CTLT Catalent Inc

CATALENT, INC.

INDEX TO ANNUAL REPORT ON FORM 10-K/A (Amendment No. 1)

For the Fiscal Year Ended June 30, 2024

PART III

Information Regarding Directors

Set forth below is certain information with respect to our current directors as of October 21, 2024.

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Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our directors, executive officers, and beneficial owners of 10% or more of our shares of common stock to file reports with the SEC about their ownership of and transactions in our common stock. Based solely on our review of reports filed with the SEC and written representations from our executive officers and directors, we believe that all reports required to be filed under Section 16(a) during fiscal 2024 were timely filed, except for one Form 4 filed on July 7, 2023 for director J. Martin Carroll to report the grant of restricted stock units on July 1, 2023.

Insider Trading Arrangements and Policies

We have adopted an Insider Trading Policy governing the purchase, sale, and/or other dispositions of our securities by our directors, officers and employees, as well as by Catalent itself, that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and NYSE listing standards. The foregoing summary of the Insider Trading Policy does not purport to be complete and is qualified in its entirety by reference to the full text of the Insider Trading Policy attached to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024 (the “2024 Annual Report”) as Exhibit 19.1 and incorporated herein by reference.

Standards of Business Conduct

Our Board and all of our employees, including our CEO, principal financial officer, principal accounting officer, and all other executive officers are required to abide by our Standards of Business Conduct to ensure that our business is conducted in a consistently legal and ethical manner. A copy of our Standards of Business Conduct can be found on our website at investor.catalent.com/corporate-governance. We will disclose on our website any future amendment to, or waiver from, provisions of our Standards of Business Conduct affecting our directors or executive officers as and to the extent required under applicable SEC and NYSE rules.

Director Nomination Process

The Nominating and Corporate Governance Committee (the “Nominating Committee”) considers and recommends the annual slate of director nominees for approval by our Board. The Nominating Committee considers a number of factors and principles in making its recommendations, including the following:

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Although our Board and Nominating Committee consider diversity of viewpoints, background, and experiences when identifying and reviewing candidates for our Board, our Board does not have a separate diversity policy. In identifying and evaluating prospective director candidates, the Nominating Committee may seek referrals and assistance from other members of our Board, management, shareholders, and other sources, including third-party search consultants. The Nominating Committee uses the same criteria for evaluating candidates regardless of the source of the referral. When considering director candidates, the Nominating Committee seeks individuals with backgrounds and qualities that, when combined with those of our incumbent directors, provide a blend of skills and experiences to further enhance our Board’s effectiveness.

Shareholders may nominate directors for election by following the provisions set forth in our bylaws concerning such matters. The Nominating Committee, in accordance with our Governance Guidelines, will consider the qualifications of any nominee proposed by one or more shareholders in the same manner in which it evaluates any other candidate.

Audit Committee and Audit Committee Financial Expert

The members of the Audit Committee are Jack Stahl (Chair), Rolf Classon, Gregory T. Lucier and Michelle R. Ryan. All members of the Audit Committee are “independent” in accordance with the NYSE listing standards and SEC rules applicable to boards of directors in general and audit committee members in particular. Our Board has determined that each member of the Audit Committee qualifies as an “audit committee financial expert” as defined in SEC rules.

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Executive Summary

Our executive compensation program is intended to attract, motivate, retain, and reward our leadership in a manner that will align their interests with those of our shareholders on an annual and long-term basis and promote sustainable shareholder value creation. We believe attracting, motivating, retaining, and rewarding superior talent is needed to maintain and improve our performance and shareholder returns. We therefore seek to maintain a competitive program that ties a significant portion of executive pay to our financial and stock price performance.

The following is a summary of important aspects of our executive compensation program.

Balanced mix of pay components and incentives. Our compensation program targets a market-based mix of cash and equity compensation, and of short- and long-term incentives. The principal elements of our program are base salary; performance-based annual bonus; and long-term equity awards, split 67/33 between performance-contingent (PSUs and stock options) and time-vested (RSUs).

Pay for Performance. We emphasize pay-for-performance to align executive compensation with our business strategy. Approximately 90% of the target total direct compensation of our CEO in 2024 was variable or performance-based.

Share Retention. Our Compensation and Leadership Committee (the “Compensation Committee”) has established stock ownership guidelines directing our executive officers to hold a multiple of annual salary in the form of shares of common stock in order to align management and shareholder interests.

Pledging and Hedging. Our executives are prohibited from pledging our shares (absent our General Counsel’s permission, which has never been granted) or hedging against the economic risk of such ownership.

Use of Independent Consultant. The Compensation Committee has engaged an independent, third-party consultant, Frederic W. Cook & Co., Inc. (“FW Cook”), to assist it in designing our compensation program and making compensation decisions.

Clawback/Forfeiture Provisions. The terms of our long-term, equity-based awards and our short-term, cash-based award plan allow us in certain circumstances to “claw back” shares and cash received pursuant to such awards or, in the case of the equity-based awards, to require the repayment of all gains realized on the vesting or exercise of such awards.

Compensation Peer Group. The Compensation Committee uses a group of peer companies, selected with the assistance of FW Cook to be aligned with corporate governance best practices, to benchmark target total direct compensation levels, other executive compensation-related programs and policies, and benefit packages.

Shareholder Say-on-Pay. At the 2023 Annual Meeting of Shareholders held in January 2024, our shareholders voted 97.31% in favor of our say-on-pay proposal, demonstrating their concurrence that our executive compensation program reflects a strong pay-for-performance orientation. In fiscal 2024, the Compensation Committee considered the outcome of the shareholder advisory vote when making decisions relating to the compensation of our named executive officers (“NEOs”) and our executive compensation program and policies.

