2018-2020awardattargetpayoutof100%.ThesePSUscliffvestonthethirdanniversaryofthegrant
date.8) RepresentstargetnumberofPSUsgrantedunderthe2019-2021awardattargetpayoutof100%.ThesePSUscliffvestonthethirdanniversaryofthegrant
date.9) RepresentsMSUsatthresholdpayoutof 100%.TheseMSUsvest infourequalinstallmentsof 25%oneachof thefirst fouranniversariesof thegrantdate,
subjecttoapayoutfactor.10) RepresentsMSUsattargetpayoutof60%.TheseMSUsvestinfourequalinstallmentsof25%oneachofthefirstfouranniversariesofthegrantdate,subjectto
apayoutfactor.11) TheseRSUsvestinfourequalinstallmentsoneachofthefirst,second,third,andfourthanniversariesofthegrantdate.12) TheseRSUs,assumedbytheCompanyandconvertedfromCelgenePSUs,cliffvestonthelastdayoftheapplicablepre-Closingthree-yearperformance
period.13) TheseRSUs,assumedbytheCompanyandconvertedfromCelgeneRSUs,continuetovestinthreeequalinstallmentsoneachofthefirst,second,andthird
anniversariesof thegrant datefor Mr. Elkins andcliff vest onthethird anniversary of thegrant datefor Dr. Vessey, all accordingto thepre-Closingvestingschedule.
14) ReflectsCVRsissuablewhentherelatedequityawardvests.ValuesarebasedonCVRtradingvalueonDecember31,2019of$3.01.
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Option Exercises and Stock Vesting
2019 Fiscal Year
Option Awards Stock Awards
Name
Number of Shares Acquired on
Exercise (#)
Value Realized On Exercise (1)
($)
Number of Shares Acquired on Vesting
(#)
Value Realized On Vesting(2)
($)
Giovanni Caforio, M.D. 0 $0 0 $0(3)
59,057 $3,019,314(4)
108,019 $5,551,096(5)
Charles Bancroft 52,884 $1,820,267 0 $0(3)
20,857 $1,071,841(4)
36,663 $1,884,112(5)
David Elkins(7) 0 $0 12,373 $794,223(3)
0 $0(4)
0 $0(5)
6,652 $20,023(6)
Sandra Leung 169,893 $5,835,825 0 $0(3)
15,320 $787,295(4)
26,341 $1,353,664(5)
Christopher Boerner, Ph.D. 0 $0 4,465 $222,759(3)
5,152 $264,761(4)
9,308 $478,338(5)
Rupert Vessey, M.A., B.M., B.Ch., F.R.C.P., D.Phil.(7) 0 $0 16,060 $1,030,891(3)
0 $0(4)
0 $0(5)
8,634 $25,988(6)
Thomas J. Lynch, Jr., M.D.(8) 0 $0 9,410 $448,396(3)
15,417 $756,086(4)
0 $0(5)
1) The value realized for each option award was determined by multiplying the number of options that were exercised by thedifferencebetweenthemarketpriceofourCommonStockatthetimeofexerciseandtheexercisepriceofthestockoptionaward.
2) Thevaluerealizedfor eachRSUandMSUawardwasdeterminedbymultiplyingthenumberof units that vestedbytheclosingshare price of our Common Stock on the respective vesting date. The value realized for each PSU award was determined bymultiplying the number of units that vested by the market price of our Common Stock on March 8, 2019, the business daypreceding March 10, 2019, the vesting date. The value realized for each contingent value right ("CVR") was determined bymultiplyingthenumberofCVRsthatwererealizedbythemarkettradingvalueofCVRsontherespectivevestingdate.
3) Reflects RSUs that vested during 2019. For Mr. Elkins and Dr. Vessey, RSUs reflect the converted Celgene 2017-2019 PSUawardsthatvestedonDecember31,2019.
4) ReflectsMSUsthatvestedduring2019.5) Reflectspayoutsofthevested2016-2018PSUsbasedontheclosingCommonStockpriceof$51.39onMarch8,2019.6) ReflectsCVRsrealizedonDecember31,2019uponvestingoftheconvertedLegacyCelgene2017-2019PSUs.Pursuanttothe
Merger,uponvestingoftheconvertedlegacyCelgeneaward,oneCVRisreceivedpershareunderlyingeachsuchaward.7) ActivitypriortotheClosing,including(i)anyMergerconsiderationreceivedatClosinginrespectofCelgeneoptionsexercisedor
RSUsthat vestedprior to theClosingand(ii) anyconsideration receivedat Closingin respect of theconversionof unexercisedCelgeneoptionsandunvestedRSUsthathavebeenexcludedfromthetable.
8) IncludesRSUsandMSUsthatvestedinconnectionwithDr.Lynch’sseparationfromtheCompanyonOctober1,2019.
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Retirement PlanAsof December 31, 2009, wediscontinuedservice accruals under theRetirement IncomePlanandtheBenefitEqualizationPlan(BEP)—RetirementPlanintheU.S.andPuertoRicoforactiveplanparticipantsandweclosedtheplanstonewentrants.Foractiveplanparticipantsatyearend2009,weprovidedfiveadditionalyearsofpaygrowth in the pension plans. Accordingly, 2014 was the last year of pay growth under our pension plans. InDecember 2018, the company announced the termination of the U.S. Retirement Income Plan (“the “Plan”)effectiveFebruary1,2019,anditsintenttotransfer$3.8billionofPlanobligations.Specifically,aspartofthePlantermination,activeemployeeswereprovidedawindowtocommencetheir Planbenefitsineitheralumpsumorannuity form of payment while remaining actively employed. The obligations were distributed through acombination of lumpsums to Plan participants whoelected such payments, and the purchase of group annuitycontracts from Athene Holding, Ltd, for all remaining liabilities. The Plan has sufficient assets to satisfy allterminationandtransferobligations,andnocompanycashcontributionswillbemadetoeffectthetransaction.Thistransactioncontinuesthecompany’spensionde-riskingstrategyandactions,whichbeganwiththefreezingofthecompany’s defined benefits plans in the U.S. andPuerto Rico in 2009. This transactionreducesthecompany’sfutureriskandadministrativecostswhileentrustingthepensionsofPlanparticipantsandtheirbeneficiariestoahighlyratedfinancialinstitutionselectedbyanindependentfiduciarywithexpertiseinthelong-termmanagementofretirementbenefits.
Prior to its effective termination date, the Plan was a tax-qualified defined benefit pension plan under Section401(a)oftheInternal RevenueCode,providingincomefor employeesafter retirement. Theretirement benefit iscalculated basedontheemployee’s final averagecompensation andyears of service. All U.S. employeeshiredbefore January 1, 2010 whowere not participants in a pension plan through a collective bargaining agreementwereeligibletoparticipateinthePlaniftheyworkedatleast1,000hoursperyear.
ThekeyplanprovisionsofthePlanareasfollows:
• Theretirementbenefitgenerallyequals:
– 2%×FinalAverageCompensation×YearsofServicethroughDecember31,2009,upto40,minus
– 1/70thofthePrimarySocialSecurityBenefit×YearsofServicethroughDecember31,2009,upto40.
• Final Average Compensation equals the average of the five consecutive years out of the last ten years,endingDecember31,2014,inwhichtheemployee’scompensationwasthehighest.Compensationequalsthe basesalary rate plus annual incentive awards paid during the year. Compensation is subject to thelimitsdefinedunderSection401(a)(17)oftheInternalRevenueCode.
• Normalretirementageis65.Employeesareeligibleforearlyretirementatage55with10ormoreyearsofservice.
• Employees eligible for early retirement may receive their pension without any reduction at age 60. Thepensionisgenerallyreducedby4%foreachyearthattheretirementageprecedesage60.
• Employeesare100%vestedafterattainingfiveyearsofservice.
• Thepensionisgenerallypayableasamonthlylifeannuity,withorwithoutsurvivorbenefits,oralumpsum.
TheBEP—RetirementPlanisanonqualifiedplanthatprovidesincomeforemployeesafterretirementinexcessofthebenefitspayableunderthePlan.EmployeeswhosepayorbenefitsexceededtheIRSqualifiedplanlimitswereeligiblefortheBEP–RetirementPlan.
ThebenefitiscalculatedusingthesameformulaasthePlan,butwithoutthelimitsoncompensationandbenefitsimposedunderSection401(a)(17)andSection415(b)oftheInternalRevenueCode.
TheprovisionsarethesameasthoseaboveforthePlan,exceptforthefollowing:
• CompensationisnotsubjecttothelimitsunderSection401(a)(17)oftheInternalRevenueCode.
• Compensationincludesthehigherofannualincentiveawardearnedorpaidduringtheyear.
• Thepensionispaidasacashlumpsumor,ifanelectionismadeatleast12monthspriortoretirement,thelumpsummaybecreditedtotheBenefitEqualizationPlan—SavingsPlan.Adistributionforanexecutiveclassified as a “Specified Employee” of the company, as defined under Section 409A of the InternalRevenueCode,issubject to409Aregulationsandisthereforesubject toasix-monthdelayfollowingtheexecutive’sseparationfromservice.
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Present Value of Accumulated Pension Benefits
2019 Fiscal Year
Name Plan Name
# of Years of CreditedService(1)
Present Value of Accumulated
Benefits(2)
PaymentsDuring
Last FiscalYear
Giovanni Caforio, M.D.(3) BenefitEqualizationPlan 0.0 $0 $0
RetirementIncomePlan 0.0 $0 $0
Charles Bancroft(4)(5) BenefitEqualizationPlan 25.6 $16,198,725 $0
RetirementIncomePlan 25.6 $0 $1,889,394
David Elkins(3) BenefitEqualizationPlan 0.0 $0 $0
RetirementIncomePlan 0.0 $0 $0
Sandra Leung(4)(5) BenefitEqualizationPlan 17.8 $9,527,399 $0
RetirementIncomePlan 17.8 $0 $1,266,940
Christopher Boerner, Ph.D.(3) BenefitEqualizationPlan 0.0 $0 $0
RetirementIncomePlan 0.0 $0 $0
Rupert Vessey, M.A., B.M.,B.Ch., F.R.C.P., D.Phil.(3)
RetirementIncomePlan 0.0 $0 $0
BenefitEqualizationPlan 0.0 $0 $0
Thomas J. Lynch Jr., M.D.(3) RetirementIncomePlan 0.0 $0 $0
BenefitEqualizationPlan 0.0 $0 $0
1) Reflects the years of credited service through December 31, 2009 at which time we discontinued service accruals under theRetirementIncomeandBenefitEqualizationPlans.ThecompanyterminatedtheUS-RIPasofFebruary1,2019andtransferredallremainingliabilitiestoaleadingthird-partyinsurer,AtheneHoldingsLtd.
2) ThepresentvalueofaccumulatedbenefitswascalculatedbasedonthefollowingassumptionswhichwereusedintheDecember31,2019disclosurefortheBEP:• 100%lump-sumutilization;• CitigroupRegularyieldcurveandimpliedforwardratesasofthemeasurementdate;and• 50/50male/femaleblendofthePri-2012MortalityTableprojectedgenerationallywithScaleMP-2018asdescribedinAppendix
ofIRSNotice2018-02forpaymentsin2019;andprojectedgenerationallywithScaleMP-2019forpaymentsin2020andlater.Theseassumptionsarethesameasthosedisclosedinconformitywithgenerallyacceptedaccountingprinciples.Foractiveexecutives,paymentsareassumedtobeginatage60forBEP,theearliestagethatemployeesareeligibleforanunreducedpension,orcurrentageifoverage60.Theactualbenefitreceivedwillvarybasedonageandinterestratesatthetimeofretirement.3) Dr.Caforio,Mr.Elkins,Dr.Boerner,Dr.VesseyandDr.LyncharenotparticipantsinanyoftheCompany’sdefinedbenefitpension
plans.ForDr.Caforio,doesnotincludethevalueofparticipationintheItaliangovernmentpensionsystem.4) Mr.BancroftandMs.LeunghavemettherequirementsforearlyretirementundertheBEP.5) ThefiguresshownrepresentthevalueofthelumpsumspaidinJuly2019andthevalueofannuitypremiumspaidinAugust2019
tosettletheexecutives’benefitsundertheUS-RIPwhichwasterminatedeffectiveFebruary1,2019.AllliabilitiesassociatedwiththeUS-RIPweresettledthroughdirectlumpsumpaymentstoparticipantsorthroughthepurchaseofgroupannuitycontractsinthethirdquarterof2019.Thelumpsumvaluesweredeterminedusingthelumpsummortalitytableineffectforpaymentsmadeduring2019underSection417(e)oftheInternalRevenueCodeandtheMay2019417(e)segmentrates,i.e. 2.72%foryears1through 5, 3.76% for years 6 through 10, and 4.33% thereafter, as called for under the provisions of the US-RIP. The annuitypremiumamountwastheamountasdeterminedbytheinsurerfromwhomtheCompanypurchasedthegroupannuitycontracts.TheamountshownforMr.Bancroftrepresentsthelumpsumof$777,863paidtohimandtheannuitypurchasedintheamountof$1,111,531tosettle his liabilitiesrelatedtotheUS-RIP, andtheamount shownfor Ms. Leungwasthelumpsumpaidtoher tosettleherliabilitiesrelatedtotheUS-RIP.
