PDCO Patterson Companies Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

SCHEDULE 14A

Filed by the Registrant ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

Commission File No. 0-20572

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1031 Mendota Heights Road

St. Paul, Minnesota 55120

August 2, 2024

Dear Shareholder:

You are cordially invited to attend the annual meeting of shareholders of Patterson Companies, Inc. to be held virtually at 4:30 p.m., Central Daylight Saving Time, on Monday, September 16, 2024. This year’s annual meeting will be conducted as a virtual meeting of shareholders, a format that we continue to believe provides expanded access, improved communications and cost savings to our shareholders and our company. Instructions regarding virtual attendance are set forth in the notice below. Shareholders attending the virtual annual meeting online will be able to listen to the meeting live, submit questions and vote.

The annual meeting will be held for the following purposes: (1) to vote for the election of nine directors, (2) to vote upon an advisory proposal concerning our executive compensation, and (3) to ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending April 26, 2025. I encourage you to vote for the nominees for director, for advisory approval of our executive compensation program, and for ratification of the selection of Ernst & Young LLP.

Whether or not you expect to attend the virtual annual meeting online, it is important that your shares be represented and voted. After reading this proxy statement, please promptly vote and submit your proxy. You may vote through the Internet, by telephone, by requesting, signing and returning a proxy card, or online during the virtual annual meeting. Your vote is important.

Very truly yours,

PATTERSON COMPANIES, INC.

 

Donald J. Zurbay

Notice of Annual Meeting

of Shareholders to be Held

September 16, 2024

TABLE OF CONTENTS

Proposal No. 1:

Election of Directors

Nine persons have been nominated for election as directors, all of whom currently serve as directors. Our directors are elected annually, by a majority of the shares represented in person or by proxy and entitled to vote at the meeting, to serve until the next annual meeting of shareholders and until their respective successors are elected and duly qualified. There are no family relationships between or among any of our directors or executive officers.

Our Bylaws provide for a Board of Directors consisting of one or more members, and further provide that the number of directors may be increased or decreased from time to time by the affirmative vote of a majority of directors serving at the time the action is taken. Concurrent with our 2024 annual meeting of shareholders, the Board has set the number of directors at nine.

It is intended that votes will be cast pursuant to the enclosed proxy for the election of the nominees, except for those proxies that vote against the nominees or abstain from voting on the nominees. As noted above, shareholders do not have cumulative voting rights with respect to the election of directors, and proxies cannot be voted for a greater number of directors than the number of nominees. If any nominee shall be unable or unwilling to serve as a director, it is intended that the proxy will be voted for the election of such other person as the proxies shall, in their discretion, determine. We have no reason to believe that any nominee will not be a candidate or will be unable to serve.

Board Membership Criteria

In carrying out its responsibility to find the best-qualified persons to serve as directors, our Governance and Nominating Committee considers appropriate information with respect to each candidate. These characteristics consist of integrity, high level of education and/or business experience, broad-based business acumen, understanding of our company’s business and industry, strategic thinking and willingness to share ideas, network of contacts, diversity of experiences, expertise and backgrounds among members, balanced representation of the best interests of the company’s shareholders as a whole, and any potential conflicts with the company’s interests.

In addition, prior to nominating an existing director for re-election to our Board, our Governance and Nominating Committee considers and reviews an existing director’s Board and committee attendance and performance; length of Board service; experience, skills and contributions that the existing director brings to our Board; and his or her independence. Pursuant to our Corporate Governance Guidelines, independent directors generally may not stand for election following their attaining the age of 75 or 20 years of service as a director on our Board.

Experience and Attributes of Director Nominees

Our Board of Directors has identified key skills and attributes that are important for effective governance of Patterson. Each director brings to us a wealth of experience that combines to varying degrees many or all of these skills, but some have more in-depth experience in a particular area than others. Consistent with the Board’s goal of ensuring a comprehensive mix of skills and attributes are represented, below we capture how the director nominees contribute to both the general skills mix (organized by key attribute), as well as more specialized skills relevant to that attribute. In making this assessment, we considered the experience each director has from work, education, board service on other public companies and engagement in community, civic and business organizations. The below chart summarizes our director qualifications and experience.

Our Director Nominees

Our Board and Governance and Nominating Committee believe that each of our nominees brings a strong and diverse set of skills, experiences, and perspectives that creates a high-performing Board that is aligned with our business strategy, and that contributes to the effective oversight of Patterson. The ages, principal occupations, directorships held, and other information about our nominees are shown below as of July 19, 2024.

Nominees for Election as Director

Board Diversity

Our current directors represent a diverse range of experience and backgrounds, and come together to govern Patterson as an effective whole. Our Governance and Nominating Committee focuses on recruiting and recommending candidates to complement current director demographics. Self-identified gender, racial and ethnic background data for our directors as of July 19, 2024 appears in the charts below.

Our Governance and Nominating Committee is committed to building a Board with diverse experiences and backgrounds. Our Corporate Governance Guidelines state that Board membership should reflect diversity of experiences, expertise and backgrounds among members. Additionally, the charter of our Governance and Nominating Committee states that the committee will advise the Board on matters of diversity including race, gender and culture and recommend, as necessary, measures contributing to a Board that, as a whole, reflects a range of viewpoints, backgrounds, skills, experience and expertise.

Pursuant to the tenure limitation described in our Corporate Governance Guidelines, Ms. Rudnick will not be standing for re-election at the 2024 annual meeting of shareholders.