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Overview of 2024 Executive Compensation

2024 COMPENSATION CONSIDERATIONS

In fiscal 2024, we remained steadfast in our commitment to attract, motivate, retain, and reward our leadership team, and implemented strategic adjustments to our compensation programs to further enhance the flexibility and accountability of our leadership team. We revised the fiscal 2024 management incentive plan (“MIP”) for our executive leadership team (“ELT”), including our NEOs, by (1) eliminating the 30% individual performance factor, (2) increasing the business performance factor weighting to 100%, and (3) introducing an individual performance modifier for MIP payment adjustments (i) for the ELT, based on our CEO’s recommendations, and (ii) for each of the CEO and Executive Chair, based on the Compensation Committee’s evaluation of his contributions. Additionally, we introduced Free Cash Flow, as defined below, as a third performance metric for determining the business performance factor of the MIP for NEOs and certain employees with the business performance factor based on our consolidated financial results.

For fiscal 2024, the business performance factor payout percentage was initially determined to be 69% of target. With respect to the three performance metrics used to determine such business performance factor, our fiscal 2024 financial performance resulted in Budget-Based Revenue being up by 1.4%, Budget-Based EBITDA missing target at 9.4%, and Free Cash Flow below target resulting in a 0% payout (all three terms as defined below). As a result, the business performance-based compensation determined for and paid out in fiscal 2024 was below the target.

However, in light of certain qualitative and quantitative considerations presented by management, the Compensation Committee adjusted the business performance factor payout percentage from 69% to 93% of target for the entire Company. These qualitative and quantitative considerations included management:

Additionally, our financial performance in fiscal 2024 resulted in materially lower payouts under the long-term incentive program compared to fiscal 2023 payouts. Our Relative Return PSUs, as described below, for the fiscal 2022-2024 performance period had a 0% payout, and our Adjusted EPS PSUs, as described below, for the same period vested at 0%. Similarly, the values of time-vested RSUs at their vesting in early fiscal 2025 were materially lower than their values at the time of their grant due to the decline in our stock price compared to early fiscal 2022 when they were awarded. As of the end of fiscal 2024, outstanding PSUs aligned to the fiscal 2023-2025 performance period are tracking meaningfully below target, while the fiscal 2024-2026 performance period PSUs are tracking above target.

EXECUTIVE PAY MIX FOR 2024

The majority of target total direct compensation for our NEOs during fiscal 2024 consisted of variable pay elements. The Compensation Committee believes this allocation aligns with our pay-for-performance compensation philosophy of motivating our NEOs to achieve our performance objectives in the short-term and to grow the business to create sustainable value for our shareholders in the long term.

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CEO 2024 TARGET DIRECT COMPENSATION OVERVIEW

Our Executive Compensation Program

OUR COMPENSATION PHILOSOPHY AND PRINCIPLES

Our executive compensation program ties pay delivery to the successful execution of our overall business goals and adherence to our core values, which we believe best serves the interests of our shareholders. We believe that attracting, motivating, retaining, and rewarding superior executive talent is a key to delivering attractive shareholder returns, and that an appropriately structured executive compensation program is critical to that end, with each element supporting the achievement of our compensation philosophy.

Our executives must be of a caliber and level of experience necessary to manage our complex, global business effectively. Given the long-cycle nature of most of our businesses, the complexity and highly regulated nature of our operations, and the competitive nature of our industry, it is especially important for us to retain our executive talent to ensure continuity of management. We seek to implement this philosophy by following three key principles:

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EXECUTIVE COMPENSATION PROGRAM ELEMENTS

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The Compensation Process

THE ROLE OF THE COMPENSATION COMMITTEE, ITS CONSULTANT, AND MANAGEMENT

The Compensation Committee oversees the compensation program for our CEO and our other executive officers, including our other NEOs. Management typically formulates new proposals concerning executive compensation, including, but not limited to salary levels, the form and content of various incentive or other compensation programs, and benefits such as healthcare and retirement programs (though management does not propose or otherwise participate in the setting of our CEO’s compensation). All management proposals as they relate to our NEOs are subject to Compensation Committee review and approval. The Compensation Committee has retained an independent consultant, FW Cook, to help it fulfill its responsibilities, including its review of management proposals. Among other things, FW Cook benchmarks compensation levels using available market data and trends and the Comparison Group approved by the Compensation Committee (see discussion of Comparison Group below). In compliance with the NYSE’s listing standards and SEC rules, the Compensation Committee in April 2024 conducted its annual independence assessment of FW Cook and concluded that it remains independent of management and that its work did not raise any conflict of interest.

THE COMPENSATION COMMITTEE’S PROCESS

In accordance with its charter, the Compensation Committee is responsible for, among other duties:

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THE USE OF MARKET DATA IN DETERMINING COMPENSATION

The Compensation Committee considers numerous factors as it formulates, reviews, and approves pay components and the overall structure of our executive compensation program. Among these factors are survey data, scoped to focus on companies with revenue comparable to ours, and the compensation practices of select peer companies, which we refer to as the “Comparison Group.” In January 2023, the Compensation Committee reviewed the Comparison Group that would be used to inform pay decisions for fiscal 2024. After reviewing the fifteen companies in the Comparison Group, the Compensation Committee determined not to make any changes because it concluded that the group continued be appropriate from a size and industry perspective, which included the observation that Catalent’s $4.8 billion trailing four-quarter revenue at the time was above the $3.9 billion peer median trailing four-quarter revenue at the time.

