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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
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Filed by the Registrant |
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Filed by a Party other than the Registrant |
Check the appropriate box: |
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14A-6(E)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material under §240.14a-12 |
DANAHER CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if
other than the Registrant)
Payment of Filing Fee (Check all boxes that apply): |
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No fee required. |
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Fee paid previously with preliminary materials. |
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
Notice of 2024 Annual Meeting of Shareholders
Items of Business
1 |
To elect the thirteen directors named in the attached Proxy Statement to hold office until the 2025 annual meeting of shareholders and
until their successors are elected and qualified. |
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2 |
To ratify the selection of Ernst & Young LLP as Danaher’s independent registered public accounting firm for the year ending
December 31, 2024. |
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3 |
To approve on an advisory basis the Company’s named executive officer compensation. |
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4 |
To act upon a shareholder proposal requesting that Danaher amend its governing documents to reduce the percentage of shares required for
shareholders to call a special meeting of shareholders from 25% to 15%. |
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5 |
To act upon a shareholder proposal requesting a report to shareholders on the effectiveness of the Company’s diversity, equity,
and inclusion efforts. |
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6 |
To consider and act upon such other business as may properly come before the meeting or at any postponement or adjournment thereof. |
Please refer to the enclosed proxy materials or
the information forwarded by your bank, broker, trustee or other intermediary to see which voting methods are available to you.
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Date and Time
May
7, 2024
3:00 p.m. Eastern Time
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Location
The
Westin Georgetown
2350 M Street NW
Washington, D.C.
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Who Can Vote
Shareholders
of Danaher Common Stock at the close of business
on March 8, 2024 can vote at Danaher’s
2024 Annual Meeting. Your vote is important. Please
submit your proxy or voting instructions at your
earliest convenience, whether or not you plan to
attend the annual meeting.
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Attending the Meeting
Shareholders who wish to attend the meeting in
person should review the instructions set forth in the attached Proxy Statement under “General Information About the Annual
Meeting – Attending the Meeting.”
By order of the Board of Directors,
James F. O’Reilly
Senior Vice President, Deputy General Counsel and Secretary
Review your proxy statement and vote in one
of the following ways:
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Via the Internet |
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By Telephone |
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By Mail |
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Visit the website listed on your Notice of Internet Availability, proxy card or voting instruction form |
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Call the telephone number on your proxy card or voting instruction form |
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Sign, date and return your proxy card or voting instruction form in the enclosed envelope |
Date of Mailing
We intend to mail the Notice Regarding the Availability
of Proxy Materials (“Notice of Internet Availability”), or the Proxy Statement and proxy card as applicable, to our
shareholders on or about March 27, 2024.
Table of Contents
2024
Notice of Annual Meeting and Proxy Statement |
2 |
Proxy Statement Summary
To assist you in reviewing the proposals to be
acted upon at our 2024 Annual Meeting, below is summary information regarding the meeting, each proposal to be voted upon at the
meeting and Danaher Corporation’s business performance, corporate governance, sustainability program and executive compensation.
The following description is only a summary and does not contain all of the information you should consider before voting. For
more information about these topics, please review Danaher’s Annual Report on Form 10-K for the year ended December 31, 2023
and the complete Proxy Statement. In this Proxy Statement, the terms “Danaher” or the “Company” refer to
Danaher Corporation, Danaher Corporation and its consolidated subsidiaries or the consolidated subsidiaries of Danaher Corporation,
as the context requires. All financial data in this Proxy Statement refers to continuing operations unless otherwise indicated.