Director Nomination Process

To submit a recommendation of a director candidate to our Governance and Nominating Committee, a shareholder must submit the following information in writing, addressed to our Chairman of the Board, care of our Corporate Secretary, at the main office of Patterson Companies, Inc.:

Our Bylaws provide that in order for a person nominated by a shareholder to be eligible for election as a director at any regular or special meeting of shareholders, a written request that his or her name be placed in nomination must be received from a shareholder of record by our Corporate Secretary not less than 90 days prior to the date fixed for the meeting, together with the written consent of such person to serve as a director. A copy of our Bylaws may be obtained by written request to Patterson Companies, Inc., 1031 Mendota Heights Road, St. Paul, Minnesota 55120, Attn: Les B. Korsh, Chief Legal Officer and Corporate Secretary.

Board Evaluations

In the spirit of our values of excellence and continuous improvement, our Board is committed to regular assessments of itself and its committees. This helps ensure that our Board’s governance and oversight responsibilities are well executed and updated to reflect best practices.

At the end of each quarterly Board meeting, our Board meets in executive session, both with and without our Chief Executive Officer, to discuss whether the meeting’s objectives were satisfied and to identify issues that might require additional dialogue. Each of our Board’s committees also regularly meets in executive session for the same purposes.

Each year, our Board conducts an annual self-evaluation process, which is led by the independent Chairman of our Board and the Governance and Nominating Committee. Each director completes a comprehensive questionnaire evaluating the performance of our Board as a whole and the committee(s) on which the director serves. The directors’ responses are aggregated and anonymized to encourage the directors to respond candidly and maintain the confidentiality of their responses. The full results are reviewed by the Governance and Nominating Committee and summarized for the full Board, which reviews the results in executive session. Each Board committee also separately reviews the feedback received for such committee in executive session.

We believe this annual evaluation process provides our Board and its committees with valuable insight regarding areas where our Board believes it functions effectively as well as areas where our Board can improve. Recommendations for improvement derived from the annual evaluation process are used to adjust our Board’s future agendas and practices.

Vote Required

Election as a director requires the affirmative vote of the holders of a majority of the shares represented in person or by proxy and entitled to vote at the meeting.

Recommendation of the Board

Our Board of Directors recommend that you vote FOR the election of each nominee listed above.

Corporate Governance

We are committed to the values of effective corporate governance and high ethical standards. We believe these values are conducive to long-term performance. We believe our key corporate governance and ethics policies help us manage our business in accordance with the highest standards of business practice and in the best interests of our shareholders.

Our Corporate Governance Guidelines and committee charters help govern the operation of our Board and its committees. These are reviewed at least annually by the Governance and Nominating Committee and the full Board and are updated periodically in response to changing regulatory requirements, evolving practices, and otherwise as circumstances warrant.

Recent Corporate Governance Enhancements

In the spirit of our values of excellence and continuous improvement, our Board is committed to regular assessments of itself and its committees. This helps ensure that our Board’s governance and oversight responsibilities are well executed and updated to reflect best practices.

Our Board regularly evaluates our governance-related practices, taking into account evolving best practices and the needs of our business. During fiscal 2024, we have made the following enhancements:

Board Leadership Structure

Our Board of Directors, which elects its Chairman annually by a majority vote, does not have a fixed policy regarding whether the same person should serve as both the Chief Executive Officer and Chairman of the Board, and our Board believes that flexibility on this point best serves our company by allowing us to employ a leadership structure that is most appropriate under the circumstances at any given time.

We currently believe that bifurcating the roles of Chief Executive Officer and Chairman of the Board, as well as the oversight exercised by the independent members of our Board through the work of the committees of our Board discussed below, enables strong and dynamic Board leadership, and effectively allocates authority, responsibility and oversight between management and the independent members of our Board. Our Board has the discretion to combine the roles of Chief Executive Officer and Chairman of the Board in the future if it deems it advisable and in the best interest of our company to do so.

The separation of the Chairman and Chief Executive Officer positions allows our Chairman to focus on governance of our Board, Board meeting agenda planning, Board committee succession planning, the recruitment of new directors, Board committee responsibilities, and other governance matters as further described below under the caption “Role of Non-Executive Chairman,” and our Chief Executive Officer to focus his attention on our business and execution of our company’s strategy. The Chairman also has an important role in the performance evaluation of the Chief Executive Officer, which helps the Governance and Nominating Committee evaluate the most effective Board leadership structure for our company. Our Board believes that these and other activities of the Chairman serve to enhance the independent leadership of the Board in order to provide robust oversight and promote overall Board effectiveness. Mr. Buck has an extensive leadership background, is actively engaged as Chairman on Board matters, and works closely with Mr. Zurbay. Mr. Buck frequently interacts with Mr. Zurbay and other members of management to provide his perspective on important issues facing our company and the informational needs of our Board. In addition to the Governance and Nominating Committee, which he chairs, and the Compliance Committee, where he currently serves as a member, Mr. Buck routinely attends the meetings of our Board’s other committees and frequently communicates with the chairs of those committees and with other independent directors both inside and outside of our Board’s normal meeting schedule to discuss Board and company issues as they arise.

Role of Non-Executive Chairman

The role of non-executive Chairman is designed to provide leadership to our Board and to provide support and advice to our Chief Executive Officer. The role is intended to foster an environment conducive to effective communication by and among our Directors and senior management. The non-executive Chairman performs such duties and responsibilities as our Board may determine appropriate, including the following:

Board Oversight

Risk Management

Risk oversight is provided by a combination of our full Board and its committees. As part of its oversight, our Board meets regularly to discuss the strategic direction and the issues and opportunities facing our company. The Board and its committees oversee the most critical risks relating to our business, which include general business and industry risks, operating risks, business continuity risks, cybersecurity risks, financial risks including infrastructure, talent management and human capital related risks and compliance and regulatory risks. While the Board oversees risk, senior management is charged with identifying, assessing and managing risk. Risk management is not allocated to a single risk management officer, but rather is administered by management in an approach that is designed to ensure that the most significant risks are managed and monitored appropriately. Our senior management has a commitment to employing and embedding risk management practices and disciplines into its business planning and management processes to better enable achievement of our financial and compliance objectives as well as to achieve and maintain a competitive advantage in the marketplace.