The fifteen companies in the Comparison Group that informed compensation decisions for fiscal 2024 were:

The Compensation Committee also considers other factors in addition to the market benchmarks, including individual executives’ tenure, proficiency in role, and criticality to our performance. The Compensation Committee concluded that our pay strategy is appropriate to assure the attraction and retention of top talent in a competitive market. While the Compensation Committee considers peer and market data, it does not target a specific market position when determining executive target compensation levels. In addition to referencing market data, as described above, the Compensation Committee considered prior year compensation history and compensation levels of other Company executives to provide context for fiscal 2024 executive compensation.

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Details of Total Direct Compensation Elements

For fiscal 2024, compensation paid to our NEOs consisted of base salary; short-term incentive pay in the form of participation in the MIP; equity-based, long-term incentive awards subject to multi-year time- and performance-vesting criteria; and the opportunity to participate in certain benefit programs and other perquisites.

We generally review the base salary and other incentive compensation target amounts of our executive officers, including our NEOs, annually, consistent with the process for our employees generally.

BASE SALARY

Base salary is the principal fixed component of target total direct compensation for NEOs, and is determined by considering the executive’s job responsibilities, market data, and the individual’s performance and contributions.

MANAGEMENT INCENTIVE PLAN

SUMMARY

The MIP is an annual cash incentive program that rewards performance against annual individual and overall business goals. We extend MIP participation to a broad group of our executives, including our NEOs. The Compensation Committee selects the overall business goals applicable to the NEOs participating in the MIP from among the corporate financial and strategic growth objectives set each year by our Board.

In previous fiscal years, each participant’s target payout under the MIP was structured such that 70% of the payout was based on business goals applicable to that participant and 30% was based on the participant’s individual goals.

For fiscal 2024, we reassessed the MIP to determine whether adjustments were necessary to enhance the flexibility and accountability for our ELT. We updated the MIP, eliminating the formulaic application of individual performance factors and introducing a discretionary modifier based on the CEO’s evaluation of each executive officer’s contribution towards the Company’s financial results and qualitative performance.

Specifically:

In all cases set forth above, the MIP payouts, after applying the discretionary performance modifier, cannot exceed a maximum of 200% of the target amount.

Additionally, since fiscal 2022, the Compensation Committee has structured the business goals portion of our MIP around the achievement of two key metrics: the Budget-Based EBITDA goal and the Budget-Based Revenue goal, both defined under “Non-GAAP Financial Measures” at the end of Item 11. Executive Compensation of this Annual Report. In fiscal 2024, the Committee expanded this framework by introducing a third performance metric, namely Free Cash Flow. This new metric, only applicable to participants with a business factor based on the Company’s consolidated financial results, is now included in the determination of the business goals portion of our MIP.

2024 PERFORMANCE TARGETS

To ensure alignment with our strategic financial objectives, the Compensation Committee refined the structure of our MIP for fiscal 2024 and based the business goals portion of our MIP on achievement of our Budget-Based EBITDA goal, our Budget-Based Revenue goal, and Free Cash Flow. The Compensation Committee uses the aforementioned performance metrics because:

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The Compensation Committee concluded for fiscal 2024 that (1) using a combination of these three measures would provide a balanced set of business performance targets that focus on growth, profitability, financial health, and the most efficient conversion of revenue to profit, (2) at the time the goals are set, the performance targets provide a reasonably achievable, but challenging, set of goals for our NEOs and other MIP participants, and (3) linking our NEOs’ bonuses to company-wide performance goals encourages collaboration across the executive leadership team. These goals are intended to incentivize all participants to maximize their performance for the benefit of our shareholders.

CALCULATING 2024 MIP AWARDS

As stated above, for fiscal 2024, the MIP awards for the ELT, including NEOs, are entirely based on business factor metrics, with a potential modifier to reward individual performance. The business performance factor comprises three key metrics: Budget-Based EBITDA, Budget-Based Revenue, and Free Cash Flow, with a weighting of 60% towards the Budget-Based EBITDA, 30% towards Budget-Based Revenue, and 10% towards Free Cash Flow.

For NEOs other than the CEO and Executive Chair, the performance modifier (if used) can adjust the calculated business factor up (cannot exceed 200% of target maximum) or down to a zero payout, reflecting CEO evaluation of each top executive’s contribution toward Catalent’s financial results and qualitative performance. For the CEO and Executive Chair, the performance modifier (if used) can adjust the calculated business factor up (cannot breach 200% of target maximum) or down to a zero payout, reflecting the Compensation Committee’s evaluation of the contribution of the CEO and Executive Chair toward Catalent’s financial results and qualitative performance. For fiscal 2024, the CEO recommended to apply the modifier for Mr. Masanovich in the amount of $140,000 and for Mr. Hopson in the amount of $42,000, and the Compensation Committee approved.

When determining MIP awards, with respect to Budget-Based EBITDA and Budget-Based Revenue, the Compensation Committee used a matrix approach that simultaneously evaluates performance of the Budget-Based EBITDA and Budget-Based Revenue components comprising 90% of the business-goal portion of the MIP, as described above. With respect to Free Cash Flow, this factor is not linear and has no proration between thresholds, producing one of three results: 0%, 100% or 200%.