2024 Annual Meeting of Shareholders
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Time and Date |
Location |
Record Date |
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3:00 p.m. Eastern time |
The Westin Georgetown 2350 M |
March 8, 2024 |
Tuesday, May 7, 2024 |
Street NW Washington, D.C. |
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Voting Matters
Proposal |
Description |
Board
Recommendation |
PROPOSAL 1 – Election of directors (page 11) |
We are asking our shareholders to elect each of the thirteen directors identified below to serve until the 2025 Annual Meeting of shareholders. |
FOR each nominee |
PROPOSAL 2 – Ratification of the appointment of the independent registered public accounting firm (page 41) |
We are asking our shareholders to ratify our Audit Committee’s selection of Ernst & Young LLP (“E&Y”) to act as the independent registered public accounting firm for Danaher for 2024. Although our shareholders are not required to approve the selection of E&Y, our Board believes that it is advisable to give our shareholders an opportunity to ratify this selection. |
FOR |
PROPOSAL 3 – Advisory vote to approve named executive officer compensation (page 87) |
We are asking our shareholders to cast a non-binding, advisory vote on the compensation of the executive officers named in the Summary Compensation Table (the “named executive officers” or “NEOs”). In evaluating this year’s “say on pay” proposal, we recommend that you review our Compensation Discussion and Analysis, which explains how and why the Compensation Committee of our Board arrived at its executive compensation actions and decisions for 2023. |
FOR |
PROPOSAL 4 – Shareholder Proposal (page 89) |
You are being asked to consider a shareholder proposal requesting that Danaher amend its governing documents to reduce the percentage of shares required for shareholders to call a special meeting of shareholders from 25% to 15%. |
X AGAINST |
PROPOSAL 5 – Shareholder Proposal (page 91) |
You are being asked to consider a shareholder proposal requesting a report to shareholders on the effectiveness of the Company’s diversity, equity, and inclusion efforts. |
X AGAINST |
Please see the sections titled “General
Information About the Meeting” and “Other Information” beginning on page 93 for important information about the
proxy materials, voting, the Annual Meeting, Company documents, communications and the deadlines to submit shareholder proposals
and director nominations for next year’s annual meeting of shareholders.
2024
Notice of Annual Meeting and Proxy Statement |
3 |
Business Highlights
2023 Performance
In 2023, Danaher achieved critical milestones
in its transformation to a global life sciences and diagnostics innovator:
• |
We spun-off our Veralto business (consisting of Danaher’s former water quality and product identification businesses) into an independent, publicly-traded company, further sharpening our strategic focus on life sciences and diagnostics. |
• |
We acquired Abcam plc, a leading global supplier of protein consumables, for a cash purchase price of approximately $5.6 billion. Abcam is now included in our Life Sciences segment. |
Even while meaningfully advancing our strategic
transformation, we:
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Continued to invest aggressively in future growth, including investments of approximately $1.5 billion in research and development and $1.4 billion in capital expenditures. |
• |
Returned approximately $778 million to common shareholders through cash dividends (marking the 31st year in a row Danaher has paid a dividend on its common shares). |
• |
Generated strong financial returns as illustrated below: |
Long-Term Performance
• |
As of December 31, 2023, out of the 220 companies in the S&P 500 that have been publicly traded since the beginning of 1985, Danaher’s annualized total shareholder return (“TSR”) ranks fourth. |
• |
Danaher is the only company in its peer group whose TSR outperformed the S&P 500 Index by more than 1,600 basis points over every rolling 5-year period from and including 1999-2023. |
2024
Notice of Annual Meeting and Proxy Statement |
4 |
• |
Danaher’s compounded average annual shareholder return has outperformed the S&P 500 Index over each of the last five-, ten-, fifteen-, twenty- and twenty-five year periods: |
Corporate Governance Highlights
Our Board of Directors recognizes that Danaher’s
success over the long-term requires a robust framework of corporate governance that serves the best interests of all our shareholders
and promotes robust risk oversight. Below are highlights of our corporate governance framework.