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Non-Qualified Deferred Compensation PlanThe Benefit Equalization Plan (BEP)—Savings Plan is a nonqualified deferred compensation plan that allowsemployees to defer a portion of their total eligible cash compensation and to receive company matchingcontributions in excess of contributions allowed under the Savings and Investment Program. The Savings andInvestment Program is a tax-qualified plan, as defined under Section 401(a) and Section 401(k) of the InternalRevenueCode.EmployeeswhoareeligibletoparticipateintheSavingsandInvestmentProgram,andwhosepayorbenefitsexceedtheIRSqualifiedplanlimits,areeligiblefortheBEP—SavingsPlan.ThekeyprovisionsoftheBEP—SavingsPlanareasfollows:
• EmployeedeferralstotheBEP—SavingsPlanbeginoncetheemployee’stotaleligiblecompensationpaidfortheyearexceedsthelimitunderSection401(a)(17)oftheInternalRevenueCode,ortotalcontributionsto theSavings and Investment Program exceed the limits under Section 415(c) of the Internal RevenueCode.
• Employeesmaydeferupto25%oftheireligiblecompensation.
• Thecompanymatchingcontributionequals100%oftheemployee’scontributiononthefirst6%ofeligiblecompensationthatanemployeeelectstocontribute.
• Anadditionalautomaticcompanycontribution,whichisbasedonapointsystemofaparticipant’sageplusservice, equals: below 40 points—3% of total eligible cash compensation; between 40 and 59 points—4.5%;andat60pointsandabove—6%.
• Theplanisnotfunded.Benefitsarepaidfromgeneralassetsofthecompany.
• Employees may allocate their contributions among 12 different notional investment options that providedifferent combinations of risk and return potential and employees can generally elect to change theirinvestmentelectionseachbusinessday.
• Theemployee’sfullbalanceundertheBEP—SavingsPlanispaidfollowingterminationofemployment,or,ifeligible,anelectioncanbemadeatleast12monthspriortoseparationfromservicetodeferpaymentsuntilalaterdate,nosoonerthanfiveyearsfollowingthedateofseparationfromservice.Adistributionforanexecutiveclassifiedasa“SpecifiedEmployee”oftheCompany,asdefinedunderSection409AoftheInternal Revenue Code, is subject to 409A regulations and is therefore subject to a six-month delayfollowingtheexecutive’sseparationfromservice.
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Non-Qualified Deferred Compensation Plan
2019 Fiscal Year
Name
Executive Contributions in
2019(1)
Registrant Contributions in
2019(2)
AggregateEarnings in 2019(3)
Aggregate Withdrawals/
Distributions in 2019
Aggregate Balance at
December 31, 2019(2)(4)
Giovanni Caforio, M.D.(5) $326,179 $666,359 $1,010,758 $0 $6,542,578
Charles Bancroft(5) $178,916 $357,833 $1,369,273 $0 $6,908,596
David Elkins(6) $0 $0 $0 $0 $0
Sandra Leung(5) $150,489 $311,817 $1,566,826 $0 $8,028,350
Christopher Boerner, Ph.D.(5) $162,096 $179,219 $146,361 $0 $1,012,292
Rupert Vessey, M.A., B.M.B.Ch., F.R.C.P., D.Phil.(6) $0 $0 $0 $0 $0
Thomas J. Lynch, Jr., M.D.(5)(7) $130,000 $275,269 $123,810 $0 $1,037,011
1) Thecontributionamountsinthiscolumnreflectthedeferralofaportionof2019basesalaryandthe2018annualincentiveawardthat was paid in March 2019. The base salary deferral amount is also included as 2019 Salary in the Summary CompensationTable.The2018annualincentiveawarddeferralamountwasalsoincludedas2018Non-EquityIncentivePlanCompensationinthepreviousyear’sSummaryCompensationTable,asapplicable.
2) The contribution amounts in this column are included as 2019 All Other Compensation in the Summary Compensation Table.Includestheadditionalannualregistrantcontributionsearnedin2019butpaidinFebruary2020.
3) Aggregateearningsarenotreflectedinthe2019SummaryCompensationTableandwerenotreflectedinprioryears’SummaryCompensationTables.Thecompanydoesnotpayabove-marketinterestratesonnon-qualifieddeferredcompensation.
4) PortionsoftheaggregatebalancesinthiscolumnreflectamountsreportedintheSummaryCompensationTablesinprioryearsasfollows:Dr.Caforio,$776,401for2017and$960,837for2018;Mr.Bancroft,$406,431for2017and$475,059for2018;Dr.Lynch,$95,108for2017and$434,857for2018;andMs.Leung,$547,178for2017and$423,265for2018.
5) Reflects2019activityandaggregatebalancesinthenon-qualifiedBEP-SavingsPlan.6) Mr.ElkinsandDr.Vesseyarenotparticipantsinthenon-qualifiedBEP-SavingsPlan.7) BecauseDr.Lynchwasa“specifiedemployee”oftheCompanyasdefinedunderSection409AoftheInternalRevenueCode,the
paymentunderhisBEP-SavingsPlanaccountisdelayedbysixmonths.Additionally,sinceDr.Lynchwasnotfullyvestedatthetime of separation, his lump sum payment will reflect 60% of the company funds balance, including the annual Companycontribution credited in February 2020. The40%unvested Companyfunds balance will be forfeited back to the Companyupondistribution.Dr.Lynchwillreceivehislumpsumpaymentof$757,817plusanyaccruedinterest,gainsandlossesthroughthedateimmediatelyprecedingthedateofdistributioneffectiveApril3,2020.
Post-Termination Benefits
Followingisadescriptionofpaymentsandbenefitsavailableunderdifferentterminationscenarios:
Voluntary TerminationThe company does not offer any payments or benefits to salaried employees, including the Named ExecutiveOfficers, upon a voluntary termination, other than those that are vested at the time of termination, unless theapplicableplanorawardagreementprovidesotherwise.
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Voluntary Termination for Good ReasonUndertheBristol-MyersSquibbSeniorExecutiveSeverancePlan,certainseniorexecutives(includingtheNamedExecutive Officers) are eligible to receive severance payments and benefits if they voluntarily terminate theiremploymentfor“goodreason,”where“goodreason”isdefinedas:
• Amaterialreductionintheexecutive’sweeklybasesalary;• The material reduction in the executive’s grade level resulting in a material diminution of the executive’s
authority,duties,orresponsibilities;or• Therelocationoftheexecutive’sjoboroffice,sothatit will bebasedatalocationwhichismorethan50
milesfurther(determinedinaccordancewiththecompany’srelocationpolicy)fromtheirprimaryresidencethantheirworklocationimmediatelypriortotheproposedchangeintheirjoboroffice.
Aterminatedexecutivewhosignsageneralreleasewillbeeligibleforthefollowing:• Severancepaymentsintheamountof2timesweeklybasesalaryforourseniormostexecutives,including
theNamedExecutiveOfficers,and1.5timesweeklybasesalaryforotherseniorexecutives;• Continuation of medical, dental and life insurance benefits until the earlier of (i) fifty-six weeks from
terminationdateor(ii)thedatetheexecutivebeginsnewemployment;and• Outplacementservices.
In addition to being eligible to receive severance payments and benefits under the Bristol-Myers Squibb SeniorExecutiveSeverancePlanasdescribedabove,Mr. ElkinsandDr. Vesseyareeligibletoreceivevestingof theirconvertedlegacyCelgeneequityawardsandtheirInducementAwards(includingtheacceleratedpaymentoftheremainingcashportion) if theyvoluntarily terminatetheir employment for “goodreason,” where“goodreason” isdefinedas:
• A material reduction in the executive’s (i)annual base salary or ( ii)target annual cash incentivecompensationopportunityandtargetannualequityincentivecompensationopportunity,intheaggregate;
• Amaterialdiminutionintheexecutive’sdutiesandresponsibilities(otherthantemporarilywhiletheEligibleEmployeeisphysically ormentally incapacitatedorasrequiredbyapplicablelaw)or, for Mr. Elkinsonly,assignmentofanydutiesinconsistentwithhisstatusasanofficeroramemberoftheleadershipteamofthecompany;
• Amaterialadversechangeintheexecutive’sreportingrelationships;• Arelocationofanexecutive’sprimaryworklocationthatresultsinanincreasetotheexecutive’sone-way
commuteby30milesormore;• Thecompany’sfailiuretotimelypayanygross-upamountsdueundercertainlegacyCelgene
arrangements;or• For Dr. Vessey only, a changeto the company’s by-laws that would cause the executive to cease to be
eligibleforindemnificationoradvancementundersuchby-laws.
IfMr.ElkinsandDr.Vesseyareterminatedandtheysignageneralrelease,theywillbeeligibleforthefollowing:• Converted Legacy Celgene Stock Options– Employees are eligible to vest in their unvested legacy
Celgenestockoptions. The legacy Celgene stock options will remain exercisable until the earlier of oneyearafterterminationandtheoriginal10-yearoptionterm.
• ConvertedLegacyCelgeneRestrictedStockUnitsandInducementAwards-Employeesareeligibletovestin their unvested legacy Celgene RSUs and, where applicable, their unvested Inducement Awards(includingtheacceleratedpaymentoftheremainingcashportion).
Retirement and DeathThefollowingbenefitsaregenerallyavailabletoallsalariedemployeesincludingtheNamedExecutiveOfficers:
Annual Incentive—Under the Annual Incentive Plan, employees are eligible for a pro-rata award based on thenumberofmonths workedin theperformanceperiodandpaid byMarch15th followingtheperformanceperiod,and under the legacy Celgene MIP employees are eligible for a pro-rata award based on the number of daysworked in the performance period;paid upon retirement with the award amount remaining subject to CompanydiscretionbasedonestimatesofCompanyperformance.
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Converted Legacy Celgene Stock Options—Mr.Elkins,Dr.Vesseyandotheremployeesareeligibletovestinall unvested options. Options will remain exercisable until the earlier of three years after termination and theoriginal10-yearoptionterm.
Restricted Stock Units—Employeesareeligibletovestinapro-rataportionofRSUsheldatleastoneyearfromthegrantdate; providedthat if anemployeeturns65onorprior totheir retirement or death, thenanyunvestedRSUsheldforatleastoneyearwillvestinfullpriortotheirretirementordeath.
Converted Legacy Celgene Restricted Stock Units and Inducement Awards—For deathanddisability only(notretirement)—Mr.Elkins,Dr.Vesseyand,forlegacyCelgeneRSUsonly,otheremployeesareeligibleforfullandimmediatevestingofallunvestedlegacyCelgeneRSUsand,whereapplicable,unvestedInducementAwards(includingtheacceleratedpaymentoftheremainingcashportion).Uponretirement,Mr.ElkinsandDr.Vesseyareeligible(i)forfullaccelerationofallunvestedlegacyCelgeneRSUs,butvestingfollowsthenormalschedule,and(ii)tovestinapro-rataportionofInducementAwardsheldatleastoneyearfromthegrantdate;providedthatifanemployeeturns65onorpriortotheirretirementordeath,thenanyunvestedInducementAwardsheldforatleastoneyearwillvestinfullpriortotheirretirementordeath.
Market Share Units—Employeesareeligibletovestinapro-rataportionofMSUsheldatleastoneyearfromthegrantdate,subjecttoperformanceprovisions;providedthatifanemployeeturns65onorpriortotheirretirementordeath,thenanyunvestedMSUsheldforatleastoneyearwillvestinfullupontheirretirementordeath,subjecttoperformanceprovisions.
Performance Share Units—Employeesareeligibleto vest in apro-rata portionof unvestedPSUsheldat leastoneyearfromthegrantdatesubjecttoperformanceprovisions.
Defined Benefit Pension Excess Benefit Plan—EmployeesmaybeeligibleforbenefitsaccruedundertheBEP—RetirementPlan.
Savings Plans—Employees are eligible for benefits accumulated under our Savings andInvestment ProgramandtheBEP—SavingsPlan(aswellasapro-rataannualcontribution(ifapplicable)oneligiblecompensationpaidintheyearofseparationfromserviceordeath)ortheCelgeneCorporation401kPlan.
Post-Retirement Medical and Life Insurance—Employeesage55orolderwith10yearsofserviceorage65oroveratthetimeofretirementareeligibleforpost-retirementmedicalandlifeinsurancebenefitsprovidedthattheywereemployedbyacompanyparticipatingintheBristol-MyersSquibbHealth&WelfareBenefitPlanatthetimethat theiremployment ended. Employees retiring with less than10years of service are not eligible to receive acompanysubsidyfortheirpost-retirementmedicalcoverage.