Throughout the year, our Board provides guidance to senior management regarding strategy and critically reviews operating plans that are intended to implement that strategy. Our Board periodically holds meetings with senior management dedicated to discussing and reviewing operating plans and overall corporate strategy. A discussion of key risks to the plans and strategy as well as risk mitigation plans and activities is conducted during that meeting. The involvement of our Board in setting business strategy is critical to the determination of the types and appropriate levels of risk undertaken by our company. Our Board’s oversight includes its receipt and review of reports on data protection and cybersecurity matters from our information technology department. Also, more particularly, and as discussed below, our Audit and Finance Committee focuses on oversight of financial risks relating to our company; our Compensation and Human Capital Committee focuses primarily on risks relating to remuneration of officers and other employees; our Governance and Nominating Committee focuses on reputational and corporate governance risks relating to our company; and our Compliance Committee focuses on oversight of matters related to the company’s compliance with applicable laws and regulations.

Strategy

Our Board and its committees are involved in overseeing our corporate strategy, risk management and key policies, including major initiatives and key financial and business objectives; capital allocation priorities; and significant acquisitions and other transactions as well as related integration issues. Our Board engages in robust discussions regarding our corporate strategy and our Board’s committees oversee elements of our strategy associated with their respective areas of responsibility.

Human Capital and Succession Planning

People are the foundation of who we are. Only with talented employees can we run our business to the highest standard and fulfill our goals for our customers. Our goal is to attract and retain the right people to work at Patterson. We support our people with meaningful benefits, a great culture and career opportunities with the potential for advancement.

As of April 27, 2024, which was the end of our fiscal 2024, we had approximately 7,600 full-time employees, of which approximately 6,200 were employed in the U.S.

Our Board’s committees oversee elements of our culture associated with their area of responsibility. For instance, our Compensation and Human Capital Committee is responsible for reviewing our performance in the development, implementation, and effectiveness of our policies and strategies relating to human capital, including those regarding culture, recruiting, retention, career development and progression, talent planning, diversity and inclusion and pay equity. Our Compensation and Human Capital Committee also considers the human capital and compensation elements of ESG matters in its decision-making, and coordinates with our Governance and Nominating Committee in regard to those ESG matters. Our Audit and Finance Committee and our Compliance

Committee coordinate with respect to oversight of our ethics and compliance program. On a management level, our chief human resources officer leads our talent attraction, diversity and development programs and reports progress – including on opportunities and recruiting metrics – to the Compensation and Human Capital Committee.

Succession planning for our senior leadership is critical to our success. Our Governance and Nominating Committee makes recommendations to our Board on succession planning and leadership development for our Chief Executive Officer and reviews programs created and maintained by management for the development and succession of other executive officers and any other individuals. Our Governance and Nominating Committee is also responsible for recruiting and identifying nominees for election as directors to our Board.

As a people-first organization, the overall well-being of our team is important to us. Our total rewards philosophy is to provide market competitive pay and a range of benefit choices designed to meet our employees’ diverse needs, reward performance, and drive shareholder value. We support our employees’ health with medical, pharmacy, dental and vision plans, mental health services and wellness programs to encourage healthy lifestyles, and parental leave for new parents. We support our employees’ financial well-being with matching 401(k) contributions, life insurance, company-paid short-term disability insurance, an employee stock purchase plan and personal finance educational tools. In addition, regular employee engagement surveys help us gain insights about how to support talent attraction, engagement and retention.

We believe that a diverse and inclusive workforce strengthens our company in ways that align with our purpose, vision and values. A recent highlight was the appointment of an inaugural director of diversity, equity and inclusion. For further information, please see “– Sustainability and ESG Program – Diversity, Equity and Inclusion” below.

To support the progression and career development of our employees, we offer training and development opportunities to build our employees’ expertise in leadership, inclusive management and creating business solutions. Such opportunities include on-demand courses, facilitator-led programs, mentoring relationships, tuition reimbursement and leadership development programs. We have implemented targeted development programs for senior leadership as well as emerging leaders in the organization. During fiscal year 2024, we achieved approximately 90% participation (representing over 800 individuals) in our enterprise-wide “Inclusive Leader” program. In addition, we conduct performance reviews for employees every year, achieving an over 90% completion rate in fiscal year 2024.

Keeping employees safe and healthy is essential to putting people first. We have systems in place to manage risks and maintain focus on employee health and safety. Our Environmental Health and Safety (EHS) system is designed to manage risks and maintain focus on employee health and safety and includes compliance audits, workplace safety communications and training. Our senior director of EHS leads our program, with oversight from the chief compliance officer. Our EHS team collaborates with safety liaisons and managers at Patterson’s sites. Liaisons coordinate and complete compliance audits and safety communications, including regarding any updates in health and safety practices and expectations. In addition, our EHS team promotes employee safety and environmental awareness through foundational systems and activities, such as safety training courses.