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Board
composition is critical, and Danaher continues to seek to
optimize the mix of skills, traits and tenure represented on
our Board. Over the past five years our Board has added important
new skills and traits as average director nominee tenure
has declined by more than 20%, and more than half of
the Company’s 2024 director nominees are diverse from a gender
and/or race/ethnicity perspective. |
|
|
|
Our
Bylaws provide for proxy access by shareholders. |
|
|
|
Our
Chairman and CEO positions are separate. |
|
|
|
Our
Board has established a Lead Independent Director position. |
|
|
|
All
of our directors are elected annually. |
|
|
|
In
uncontested elections, our directors must be elected by a majority
of the votes cast,
and we have a director resignation policy that
applies to any incumbent director who fails to receive
such a majority. |
|
Our
shareholders have the right to act by written consent. |
|
|
|
Shareholders
owning 25% or more of our outstanding shares may call a special meeting of shareholders. |
|
|
|
We
have never had a shareholder rights plan. |
|
|
|
We
have no supermajority voting requirements in our Certificate of Incorporation or Bylaws. |
|
|
|
All
members of our Audit, Compensation and Nominating and Governance
Committees are independent
as defined by the New York Stock Exchange listing
standards and applicable SEC rules. |
|
|
|
Danaher
(including its subsidiaries during the period we have owned
them) has made no political contributions in the last decade,
has no intention of contributing any Danaher
funds for political purposes, and discloses
its political expenditures policy on its public
website. The 2023 CPA-Zicklin Index of Corporate
Political Disclosure and Accountability ranked Danaher
as a First Tier company. |
Shareholder Engagement Program
We actively seek and highly value feedback from
our shareholders. During 2023, in addition to our traditional Investor Relations outreach efforts, we engaged with shareholders
representing approximately 25% of our outstanding shares on topics including our business strategy and financial performance,
governance and executive compensation programs and sustainability initiatives. Attendees included members of our senior management
and, in some cases, members of our Board of Directors. We shared feedback received during these meetings with the applicable Board
committees, informing their decision-making.
2024
Notice of Annual Meeting and Proxy Statement |
5 |
Board of Directors Nominees
Below is an overview of each of the director nominees
you are being asked to elect at the 2024 Annual Meeting.
|
|
|
|
|
|
Director
|
|
Committee Memberships |
Name and Principal Occupation |
|
Independent |
|
Age |
|
Since |
|
A |
C |
N |
S |
E |
F |
Rainer M. Blair
President and Chief Executive Officer
Danaher Corporation
|
|
|
|
59 |
|
2020 |
|
|
|
|
|
|
|
Feroz Dewan
Chief Executive Officer
Arena Holdings Management LLC
|
|
|
|
47 |
|
2022 |
|
|
|
|
|
|
|
Linda Filler
Former President of Retail Products, Chief Marketing Officer, and Chief Merchandising
Officer
Walgreen Co.
|
|
|
|
64 |
|
2005 |
|
|
|
|
|
|
|
Teri List
Former Executive Vice President and Chief Financial Officer
Gap Inc.
|
|
|
|
61 |
|
2011 |
|
|
|
|
|
|
|
Jessica L. Mega, MD, MPH
Former Chief Medical and Scientific Officer
Verily Life Sciences LLC
|
|
|
|
49 |
|
2019 |
|
|
|
|
|
|
|
Mitchell P. Rales
Chairman of the Executive Committee
Danaher Corporation
|
|
|
|
67 |
|
1983 |
|
|
|
|
|
|
|
Steven M. Rales
Chairman of the Board
Danaher Corporation
|
|
|
|
72 |
|
1983 |
|
|
|
|
|
|
|
Pardis C. Sabeti, MD, D.Phil
Investigator
Howard Hughes Medical Institute
|
|
|
|
48 |
|
2019 |
|
|
|
|
|
|
|
A. Shane Sanders
Former Senior Vice President of Business Transformation
Verizon Communications Inc.
|
|
|
|
61 |
|
2021 |
|
|
|
|
|
|
|
John T. Schwieters
Former Principal
Perseus TDC
|
|
|
|
84 |
|
2003 |
|
|
|
|
|
|
|
Alan G. Spoon
Former Managing General Partner
Polaris Partners
|
|
|
|
72 |
|
1999 |
|
|
|
|
|
|
|
Raymond C. Stevens, PhD
Chief Executive Officer
Structure Therapeutics
|
|
|
|
60 |
|
2017 |
|
|
|
|
|
|
|
Elias A. Zerhouni, MD
President and Vice Chairman
OPKO Health, Inc.