Involuntary Termination Not for CauseThefollowingbenefitsaregenerallyavailabletoallsalariedemployeesincludingtheNamedExecutiveOfficers:
Annual Incentive—UndertheAnnualIncentivePlan,employeeswhoareseveranceeligibleandexecuteanddonotrevokeaSeparationAgreementareeligibleforapro-rataawardbasedonthenumberofmonthsworkedintheperformanceperiodif theterminationoccurs onor after September 30thof theplanyear. Further, anemployeewhoisseverance eligible andwhoseageplus years of service equals or exceeds 70, and whohas at least 10years of service, uponsigning and not revoking a Separation Agreement the employee is eligible for a pro-rataawardbasedonthenumberofmonthsworkedintheperformanceperiodforaterminationoccurringatanypointinthe plan year. Under the legacy Celgene MIP, an employee’s eligibility for a MIP award is determined by theCompany,initssolediscretion,andiscontingentuponexecutionandnon-revocationofaSeparationAgreement.
Converted Legacy Celgene Stock Options—Uponsigningageneralrelease,Mr.Elkins,Dr.Vesseyandotheremployeesareeligibletovestinallunvestedoptions.Optionswillremainexercisableuntiltheearlierofoneyearafterterminationandtheoriginal10-yearoptionterm.
Restricted Stock Units—Uponsigningageneralrelease,employeesareeligibletovestinapro-rataportionofRSUs held at least one year from the grant date; provided that if an employee turns 65 on or prior to theirinvoluntaryterminationnotforcause,thenanyunvestedRSUsheldforatleastoneyearwillvestinfullupontheirinvoluntaryterminationnotforcause.
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Converted Legacy Celgene Restricted Stock Units and Restricted Stock Unit Inducement Awards—Uponsigningageneralrelease,Mr.Elkins,Dr.Vesseyand,forlegacyCelgeneRSUsonly,otheremployeesareeligibletovestinallunvestedlegacyCelgeneRSUsand,whereapplicable,unvestedInducementAwards(includingtheacceleratedpaymentoftheremainingcashportion).
Market Share Units—Upon signing a general release, employees are eligible to vest in a pro-rata portion ofunvestedMSUsheldatleastoneyearfromthegrantdate,subjecttoperformanceprovisions;providedthatifanemployeeturns65onorpriortotheirinvoluntaryterminationnotforcause,thenanyunvestedMSUsheldforatleastoneyearwillvestinfullupontheirinvoluntaryterminationnotforcause,subjecttoperformanceprovisions.
Performance Share Units—Uponsigningageneralrelease,employeesareeligibletovestinapro-rataportionofunvestedPSUsheldatleastoneyearfromthegrantdate,subjecttoperformanceprovisions.
Defined Benefit Pension Excess Benefit Plan—EmployeesmaybeeligibleforbenefitsaccruedundertheBEP—RetirementPlan.Iftheemployee’sageplusyearsofserviceequalorexceed70andtheemployeehasatleast10yearsofservice,theemployeeisnoteligibleforearlyretirement,andtheemployeesignsageneralrelease,theretirement benefits are payable following termination of employment based upon enhanced adjustment factorssimilartothoseappliedtoemployeeseligibleforearlyretirement.
Savings Plans—EmployeesareeligibleforbenefitsaccumulatedunderourSavingsandInvestmentProgramandtheBEP—SavingsPlan,ortheCelgeneCorporation401kPlan.UndertheSavingsandInvestmentProgramandtheBEP-SavingsPlan,iftheemployeeisinvoluntarilyterminatednotforcauseonorafterSeptember30thandtheemployeeisreceivingseveranceandsignsageneralrelease,ortheemployee’sageplusyearsofserviceequalorexceed70andtheemployeehasatleast10yearsofservice,theemployeeisnoteligibleforearlyretirement,andtheemployeeisreceivingseveranceandsignsageneral release, theemployeeis eligiblefor a pro-rata annualcontribution(ifapplicable)basedoneligiblecompensationpaidintheyearofseparationfromservice.
Post-Retirement Medical Insurance—If the employee’s age plus years of service equal or exceed 70 and theemployeehasatleast10yearsofservice,theemployeeisnoteligibleforearlyretirement,andtheemployeesignsa general release, the employee is eligible for continued medical coverage beyond the severance and COBRAperiod,providedthattheywereemployedbyacompanyparticipatingintheBristol-MyersSquibbHealth&WelfareBenefitPlanatthetimethattheiremploymentended,andaslongasnoothergroupmedicalcoverageisavailable,without companysubsidyuntil age55. At age55, theybecomeeligible for company-subsidized, post-retirementmedicalbenefits.
UndertheBristol-MyersSquibbSeniorExecutiveSeverancePlan,certainseniorexecutives(includingtheNamedExecutiveOfficers)areeligibletoreceiveseverancepaymentsandbenefitsiftheyareinvoluntarilyterminatednotfor“cause,”where“cause”isdefinedas:
• failureorrefusalbytheexecutivetosubstantiallyperformhisorherduties(exceptwherethefailureresultsfromincapacityduetodisability);or
• severe misconduct or engaging in an activity, which may include a failure to take action, deemeddetrimentaltotheinterestsofthecompanyincluding,butnotlimitedto,actsinvolvingdishonesty,violationofcompanypolicies,violationofsafetyrules,disorderlyconduct,discriminatoryharassment,unauthorizeddisclosureof confidential information, or theentry of a pleaof nolocontendereto, or theconvictionof, acrime.
Aterminatedexecutivewhosignsageneralreleasewillbeeligibleforthefollowing:
• Severance payments in the amount of 2 times base salary for our senior-most executives, including theNamedExecutiveOfficers,and1.5timesbasesalaryforotherseniorexecutives;
• Continuationofmedical,dentalandlifeinsurancebenefits;and
• Outplacementservices.
ForDr.Vessey,“cause”isdefinedas:
• on or within four years following the Closing, the executive’s dishonesty, fraud, insubordination, willfulmisconduct,refusaltoperformservices(foranyreasonotherthanillnessorincapacity),materialviolationofawrittencompanypolicy,materialbreachofanemploymentorsimilaragreement,ormisappropriationof
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companyproperty;provided,thatintheeventofadisputeconcerningtheapplicationofthisprovision,theBoardmustdeterminethatithasbeenestablishedbyclearandconvincingevidencethatCauseexistsandmustadoptaresolutiontothat effect withapproval of at least 75%of theBoard(after reasonablenoticeandanopportunitytobeheardisprovidedtotheexecutive);and
• after thefour-year periodfollowingtheClosing, “cause” is as definedaboveexcept for that thedefinition(i) includes materially unsatisfactory performance of the executive’s duties to the company that has notbeen cured within ten days after a written demand for substantial performance is delivered by theCompensationandManagement Development Committeeand(ii) doesnot includetherequirement for aBoarddeterminationandresolutionintheeventofadispute.
ForMr.Elkins,“cause”includestherequirementforaBoarddeterminationandresolutionasdescribedaboveforDr.Vesseyintheeventofadisputeatanytimeandisotherwisedefinedas:
• the executive’s dishonesty, fraud, insubordination, willful misconduct, refusal to performservices (for anyreasonotherthanillnessorincapacity),materialviolationofawrittencompanypolicy,materialbreachofanemployment or similar agreement, or misappropriation of company property, in each case, that has notbeencuredwithintendaysafterawrittennoticeisdeliveredbythecompany.
Change-in-ControlAs disclosed in the CD&A, the company has entered into change-in-control agreements with certain seniorexecutives, including all of the NamedExecutive Officers. The current agreements will expire on December 31,2020,andmaybeextendedwithrevisions,asappropriate,beginningonJanuary1,2021,inone-yearincrementsunless either the company or the executive gives prior notice of termination of the agreement or a change-in-controlshallhaveoccurredpriortoJanuary1ofsuchyear.
Totriggerbenefits,theremustbebothachange-in-controlofthecompanyandeither(i)asubsequentinvoluntarytermination without cause by the company or (ii) a good reason termination by the employee. Good reason isfurtherdefinedintheagreementsandincludesareductioninjobresponsibilities,changesinpayandbenefitsaswell as relocation beyond 50 miles. The executive has 120 days to assert a claim for payments under thisprovision. This protection extends for 36 months following a change-in-control for our senior most executives,includingallourNamedExecutiveOfficers, exceptforDr. Boerner, Mr. ElkinsandDr. Vessey,orexceptinverylimited circumstances, 24 months following a change-in-control for other executives who became eligible forchange-in-controlbenefitsafterSeptember1,2010,includingDr.Boerner,Mr.ElkinsandDr.Vessey:
“Change-in-Control”meanstheearliesttooccurofanyoneofthefollowingdates:
(i) ThedateanyPerson(asdefinedinSection13(d)(3)oftheSecuritiesExchangeAct)shallhavebecomethedirectorindirectbeneficialownerofthirtypercent(30%)ormoreofthethenoutstandingcommonsharesofthecompany;
(ii) Thedateofconsummationofamergerorconsolidationofthecompanywithanyothercorporationotherthan(A) a merger or consolidation which would result in the voting securities of the company outstandingimmediatelypriortheretocontinuingtorepresentatleastfiftyonepercent(51%)ofthecombinedvotingpowerof thevotingsecurities of thecompanyor thesurvivingentity outstandingimmediately after suchmerger orconsolidation, or (B) a merger or consolidation effected to implement a recapitalization of the company inwhichnoPersonacquiresmorethanfiftypercent(50%)ofthecombinedvotingpowerofthecompany’sthenoutstandingsecurities;
(iii) The date the stockholders of the company approve a plan of complete liquidation of the company or anagreementforthesaleordispositionbythecompanyofallorsubstantiallyallthecompany’sassets;or
(iv) ThedatethereshallhavebeenachangeinthecompositionoftheBoardofDirectorsofthecompanywithinatwo-year period such that a majority of the Board does not consist of directors who were serving at thebeginning of such period together with directors whose initial nomination for election by the company’sstockholders or, if earlier, initial appointment to the Board, was approved by the vote of two-thirds of thedirectors then still in office who were in office at the beginning of the two-year period together with thedirectorswhowerepreviouslysoapproved.
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Each of our Named Executive Officers is eligible to receive the following benefits if he or she is terminated inconnectionwithachange-in-control:
• A cash payment equal to 2 years of base salary plus target annual incentive award for Dr. Boerner,Mr.ElkinsandDr.Vesseyand2.99yearsofbasesalaryplustargetannualincentiveawardfortheotherNamedExecutiveOfficers.
• ForMr.ElkinsandDr.Vessey,acceleratedpaymentoftheremainingcashportionoftheInducementAwards.
• Payoutofannualincentiveawardonapro-ratabasisattarget.
• Vestingofunvestedstockoptions,ifany,includingoptionsheldlessthanoneyear.
• VestingofunvestedRSUs,ifany,includingunitsheldlessthanoneyear.
• VestingofunvestedMSUs,subjecttoperformanceprovisions,includingunitsheldlessthanoneyear.
• Payout of a proportionate amount of outstanding PSUs at target for awards granted prior to 2019 andpayoutofalloutstandingperformanceshareunitsattargetforawardsgrantedin2019andbeyond.
• ThreeadditionalyearsofserviceandageforpensionpurposesifaparticipantisinBEP—RetirementPlansponsoredbyBMS,andeligibilityfortheplan’searlyretirementsubsidyiftheexecutive’sageandservicefall below the normal eligibility threshold (i.e., 55 years old with at least 10 years of service). As ofSeptember 1, 2010, we no longer provide any pension subsidy or enhancement for newly eligibleexecutives. In lieu of such subsidy or enhancement, we provide under the non-qualified savings plan acontinuationofcompanymatchingcontributionsandautomaticyear-endcontributionsequaltothelengthoftheseveranceperiod.
• Eligibility for retireemedical benefits basedontwoyearsadditional ageandservicefor Dr. Boerner, andthreeyearsadditionalageandservicefortheotherlegacyBMSNamedExecutiveOfficers
• ContinuationofhealthbenefitsfortwoyearsforDr.Boerner,Mr.ElkinsandDr.VesseyandthreeyearsfortheotherNamedExecutiveOfficers.
• Vestingofunvestedmatchinthecompany’ssavingsplans.
• Wenolongergrossupcompensationonexcessparachutepaymentsforanyofourexecutives,includingall of our legacy BMS Named Executive Officers. All gross-ups are pursuant to legacy Celgenearrangements.
• Paymentofanyreasonablelegalfeesincurredtoenforcetheagreement.
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The following illustrates the potential payments and benefits under the company’s plans and programs to theNamedExecutiveOfficersuponaterminationofemploymentassuminganeffectivedateofDecember31,2019.Totheextentpaymentsandbenefitsaregenerallyavailabletosalariedemployeesonanondiscriminatorybasis,theyareexcludedfromthetable.