Cybersecurity

Our processes for assessing, identifying, and managing material risks from cybersecurity threats are incorporated into our overall enterprise risk management framework. We take a cross-functional approach to cybersecurity risk, which includes input from information security, information technology, legal, compliance, internal audit, finance, and operations, as appropriate. Under the oversight of our Board, including its Audit and Finance Committee, our senior management, information security team, and our Cybersecurity Risk Committee (comprised of key executive and senior leaders from primary corporate functions) devote resources to cybersecurity and implement risk management processes designed to adapt to the changing cybersecurity landscape, respond to emerging threats and proactively coordinate our people, processes and procedures to respond to cybersecurity incidents. We regularly assess the threat landscape and cybersecurity risks. Our internal audit team reviews enterprise risk management-level cybersecurity risks as part of our overall enterprise risk management framework. In addition,

our information security team oversees regular monitoring of our information technology and other operating systems that are designed to detect potential security incidents. We have operationalized a written incident response plan designed to assess, identify and coordinate among various functions the response activities to cyber incidents and determine the impact of any such cybersecurity incidents that may jeopardize the confidentiality, integrity or availability of our information systems or adversely affect our business and information systems. In the event of a significant cybersecurity incident, the incident response plan provides guidance on roles, responsibilities, procedures and reporting processes.

Our chief information security officer is responsible for developing and implementing our cybersecurity risk management and information security program, including regularly reporting on cybersecurity matters to management and the Audit and Finance Committee. Our chief information security officer also reports to our chief information officer, who oversees our broader information technology program. Among other matters, our Board delegates to our Audit and Finance Committee the oversight of our programs, policies, and procedures related to cybersecurity, information asset security, and network security. Broad oversight is maintained by our full Board, which receives regular reports from the Audit and Finance Committee as well as management, as appropriate. The Audit and Finance Committee and the full Board actively participate in discussions with management and among themselves regarding cybersecurity risk. Our chief information officer and chief information security officer present to the Audit and Finance Committee at least a bi-annual review of our strategies, policies and internal controls relating to information technology and cybersecurity (including network security, cloud security and physical security), with respect to corporate goals, industry trends and competitive advantages.

Our Board of Directors and Committees

Overview

Our Board of Directors represents the interests of our shareholders as a whole and is responsible for directing the management of the business and affairs of our company, as provided by Minnesota law. Our Board held six meetings and took action by written consent three times during fiscal 2024. In addition to meetings of the full Board, directors also attended committee meetings. Each director attended at least 75% of all of the meetings of the Board and of those committees on which he or she served.

Director Independence

Our Board is comprised of a majority of independent directors as defined in Rule 5605(a)(2) of the Marketplace Rules of the NASDAQ Stock Market. Our Board has affirmatively determined the independence under the applicable Marketplace Rule as to each of our directors who are identified as independent directors in the chart that appears below within the subsection captioned “Committee Overview.”

Our Board has determined that each of our directors, other than Mr. Zurbay, is independent of Patterson and its management. Mr. Zurbay is not independent because he serves as our President and Chief Executive Officer.

The independent members of our Board meet in executive session at each regular meeting of our Board, with no members of management present. Our company and our Board are members of the National Association of Corporate Directors (“NACD”). Our Board authorizes, recommends and encourages each Board member and our company’s senior management to attend educational courses offered by the NACD or similar accredited educational organization. We reimburse reasonable expenses incurred by our directors and senior management in attending such courses.

Committee Overview

The current committees of our Board of Directors are the Audit and Finance Committee, the Compensation and Human Capital Committee, the Governance and Nominating Committee and the Compliance Committee. Each committee consists solely of members who are independent as defined in Rule 5605(a)(2) of the Marketplace

Rules of the NASDAQ Stock Market. In addition, each member of our Audit and Finance Committee is independent as defined in Exchange Act Rule 10A-3 and each member of our Compensation and Human Capital Committee is a non-employee director under the rules of the Securities and Exchange Commission.

Each Board committee has a charter, all of which are available on our website at https://investor.pattersoncompanies.com/investor-relations/governance/default.aspx#section=governance or in print upon written request to Patterson Companies, Inc., 1031 Mendota Heights Road, St. Paul, Minnesota 55120, Attention: Investor Relations. Such committees review and reassess the adequacy of their respective charters and recommend any changes to them at least annually. These charters were last reviewed and revised in June 2024 at which time the revisions discussed above under “Corporate Governance – Recent Corporate Governance Enhancements” were made. Our committees also engage in an annual review of committee performance. We are not including the information contained on or available through our website as a part of, or incorporating such information by reference into, this proxy statement.

The following table shows the current membership of our Board committees and identifies our independent directors:

The Board sets the annual schedule of committee meetings, with regularly scheduled meetings held adjacent to our Board’s regularly scheduled meetings. In addition to meetings set by the Board, each committee meets, either by means of electronic communication or in person, when and as often as the chairperson of each committee deems appropriate. The chairperson of each committee, with the advice and consultation of management and the committees’ outside advisors, if any, sets the agenda for each meeting. Committee members receive detailed materials related to the topics on the agenda prior to each meeting.

Committee Responsibilities

Our Audit and Finance Committee

Our Compensation and Human Capital Committee

Our Governance and Nominating Committee

Our Compliance Committee

Communications with Board Members

Our Board of Directors has provided the following process for interested persons to send communications to our Board or individual directors. All communications from shareholders should be addressed to Patterson Companies, Inc., 1031 Mendota Heights Road, St. Paul, Minnesota 55120, Attention: Les B. Korsh, Chief Legal Officer and Corporate Secretary. Communications to individual directors may also be made to such director at our company’s address. All communications sent to the chair of our Audit and Finance Committee or to any individual director will be received directly by such individuals and will not be screened or reviewed by any company personnel. Any communications sent to our Board in the care of our Chief Legal Officer and Corporate Secretary will be reviewed by him to ensure that such communications relate to the business of our company or its subsidiaries before being reviewed by our Board.