|
|
|
|
72 |
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
|
Chair |
|
Member |
A = Audit Committee C
= Compensation Committee N = Nominating and Governance Committee S = Science & Technology Committee E = Executive Committee
F = Finance Committee
2024
Notice of Annual Meeting and Proxy Statement |
6 |
Director Nominee Diversity
Skills and Experience
2023 Meeting Attendance
|
|
|
|
|
98% Overall attendance at
Board and Committee
Meetings |
|
10 Directors attended 100%
of Board and Committee
Meetings |
|
There were 7
Board Meetings
in 2023 |
|
|
|
|
|
2024
Notice of Annual Meeting and Proxy Statement |
7 |
Sustainability at Danaher
|
|
|
|
|
Innovating products that Improve lives and our
planet
• At
Danaher, innovation doesn’t happen by accident. It is the product of the DBS Innovation Engine, a rigorous, holistic
management program encompassing tools that facilitate innovation, process, strategy, organization, talent and culture
• In
2023, we also updated our DBS product development tools to explicitly prompt consideration of our customers’ sustainability
needs at key junctures in the product design, development and launch processes
• We
invested $1.5 billion in research and development in 2023
|
|
Building the best team
• We
are committed to attracting, developing, engaging and retaining the best people from around the world to sustain and grow
our science and technology leadership
• Consistently
attracting and retaining exceptional talent” is one of our three strategic priorities and “The Best Team Wins”
is one of our five Core Values
• In
2023, we increased female representation in our global workforce to 40% and U.S. People of Color (POC) representation
to 42%
|
|
Protecting our environment
• In
2022, we announced a new target to reduce absolute Scope 1 and 2 greenhouse gas (GHG) emissions by 50.4% in 2032 vs. 2021.
In 2024, we further committed to set science-based GHG emission reduction targets in line with the Science Based Targets
initiative (SBTi), including a long-term target to achieve net-zero value chain emissions by no later than 2050
• The
Danaher Business System continues to be a uniquely powerful system for supporting our decarbonization ambitions. With
the DBS Energy Management Toolkit as our foundation, in 2023 we developed a suite of domain-specific DBS tools and processes
to drive efficient progress toward our greenhouse gas reduction goal
• In
2023, we also deployed across our businesses a climate risk and opportunity assessment program based on elements of the
Task Force on Climate-Related Financial Disclosures (TCFD) recommendations
|
Executive Compensation Highlights
Overview of Executive Compensation Program
As discussed in detail under “Compensation
Discussion and Analysis,” with the goal of building long-term value for our shareholders, we have developed an executive
compensation program designed to:
• |
attract and retain executives with the leadership skills, attributes and experience necessary to succeed in an enterprise with Danaher’s size, diversity and global footprint; |
• |
motivate executives to demonstrate exceptional personal performance and perform consistently at or above the levels that we expect, over the long-term and through a range of economic cycles; and |
• |
link compensation to the achievement of corporate goals that we believe best correlate with the creation of long-term shareholder value. |
To achieve these objectives our compensation program
combines annual and long-term components, cash and equity, and fixed and variable elements, with a bias toward long-term, performance-based
equity awards tied closely to shareholder returns and subject to significant vesting and/or holding periods. Our executive compensation
program rewards our executive officers when they help increase long-term shareholder value, achieve annual business goals and build
long-term careers with Danaher.