Termination of Employment Obligations (Excluding Vested Benefits)
2019 Fiscal Year
NameCash
Severance
In-the- Money
Value of Options
Restricted Stock Units
(“RSUs”)
Market Share Units
(“MSUs”)
PerformanceShare Units
(“PSUs”)
ContingentValue Rights
(“CVRs”) Pension Plans
Savings Plans Health
Retiree Medical Total
Gross-Up on Excise Taxes
Termination for Good Reason
Giovanni Caforio,M.D. $3,300,000 $0 $0 $0 $0 $0 $0 $0 $33,899 $0 $3,333,899 n/a
CharlesBancroft $2,131,578 $0 $0 $0 $0 $0 $0 $0 $24,603 $0 $2,156,181 n/a
David Elkins $3,050,000 $2,275,856 $17,314,161 $0 $0 $614,172 $0 $0 $22,643 $0 $23,276,833 $2,719,821
Sandra Leung $2,090,000 $0 $0 $0 $0 $0 $0 $0 $20,644 $0 $2,110,644 n/a
ChristopherBoerner, Ph.D. $1,850,000 $0 $0 $0 $0 $0 $0 $0 $34,063 $99,892 $1,983,955 n/a
Rupert Vessey,M.A., B.M., B.Ch.,F.R.C.P., D.Phil. $3,000,000 $2,206,707 $14,163,138 $0 $0 $524,640 $0 $0 $22,631 $0 $19,917,117 $0
Involuntary Termination Not for Cause
Giovanni Caforio,M.D. $3,300,000 $0 $0 $0 $0 $0 $0 $0 $33,899 $0 $3,333,899 n/a
CharlesBancroft $2,131,578 $0 $0 $0 $0 $0 $0 $0 $24,603 $0 $2,156,181 n/a
David Elkins $3,050,000 $2,275,856 $17,314,161 $0 $0 $614,172 $0 $0 $22,643 $0 $23,278,833 $2,719,821
Sandra Leung $2,090,000 $0 $0 $0 $0 $0 $0 $0 $20,644 $0 $2,110,644 n/a
ChristopherBoerner, Ph.D. $1,850,000 $0 $0 $274,412 $1,069,534 $0 $0 $0 $34,063 $99,892 $3,327,901 n/a
Rupert Vessey,M.A., B.M., B.Ch.,F.R.C.P., D.Phil. $3,000,000 $2,206,707 $14,163,138 $0 $0 $524,640 $0 $0 $22,631 $0 $19,917,117 $0
Qualifying Termination Within 2 or 3 Years Following a Change-in-Control
Giovanni Caforio,M.D. $12,333,750 $0 $0 $12,331,605 $9,548,776 $0 $0 $0 $103,703 $0 $34,317,834 n/a
CharlesBancroft $7,010,760 $0 $0 $4,108,160 $3,165,594 $0 $9,352,038 $0 $75,051 $0 $23,711,603 n/a
David Elkins $5,050,000 $2,275,856 $17,314,161 $0 $0 $614,172 $0 $67,805 $41,802 $0 $25,363,797 $3,893,327
Sandra Leung $6,249,100 $0 $0 $3,095,242 $2,415,020 $0 $7,453,874 $0 $63,337 $0 $19,276,574 n/a
ChristopherBoerner, Ph.D. $3,700,000 $0 $677,205 $2,355,580 $3,117,772 $0 $0 $385,010 $69,908 $93,868 $10,399,344 n/a
Rupert Vessey,M.A., B.M., B.Ch.,F.R.C.P., D.Phil. $5,000,000 $2,206,707 $14,163,138 $0 $0 $524,640 $0 $34,200 $41,781 $0 $21,970,466 $3,407,553
1) Forvoluntaryterminationforgoodreasonandinvoluntaryterminationnotforcause,cashseveranceisequalto2timesbasesalary.Forchange-in-control,cashseveranceisequalto2timesbasesalaryplustargetannualincentiveawardforMr.Elkins,Dr.Boerner,andDr.Vesseyand2.99timesfortheotherNamedExecutiveOfficers.ForMr.ElkinsandDr.Vessey,forvoluntaryterminationforgoodreason,involuntaryterminationnotforcauseandforachange-in-control,ineach case, cash severance also include $1,050,000 and $1,000,000, respectively, in respect of the acceleration of the remaining cash portion of theirInducementAwards.
2) ForMr.ElkinsandDr.Vessey,representsallin-the-moneyunvestedoptions.3) For Dr. Boerner, for involuntary termination not for cause, represents pro-rata portion of awards held at least oneyear. For change-in-control, represents all
unvestedunits.ForMr.ElkinsandDr.Vessey,representsallunvestedRSUs.4) Forinvoluntaryterminationnotforcause,representspro-rataportionofawardsheldatleastoneyear.Forchange-in-control,representsallunvestedunits.The
payoutfactorappliedisequaltothe10-dayaverageclosingpriceonDecember31,2019dividedbythe10-dayaverageclosingpriceonthegrantdate.
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5) Forchange-in-control,representsapro-ratapayoutofthe2017-2019and2018-2020PSUawardsattargetandafullpayoutofthe2019-2021PSUawardattarget.Forinvoluntaryterminationnotforcause,thepaymentexcludesthepayoutof2019-2021PSUawardbecauseasofDecember31,2019theawardhadnotbeenheldforatleastoneyearsincethegrantdate.
6) ForawardsotherthanCVRs.valuesasofDecember31,2019basedontheclosingCommonStockpriceof$64.19onthatday.ForCVRs,valuesarebasedonthemarkettradingvalueasofDecember31,2019of$3.01.
7) PursuanttotheMerger,uponvestingoftheconvertedlegacyCelgeneequityawards,includingacceleratedvestinginanyofthethreeterminationscenarios,oneCVRisreceivedpershareunderlyingeachsuchaward,ifapplicable.
8) ReflectsBEP-RetirementPlan.Change-in-controlvaluesincludeearlyretirementsubsidyandadditionalyearsofcreditedserviceandage.9) ChangeincontrolvaluesreflectCompanymatchingcontributionsandautomaticyear-endcontributions,ifapplicable,underthelegacyCelgene401(k)planfor
Mr. ElkinsandDr. VeseyandundertheCompany’sSavingsPlansfor theotherNEOsandequal twoadditional yearsof service. ForMr. Elkins, additionallyreflectsvestingoftheunvestedportionofhisCompanymatchingcontributions.
10) Forvoluntaryterminationforgoodreasonandinvoluntaryterminationnotforcause,reflectshealthcarebenefitcontinuationthroughtheseveranceperiodof56weeks.Forchangeincontrol,representscontinuationofhealthcarebenefitsfortwo(2)yearsforMr.ElkinsandDr.Vesseyandthree(3)yearsfortheotherNamedExecutiveOfficers.
11) ReflectscosttotheCompanyforprovidingretireemedicalbenefits.Forchange-in-control,includesadditionalyearsofcreditedserviceandage.12) TheseNamedExecutiveOfficersareretirement-eligibleunderourstockplansandthereforeareentitledtothefollowingbenefits,whicharegenerallyavailableto
allretirementeligibleparticipantsinourstockplans:• apro-rataportionofRSUsheldforoneyearfromthegrantdate;• apro-rataportionofMSUsheldforoneyearfromthegrantdate,subjecttoperformanceprovisions;and• apro-rataportionofthePSUsheldoneyearfromthegrantdate,subjecttoperformanceprovisions.
13) Drs.Caforio,BoernerandVesseyandMr.Elkinsarenotparticipantsinanyofourpensionplans.14) TheseNamedExecutiveOfficersareretirement-eligibleunderourstockplansandthereforethenumberofunitsusedtocalculatethechange-in-controlvalue
reflects:• RestrictedStockUnits—thedifferencebetweenapro-rataportionofRSUsheldforoneyearfromthegrantdateandallunvestedRSUsincludingunitsheld
lessthanoneyear.• MarketShareUnits—thedifferencebetweenapro-rataportionofMSUsheldforoneyearfromthegrantdateandallunvestedMSUsincludingunitsheld
lessthanoneyearfromthegrantdate,subjecttoperformanceprovisions.• PerformanceShareUnits—apayoutofthe2019-2021PSUawardattarget.
15) ItistheCompany’spracticetonotgrossupcompensationonexcessparachutepaymentsforourexecutives.Thesegross-upsarepursuanttolegacyCelgenearrangements,approvedpriortotheTransactionandassumedbytheCompany.Anyliabilityforgross-uppaymentsarelimitedsolelytopayments,ifany,relatedtotheCelgeneTransaction.Theexcisetaxamountontheexcessparachutepayment(i.e.,theamountsubjecttotheexcisetax)isgrosseduptoaccountfortheeffectoffederalandstateincometaxes,andtheexcisetax.IncludesFederalincometaxof39.4%,excisetaxof20%andrelevantstatetaxes.Itdoesnotreflectemploymenttaxes.Theseestimatesdonottakeintoaccountanymitigationforpaymentswhichcouldbeshown(underthefactsandcircumstances)nottobecontingentonachange-in-controlorforanypaymentsmadeinconsiderationofnon-competeagreementsorasreasonablecompensation.
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Pay Ratio
To determine the ratio of the CEO’s annual total compensation to the median annual total compensation of allemployeesexcludingtheCEO,weidentifiedthemedianemployeeasofOctober2,2018usingtargettotalcashcompensation(i.e.,salaryplus2018targetincentiveaward).InaccordancewithSECrules,ourmedianemployeeremained the same for 2019 because we determined that there was no change in our employee population oremployeecompensationarrangementsthatwereasonablybelievedwouldresultinasignificantchangetoourpayratio disclosure, in part because, also in accordance with SEC rules, we omitted approximately 9,449 legacyCelgeneemployeesfromourcalculationwhobecameouremployeesasaresultoftheCelgeneTransaction.Webelieve this measure most reasonably reflects the typical annual compensation of our employee population andwasconsistentlyappliedforallemployees.Weestimatethatthemedianemployee’s2019totalcompensation,asdeterminedinthesamemanneras“TotalCompensation”inTheSummaryCompensationTable,was$123,365.Dr.Caforio’s2019totalcompensationwas$18,767,253,whichwas152:1timesthatofthemedianoftheannualtotalcompensationofallemployees.
Item 2—Advisory Vote to Approve the Compensation of Our Named Executive Officers
AsrequiredbySection14AoftheSecuritiesExchangeActof1934,asamended,weareprovidingshareholderstheopportunitytoadvisetheCompensationandManagementDevelopmentCommitteeandtheBoardofDirectorsregarding the compensation of our Named Executive Officers, as such compensation is described in the“Compensation Discussion and Analysis” section, the tabular disclosure regarding such compensation and theaccompanyingnarrativedisclosure,beginningonpage33.Westronglyencourageyoutoreadthesesectionsforadetailed description of our executive compensation philosophy and programs, the compensation decisions theCommittee has made under those programs, the factors considered in making those decisions, the changesapprovedtosuchprogramsandthefeedbackwereceivedfromourshareholderengagement.Accordingly,wearerequestingyournon-bindingvoteonthefollowingresolution:
“RESOLVED,thattheshareholdersofBristol-MyersSquibbCompanyapprove,onanadvisorybasis,thecompensationofthecompany’sNamedExecutiveOfficers,asdescribedintheCompensationDiscussionand Analysis section, the tabular disclosure regarding such compensation and the accompanyingnarrativedisclosuresetforthinthecompany’s2020ProxyStatement.”
Ourexecutivecompensationprogramsaredesignedtoenableustoattractandretaintalentedexecutivescapableofleadingourbusinessinthehighlycomplexandcompetitivebusinessenvironmentinwhichweoperate.Weseekto accomplish this goal in a way that rewards performance and is aligned with our shareholders’ long-terminterests. A significant portion of each executive’s pay depends on his or her individual performance againstfinancial and operational objectives as well as key behaviors necessary to our evolution as a leadingbiopharmaceutical company. In addition, a substantial portion of an executive’s compensation is in the form ofequityawardsthattietheexecutive’scompensationdirectlytocreatingshareholdervalueandachievingfinancialand operational results. We value input from our shareholders as expressed through their votes and othercommunications.Asanadvisoryvote,thisproposalisnotbindingonthecompany.However,consistentwithourrecordofshareholderresponsiveness,theCompensationandManagementDevelopmentCommitteewillconsidertheoutcomeofthevotewhenmakingfutureexecutivecompensationdecisions
The Board of Directors unanimously recommends a vote “FOR” the approval, on an advisory basis, of thecompensation of our Named Executive Officers.
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Equity Compensation Plan Information
Thefollowingtablesummarizesinformationconcerningthecompany’sequitycompensationplansandoutstandingandexercisableoptionsasofDecember31,2019:
Number of securities to be issued upon
exercise of outstanding options,
warrants and rights (in millions)
Weighted- average exercise price of outstanding
options, warrants and rights
Number of securities remaining available for future issuance
under equity compensation plans (excluding securities reflected in column
(a)) (in millions)
Plan Category (a) (b) (c)
Equity compensation plans approved bysecurity holders 140.4(1) $48.08(1) 127.7(2)
Equity compensation plans not approvedby security holders(3) 0.0 28.5
140.4 $48.08 156.2
1) The weighted average exercise price of outstanding awards does not take into account the shares issuable upon vesting ofoutstandingrestrictedstockunits,marketshareunitsorperformanceshareunitswhichhavenoexerciseprice.AtDecember31,2019, there were a total of approximately 34.7 million shares subject to restricted stock units, approximately 1.6 million sharessubjecttomarketshareunitsandapproximately3.0millionsharessubjecttoperformanceshareunits.