Board Member Attendance at Annual Meetings

Under our Corporate Governance Guidelines, it is our policy that all directors be present at the annual meeting of shareholders. We generally hold a Board of Directors meeting coincident with the shareholders’ meeting to facilitate their attendance at the shareholders’ meeting. All directors then in office attended the most recently completed annual meeting of shareholders.

Sustainability and ESG Program

We focus on corporate responsibility as an employer, industry participant and distributor of dental and animal health products and services. Our culture is centered on our Purpose, Vision, Values.

Patterson’s Purpose, Vision, Values

Our Approach to Sustainability

We believe that sustainability takes root from the ground up – beginning with employee initiatives and resulting in improved operations. We strive to meet quality standards and minimize our overall impact on the environment.

ESG Program Governance

We strive to improve the impact of our operations on the environment, promote diversity and inclusion, and provide resources and opportunities to our team members and communities. Consistent with its charter, our Governance and Nominating Committee is focused on providing oversight of, and providing feedback to management regarding, our efforts with respect to environmental, social and governance matters that are of strategic significance to Patterson. Our Governance and Nominating Committee also oversees our sustainability, corporate social responsibility and corporate citizenship matters, seeks to maintain an informed status on such matters through discussions and receipt of reports from management and reviews our corporate responsibility reports. Additionally, our Compensation and Human Capital Committee takes into consideration the human capital and compensation elements of ESG matters in its decision-making.

Key ESG developments on which Patterson has focused in recent fiscal years include the following:

Patterson was included in the Human Rights Campaign Foundation’s 2022 Corporate Equity Index (the nation’s foremost benchmarking survey and report measuring corporate policies and practices related to LGBTQ+ workplace equality) in which it scored 70 out of a possible 100 points.

During fiscal 2024, we advanced our commitment to ESG by performing an ESG materiality assessment. This assessment helped us identify priority ESG topics that are salient for our company and contribute to the creation of long-term value. These priority ESG topics serve as the foundation for our ESG strategy and go-forward ESG reporting. In July 2024, we published our 2024 Corporate Responsibility Report, which can be found on our website at www.pattersoncompanies.com. We expect to periodically update such report. The information contained or referenced on our website, including our 2024 Corporate Responsibility Report, is not a part of this proxy statement and is not deemed incorporated by reference into this proxy statement or any other public filing made with the Securities and Exchange Commission.

Diversity, Equity and Inclusion

We have a broad view on diversity, including gender, race, ethnicity, sexual orientation and identity, religion, nationality, skill set, educational background, diversity of experiences, expertise and backgrounds, and disability/ability, among other aspects. We believe that a diverse and inclusive workforce makes our company stronger. We are committed to working toward increasing diversity in key roles throughout the company.

Our Governance and Nominating Committee advises the Board on matters of diversity including race, gender and culture and recommends, as necessary, measures contributing to a Board that, as a whole, reflects a range of viewpoints, backgrounds, skills, experience and expertise. Our Governance and Nominating Committee also focuses on recruiting and recommending diverse director candidates to complement current director demographics. Additionally, our Compensation and Human Capital Committee reviews the development, implementation and effectiveness of our policies and strategies relating to human capital.

Code of Conduct and Corporate Governance Guidelines

Our company has adopted and published a Code of Conduct, which provides an overview of the laws, regulations, and company policies that apply to our employees and our directors and is intended to comply with Rule 5610 of the Marketplace Rules of the NASDAQ Stock Market. Our Code of Conduct is available on our website at https://investor.pattersoncompanies.com/investor-relations/governance/default.aspx#section=governance or in print upon written request to Patterson Companies, Inc., 1031 Mendota Heights Road, St. Paul, Minnesota 55120, Attention: Investor Relations. We intend to satisfy the disclosure requirement of Form 8-K regarding an amendment to, or waiver from, a provision of our Code of Conduct that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and that relates to any element of the code of ethics definition enumerated in Item 406(b) of Regulation S-K by posting such information on our website at www.pattersoncompanies.com.

Our company also has adopted and published Corporate Governance Guidelines. Our Corporate Governance Guidelines address various governance topics, including:

Our Corporate Governance Guidelines are available on our website at https://investor.pattersoncompanies.com/

investor-relations/governance/default.aspx#section=governance or in print upon written request to Patterson Companies, Inc., 1031 Mendota Heights Road, St. Paul, MN 55120, Attention: Investor Relations.

Non-Employee

Director Compensation

Non-employee directors receive cash compensation and equity-based compensation for their service on our Board of Directors. For fiscal 2024, non-employee director compensation included an overall Board retainer of $235,000, with $90,000 representing an annual cash retainer and $145,000 issued in the form of restricted stock awards vesting one year from date of grant. Committee member and committee chair annual cash retainers were $10,000 and $25,000, respectively. In addition, the non-executive Chairman of the Board receives an annual cash retainer of $100,000. Non-employee directors may elect to receive shares of common stock in lieu of their director fees otherwise payable in cash. Directors are also reimbursed for all reasonable out-of-pocket expenses incurred in connection with their service on our Board.

For fiscal 2025, Semler Brossy, the Compensation and Human Capital Committee’s independent compensation consultant, benchmarked our non-employee director compensation program against our peer group. Based on this review and the limited frequency with which our Governance and Nominating Committee typically adjusts the compensation of non-employee directors, the following changes were implemented for fiscal 2025 non-employee director compensation:

Under our Omnibus Plan, annual restricted stock awards vest in full on the first anniversary of the date of grant. Non-employee directors who have a term expiring not more than 29 days prior to the natural vesting date of their restricted stock award are deemed to remain in service as a non-employee director until such natural vesting date, but only for purposes of satisfying the vesting restrictions. Otherwise, unvested restricted stock awards are forfeited on the effective date of termination of service as a director.