2024
Notice of Annual Meeting and Proxy Statement |
8 |
Compensation Governance
Our Compensation Committee also recognizes that
the success of our executive compensation program over the long-term requires a robust framework of compensation governance. As
a result, the Committee regularly reviews external executive compensation practices and trends and incorporated best practices
into our 2023 executive compensation program:
|
|
What
We Do |
|
|
|
What
We Don’t Do |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Four-year vesting requirement for stock options;
three-year performance period plus further two-year holding period for PSUs |
|
|
|
No tax gross-up provisions (except as applicable
to management employees generally such as relocation policy) |
|
|
|
|
|
|
|
|
|
Incentive compensation programs feature multiple,
different performance measures aligned with the Company’s strategic
performance metrics |
|
|
|
No dividend/dividend equivalents paid on unvested
equity awards |
|
|
|
|
|
|
|
|
|
Short-term and long-term performance metrics that balance
our absolute performance and our relative performance versus
peer companies |
|
|
|
No “single trigger” change of control benefits |
|
|
|
|
|
|
|
|
|
Rigorous, no-fault clawback policies that
are triggered even in the absence of wrongdoing |
|
|
|
No defined benefit pension program for any
NEO |
|
|
|
|
|
|
|
|
|
Minimum one-year vesting requirement for 95% of
shares granted under the Company’s stock plan |
|
|
|
No hedging of Danaher securities permitted |
|
|
|
|
|
|
|
|
|
Stock ownership requirements for all executive
officers |
|
|
|
No long-term incentive compensation is denominated
or paid in cash (other than PSU dividend accruals) |
|
|
|
|
|
|
|
|
|
Limited perquisites and a cap on CEO/CFO personal
aircraft usage |
|
|
|
No above-market returns on deferred compensation
plans |
|
|
|
|
|
|
|
|
|
Independent compensation consultant that performs
no other services for the Company |
|
|
|
No overlapping performance metrics between
short-term and long-term incentive compensation programs |
|
|
|
|
|
|
|
2024
Notice of Annual Meeting and Proxy Statement |
9 |
Named Executive Officers’ 2023 Compensation
The following table sets forth the 2023 compensation
of our named executive officers. Please see pages 61-63 for information regarding 2022 and 2021 compensation, as well as footnotes.
Name and
Principal Position |
|
Salary
($) |
|
Bonus
($) |
|
Stock
Awards
($) |
|
Option
Awards
($) |
|
Non-Equity
Incentive Plan
Compensation
($) |
|
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
($) |
|
All Other
Compensation
($) |
|
Total
($) |
Rainer M. Blair,
President and CEO
|
|
1,300,000 |
|
0 |
|
8,068,474 |
|
7,509,417 |
|
3,541,200 |
|
0 |
|
484,191 |
|
20,903,282 |
Matthew R. McGrew,
Executive Vice President and CFO
|
|
966,310 |
|
0 |
|
2,555,306 |
|
2,377,957 |
|
1,350,418 |
|
0 |
|
245,561 |
|
7,495,552 |
Joakim Weidemanis,
Executive Vice President
|
|
1,008,480 |
|
0 |
|
2,958,575 |
|
2,753,420 |
|
1,535,411 |
|
0 |
|
215,799 |
|
8,471,685 |
Georgeann Couchara,
Senior Vice President, Human Resources
|
|
660,000 |
|
0 |
|
1,840,043 |
|
1,745,775 |
|
878,922 |
|
0 |
|
125,077 |
|
5,249,817 |
Jose-Carlos Gutierrez-Ramos,
Senior Vice President and Chief Science Officer
|
|
784,160 |
|
0 |
|
2,604,987 |
|
2,503,057 |
|
1,116,409 |
|
0 |
|
188,572 |
|
7,197,185 |
2024
Notice of Annual Meeting and Proxy Statement |
10 |
PROPOSAL 1
Election of Directors
We are seeking your support for the election of
the thirteen candidates whom the Board has nominated to serve on the Board of Directors (each of whom currently serves as a director
of the Company), to serve until the 2025 Annual Meeting of shareholders and until their successor is duly elected and qualified.
We extend our gratitude to Mr. Walter G. Lohr, Jr., who will be retiring from our Board as of the 2024 Annual Meeting, for his
years of dedicated service to Danaher. Although as of the date of this Proxy Statement the number of directors is fixed at fourteen,
the Board has adopted a resolution that effective as of the time of the 2024 Annual Meeting, the size of the Board will be reduced
to thirteen.