2) AspartoftheCelgeneacquisition,BMSassumedthe2017StockIncentivePlanandthe2014EquityIncentivePlanfromCelgene.AtDecember31,2019approximately29.5millionshareswereavailableforawardundertheseplans.
3) Noawardshavebeengrantedunderthisplansince2006andnofutureawardswillbemadeunderthisplan.
Item 3—Ratification of the Appointment of Independent Registered Public AccountingFirm
Our Board of Directors, upon the recommendation of its Audit Committee, has ratified the Audit Committee’sappointmentofDeloitte&ToucheLLP(“D&T”) asourindependentregisteredpublicaccountingfirmfortheyear2020.TheAuditCommitteeandtheBoardbelievethatthecontinuedretentionofD&Ttoserveasourindependentregisteredpublicaccountingfirmisinthebestinterestsofthecompanyanditsshareholders.Asamatterofgoodcorporategovernance,weareaskingshareholderstoratifysuchappointment.Intheeventourshareholdersfailtoratify the appointment, the Board of Directors and the Audit Committee will reconsider such appointment. It isunderstood that even if the appointment is ratified, the Audit Committee at its discretion, may direct theappointment of a new independent registered public accounting firm at any time during the year if the AuditCommitteefeelsthatsuchachangewouldbeinthebestinterestsofourcompanyandourshareholders.
The Audit Committee is directly responsible for appointing, compensating and providing oversight of theperformance of our independent registered public accounting firm for the purpose of issuing audit reports andrelatedworkregardingourfinancialstatementsandtheeffectivenessofourinternalcontroloverfinancialreporting.The Audit Committee is also responsible for approving the audit fees of our independent registered publicaccounting firm. In order to assure continuingauditor independence, the Audit Committee periodically considerswhether there should be a rotation of the independent registered public accounting firm. Further, in conjunctionwiththemandatedrotationoftheauditfirm’sleadengagementpartner, theAuditCommitteeanditschairpersonparticipateintheprocessfortheselectionofD&T’snewleadengagementpartner.
RepresentativesfromD&TwillbepresentattheAnnualMeetingtorespondtoappropriatequestionsandtomakeanystatementsastheymaydesire.
The Board of Directors unanimously recommends a vote “FOR” the ratification of the appointment ofDeloitte & Touche LLP as Bristol-Myers Squibb Company’s independent registered public accounting firmfor 2020.
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Audit and Non-Audit Fees
ThefollowingtablepresentsaggregatefeesforprofessionalauditservicesrenderedbyD&TfortheyearsendedDecember31,2019and2018fortheauditsofourannualfinancialstatementsandinternalcontroloverfinancialreporting,andfeesbilledforotherservicesrenderedbyD&Tduringthoseperiods.
2019 2018
(in millions)
Audit $16.70 $10.36
AuditRelated 2.20 1.65
Tax 10.00 7.11
AllOther 0.10 0.24
Total $29.00 $19.36
Auditfeesfor2019and2018wereforprofessionalservicesrenderedfortheauditsofourconsolidatedfinancialstatements, including accounting consultations and adoption of new accounting standards, and of our internalcontroloverfinancialreportinginaccordancewithSection404oftheSarbanes-OxleyAct,statutoryandsubsidiaryaudits,timelyreviewsof quarterly financial statements, consents, andassistancewith reviewof documents filedwiththeSEC.
Audit Relatedfees for 2019 and 2018 were primarily for agreed-upon procedures, special purpose financialstatementaudits, due diligence related to acquisitions, and other audit-related services that are not required bystatuteorregulation.
Taxfees werefor services related to tax compliance, includingthepreparation of tax returns, claimsfor refund,assistance with tax audits and appeals and preparation of transfer pricing documentation studies and suchamountswere$6.0millionand$4.2millionin2019and2018,respectively.Additionally,feeswereincurredfortaxplanning(excludingplanningrelatedtotransactionsorproposalsforwhichthesolepurposemaybetaxavoidanceor for which tax treatment may not be supported by the Internal Revenue Code) and tax advice, includingassistancewithadvicerelatedtoacquisitions,internalrestructurings,legislativeupdates,andrequestsforrulingsor technical advice from tax authorities. Suchamounts were $4.0 million and $2.0 million in 2019 and 2018,respectively.
All Otherfeesfor 2019and2018wererelatedto subscriptions to researchdatabases, as well a benchmarking,forumsandcomplianceprocedures.
Pre-Approval Policy for Services Provided by our Independent Registered PublicAccounting Firm
TheAuditCommitteehasestablishedapolicytopre-approveallauditandpermissiblenon-auditservicesprovidedby our independent registered public accounting firm consistent with applicable SEC rules. Our independentregistered public accounting firm is prohibited from providing tax consulting services relating to transactions orproposalsinwhichthesolepurposemaybetaxavoidanceorforwhichthetaxtreatmentmaynotbesupportedbytheInternalRevenueCode.Priortotheengagementofourindependentregisteredpublicaccountingfirmforthenextyear’saudit,ascheduleoftheaggregateofservicesexpectedtoberenderedduringthatyearforeachofthefourcategoriesofservicesdescribedaboveissubmittedtotheAuditCommitteeforapproval.Priortoengagement,theAudit Committee pre-approves theseservices bycategory of service. Thefeesare budgetedbycategory ofserviceandtheAuditCommitteereceivesperiodicreportsfromourindependentregisteredpublicaccountingfirmonactual feesversusthebudgetbycategoryof service. Duringtheyear, circumstancesmayarisewhenit maybecome necessary to engage our independent registered public accounting firm for additional services notcontemplated in thepre-approval. In thoseinstances, the Audit Committee requires specific pre-approval beforeengagingourindependentregisteredpublicaccountingfirm.
The Audit Committee may delegate pre-approval authority to one or more of its members. The member ormemberstowhomsuchauthorityisdelegatedisrequiredtoreport, forinformationalpurposes,anypre-approvaldecisionstotheAuditCommitteeatitsnextregularlyscheduledmeeting.During2019,theAuditCommitteedidnotdelegatepre-approvalauthoritytoanyofitsmembers.
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Audit Committee Report
AstheAuditCommitteeoftheBoardofDirectors,wearecomposedofindependentdirectorsasrequiredbyandincompliancewiththelistingstandardsoftheNewYorkStockExchange.WeoperatepursuanttoawrittencharteradoptedbytheBoardofDirectorsthatispublishedonthecompany’swebsite.
Management has primary responsibility for the company’s financial reporting process, principles and internalcontrols as well as preparation of its consolidated financial statements. The independent registered publicaccounting firm is responsible for performing an audit in accordance with the standards of the Public CompanyAccountingOversightBoard(UnitedStates)(“PCAOB”)toobtainreasonableassurancethatBristolMyersSquibb’sconsolidatedfinancialstatementsarefreefrommaterialmisstatementandexpressinganopinionontheconformityofsuchfinancialstatementswithaccountingprinciplesgenerallyacceptedintheUnitedStates.WeareresponsibleforoverseeingandmonitoringD&T’sauditingprocessonbehalfoftheBoardofDirectors.
Aspartoftheoversightofthecompany’sfinancialstatements,wereviewanddiscusswithbothmanagementandD&Tallannualandquarterlyfinancialstatementspriortotheirissuance.Managementadvisedusthateachsetoffinancialstatements reviewed was prepared in accordance with accounting principles generally accepted in theUnited States. We have reviewed with management significant accounting and disclosure issues and reviewedwithD&TmattersrequiredtobediscussedpursuanttoauditingstandardsadoptedbythePCAOB.
In addition, we have received the written disclosures and the letter from D&T required by PCAOB Ethics andIndependence Rule 3526, “Communication with Audit Committees Concerning Independence”, and havediscussedwithD&TtheirindependencefromBristolMyersSquibbanditsmanagement.WehavedeterminedthatD&T’sprovisionofnon-auditservicesin2019wascompatiblewith,anddidnotimpair,itsindependence.WehavealsoreceivedwrittenmaterialsaddressingD&T’sinternalqualitycontrolproceduresandothermatters,asrequiredbytheNewYorkStockExchangelistingstandards.
WehavediscussedwithourinternalauditorsandD&Ttheoverallscopeandplansfortheirrespectiveaudits.WehavemetwiththeinternalauditorsandD&T,withandwithoutmanagementpresent,todiscusstheirevaluationsofthecompany’sinternalcontroloverfinancialreporting,andtheoverallqualityofthecompany’sfinancialreporting.
Based on the reviews and discussions described above, we recommended to the Board of Directors, and theBoardhasapproved,thattheauditedconsolidatedfinancialstatementsfortheyearendedDecember31,2019beincludedinBristol-MyersSquibbCompany’sAnnualReportonForm10-KfortheyearendedDecember31,2019forfilingwiththeSecuritiesandExchangeCommission.
In addition, we have confirmed there have been no new circumstances or developments since our respectiveappointmentstotheCommitteethatwouldimpairanyofourmember’sabilitytoactindependently.
The Audit Committee
RobertBertolini,ChairPeterJ.ArduiniMichaelBonneyMichaelGrobsteinAlanJ.LacyTheodoreR.SamuelsGeraldL.Storch
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ShareholderProposals
TheCompanyexpects thefollowingshareholder proposals (Items4 and5) to bepresentedat the 2020AnnualMeeting.TheBoardofDirectorshasrecommendedavoteagainsttheseproposalsforthepolicyreasonssetforthfollowing each proposal. The stock holdings of each proponent will be provided upon request to the CorporateSecretaryofBristol-MyersSquibbCompany.
Item 4— Shareholder Proposal on the Adoption of a Board Policy that the Chairpersonof the Board be an Independent Director
TheproponentsofthisresolutionareleadfilerTheSistersofSt.FrancisofPhiladelphiaandotherco-filers1.TheSistersofSt.FrancisofPhiladelphiaislocatedat609S.ConventRoad,Aston,PA19014.
Proposal 4—Separate Chair & CEORESOLVED: The shareholders request the Board of Directors to adopt as policy, and amend the bylaws asnecessary,torequiretheChairoftheBoardofDirectors,wheneverpossible,tobeanindependentmemberoftheBoard.ThispolicywouldbephasedinforthenextCEOtransition.
If the Board determines that a Chair who was independent when selected is no longer independent, the Boardshall select a new Chair who satisfies the requirements of the policy within a reasonable amount of time.CompliancewiththispolicyiswaivedifnoindependentdirectorisavailableandwillingtoserveasChair.
Supporting statement
Webelieve:
• TheroleoftheCEOandmanagementistorunthecompany.
• TheroleoftheBoardofDirectorsistoprovideindependentoversightofmanagementandtheCEO.
• ThereisapotentialconflictofinterestforaCEOtohaveapastCEOaninsidedirectoractasChair.
Giovanni Caforio hasbeentheChief Executive Officer of BMSsince2015andits Chairmanof theBoardsince2017. The company has designated a board member as lead independent director, but BMS’ own CorporateGovernanceGuidelinesstatesthatthispersonshall“...facilitateinformationflowandcommunicationbetweentheDirectors and the Chairman, and to perform such other duties specified by the Board”, thus making the leadindependent director merely a conduit to the Chair. We believe Bristol-Myers Squibb should create a strongergovernancestructuremovingforward.
AsAndrewGrove,Intel’sformerchair,stated,“Theseparationofthetwojobsgoestotheheartoftheconceptionofacorporation.IsacompanyasandboxfortheCEO,oristheCEOanemployee?Ifhe’sanemployee,heneedsaboss,andthatbossistheBoard.TheChairmanrunstheBoard.HowcantheCEObehisownboss?”
In our view, shareholders are best servedby anindependent Board Chair whocanprovide a balanceof powerbetweenthe CEOandthe Board. Theprimary duty of a Board of Directors is to overseethe management of acompanyonbehalfofshareholders.ACEOservingasChaircanresultinexcessivemanagementinfluenceontheBoard and weaker oversight of management. We urge BMS’ Board to take the opportunity to appoint a newindependentBoardChairinthenextroundofsuccession.
The Sisters of St. Francis of Philadelphia is co-filing this proposal with the Mercy Investment Services, Inc., Daughters of Charity,DignityHealth,SchoolSistersofNotreDameCooperativeInvestmentFund,DanaInvestmentAdvisors,MonasteriodeSanBenitoandBonSecoursMercyHealth.
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Numerous institutional investors recommend independence for these two roles. For example, California’sRetirementSystemCalPERS’Principles&Guidelinesencourageseparation,evenwithaleaddirectorinplace.Inaddition,investorinterestinthisgovernancepracticeisgrowing.
AccordingtoISS“2017BoardPractices”,(March2017),58%ofS&P1,500firmsseparatethesetwopositionsandthenumberofcompaniesseparatingtheserolesisgrowing.
Tosimplifythetransition,thispolicywouldbephasedinandimplementedwhenthenextCEOischosen.