Mr. Zurbay did not receive any compensation in relation to his services performed as a director.

Compensation of Directors

The following table sets forth the compensation of our non-employee directors for fiscal 2024:

Executive Officers

Proposal No. 2:

Advisory Vote on Executive

Compensation

We are committed to a compensation philosophy that links executive compensation to the attainment of business objectives and earnings performance, over the near and longer term, which in turn enables us to attract, retain and reward executive officers who contribute to our success. To fulfill this philosophy, our Compensation and Human Capital Committee seeks to provide market-competitive compensation packages that emphasize our commitment to consistent long-term profitable growth and our belief that a substantial portion of the total compensation received by our executive officers should be dependent upon the performance of the business annually and over time. We have structured our annual and long-term incentive compensation programs to motivate executives to achieve the business goals of our company and reward them for achieving these goals. We believe our executive compensation program is strongly aligned with the long-term interests of our shareholders. We urge you to read the “Executive Compensation” section of this proxy statement for additional details regarding our executive compensation.

Congress has enacted requirements commonly referred to as “say on pay” rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”). As required by these rules and related Securities and Exchange Commission rules under Section 14A of the Exchange Act, we are asking our shareholders to vote on the adoption of the following resolution:

BE IT RESOLVED by the shareholders of Patterson Companies, Inc. (“Patterson”) that the shareholders approve the compensation of Patterson’s named executive officers as disclosed in this proxy statement pursuant to the Securities and Exchange Commission’s compensation disclosure rules.

As an advisory vote, this proposal is non-binding. Although this vote is non-binding, our Board of Directors and Compensation and Human Capital Committee value the opinions of our shareholders, and will, as they did last year, consider the outcome of this vote when establishing future executive compensation for our named executive officers. Our Compensation and Human Capital Committee has implemented an annual advisory vote on our executive compensation program, so it is anticipated that the next advisory vote on executive compensation will occur at our 2025 annual meeting of shareholders.

Vote Required

The affirmative vote of the greater of (1) a majority of the outstanding shares of our common stock present in person or by proxy and entitled to vote on this proposal at the meeting and (2) a majority of the minimum number of shares entitled to vote that would constitute a quorum for the transaction of business at the meeting, is required to approve this proposal. Abstentions will be considered for purposes of calculating the vote, but will not be considered to have been voted in favor of such matter. Broker non-votes are counted towards a quorum, but are not counted for any purpose in determining whether this matter has been approved. If you own shares through a bank, broker, or other holder of record, you must instruct your bank, broker, or other holder of record how to vote in order for them to vote your shares on this proposal.

Recommendation of the Board

Our Board of Directors recommends that you vote FOR approval of this proposal.

Executive Compensation

Compensation Discussion and Analysis

Our Compensation and Human Capital Committee (throughout this Compensation Discussion and Analysis, the “committee”) oversees and makes certain decisions regarding our executive compensation and benefit programs. The following discussion should be read in conjunction with the Summary Compensation Table, and related tables and footnote disclosures setting forth the compensation of the following named executive officers:

Our executive compensation programs are designed to help achieve the goals of attracting, engaging, and retaining highly talented individuals, while balancing the long-term interests of shareholders, partners and customers. We accomplish this, in part, by delivering executive pay that includes short-term cash incentives to achieve financial performance objectives and link pay to performance as well as long-term equity incentives to promote an ownership mentality and help ensure shareholder alignment.

The disclosure below contains certain non-GAAP financial metrics. See the reconciliation of GAAP to non-GAAP financial measures table, which appears as Annex A to this proxy statement, for further information regarding our non-GAAP financial metrics. These non-GAAP measures may provide a helpful representation of our performance, and enable comparison of financial results between periods where certain items may vary independent of business performance. These non-GAAP financial measures are presented solely for informational and comparative purposes and should not be regarded as a replacement for corresponding, similarly captioned, GAAP measures.

Fiscal 2024 Results

As depicted in the tables below, adjusted operating income for fiscal 2024 was $303.9 million, a 6.2% percent decrease compared to prior year, and adjusted earnings per diluted share was $2.30, a 5.0% decrease compared to prior year.

 

Compensation Decisions

The management team drove many positive developments in fiscal 2024; however, financial performance did not exceed our objectives and the overall value of our fiscal 2024 executive compensation package was delivered below the targeted level. Both short-term and long-term incentives were delivered below target.

Base Salary. Effective July 2023, base salary increases for fiscal 2024 were implemented to reflect a combination of factors including positioning against external benchmarks, experience in role, and individual performance.

Annual Short-Term Incentives (STI) and Long-Term Incentives (LTI). During fiscal 2024, the committee continued to emphasize the importance of fiscal 2024 operational results to our company’s long-term success by aligning executive compensation with enterprise performance objectives and individual accountabilities.

Patterson did not achieve the committee’s adjusted operating income target or the committee’s free cash flow target for compensation purposes for fiscal 2024. As a result of the foregoing, the financial performance component of our MICP funded at 72.33% of target for our named executive officers (other than Mr. Rogan whose MICP, which was partially dependent upon the Dental business unit financial performance, funded at 65.67% of target). In consideration of the financial performance in fiscal 2024, the committee determined it would not be desirable to distinguish among the executives by applying additional modifications to financial performance outcomes.

Patterson achieved the committee’s three-year cumulative adjusted earnings per share goal under the 2022-2024 performance stock unit awards; however, the amounts conditionally earned based on financial performance were reduced through application of the cumulative rTSR modifier based on our performance against the S&P 400 Mid-Cap Index. As a result of the foregoing, the performance stock unit awards granted in fiscal 2022 funded at 81.91% of target for our named executive officers.