We believe the nominees set forth below have qualifications
consistent with our position as a large, global and diversified science and technology company. We also believe these nominees
have the experience and perspective to guide Danaher as we seek to sustainably expand our business in high-growth geographies and
high-growth market segments, identify, consummate and integrate appropriate acquisitions, develop innovative and differentiated
new products and services, adjust to rapidly changing technologies, business cycles and competition and address the demands of
an increasingly regulated environment. Set forth below is biographical information regarding each candidate as of March 15, 2024.
Proxies cannot be voted for a greater number of
persons than the thirteen nominees named in this Proxy Statement. In the event a nominee declines or is unable to serve, the proxies
may be voted in the discretion of the proxy holders for a substitute nominee designated by the Board, or the Board may reduce the
number of directors to be elected. We know of no reason why this will occur.
Director Nominees
|
|
|
Rainer M.
Blair (Age 59) |
Director Since: |
Other Public Directorships: |
Chief Executive Officer |
2020 |
None |
|
|
|
Mr. Blair has served as Danaher’s President
and Chief Executive Officer since September 2020. Since joining Danaher in 2010, Mr. Blair has served in a series of progressively
more responsible general management positions (and as a Danaher officer since 2014), including as Vice President - Group Executive
from March 2014 until January 2017 and as Executive Vice President from January 2017 until September 2020.
Mr. Blair’s broad operating and functional
experience across diverse end-markets and geographies, in-depth knowledge of Danaher’s businesses and of the Danaher Business
System and leadership experience from his service in the U.S. Army are particularly valuable to the Board given the global, diverse
nature of Danaher’s portfolio. In addition, Mr. Blair adds deep multi-cultural experience having lived and worked on three
continents.
|
|
|
Skills and Qualifications: |
|
Committees: |
|
|
|
• Global/International
• Life
Sciences
• Product
Innovation
|
• M&A
• Public
Company CEO and/or President
|
• Executive
• Finance
• Science
& Technology
|
2024
Notice of Annual Meeting and Proxy Statement |
11 |
Feroz
Dewan (Age 47) |
Director Since: |
Other Public Directorships: |
Independent |
2022 |
None |
|
|
|
Mr. Dewan has served as the Chief Executive Officer
of Arena Holdings Management LLC, an investment holding company, since 2016. Previously, Mr. Dewan served in a series of positions
with Tiger Global Management, an investment firm, from 2003 to 2015, including most recently as Head of Public Equities. He also
served as a Private Equity Associate at Silver Lake Partners, a private equity firm focused on leveraged buyout and growth capital
investments in technology, technology-enabled and related industries, from 2002 to 2003. Within the past five years, Mr. Dewan
served on the board of directors of each of The Kraft Heinz Company and Fortive Corporation.
Mr. Dewan’s qualifications to sit on the
Board include, among other factors, extensive experience in the technology industry and with technology-related companies, including
extensive experience in valuation, investments and acquisitions, financial reporting, risk management, corporate governance, capital
allocation, and operational oversight.
|
|
|
Skills and Qualifications: |
|
Committees: |
|
|
|
• Global/International |
• Accounting |
• Finance |
• Digital Technology |
• Finance |
• Nominating and Governance |
• M&A |
|
• Science & Technology |
|
|
|
|
|
|
Linda Filler (Age
64) |
Director Since: |
Other Public Directorships: |
Independent |
2005 |
The Carlyle Group |
|
|
Veralto Corporation |
|
|
|
Ms. Filler retired as President of Retail Products,
Chief Marketing Officer and Chief Merchandising Officer at Walgreen Co., a retail pharmacy company, in April 2017. Prior to Walgreen
Co., Ms. Filler served as President, North America of Claire’s Stores, Inc., a specialty retailer, and in Executive Vice
President roles at Walmart Inc., a retail and wholesale operations company, and at Kraft Foods, Inc., a food and beverage manufacturing
and processing company. Prior to Kraft Foods, Inc., Ms. Filler served for a number of years at Hanesbrands Inc., a multinational
clothing company, including Chief Executive Officer roles for its largest branded apparel businesses.