Performance at target for each of the metrics results in achievement of the business-goal portion of the MIP award at 100% of a participant’s target amount. With respect to the Budget-Based EBITDA and Budget-Based Revenue, performance below or above the targets, subject to a range of 80% to 125% and a minimum 80% achievement of Budget-Based EBITDA target, results in an achievement of 90% of the business-goal portion of the MIP award in the manner set forth in the following table (at 0-200% of target), with linear interpolation applied for results that fall between two consecutive revenue or EBITDA achievement levels:

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				Revenue Goal Achievement (as a percentage of budget)
				<80%		80%		85%		90%		95%		100%		105%		110%		115%		120%		125%
EBITDA Goal Achievement (as a percentage of budget)		<80%		0%		0%		0%		0%		0%		0%		0%		0%		0%		0%		0%
		80%		32%		32%		39%		46%		53%		60%		62%		64%		66%		68%		70%
		85%		49%		49%		49%		56%		63%		70%		72%		74%		76%		78%		80%
		90%		66%		66%		66%		66%		73%		80%		80%		80%		80%		80%		80%
		95%		75%		75%		75%		78%		85%		85%		85%		85%		85%		85%		85%
		100%		90%		95%		95%		95%		96%		100%		105%		110%		115%		115%		115%
		105%		95%		98%		100%		104%		109%		113%		120%		125%		125%		125%		125%
		110%		100%		109%		113%		117%		122%		126%		133%		140%		140%		140%		140%
		115%		104%		122%		126%		130%		135%		139%		146%		153%		160%		160%		160%
		120%		117%		135%		139%		143%		148%		152%		159%		166%		173%		175%		175%
		125%		130%		148%		152%		156%		161%		165%		172%		179%		186%		193%		200%

Achievement by each participant, including each of our NEOs, against Catalent’s financial performance and for non-NEOs, including financial and individual performance, can result in payment of the MIP award between 0% and 200% of the target amount. The target amount for each participant in our MIP, including each of our NEOs, is a fixed sum and is reviewed annually by the Compensation Committee, consistent with the process for our employees generally.

CLAWBACK/FORFEITURE

Participation in the MIP may be cancelled or forfeited and repaid to us if the participant engages in any “Detrimental Activity,” including but not limited to fraud, breaches of restrictive covenants, and disparagement of the company, as defined in the 2018 Omnibus Plan. In addition, if a participant receives any amount in excess of what the participant should have received for any reason (including by reason of a financial restatement, mistake in calculation, or other administrative error), the participant must repay the excess. Without limiting the foregoing, all MIP awards are subject to reduction, cancellation, forfeiture, or recoupment to the extent necessary to comply with applicable law.

In October 2023, the Company adopted a Clawback Policy in accordance with Section 10D of the Exchange Act and Rule 10D-1 promulgated thereunder and the NYSE listing standards.

2024 MIP AWARDS

The business performance goals and achievement levels for fiscal 2024, which collectively represented 100% of each NEO’s overall target MIP award, are as follows (in millions of U.S. dollars, using our internal budget-based currency exchange rates, or percentages):

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The CEO, together with the Senior Vice President and Chief Human Resources Officer during fiscal 2024, evaluated the individual performance of each of our executive officers, including the NEOs other than the CEO, based on each individual’s fiscal 2024 goals and objectives. After considering the individual’s performance as well as their contribution to the financial results of the Company, management determined a recommended MIP award for each such executive officer, which they presented to the Compensation Committee. In approving MIP awards for the NEOs other than the CEO, the Compensation Committee considered our financial performance in fiscal 2024 and the individual assessment of performance and accomplishments relative to their respective goals and objectives.

The CEO also presented to the Compensation Committee an assessment of his own individual performance, which the Compensation Committee evaluated in determining the CEO’s MIP award. The CEO’s MIP award was based on his fiscal 2024 goals and objectives in the areas of: (1) delivering on financial commitments in net revenue, EBITDA, working capital improvements, cost savings and capex; (2) improving operating performance while continuing to strengthen Catalent’s foundation; (3) optimizing Catalent’s portfolio’s potential and unlocking each division’s contribution to the collective whole; (4) maintaining organizational vitality and culture; and (5) restoring investor confidence. The Compensation Committee did not assign weights in considering these areas, but took account of the differing levels of focus in each area as the year progressed. After consideration of all of these factors, the Compensation Committee decided to award the CEO a MIP bonus for fiscal 2024.

The Executive Chair presented to the Compensation Committee an assessment of his own personal performance, which the Compensation Committee evaluated in determining the Executive Chair’s MIP award. The Executive Chair’s 2024 goals and objectives included the following: (1) coaching and mentoring the CEO and ELT; (2) effectively leading the Board and Strategic and Operational Review Committee in the evaluation of operational improvement opportunities and strategic options for the future; (3) on-boarding the CFO; (4) leading, along with the CEO, an effective succession planning process for Catalent’s leadership team; (5) guiding the Catalent’s M&A strategy and portfolio transformation strategy; and (6) leading the Board by working with the CEO and Lead Independent Director to set effective Board meeting agendas and effectively manage Board meetings. After consideration of all of these factors, the Compensation Committee decided to award the Executive Chair a MIP bonus for fiscal 2024.

LONG-TERM INCENTIVE AWARDS

Our long-term incentive compensation program is potentially available to all our employees, including our NEOs, and includes one or some combination of three types of equity-based awards:

By awarding grants with multi-year performance or vesting periods, we appropriately align program participants with the long-term best interests of our shareholders. Those interests are also protected by restrictive covenants that are imposed on our participants, including a confidentiality obligation, a limitation on competing with us for the greater of one-year post-departure and the final vesting of outstanding equity-based awards, and an agreement not to solicit our employees for one year after leaving our employ.