Board of Directors’ Position
The Board of Directors recommends a vote “AGAINST” the proposal for the following reasons.TheBoardhascarefullyconsideredthisproposalandbelievestheactionsrequestedarenotinthebestinterestsofthecompanyanditsshareholders.TheBoardbelievesthatshareholderinterestsarewellservedwhentheBoardhastheflexibilitytodeterminethebestpersontoserveasChairman.
The Board completes a robust evaluation of its leadership structure each year. The company’s governancedocuments provide the Board with the ability to design the company’s board leadership structure as it deemsappropriatebasedonthecircumstancesatthetime.ThisenablestheBoardtotailoritsstructuretothestrengthsofthecompany’s officers anddirectors in order to best addressthecompany’sevolvingandcomplexbusiness.TheBoardbelievesthatthecompanyandits shareholders arewell servedbyallowingtheBoardtocontinuetofollowitscurrentpolicyofdeterminingthemostadvantageousgovernanceforthecompanygenerally,andthebestpersontoserveastheChairmanspecifically.
In fact, the Boardhasimplementedthis practice for manyyears, includingover thelast twodecadeswheretheBoardhashaddifferentleadershipstructuresdependingontheneedsoftheBoardandthecompanyatthetime.In particular, from 2005 until 2007 and from 2010 until 2017, the Board had a separate Chairman and ChiefExecutiveOfficer.Thecompany’sindependentdirectorshavedeterminedthatitiscurrentlyappropriateandinthebest interest of shareholders to have a combined Chairman and Chief Executive Officer role for the reasonsdescribedelsewhereinthisProxyStatement.ThisiscounterbalancedbyastrongLeadIndependentDirectorroleandothersoundgovernancepractices,asdescribedinthisProxyStatementandfurtherbelow.
Thecompany’s Corporate Governance Guidelines provide that the independent directors will designate a LeadIndependentDirectorwhentheChairmanisnotanindependentdirector.TheBoardbelievestherobustdutiesofthe Lead Independent Director, who is selected annually by the company’s independent directors, provide foreffective, appropriate safeguards and oversight. The role of the Lead Independent Director at the company ismodeled on the role of an independent chairman, ensuring a strong, independent and active Board. Thecompany’s Corporate Governance Guidelines provide that the Lead Independent Director shall “preside overexecutivesessionsofthecompany’sindependentdirectors,facilitateinformationflowandcommunicationbetweentheDirectorsandtheChairman,andtoperformsuchotherdutiesspecifiedbytheBoard.”TheLeadIndependentDirector’sresponsibilitiesinclude:
• ServingasliaisonbetweentheindependentdirectorsandtheChairmanandChiefExecutiveOfficer.
• Reviewingandapprovingmeetingagendasandsufficiencyoftime.
• Callingmeetingsoftheindependentdirectors.
• Presiding at all meetings of the independent directors and any Board meeting when the Chairman andChiefExecutiveOfficerisnotpresent,includingexecutivesessionsoftheindependentdirectors.
• Approvingthequality,quantityandtimelinessofinformationsenttotheBoard.
• ServingakeyroleinBoardandChiefExecutiveOfficerevaluations.
• Engagingwith,andrespondingdirectlyto,shareholderandstakeholderquestions,asappropriate.
• Providing feedback from executive sessions of the independent directors to the Chairman and ChiefExecutiveOfficerandotherseniormanagement.
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• Recommendingadvisorsandconsultants.
• Conducting,alongwiththeCommitteeonDirectorsandCorporateGovernance,anannualassessmentoftheBoardandcommittees.
The Board operates under sound principles of corporate governance. When the roles of Chairman and ChiefExecutive Officer are combined, the Board ensures independent oversight of the company through acounterbalancing governance structure. For example, the company’s robust corporate governance policies andpracticesprovideindependentdirectorswiththeabilitytoeffectivelyoverseethecompany’smanagement.Theseinclude:
• Director independence. Currently,11ofthe12directornomineesareindependent.
• Fully independent Board committees. All members of the Audit Committee, Compensation andManagementDevelopment Committee, Committee on Directors and Corporate Governance andScienceandTechnologyCommitteeare“independent”inaccordancewithorasdefinedintherulesadoptedbytheSECandtheNewYorkStockExchangeandthecompany’sownCorporateGovernanceGuidelines.
• Continued Board refreshment. The Board continually reviews its composition with a focus on refreshingnecessaryskillsetstooverseemanagement’sexecutionofthecompany’sstrategy.
• Independent evaluation of Chief Executive Officer performance. The company’s Compensation andManagementDevelopmentCommittee,whichisfullyindependent,isresponsibleforperforminganannualevaluationoftheChiefExecutiveOfficeragainsthisperformanceobjectives.
The Board’s current governance structure ensures strong independent leadership while still giving the Boardflexibility. The adoption of a mandate that the Chairman of the Board be an independent director is highlyprescriptive and woulderode the Board’s judgement and flexibility. Such a requirement would limit the Board’sabilitytoselectthestyleofleadershipbestsuitedtomeettheneedsofthecompanyanditsshareholdersbasedontherelevantfacts,circumstances,andcriteria,astheyexistatthetimeofdetermination.TheBoardmusthaveacertaindegreeofdiscretion,andthecompanybelievesthecurrentgovernancestructureprovidesthenecessaryflexibility in determining the Board’s leadership structure. The Board will continue to monitor the company’sgovernance structure; however, given the needs of the company continually evolve, the Board believes it isbeneficial to maintain the flexibility to determine the best leadership structure for the Board at the time. A vote“FOR” the proposal would upset the careful balance the Board has struck between ensuring the leadershipremains accountable to the company’s shareholders while being best suited to meet their needs. For thesereasonstheBoardrecommendsthatyouvoteagainstthisproposal.
Accordingly, the Board of Directors unanimously recommends a vote “AGAINST” this proposal.
Item 5 – Shareholder Proposal on Shareholder Right to Act by Written Consent
The proponent of this resolution is James McRitchie, 9295 Yorkship Court, Elk Grove, CA 95758.
Proposal 5—Shareholder Right to Act by Written ConsentResolved, Bristol-Myers Squibb (“BMY” or “Company”) shareholders request our board of directors undertakesteps as necessary to permit written consent by shareholders entitled to cast the minimum number of votesnecessarytoauthorizeactionatameetingatwhichallshareholdersentitledtovotewerepresentandvoting.Thiswrittenconsentistobeconsistentwithgivingshareholdersthefullestpowertoactbywrittenconsentconsistentwithapplicablelaw,includingtheabilitytoinitiateanytopicforwrittenconsentconsistentwithapplicablelaw.
Supporting statementShareholder rightstoact bywrittenconsent andspecial meetingsareoftencomplimentary waystobringurgentmatterstotheattentionofmanagementandshareholdersoutsidetheannualmeetingcycle.
Manyboardsandinvestorsassumeafalseequivalencybetweenrightsofwrittenconsentandspecial meetings.However,anyshareholder,regardlesshowmany(orfew)sharessheowns,canseektosolicitwrittenconsentsonaproposal.
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By contrast, calling a special meeting may require a two-step process. A shareholder who does not own theminimum shares required must first obtain the support of other shareholders. Once that meeting is called, theshareholder mustdistribute proxies asking shareholders to vote on the proposal to be presented at the specialmeeting. Thistwo-stepprocess cantake more timeandexpense thanthe one-step process of soliciting writtenconsents,especiallywhenBMYrequiresa25%threshold,insteadof10%asprovidedforinDelawarelaw.
Blackrock’sproxyvotingguidelinesfor2019includethefollowing:
Inexceptionalcircumstancesandwithsufficientlybroadsupport,shareholdersshouldhavetheopportunitytoraiseissues of substantial importance without having to wait for management to schedule a meeting. We thereforebelieve that shareholders should have the right to solicit votes by written consent provided that: 1) there arereasonable requirements to initiate the consent solicitation process (in order to avoid the waste of corporateresources in addressing narrowly supported interests); and 2) shareholders receive a minimum of 50% ofoutstandingsharestoeffectuatetheactionbywrittenconsent.
Thisproposaltopicistrendingpositively.Writtenconsentwon47%supportatUnitedRentalsin2018;51%supportin2019.AtFlowserve43%supportin2018;51%supportin2019.AtCapitalOneFinancial44%supportin2018;56% support in 2019. The topic also recently won majorities at JetBlue, Cigna, Applied Materials, NuanceCommunications,Netflix,NewellBrands,GileadSciences,L3Technologies,EasternChemicalCompany,KansasCitySouthernandHP.
OurCompanyshouldjointhehundredsofmajorcompaniesthatenableshareholderstoactbywrittenconsent.
IncreaseShareholderValueVoteforrighttoactbywrittenconsent–Proposal5
Board of Directors’ Position
The Board of Directors recommends a vote “AGAINST” the proposal for the following reasons.The Board has carefully considered the proposal and believes that permitting shareholders to act by writtenconsentisunnecessaryandnotinthebestinterestsofthecompanyanditsshareholders.
Currently, the company’s shareholders have the ability to propose matters for consideration at each annualmeetingofshareholders.Inaddition,thecompany’sBylawspermitholdersof25%ormoreofoutstandingshares,halfofthenecessarythresholdforshareholderstoactbywrittenconsentunderDelawarelawandthisproposal,tocallspecialmeetingsofshareholders.Thisrightprovidesshareholdersanopportunitytoraiseappropriateissuesforthecompanytoconsiderbetweenannualmeetingsandonwhichallshareholderscandeliberateandvote.Anygroup of shareholders with holdings sufficient to act by written consent under this proposal may already call aspecialmeetingofshareholders.
TheBoardbelievesthatpermittingshareholderactionbywrittenconsentwouldcircumventtheproperandusualprocessof allowing deliberation at a meeting of shareholders, would be contrary to principles of openness andgoodgovernance,andwouldhavethepotentialtoinappropriatelydisenfranchiseshareholders.Unlikemeetingsofshareholders,actionbywrittenconsentwoulddisenfranchisecertainshareholdersbydenyingthemtheabilitytovoteorotherwisehaveasayonproposedshareholderactions.Actionbywrittenconsentwouldenabletheholdersofjustamajorityofthecompany’soutstandingsharestotakeactiononaproposalwithoutthebenefitofhearingtheviews,questionsandargumentsofothershareholdersorthecompany.Inaddition,actionbywrittenconsenteliminatestheneedforadvancenoticetobeprovidedtoshareholdersaboutaproposedaction.Therefore,certainshareholdersmaynotbeinformedabouttheproposedactionuntilaftertheactionhasalreadybeentaken,denyingtheseshareholderstheabilitytoexercisetheirrights.TheBoardbelievesthatthisproposalcouldadverselyaffecttheconductofshareholderbusinessifthecompanytakesanactionitotherwisewouldnothavetakenifallofthecompany’s shareholders were afforded the opportunity to discuss, debate and vote on the matter. The Boardbelieves that a meeting of shareholders, which provides all shareholders an opportunity to deliberate about aproposedactionandvotetheirshares,isthemostappropriateforumtofacilitateshareholderaction.
Permittingshareholderstoactbywrittenconsenthasthepotentialtocreatesubstantialconfusionanddisruption,andthe Board does not believe it is appropriate for the corporate governance of a widely-held public company.Multiple
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groupsofshareholderswouldbeabletosolicitwrittenconsentsatanytimeandasfrequentlyastheychooseonarangeof special or self-interestedissues. Therealsoisthepossibility that consentsolicitationsmayconflict withoneanother,beduplicative, or not beinthebest interests of thecompanyortheshareholdersasawhole. Thewrittenconsentprocessthatthisproposalseekstoauthorizemaybecumbersome,timeconsumingandcostlyforthe company. As a result, the Board continues to believe that holding meetings where all shareholders maydiscusstheproposedactionsandvotetheirsharesisthebestwayforshareholderstotakeaction.
Additionally,permittingshareholderstoactbywrittenconsentisunnecessarygiventheotheravenuesavailabletoshareholders to engage with the company and its Board. In addition to soliciting, evaluating and responding tofeedbackfromthecompany’sshareholdersonanongoingbasis,withtheleadershipofastrongLeadIndependentDirector, theBoard continually reassesses the company’s corporate governance practices to identify additionalsteps to further benefit shareholders. For example, following extensive engagement with the company’sshareholders throughout 2015, theBoardamendedthecompany's Bylawsto adopt a proxyaccessshareholderright in February 2016. The Board tookparticular care to adopt a bylaw with provisions that reflect the input ofshareholders, the details of which are describedonpage13of this Proxy Statement under the heading “ProxyAccessShareholderRight.”TheBoardrecommended,andshareholdersapproved,amendmentstothecompany’sgoverning documents to eliminate all supermajority provisions applicable to common shareholders. Further, theBoard's Committee on Directors and Corporate Governance has created a process for shareholders tocommunicate directly with the company’s non-employee directors outside the annual meeting cycle, which isdescribedonpage26ofthisProxyStatementundertheheading“HowtoCommunicatewithUs”Moreinformationaboutthecompany'scorporategovernancepracticesandpoliciescanbefoundbeginningonpage14ofthisProxyStatementundertheheading“HowWeGovernandAreGoverned.”