Determining Executive Compensation

The committee is responsible for the review and approval of all aspects of the executive compensation program. The committee meets regularly each year to (among other items):

When establishing executive compensation, the committee takes many factors into account. These factors include shareholder value, our company’s performance compared to pre-established performance goals and objectives, objective and subjective considerations of each individual’s skills, performance and level of contribution towards desired business objectives, retention considerations, the individual’s tenure and experience with our company and in his or her current position, the individual’s current and historical compensation, the committee’s compensation philosophy, the results of the most recent shareholder advisory vote on executive compensation and comparisons to compensation levels and payouts of comparably situated executives (both those of our company and those of peer companies). The committee’s process utilizes input, analysis and review from a number of sources, including our company’s management, other independent directors of the Board, the committee’s independent compensation consultant, and market studies and other comparative compensation information as discussed below.

The committee uses this information in conjunction with its own review of the various components of our executive compensation program to determine the base salary and annual short-term and long-term incentive targets and opportunities of the executive officers as a group and individually.

Role of Executive Officers in Determining Compensation. The committee meets with the Chief Executive Officer annually to review the performance of the other executives. The meeting includes a discussion of each executive officer’s performance for the year and a review of individual contributions towards achievement of our business goals. A summary of the performance review is presented to the full Board each year.

The committee considers input from the Chief Executive Officer and other select executives when developing and selecting metrics and performance objectives that may be referenced in the annual short-term or long-term incentive program, and evaluating performance against such pre-established metrics and objectives. The committee also receives recommendations from the Chief Executive Officer regarding base salary amounts, annual short-term and long-term incentive award amounts for the other executive officers. In determining the Chief Executive Officer’s compensation, the committee considers comparative compensation information and input from its independent compensation consultant.

Role of the Compensation Consultant. During fiscal 2024, the committee retained Semler Brossy as its independent compensation consultant. The committee reviewed and confirmed the independence of such firm. The independent compensation consultant provides the committee with an annual compensation market analysis for the executives; makes recommendations on the executive pay programs; reviews, participates and comments on executive compensation matters; assists the committee in its assessment of the potential for risk stemming from our compensation programs; and provides updates on regulatory changes in compensation related issues and other developments and trends in executive compensation. For fiscal 2025, the committee intends to use Semler Brossy as its independent compensation consultant.

Market Competitiveness Review. The committee reviews recommendations from its independent compensation consultant on a peer group of companies about which competitive compensation data is obtained. In connection with establishing executive compensation for fiscal 2024, the committee worked with its independent compensation consultant in the peer group development process. The committee, acting on the recommendation of its independent compensation consultant, added AMN Healthcare Services, Inc, Adapthealth Corp., and Premier Inc. to the peer group for fiscal 2024 and removed Covetrus Inc., which was acquired in October 2022, and Hill-Rom, Inc., which was acquired in December 2021. The peer group companies for fiscal 2024 had annual revenue ranging from $1.3 billion to $16.5 billion (median $4.5 billion) and market capitalization ranging from $1.0 billion to $47.0 billion (median $6.4 billion). Both management and the committee believe that the peer group of 17 companies provided a robust statistical set of compensation data to serve as a basis for reviewing fiscal 2024 executive compensation.

The companies comprising the peer group used to establish fiscal 2024 compensation opportunities of the named executive officers are listed below:

The reports furnished by the compensation consultant provided the committee with market information at the 25^th, 50^th, and 75^th percentiles for each executive position, including each pay component and total direct compensation. Such reports further compared the market compensation data to current pay for each executive.

This market information is an important element reviewed by the committee and provides a basis for adjusting a component of pay, or total direct compensation, above or below these ranges to recognize the specific circumstances of individual executive officers in a manner consistent with the stated objectives of the compensation program.

Shareholder Approval of our Executive Compensation Program. The committee continues to consider the perspectives of our shareholders in the design and administration of our executive compensation programs. Historically, Patterson’s shareholders have provided strong support of our executive compensation programs with the overwhelming majority of shares voted at our annual meetings approving, on an advisory basis, the compensation of our named executive officers. At last year’s annual meeting, the proposal regarding advisory approval of executive compensation was approved by 93.9% of the shares voted on such proposal.

Shareholder Engagement. As part of our company’s efforts to continuously improve governance practices, our company conducts targeted shareholder engagement with certain of our institutional investors. Members of our management team periodically meet with shareholders and discuss a variety of topics, including those relative to our business performance and our executive compensation strategy.

Compensation Philosophy, Practices and Components

Compensation Philosophy

The committee is guided by the following objectives that it believes are key to the successful execution of our strategic business imperatives, enhancing growth opportunities and providing benefits to our shareholders:

Compensation Practices

The committee leverages the following best practices in designing, administering and governing our executive compensation programs:

Compensation Components

To assist in understanding the intended goals of the committee, the committee has described, at a high level, each of the primary compensation elements for fiscal 2024 in the following table:

Base Salary

The committee annually reviews base salaries for the executive officers to determine whether adjustment is warranted in consideration of the factors identified in the above table.

For fiscal 2024, the committee maintained the base salary for our Chief Executive Officer and approved base salary increases ranging between 3.0% and 6.5% for our other named executive officers. These increases were in recognition of their performance and in consideration of the market for comparable executives and became effective on July 1, 2023. Specific base salary increases are set forth in the table below.

For fiscal 2025, the committee increased the base salary for our Chief Executive Officer by approximately 3% and increased base salaries between 4% and 6% for our other named executive officers. These increases were in recognition of their performance and in consideration of the market for comparable executives and became effective on July 1, 2024.