With the exception of Mr. Greisch, awards to our NEOs for the fiscal 2024-2026 performance period, awarded in early fiscal 2024, were divided into PSUs (with the target number of shares providing 34% of the target value awarded), stock options (33% of the target value awarded), and RSUs (33% of the target value awarded). The change in the mix of LTIP awards from fiscal 2023 was the result of an inability to set meaningful long-term financial goals in early fiscal 2024 due to the business challenges at the time, and the Compensation Committee’s desire to maintain a strong focus on performance by up-weighting both the relative TSR PSUs and the options such that a total of two-thirds of the LTIP mix of awards is in an “at-risk” award type.

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Per the terms of Mr. Greisch’s employment agreement, his fiscal 2024-2026 LTIP award composed of 75% stock options and 25% PSUs. In turn, the target value awarded as PSUs was granted in the form of relative total shareholder return (“Relative Return”), as described below in this section. The target size for our NEOs’ LTIP awards was set by the Compensation Committee using a market-based determination of LTIP grant value, individual performance, and other factors.

Awards to our NEOs for the fiscal 2024-2026 performance period, awarded in early fiscal 2024 under our LTIP were generally determined and approved by the Compensation Committee on a dollar-value basis, which is then translated into a fixed or target number of options, RSUs, or PSUs by dividing the award by the per-instrument price, using a Black-Scholes valuation for options, grant date share price for RSUs, and the value derived from a Monte Carlo pricing model for Relative Return PSUs, and then rounding up to the nearest whole number of shares. Subject to the recipient’s continued service with us through each applicable vesting date, options vest in equal installments over the first four anniversaries of the grant date, RSUs vest one-third on the first, second, and third anniversaries of the grant date, and PSUs vest when and if we determine that the performance criteria are met at the end of the three-year performance period. The continued service requirement is waived in the event of a participant’s disability or retirement in accordance with the “Rule of 65,” which applies if a participant retires on or after the date on which the sum of the participant’s age and period of service with us equals sixty-five (65) years, so long as they are at least the age of fifty-five (55) and give at least six-months’ notice and, beginning with grants awarded in fiscal 2021, have completed at least five years of service with us.

The performance criteria for the PSUs granted during fiscal 2024 are as follows:

The Compensation Committee believes that the performance targets for the Relative Return PSUs represent reasonably achievable but challenging goals and are intended to incentivize all participants to maximize their performance for the long-term benefit of our shareholders.

FISCAL 2022-2024 PSU PERFORMANCE

In fiscal 2022, the Compensation Committee granted PSUs representing 50% of the total long-term incentives to executives for the fiscal 2022-2024 performance period, awarded one-half as Adjusted EPS PSUs and one-half as Relative Return PSUs. These PSUs issued in respect of the fiscal 2022-2024 performance period vested in fiscal 2025 at a performance level of 0% of target for the Adjusted EPS PSUs and 0% of target for the Relative Return PSUs earned by our NEOs.

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Fiscal 2022-2024 Performance Targets

Fiscal 2022-2024 Performance Achievement

EQUITY GRANT PRACTICES

Effective in 2021 for the fiscal 2022-2024 LTIP performance period, the Compensation Committee approved a fixed grant date of July 26^th for purposes of awarding the annual LTIP to executives, which includes options and RSUs. The Compensation Committee generally meets at their scheduled July meeting or by written consent (if needed), which is typically scheduled prior to the July 26^th fixed date. In the event the grant date falls on a weekend, the fair market value will be based on the previous Friday’s closing stock price. For newly hired executives beginning employment after the annual July 26^th fixed date, the Compensation Committee will be presented with the executive’s LTIP award for approval, with the grant date typically coinciding with the executive’s date of hire. Throughout the year on a quarterly basis, LTIP-based equity awards are occasionally made to new hires and promoted employees. The Compensation Committee may delegate the authority to grant equity awards to eligible employees who are not Section 16 officers.

The Compensation Committee does not take material non-public information into account when determining the timing and terms of option awards, and the Company does not time the disclosure of such material non-public information for purposes of affecting the exercise price of the options or the value of executive compensation. In addition, the Company does not grant options during the four business days prior to or the one business day following the filing of a periodic report on Form 10-Q or Form 10-K, or the filing or furnishing of a Form 8-K that discloses material non-public information.

Other Benefits Under Our Executive Compensation Program

BENEFITS AND PERQUISITES

We provide to all our employees, including our NEOs, broad-based benefits that are intended to attract and retain employees while providing them with retirement and health and welfare security. Broad-based employee benefits available to our NEOs include:

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Under our 401(k) savings plan and the equivalent U.K. plan, we match a portion of the funds set aside by the employee. In the U.S., we match 100% of up to 4% of eligible annual compensation contributed, up to federal tax law limits on both eligible compensation that may be considered for contribution and the amount employees may contribute. In the U.K., the plan provides for an employer matching contribution of 5.5-8% of eligible base salary compensation dependent on the participant contributing 3.5-6% of eligible base salary compensation.

Our employee stock purchase plan (the “Employee Stock Purchase Plan”) is designed to allow our eligible employees to purchase shares of our common stock at designated intervals at a discounted price of 10% through their accumulated payroll deductions or other contributions. Employees who are United States tax residents may benefit from favorable tax treatment as the Employee Stock Purchase Plan is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code. In fiscal 2024, the employee stock purchase plan was offered to eligible employees from July 1, 2023 through March 31, 2024. As a result of the announced transaction with Novo Holdings, the employee stock purchase plan was suspended after the third quarter offering period ended on March 31, 2024.