TheBoard,therefore,believesthatshareholderactionbywrittenconsentcontinuestonotbeinthebestinterestsofthecompanyoritsshareholders.ForthesereasonstheBoardrecommendsthatyouvoteagainstthisproposal.
Accordingly, the Board of Directors unanimously recommends a vote “AGAINST” this proposal.
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VotingSecuritiesandPrincipalHoldersAt the close of business on March 16, 2020, there were 2,262,463,353.509 shares of $0.10 par value commonstockand3,546sharesof$2.00convertiblepreferredstockoutstandingandentitledtovote.
Common Stock Ownership by Directors and Executive Officers
Thefollowingtablesetsforth,asofMarch16,2020,beneficialownershipofsharesofourcommonstockbyeachdirector,eachofourNamedExecutiveOfficersandalldirectorsandexecutiveofficersasagroup,ineachcase,asof such date. Shares are beneficially owned when an individual has voting and/or investment power over thesharesorcouldobtainvotingand/orinvestmentpowerovertheshareswithin60days.Votingpowerincludesthepowertodirectthevotingofthesharesandinvestmentpowerincludesthepowertodirectthedispositionoftheshares. Unless otherwise noted, shares listed below are owned directly or indirectly with sole voting andinvestmentpower.Noneofourdirectorsandexecutiveofficers,individuallyorasagroup,beneficiallyownsgreaterthan1%ofouroutstandingsharesofcommonorpreferredstock.
Bristol-Myers Squibb Company
NameTotal Common
Shares Owned(1)
Common Shares Underlying Options or
Stock Units(2)
Common Shares Underlying Deferred
Share Units(3)
P. J. Arduini 25,204 0 25,204
C. A. Bancroft(4) 437,534 0 0
R. Bertolini 31,405 0 20,008
C. Boerner, Ph.D. 21,033 0 0
M. Bonney 112,039 102,169 3,801
G. Caforio, M.D. 485,424 0 0
D. Elkins 82,809 48,318 0
M. W. Emmens 20,505 0 20,245
M. Grobstein(5) 90,368 0 86,819
J. Haller, M.D. 89,731 83,469 3,853
A. J. Lacy(5) 79,878 0 77,573
S. Leung 580,563 0 0
D. C. Paliwal 46,072 0 33,137
T. R. Samuels 45,769 0 18,769
V. L. Sato, Ph.D. 70,460 0 70,460
G. L. Storch 56,021 0 56,021
R. Vessey, M.A, B.M., B.Ch., F.R.C.P., D.Phil. 217,229 168,273 0
K. H. Vousden, Ph.D. 13,636 0 13,636
P. Yale 3,853 0 3,853
All Directors and Executive Officers as aGroup(6) 3,119,662 631,254 433,379
1) Consists of direct and indirect ownership of shares, shares credited to the accounts of the executive officers under the Bristol-MyersSquibbCompanySavingsandInvestmentProgram,andCelgeneCorporation401(k)Plan,stockoptionsthatarecurrentlyexercisable, restrictedstockunitsthat vest within60days, thetarget numberof marketshareunitsthat vest within60daysanddeferredshareunits.
2) Consistsofsharesunderlyingstockoptionsthatarecurrentlyexercisable,restrictedstockunitsthatvestwithin60days,andthetargetnumberofmarketshareunitsthatvestwithin60days.Noneoftheseshareshaveanyvotingrights.
3) Consists of deferred share units that are valued according to the market value and shareholder return on equivalent shares ofcommonstock.Deferredshareunitshavenovotingrights.
4) Mr.BancroftretiredfromthecompanyonMarch16,2020.5) Mr.GrobsteinandMr.Lacyarenotstandingforre-electionatthe2020AnnualMeeting.6) Includes29individuals.
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Principal Holders of Voting Securities
Thefollowingtablesetsforthinformationregardingbeneficialownersofmorethan5%oftheoutstandingsharesofourcommonstock. There are nobeneficial owners of more than5%of the outstanding shares of our preferredstock.
Name Number of Shares Beneficially Owned Percent of Class
Vanguard Group Inc. PO Box 2600 V26 Valley Forge, PA 19482-2600
194,860,154(1) 8.66%(1)
BlackRock, Inc. 55 East 52nd Street New York, NY 10055
171,343,446(2) 7.61%(2)
1) ThisinformationisbasedontheForm13G/AfiledbyVanguardGroupInc.withtheSEConFebruary12,2020reportingbeneficialownershipasofDecember30,2019.Thereportingpersonhassolevotingpowerwithrespectto3,570,899shares,sharedvotingpowerwithrespectto656,771shares,soledispositivepowerwithrespectto190,848,600sharesandshareddispositivepowerwithrespectto4,011,554shares.
2) ThisinformationisbasedontheSchedule13G/AfiledbyBlackRock,Inc.withtheSEConFebruary5,2020reportingbeneficialownership as of December 31, 2019. The reporting person has sole voting power with respect to 146,949,101 shares, sharedvotingpowerwithrespecttozeroshares,soledispositivepowerwithrespectto171,343,446sharesandshareddispositivepowerwithrespecttozeroshares.
Delinquent Section 16(a) Reports
Under Section 16(a) of the Securities ExchangeAct of 1934, our directors, executive officers andthe beneficialholdersofmorethan10%ofourcommonstockarerequiredtofilereportsofownershipandchangesinownershipwit theSEC.Tothebest of our knowledge, duringtheyear endedDecember 31, 2019, our directors, executiveofficersandgreaterthan10%shareholderscompliedwithallapplicableSection16(a)filingrequirementswiththefollowingexceptions:(ii)Form4reportsforeachorMessrs.AhmedandElkinsandDr.Vesseywerenottimelyfileddue to an administrative delay in calculations surrounding the total merger consideration received by theseindividualsinconnectionwiththeCelgeneTransaction;and(ii) Form4reportsforourlegacyBMSexecutivesinconnectionwithourannualawardsvestingsonMarch10,2019,duetoasystem-widefailureintheadministrativesoftwareusedforthesefilings.
Policy on Hedging and Pledging
Ourinsidertradingpolicyprohibitsallemployees,includingdirectorsandexecutiveofficers,fromengaginginanyspeculativeorhedgingtransactions.Ourinsidertradingpolicyalsoprohibitsallemployees,includingdirectorsandexecutiveofficers,fromholdingoursecuritiesinamarginaccountorpledgingoursecuritiesascollateralforaloanexceptincertainlimitedcircumstancespre-approvedbyourCorporateSecretarywhenapersonwishestopledgeour securities as collateral for a loanandclearly demonstrates the ability to repay the loanwithout selling suchsecurities. Noneof ourdirectorsor executiveofficershaspledgedsharesof ourstockascollateral for aloanorholdssharesofourstockinamarginaccount.
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OtherMatters
Advance Notice Procedures
AssetforthinourBylaws,ifyouwishtoproposeanyaction,includingthenominationofdirectors,atnextyear’sannualmeeting,youmustdelivernoticetoBMScontainingcertaininformationsetforthinourBylaws,notlessthan90but not more than 120days before the anniversary of the prior year’s annual meeting. For our 2021AnnualMeeting, we must receive this notice between January 5, 2021 and February 4, 2021. These requirements areseparate anddistinct fromthe SECrequirements that a shareholder must meet to havea shareholder proposalincludedinourproxystatement.Forfurtherinformationonhowashareholdermaynominateacandidatetoserveasadirector,pleaseseepage13.
Our Bylaws are available on our website at www.bms.com/ourcompany/governance. In addition, a copy of theBylawprovisionsdiscussedabovemaybeobtainedbywritingtousatourprincipalexecutiveoffices,Bristol-MyersSquibbCompany,430East29thStreet—14thFloor,NewYork,NewYork10016,Attention:CorporateSecretary.
2021 Shareholder Proposals
Shareholder proposals relating to our 2021 Annual Meeting of Shareholders must be received by us at ourprincipalexecutiveoffices,Bristol-MyersSquibbCompany,430East29thStreet—14thFloor,NewYork,NewYork10016,Attention:CorporateSecretary,nolaterthanNovember25,2020.SuchproposalsmustcomplywithSECregulations under Rule 14a-8 regarding the inclusion of shareholder proposals in company sponsored proxymaterials. Shareholders are encouraged to contact the Office of the Corporate Secretary prior to submitting ashareholderproposaloranytimetheyhaveaconcern.AtthedirectionoftheBoardofDirectors,theOfficeoftheCorporateSecretaryactsascorporategovernanceliaisontoshareholders.
Compensation Committee Interlocks and Insider Participation
There were no Compensation and Management Development Committee interlocks or insider (employee)participationin2019.
Availability of Corporate Governance Documents
OurCorporateGovernanceGuidelines(includingthestandardsofdirectorindependence),PrinciplesofIntegrity,CodeofEthicsforSeniorFinancialOfficers,CodeofBusinessConductandEthicsforDirectors,additionalpoliciesand guidelines, committee charters and links to Reports of Insider Transactions are available on our corporategovernancewebpageatwww.bms.com/ourcompany/governanceandareavailabletoanyonewhorequeststhembywritingto:CorporateSecretary, Bristol-MyersSquibbCompany,430East29thStreet—14thFloor,NewYork,NewYork10016.
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Why am I receiving these materials?This Proxy Statement is being delivered to allshareholdersofrecordasofthecloseofbusinessonMarch 16, 2020 in connection with the solicitation ofproxiesonbehalf of theBoardofDirectorsforuseattheAnnualMeetingofShareholdersonMay5,2020.We expect our proxy materials, including this ProxyStatement and the Annual Report, to be first madeavailabletoshareholdersonoraboutMarch25,2020.AlthoughtheAnnualReportandProxyStatementarebeing delivered together, the Annual Report shouldnotbedeemedtobepartoftheProxyStatement.
What is “householding” and how does itwork?“Householding” is a procedure we adopted wherebyshareholdersofrecordwhohavethesamelastnameandaddress and who receive the proxy materials bymail will receiveonlyonecopyoftheproxymaterialsunless we have received contrary instructions fromone or more of the shareholders. This procedurereduces printing and mailing costs. If you wish toreceiveaseparatecopyoftheproxymaterials,noworin the future, at the same address, or if you arecurrently receiving multiple copies of the proxymaterials at the sameaddress and wish to receive asingle copy, you may contact us by writing toShareholder Services, Bristol-Myers SquibbCompany, 430 East 29th Street—14th Floor, NewYork,NewYork10016,orbycallingusat(212)546-3309. If you are a beneficial owner (your shares areheldinthenameof abank, brokeror otherholderofrecord),thebank,brokerorotherholderofrecordmaydeliver only one copy of the Proxy Statement andAnnual Report, or Notice of Internet Availability ofProxy Materials, to shareholders whohave the sameaddress unless the bank, broker or other holder ofrecordhasreceivedcontrary instructionsfromoneormore of the shareholders. If you wish to receive aseparate copy of the Proxy Statement and AnnualReport, or Notice of Internet Availability of ProxyMaterials,noworinthefuture,youmaycontactusatthe address or phone number above and we willpromptly deliver a separate copy. Beneficial ownerssharing an address who are currently receivingmultiple copies of the Proxy Statement and AnnualReport, or Notice of Internet Availability of ProxyMaterials, and wish to receive a single copy in thefuture, should contact their bank, broker or otherholderofrecordtorequestthatonlyasinglecopybedeliveredtoallshareholdersatthesharedaddressinthefuture.
Who can attend the Annual Meeting?Only shareholders of Bristol-Myers Squibb Companyasoftherecorddate,March16,2020,theirauthorizedrepresentatives and guests of Bristol-Myers SquibbCompanymayattendtheAnnualMeeting.Admissionwill be by ticket only. A form of government-issuedphotographidentificationandproofofownershipasofthe record date (such as an admission ticket, abrokeragestatement, proxy card or voting instructionformreflectingyourstockownership),willberequiredto enter the meeting. Large bags, backpacks,briefcases, cameras, recording equipment and otherelectronicdeviceswillnotbepermittedinthemeeting,andattendees will besubject to security inspections.Ourofficesarewheelchairaccessible.Wewillprovide,upon request, wireless headsets for hearingamplification. Please see below instructions forobtaininganadmissionticket.
How do I receive an admission ticket?To request an admission ticket in advance of theAnnualMeeting,pleasevisit www.proxyvote.comandfollowtheinstructionsprovided.Youwillneedthe16-digit number included on your proxy card, votinginstruction form or Notice of Internet Availability ofProxyMaterials.
If you are a registered shareholder (your shares areheld in your name) and plan to attend the meeting,you should bring either the Notice of InternetAvailabilityofProxyMaterialsorthetopportionoftheproxycard,bothofwhichwillserveasyouradmissionticket.