Management Incentive Compensation Plan (“MICP”)

The named executive officers are eligible to earn annual cash incentive compensation under the MICP. For fiscal 2024, a cash incentive is payable if a specified level of performance is achieved, and the ultimate payout varies with performance.

For fiscal 2024, the committee determined that for all named executive officers (other than business unit heads), annual cash incentives for fiscal 2024, if any, would be earned on the basis of consolidated adjusted operating income weighted at 70% and consolidated free cash flow weighted at 30%. Such weightings were made (1) to emphasize the importance of fiscal 2024 operational results to our company’s long-term success, (2) to align executive compensation with enterprise performance objectives, (3) to maintain our ability to attract and retain executive talent, and (4) in consideration of existing best practices around key design features.

The fiscal 2024 payout curve and adjusted operating income and free cash flow performance goals were set in respect of the committee’s desire to establish a short-term incentive program that would serve to drive performance and incentivize management.

As the committee considers various factors in MICP opportunity, design and goal calibration, it focuses on:

Actual incentive payouts under the MICP for our named executive officers (other than business unit heads) were calculated as follows:

MICP for Named Executive Officers (Other than Business Unit Heads)

As shown in the table above, the financial performance metrics under the fiscal 2024 MICP funded at 72.33% of management’s aggregate targeted annual cash incentive compensation.

Mr. Rogan’s MICP opportunity as then President of Patterson Dental was tied to a different set of financial performance metrics. The committee took similar action with respect to the alignment of financial performance objectives to which Mr. Rogan’s compensation was tied and used a combination of enterprise financial objectives and financial objectives specific to our Dental business unit. The financial performance objectives for Mr. Rogan under the MICP varied according to performance outcomes as follows:

MICP for Named Executive Officer (Dental Business Unit Head)

As shown in the table above, for fiscal 2024, the financial performance metrics under the MICP for Mr. Rogan funded at 65.67% of target.

Fiscal 2024 incentive payments across our MICP for each named executive officer are set forth in the following table:

For fiscal 2025, the committee maintained the MICP target award percent of base salary for our named executive officers who are currently employed by our company in consideration of the market for comparable executives and our financial performance.

Long-Term Incentives

Our fiscal 2024 long-term incentive program for named executive officers delivered 50% of the long-term incentive opportunity in performance units, 25% in stock options, and 25% in restricted stock units. The table below highlights the value and number of awards granted to each of our named executive officers (a thorough description of each vehicle follows).

Note: The above awards were granted on July 1, 2023. The 50%, 25% and 25% mix between these awards is based on dollar value rather than the actual number of shares or units awarded.

For fiscal 2025, the committee increased the total long-term incentive program value for our Chief Executive Officer from $4,000,000 to $4,550,000, and approved increases ranging from $100,000 to $300,000 for our other named executive officers who are currently employed by our company, in recognition of their performance and in consideration of the market for comparable executives.

Fiscal 2024 Performance Units

The actual number of fiscal 2024 performance units that are earned and vested is based on our three-year cumulative adjusted earnings per share and rTSR results. The committee selected three-year cumulative non-GAAP adjusted earnings per share to focus on sustained execution. This structure maintains management’s focus

on earnings per share while preserving a relative performance component and a multi-year performance measurement period. The committee believes this incentive framework for fiscal 2024 is strongly aligned with shareholder interests and is consistent with shareholder feedback.

As we do with our MICP, performance goals and actual achievement are disclosed at the end of the performance period.

Following completion of the three-year cumulative performance period associated with the fiscal 2024 grant of performance units, a cumulative rTSR modifier based on Patterson’s performance against the S&P 400 Mid-Cap Index is applied to the number of performance units earned. The rTSR modifier may result in an adjusted payout equal to 37.5% of target if a threshold level of performance is achieved and an adjusted maximum payout of 200% of target. The committee regards this potential adjustment as an appropriate balancing of pay-for-performance objectives with retention considerations.

Note: Adjustments for levels achieved between the 25^th and 80^th percentile are linearly interpolated.

The below chart shows potential award scenarios:

Fiscal 2024 Stock Option Grants and Fiscal 2024 Restricted Stock Units

Stock options continued to be an element of our committee’s long-term incentive strategy for fiscal 2024 with 25% of the long-term incentive value delivered in the form of stock options. Multi-year vesting requirements require long-term growth in our company’s stock price for executives to receive value from these awards. Stock options granted in fiscal 2024 under the long-term incentive program vest one-third each year, starting one year after grant, and expire after 10 years.

While the committee adheres to an overall executive compensation program that is heavily performance-based, the committee also recognizes the importance of leadership retention and stock ownership. Therefore, 25% of the long-term incentive value is delivered in service-based RSUs. RSUs granted in fiscal 2024 under the long-term incentive program vest one-third each year, starting one year after grant.

The committee regarded the design of these elements of long-term incentive compensation for fiscal 2024 as inspiring long-term perspective, encouraging shareholder value creation and aligning interests of management and shareholders.

Fiscal 2022 Performance Units

The actual number of performance units that were conditionally earned and vested under the fiscal 2022-2024 cycle was based on the achievement of our three-year cumulative adjusted earnings per share goal.

Following completion of the three-year cumulative performance period associated with the fiscal 2022 grant of performance units, a cumulative rTSR modifier based on our performance against the S&P 400 Mid-Cap Index was applied to the number of performance units conditionally earned and vested based on performance using the following schedule.

Note: Adjustments for levels achieved between the 25^th and 80^th percentile are linearly interpolated.

Based on actual performance results, the rTSR modifier applied was 0.8191, resulting in a cumulative payout percentage of 81.91% of target for the fiscal 2022 grant of performance units as shown in the following table.

The final calculation for the fiscal 2022 grant of performance units for each named executive officer is shown in the following table.