We provide basic life and accident insurance coverage valued at two times the employee’s annual base salary at no cost to our employees. The employee may also select supplemental life and accident insurance, for a premium to be paid by the employee.

We also provide our NEOs with limited perquisites and personal benefits that are not generally available to all employees, such as financial counseling services. We provide these limited perquisites and personal benefits in order to further our goal of attracting and retaining our executive talent and to avoid unnecessary personal distractions that may impede maximum personal performance. These benefits and perquisites are reflected in the “All Other Compensation” column of the Summary Compensation Table and the accompanying footnotes in accordance with SEC rules.

DEFERRED COMPENSATION PLAN

Our deferred compensation programs (collectively, the “Deferred Compensation Plan”) permit a broad group of U.S.- and U.K.-based executives, including all of our NEOs, to defer up to 80% of base salary, commissions (not applicable to NEOs), and MIP bonus. We credit the first 6% of cash compensation deferred with a matching contribution equal to 50% of the amount deferred. Participants are immediately vested in all amounts they contribute and the related investment gains, but matching contributions and their related investment gains vest ratably over the participant’s first four years of service. Participants may choose from a variety of investment options for the cash amounts deferred.

Under the Deferred Compensation Plan, we also credit each participant’s deferral account with notional earnings and/or losses based on the deemed investment of the accounts in one or more of a variety of investment alternatives selected by such participant. Participants may elect from a variety of forms of payout, including lump-sum payment and various types of annual installments, with the timing depending on the form selected.

In addition, our Deferred Compensation Plan permits U.S. participants to defer unvested incentive compensation grants (other than options) in order to delay recognition of income on these awards upon vesting; however, in June 2023, with the exception of the non-employee Directors, the Company decided to suspend equity deferrals from the Deferred Compensation Plan for eligible U.S. participants.

Cash and equity deferrals, company contributions, and applicable gains are held in a “rabbi” trust. “Rabbi” trust assets are ultimately controlled by us. Operating the Deferred Compensation Plan this way permits participants to defer recognition of income for tax purposes on the amounts deferred until they are paid to the participants.

Our U.S.- and U.K.-based directors can also participate in the Deferred Compensation Plan on the same terms as our executives, though they are not provided a matching contribution on their cash deferrals.

We believe that providing the NEOs and other eligible participants with deferred compensation opportunities is a market-based benefit plan necessary for us to deliver competitive benefit packages. Additional details of the Deferred Compensation Plan follow the table entitled “Fiscal 2024 Nonqualified Deferred Compensation Table,” following this Compensation Discussion & Analysis (“CD&A”) section.

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SEVERANCE AND PAYMENTS ON A CHANGE OF CONTROL

Our NEOs are eligible for severance benefits in connection with a termination of employment and/or a change of control in certain circumstances. The amounts of such benefits and the conditions for their payment are described in the Fiscal 2024 Potential Payments upon Employment Termination or Change of Control Tables, including the accompanying notes.

Compensation Determinations for Fiscal 2024

We generally review the base salary and other incentive compensation target amounts of our executive officers, including our NEOs, annually, consistent with the process for our employees generally. For fiscal 2024, compensation paid to our NEOs consisted of base salary, short-term incentive pay in the form of participation in the MIP, equity-based, long-term incentive awards subject to multi-year time- and performance-vesting criteria, and the opportunity to participate in certain benefit programs and other perquisites.

The Compensation Committee observed at the beginning of fiscal 2022 that executive compensation opportunities were meaningfully low versus peer and market data overall and the Compensation Committee determined to move targeted pay levels over a multi-year period which resulted in larger pay increases than in the past for certain individuals, particularly in their long-term incentive award grant values. It continued with this strategy when setting fiscal 2024 target pay opportunities in July 2023 and the need to stabilize the business and retain key members of the team during a challenging time. Despite the target total direct compensation increases, and due to continued market movement, Catalent’s fiscal 2024 target total direct compensation levels for all NEOs collectively were generally at market. 

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Other Compensation Practices and Policies

EXECUTIVE AGREEMENTS

The following is a description of the provisions of employment agreements and offer letters with our NEOs, as in effect during fiscal 2024. In addition, our NEOs have entered into agreements with respect to the long-term incentive grants they have received, the terms of which are described elsewhere in this Annual Report. Severance agreements and arrangements affecting our NEOs are further described in the table entitled “Fiscal 2024 Potential Payments upon Employment Termination or Change of Control Tables” and accompanying notes.

EMPLOYMENT AGREEMENT FOR ALESSANDRO MASELLI

On January 4, 2022, we entered into an employment agreement with Mr. Maselli in connection with his transition to his current position as President and Chief Executive Officer. Effective July 1, 2022, his base salary increased to $925,000. Effective July 1, 2023, his target cash incentive opportunity under the MIP for fiscal 2024 increased to $1,110,000, and his LTIP grant in respect of fiscal 2024 remained at $5,500,000, however he received a one-time increase to the award in the amount of $1,375,000. The terms also include (a) a one-year employment term commencing July 1, 2022, which automatically extends for successive one-year periods unless either party gives notice of non-renewal at least 60 days before the end of the then-current term, and (b) participation in all group health, life, disability, and other employee benefit and perquisite plans and programs in which our other senior executives generally participate.