If youareabeneficialowner(yoursharesareheldinthenameofabank,brokerorotherholderofrecord)and plan to attend the meeting, you can obtain anadmissionticketinadvancebywritingtoShareholderServices, Bristol-Myers Squibb Company, 430 East29thStreet,14thFloor,NewYork,NY10016.Pleasebesuretoencloseproofofownership,suchasabankorbrokerageaccountstatement.Shareholderswhodonot obtain tickets in advance may obtain them uponverification of ownership at the Registration Desk onthedayoftheAnnualMeeting.
Wemay also issue tickets to other individuals at ourdiscretion.
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FrequentlyAskedQuestions
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Who is entitled to vote?All holders of record of our $0.10 par value commonstock and $2.00 convertible preferred stock at thecloseofbusinessonMarch16,2020willbeentitledtovote at the 2020 Annual Meeting. Each share isentitled to one voteon each matter properly broughtbeforethemeeting.
How do I vote if I am a registeredshareholder?Proxiesaresolicitedtogiveall shareholderswhoareentitled to vote on the matters that come before themeetingtheopportunity to dosowhether or not theyattend the meeting in person. If you are a registeredholder, you can vote your shares by proxy in one ofthefollowingmanners:
i) viaInternetatwww.proxyvote.com;
ii) bytelephoneat(800)690-6903;
iii) bymail,ifyoureceivedapapercopyoftheproxymaterials;or
iv) inpersonattheAnnualMeeting.
Choosing to vote via Internet or calling the toll-freenumberlistedabovewillsaveusexpense.Inordertovoteonline or via telephone, have the voting form inhandandeither call thenumber or goto thewebsiteandfollowtheinstructions.IfyouvoteviatheInternetor bytelephone,pleasedonot returnasignedproxycard.
If you received a paper copy of the proxy materialsand choose to vote by mail, specify how you wantyour shares voted on each proposal by marking theappropriateboxesontheproxycardenclosedwiththeProxy Statement, date and sign it, and mail it in thepostage-paidenvelope.
Ifyouwishtovoteinperson,youcanvoteyoursharesattheAnnualMeeting.
How do I vote if I am a beneficialshareholder?Ifyouareabeneficialshareholder,youhavetherighttodirect your broker or nominee on how to vote theshares.Youshouldcompleteavotinginstructioncard,which yourbroker or nomineeis obligated to provideyou.Ifyouwishtovoteinpersonatthemeeting,youmust first obtain fromtherecordholder alegal proxyissuedinyourname.
Under the rules of the New York Stock Exchange(NYSE), brokers that have not received votinginstructionsfromtheir customers10daysprior to themeetingdatemayvotetheircustomers’sharesinthebrokers’discretionontheproposalsregardingroutinematters, which in mostcasesincludestheratificationof the appointment of the independent registeredpublicaccountingfirm,
Under NYSE rules, the election of directors, theadvisory vote to approve the compensation of ourNamed Executive Officers and the approval of anyshareholder proposals are considered “non-discretionary” items, which means that your brokercannotvoteyoursharesontheseproposals.
What items will be voted upon at theAnnual Meeting?AttheAnnualMeeting,wewillconsiderandactonthefollowingitemsofbusiness:
i) the election to the Board of Directors the 12personsnominatedbytheBoard,eachforatermofoneyear;
ii) anadvisoryvotetoapprovethecompensationofourNamedExecutiveOfficers;
iii) the ratification of the appointment of ourindependent registered public accounting firm;and
iv) two shareholder proposals, if presented at themeeting.
We do not know of any other matter that may bebroughtbeforethemeeting.However,ifothermattersareproperlypresentedforaction,it istheintentionofthenamedproxiestovoteonthemaccordingtotheirbestjudgment.
What are the Board of Directors’ votingrecommendations?For the reasons set forth in more detail in the ProxyStatement,ourBoardofDirectorsrecommendsavoteFORthe election of each director, FORthe advisoryvote to approve the compensation of our NamedExecutive Officers, FOR the ratification of theappointment of Deloitte & Touche LLP as ourindependentregisteredpublicaccountingfirmfor2020andAGAINSTtheshareholderproposal.
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How many votes are needed to elect thedirectors and to approve each of theproposals?Director Elections: A majority of votes cast withrespect to each director’s election at the meeting isrequiredtoelecteachdirector.Amajorityofthevotescast means that the number of votes cast “for” adirector must exceed the number of votes cast“against” that director in order for the director to beelected.Abstentionswillnotbecountedasvotescastfor or against the director and broker non-votes willhavenoeffectonthisproposal.
Advisory Vote to Approve Compensation of OurNamedExecutive Officers: The affirmative vote of amajority of our outstanding shares present in personor by proxy and entitled to vote on the matter isrequired for the approval of the advisory vote toapprove the compensation of our Named ExecutiveOfficers. Because your vote is advisory, it will not bebinding upon our Board of Directors. Abstentions willbecountedasvotesagainstthisproposalandbrokernon-voteswillhavenoeffectonthisproposal.
Ratificationof Our Auditors: Theaffirmative vote of amajority of our outstanding shares present in personor by proxy and entitled to vote on the matter isrequired for the ratification of the appointment of ourindependent registered public accounting firm.Abstentions will be counted as votes against thisproposal. As described above, a broker or othernominee
may generally vote on routine matters such as thisone,andthereforenobroker non-votesareexpectedtoexistinconnectionwiththisproposal.
Shareholder Proposals: The affirmative vote of amajority of our outstanding shares present in personor by proxy and entitled to vote on this matter isrequiredfortheapprovaloftheshareholderproposalsif presented at the meeting. Abstentions will becounted as votes against the proposals and brokernon-voteswillhavenoeffectontheproposals.
How are the votes counted?In accordance with the laws of Delaware, ourAmended and Restated Certificate of Incorporationand our Bylaws, for all matters being submitted to avote of shareholders, only proxies and ballots thatindicate votes “FOR,” “AGAINST” or “ABSTAIN” ontheproposals, or thatprovidethedesignatedproxieswiththeright to votein their judgmentanddiscretionontheproposalsarecountedtodeterminethenumberof shares present and entitled to vote. Broker non-votesarenot countedassharespresent andentitledtovotebutwillbecountedforpurposesofdeterminingquorum(whetherenoughvotesarepresenttoholdtheAnnualMeeting).
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How will my shares be voted at the Annual Meeting?
Voting Options
Item Proposal Voting OptionsEffect of
Abstentions
BrokerDiscretionary
Voting Allowed?Effect of Broker
Non-Votes
1 ElectionofDirectors FOR,AGAINSTorABSTAIN(foreachdirectornominee)
Noeffect—notcountedasavotecast
No Noeffect
2 AdvisoryvotetoapprovethecompensationofourNamedExecutiveOfficers
FOR,AGAINSTorABSTAIN TreatedasavoteAGAINSTtheproposal
No Noeffect
3 Ratificationoftheappointmentofanindependentregisteredpublicaccountingfirm
FOR,AGAINSTorABSTAIN TreatedasavoteAGAINSTtheproposal
Yes Notapplicable
4 ShareholderProposalonSeparateChairandCEO
FOR,AGAINSTorABSTAIN TreatedasavoteAGAINSTtheproposal
No Noeffect
5 ShareholderProposalonShareholderRighttoActbyWrittenConsent
FOR,AGAINSTorABSTAIN TreatedasavoteAGAINSTtheproposal
No Noeffect
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Can I change my vote after I return theproxy card, or after voting by telephoneor electronically?If you are a shareholder of record, you can revokeyourproxyatanytimebeforeitisvotedatthemeetingbytakingoneofthefollowingthreeactions:
i) bygivingtimelywrittennoticeoftherevocationtotheCorporate Secretary of Bristol-Myers SquibbCompany;
ii) by casting a new vote by telephone or by theInternet;or
iii) byvotinginpersonattheAnnualMeeting.
If you are a beneficial owner of shares, you maysubmit new voting instructions by contacting yourbank, broker orother holderof record. Youmayalsovote in person at theAnnual Meeting if you obtain alegalproxy.
All shares that have been properly voted and notrevokedwillbevotedattheAnnualMeeting.
How do I designate my proxy?If youwishtogiveyourproxytosomeoneotherthanthepersonsnamedasproxiesintheenclosedformofproxy,youmaydosobycrossingoutthenamesofallthree persons named as proxies on the proxy cardandinsertingthenameofanotherperson.Thesignedcardmustbepresentedatthemeetingbythepersonyouhavedesignatedontheproxycard.
Who counts the votes?An independent agent tabulates the proxies and thevotes cast at the meeting. In addition, independentinspectors of election certify the results of the votetabulation.
Is my vote confidential?Yes, any information that identifies a shareholder orthe particular vote of a shareholder is keptconfidential.
Who will pay for the costs involved in thesolicitation of proxies?Wewillpayallcostsofpreparing,assembling,printingand distributing the proxy materials as well as thesolicitation of all proxies. We have retainedGeorgeson Shareholder Communications Inc. toassist in soliciting proxies for a fee of $22,000, plusreasonable out-of-pocket expenses. We may solicitproxiesonbehalfoftheBoardofDirectorsthroughthemail, in person, electronically, and bytelecommunications.Wewill,uponrequest,reimbursebrokerage firms and others for their reasonableexpenses incurred for forwarding solicitationmaterialtobeneficialownersofstock.
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ExhibitA
Categorical Standards of Independence
In determining director independence, the Board has adopted the following categorical standards to assist it indeterminingwhichrelationshipswillbeconsideredimmaterial:
a) an immediate family member of the director is or has been employed by the company, provided that suchfamily member is not, and has not been for at least a period of three years, an executive officer of thecompany;
b) morethanthreeyearshaselapsedsincei)thedirectorwasemployedbythecompany,ii)animmediatefamilymemberofthedirectorwasemployedbythecompanyasanexecutiveofficer,oriii)anexecutiveofficerofthecompanywasontheboardofdirectorsofacompanythatemployedeitherthedirectororanimmediatefamilymemberofthedirectorasanexecutiveofficer;
c) thedirector, or animmediatefamily memberof thedirector, received, in any12-monthperiodwithin thelastthree years, $120,000 or less in direct compensation from the company (other than director’s fees orcompensationthatwasdeferredforpriorservicewiththecompany);
d) morethanthreeyearshaselapsedsincei)thedirectorhasbeenapartnerwithoremployedbythecompany’sindependentauditororii)animmediatefamilymemberpersonallyworkedonthecompany’sauditasapartneroremployeeofthecompany’sindependentauditor;
e) thedirectorhasanimmediatefamilymemberwhoi)isanemployeeof,butnotapartnerof,theindependentauditorandii)doesnotpersonallyworkonthecompany’saudit;
f) thedirectorofthecompany,oranimmediatefamilymemberofadirector,isadirector,anexecutiveofficeroranemployeeof,orisotherwiseaffiliatedwith,anothercompanythatmakespaymentto,orreceivespaymentfrom,thecompanyfor propertyor servicesinanamountwhichinanysinglefiscal yearwithintheprecedingthree years, does not exceed the greater of $1 million or 2% of such other company’s consolidated grossrevenues;
g) thedirectorofthecompanyand/oranimmediatefamilymemberofthedirectordirectlyorindirectlyowns,intheaggregate,10%equityinterestorlessinanothercompanythatmakespaymentto,orreceivespaymentfrom,thecompanyforpropertyorservices;and
h) the director of the company is a director, executive officer, or trustee of, or is otherwise affiliated with, acharitableorganizationornon-profitorganization,andthecompany’s,ortheBristol-MyersSquibbFoundation’sdiscretionarycharitablecontributionstotheorganization,intheaggregate,inanysinglefiscalyearwithintheprecedingthreeyears,donotexceedthegreaterof$1millionor2%ofthatorganization’sconsolidatedgrossrevenues.
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ExhibitB
Directions to our Lawrence Township office at:
3401PrincetonPikeLawrenceTownship,NewJersey08648Phone:609-302-7630
By Car:
From the North:
TakeUS-1StoCountyRd533/QuakerbridgeRdinWestWindsorTownshipTaketheCountyRd533NexitfromUS-1SMergeontoCountyRd533/QuakerbridgeRdUsetheleft2lanestoturnleftontoProvinceLineRdTurnleftontoPrincetonPikeTurnrightontoBMSDrive
From Southern New Jersey:
AccessI-295NContinueonI-295NtoLawrenceTownshipTakeexit8BfromI-95SMakeleftatlightontoBMSDrive
From Western New Jersey / Pennsylvania:
AccessI-95NTakeexit7Bonto206NorthBearrightontoFranklinCornerRoad0.2milesmakeleftontoLewisvilleRdGotoendofLewisvilleRoadmakerightontoPrincetonPikeBMSPrincetonPikeimmediatelyontheright
By Train:New Jersey Transit and Amtrak train service is available to Princeton Junction, New Jersey. Our LawrenceTownshipofficeisapproximatelya15-minutecardrivefromthestation.
Parking:Free parking for shareholders attending the 2020Annual Meeting is available. Please go directly to the parkingareareservedforshareholders.
B-1
Y O U R V O T E I S I M P O R T A N TP L E A S E V O T E Y O U R P R O X Y
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