Mr. Maselli is subject to a covenant not to (x) compete with us or solicit the business of any client or prospective client while employed and for one year following his termination of employment for any reason or (y) solicit our employees or consultants while employed and for two years following his termination of employment for any reason, in each case subject to certain specified exclusions. The agreement also contains customary confidential information, assignment of intellectual property rights, and indemnification provisions, as well as the severance terms described below under “Fiscal 2024 Potential Payments upon Employment Termination or Change of Control Tables—Severance and Payments on a Change of Control.”

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OFFER LETTER FOR MATTI MASANOVICH

On June 15, 2023, we provided a letter to Mr. Masanovich, with an effective date of July 5, 2023, in connection with his appointment as our Senior Vice President and Chief Financial Officer. The letter set his base salary and MIP target at $800,000 and $640,000, respectively, and provided that he be recommended to receive an LTIP grant for fiscal 2024 of $5,000,000.

OFFER LETTER FOR RICKY HOPSON

On July 1, 2022, we provided a letter to Mr. Hopson in connection with his promotion to President, Division Head for Clinical Development & Supply. The letter set his base salary and MIP target at $380,000 and $310,000, respectively, and provided that he be recommended to receive an LTIP grant for fiscal 2023 of $350,000. On May 1, 2023, we provided a letter to Mr. Hopson, with an effective date of April 14, 2023, in connection with his appointment as our Interim Chief Financial Officer. The letter provided that he would be entitled to receive an additional cash stipend of $20,000 per month for the duration of his assignment until such time as the Company hired a permanent Chief Financial Officer, and that all other elements of his existing compensation would remain unchanged.

Mr. Hopson ceased serving as Interim Chief Financial Officer effective July 5, 2023 and, after supporting Mr. Masanovich with his transition, returned to a business leadership role at the Company as President, Division Head for Bioproduct Delivery, and Chief of Staff.

EMPLOYMENT AGREEMENT OF JOHN GREISCH

On August 28, 2023, we entered into an employment agreement with John Greisch in connection with his transition to his current role of Executive Chair, providing for a term commencing immediately and continuing through the date of the regularly scheduled annual shareholders’ meeting in the fall of 2026. The terms include (1) an annual base salary of $700,000, subject to discretionary increases from time to time, (2) participation in our MIP, with a minimum annual target amount of $560,000, (3) participation in our annual LTIP with a minimum annual target grant value of $3,740,000, and (4) participation in all group health, life, disability, and other employee benefit and perquisite plans and programs in which our other senior executives generally participate. He also is entitled to receive annual reimbursements for the reasonable cost of financial services/planning (not to exceed $17,000).

Mr. Greisch is subject to a covenant not to (x) compete with us or solicit the business of any client or prospective client while employed and for one year following his termination of employment for any reason or (y) solicit our employees or consultants while employed and for one year following his termination of employment for any reason, in each case subject to certain specified exclusions. The agreement also contains customary confidential information, assignment of intellectual property rights, and indemnification provisions.

OFFER LETTER FOR LISA EVOLI

On June 8, 2023, we provided a letter to Ms. Evoli, with an effective date of August 1, 2023, in connection with her appointment as our Senior Vice President and Chief Human Resources Officer. The letter set her base salary and MIP target at $500,000 and $350,000, respectively, and provided that she be recommended to receive an LTIP grant for fiscal 2024 of $900,000.

OFFER LETTER FOR DAVID MCERLANE

On August 25, 2023, we provided a letter to Mr. McErlane, with an effective date of September 25, 2023, in connection with his appointment as our Group President, Biologics. The letter set his base salary and MIP target at $525,000 and $420,000, respectively, and provided that he be recommended to receive an LTIP grant for fiscal 2024 of $925,000.

EXECUTIVE STOCK OWNERSHIP GUIDELINES

Our executive stock ownership guidelines for our CEO and certain of our executives, including the other NEOs, set a multiple of each executive’s base salary as the amount of qualifying equity to be acquired and held by each executive. In assessing compliance with the guidelines, we count shares held outright, 50% of the value of unvested RSUs (or restricted stock issued in lieu thereof), and 100% of shares held in benefit plans, if any. Shares underlying stock options (vested or unvested) or unearned PSUs do not count toward achievement of the guidelines. Our guidelines by executive level are as follows:

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If, on the date of any exercise of an option to purchase our common stock or the delivery of our common stock underlying any vested RSU or PSU, an executive has not reached the minimum ownership level under the guidelines, then the executive should retain and not sell that portion of the delivered shares whose market value is equal to at least 50% of the after-tax market value of all shares delivered on that date. For purposes of complying with this provision of the guidelines, the market value is equal to the average closing price per share of our common stock as reported on the NYSE for all trading days in the last month of the prior fiscal year.

All of our NEOs complied with these guidelines during fiscal 2024 and have remained in compliance through the date of this Annual Report.

HEDGING AND PLEDGING

Our Insider Trading Policy prohibits directors and all of our employees, including our executive officers, from engaging in any transactions that are designed to hedge or offset any decrease in the market value of our securities, including, but not limited to, through the use of financial instruments such as exchange funds, variable forward contracts, equity swaps, puts, calls, and other derivative instruments, or through the establishment of a short position in our securities. Though our Insider Trading Policy allows the pledging by our directors and employees, including our executive officers, of our securities in situations approved by our General Counsel, our current policy and practice is that no such pledging is allowed.

RISK ASSESSMENT OF COMPENSATION PRACTICES AND POLICIES

With the assistance of its independent consultant, the Compensation Committee annually reviews our compensation program from a risk perspective. Based on that review, the Compensation Committee believes that our program is not reasonably likely to have a material adverse effect on us and our shareholders. Our compensation program achieves this by striking an appropriate balance between short-term and long-term incentives, using a diversity of metrics to assess performance and payout under our incentive programs, placing caps on our incentive award payout opportunities, and having stock ownership and retention requirements. For example, our current long-term equity incentive program incorporates our financial performance and stock price into its performance measures and generally magnifies the impact of changes in our stock price as well as Relative Return performance.

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Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this Annual Report on Form 10-K. Based on its review and discussions, the Compensation Committee recommended to our Board that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K as filed with the SEC.

Submitted by the Compensation Committee:

Gregory T. Lucier, Chair

Michael J. Barber

J. Martin Carroll

Rolf Classon

Frank D’Amelio

Stephanie Okey

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Executive Compensation Tables

Fiscal 2024 Summary Compensation Table

Relative Return PSUs are subject to market conditions, as opposed to performance conditions, and therefore do not have maximum grant date fair market values that differ from the grant date fair market values under FASB ASC Topic 718. The actual value of the PSUs, if any, that ultimately convert to shares of our common stock or are no longer subject to forfeiture, respectively, on the vesting dates will depend on (x) our share price on such dates and (y) our performance according to the applicable performance criteria.

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The amount reported for Ms. Evoli for fiscal 2024 includes RSUs with a grant date fair market value of $1,000,012 granted on August 1, 2023 in connection with her offer letter. The amount reported for Mr. McErlane for fiscal 2024 represents RSUs with a grant date fair market value of $590,004 granted on September 25, 2023 in connection with his offer letter.

(A) Under our 401(k) Savings Plan, we match up to a maximum 4% of annual compensation contributed by participants, up to federal tax law limits on both eligible compensation and individual contributions.

(B) Represents company contributions under our Deferred Compensation Plans, representing 50% of each participant’s contribution up to the first 6% of eligible pay that such participant contributes to the plan, up to any applicable limit.

(C) Mr. Maselli received certain tax equalization benefits during fiscal 2024 in connection with his relocation from the United Kingdom and long-term assignment in the United States prior to fiscal 2023, resulting primarily from timing differences between the determination and payment of U.S. and U.K. taxes across multiple tax years. Such benefits are consistent with our standard policies and practices applicable, by location, to employees on long-term assignments.

(D) Each of the NEOs, pursuant to the terms of an employment agreement or otherwise, is entitled to services, which may be submitted in the form of a reimbursement, for the reasonable cost of financial services/planning, subject to an aggregate cap of $17,000 during each calendar year. The amounts reported in each fiscal year may differ from this cap due to timing differences between each fiscal year and calendar year. During fiscal 2024, Messrs. Maselli, Masanovich, Hopson, McErlane and Ms. Evoli received financial services/planning services in the amounts of $17,559, $17,372, $17,559, $12,109 and $14,737, respectively, applicable to calendar years 2023 and 2024. The amount reported in this column for Mr. Maselli includes $2,704 for tax preparation services paid in connection with his long-term assignment in the U.S. prior to fiscal 2023.

(E) The amount reported for Mr. Masanovich includes an aggregate stipend of $98,000 paid to offset travel costs from Florida to New Jersey from September 2023 through June 2024. The amount reported for Mr. Hopson includes (1) an aggregate stipend of $40,000 paid in connection with Mr. Hopson’s services as Interim Chief Financial Officer in supporting the fiscal 2023 compensation year-end planning process and facilitating the transition to the newly hired CFO from July 2023 through August 2023 and (2) $923 in connection with his cash-out from Catalent’s employee recognition platform, of which $575 included the gross-up amount for taxes. The amount reported for Ms. Evoli represents (1) contributions we made under our Catalent Cares matching gift program in the amount of $200 and (2) an aggregate stipend of $55,000 to offset commuting costs from Pennsylvania to New Jersey from August 2023 through June 2024. From time to time, family members of executives may accompany them on a business-related flight aboard a private aircraft. There is no incremental cost to the Company, and therefore no incremental costs are reflected in the amounts above, for the use of such flights by family members of executives.

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Fiscal 2024 Grants of Plan-Based Awards Table

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Fiscal 2024 Outstanding Equity Awards at Year-End Table

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No portion of the PSUs granted to Messrs. Maselli and Hopson on July 26, 2021 were earned based on performance relative to pre-determined Relative Return and Adjusted Earnings Per Share performance targets.

As described in the section of the 2024 Annual Report entitled “Fiscal 2024 Potential Payments Upon Employment Termination or Change in Control,” all or a portion of the RSUs or PSUs may vest earlier in connection with a change of control of our Company or certain terminations of employment

For information regarding the effects of the transaction with Novo Holdings on the Company’s outstanding equity awards, please see the sections entitled “The Merger Agreement—Treatment of Catalent Equity Awards—Treatment of Options,” “The Merger Agreement—Treatment of Catalent Equity Awards—Treatment of Restricted Stock Units,” “The Merger Agreement—Treatment of Catalent Equity Awards—Treatment of Performance Stock Units,” “The Merger Agreement—Treatment of Catalent Equity Awards—Treatment of the Employee Stock Purchase Plan,” and “The Merger (Proposal 1)—Interests of Catalent’s Directors and Executive Officers in the Merger” in the Company’s proxy statement filed with the SEC on April 15, 2024.

Fiscal 2024 Option Exercises and Stock Vested Table

Fiscal 2024 Nonqualified Deferred Compensation Table