Ms. Filler has served in senior management roles
with leading retail and consumer goods companies, with general management responsibilities and responsibilities in the areas of
marketing, branding and merchandising. Understanding and responding to the needs of our customers is fundamental to Danaher’s
business strategy, and Ms. Filler’s keen marketing and branding insights have been a valuable resource to Danaher’s
Board. Her prior leadership experiences with large public companies have given her valuable perspective for matters of global portfolio
strategy and capital allocation as well as global business practices.
|
|
|
Skills and Qualifications: |
|
Committees: |
|
|
|
• Global/International
• Product
Innovation
• M&A
|
• Public
Company CEO and/or President
• Branding/Marketing
|
• Nominating
and Governance (Chair)
• Science
& Technology
|
2024
Notice of Annual Meeting and Proxy Statement |
12 |
Teri List (Age
61) |
Director Since: |
Other Public Directorships: |
Independent |
2011 |
Microsoft Corporation |
|
|
Visa Inc. |
|
|
lululemon athletica inc. |
|
|
|
Ms. List served as Executive Vice President and
Chief Financial Officer of Gap Inc., a global clothing retailer, from January 2017 until March 2020. Prior to joining Gap, she
served as Executive Vice President and Chief Financial Officer of Dick’s Sporting Goods, Inc., a sporting goods retailer,
from August 2015 to August 2016, and with Kraft Foods Group, Inc., a food and beverage company, as Advisor from March 2015 to May
2015, as Executive Vice President and Chief Financial Officer from December 2013 to February 2015 and as Senior Vice President
of Finance from September 2013 to December 2013. From 1994 to September 2013, Ms. List served in a series of progressively more
responsible positions in the accounting and finance organization of The Procter & Gamble Company, a consumer goods company,
most recently as Senior Vice President and Treasurer. Prior to joining Procter & Gamble, Ms. List was employed by the accounting
firm of Deloitte & Touche for almost ten years. Within the past five years, Ms. List served on the board of directors of Oscar
Health, Inc. and DoubleVerify Holdings, Inc.
Ms. List’s experience dealing with complex
finance and accounting matters for Gap, Dick’s, Kraft and Procter & Gamble have given her an appreciation for and understanding
of the similarly complex finance and accounting matters that Danaher faces. In addition, through her leadership roles with large,
global companies she has insight into the business practices that are critical to the success of a large, growing public company
such as Danaher.
Given Ms. List’s extensive experience as
a Chief Financial Officer, her proficiency in accounting, her knowledge of and dedication to Danaher and her retirement from full-time
employment our Board has determined that Ms. List’s simultaneous service on the audit committee of more than three public
companies does not impair her ability to effectively serve on our Audit Committee. In 2023, Ms. List attended all of the meetings
of the Board and of the committees on which she served.
|
|
|
Skills and Qualifications: |
|
Committees: |
|
|
|
• Global/International |
• Accounting |
• Audit |
• Digital Technology |
• Finance |
• Compensation |
• M&A |
|
|
|
|
|
|
|
|
Jessica L. Mega,
MD, MPH (Age 49) |
Director Since:
2019 |
Other Public Directorships:
Boston Scientific Corporation |
Independent |
|
|
|
|
|
Dr. Mega served as Chief Medical and Scientific
Officer at Verily Life Sciences LLC, a subsidiary of Alphabet Inc. focused on life sciences and healthcare, from March 2015 to
January 2023. Prior to joining Verily, she served as Cardiologist and Senior Investigator at Brigham & Women’s Hospital
from 2008 to March 2015. Dr. Mega has also served as a faculty member at Harvard Medical School and a senior investigator with
the TIMI Study Group, where she helped lead international trials evaluating novel cardiovascular therapies and directed the genetics
program.
At Verily, Dr. Mega oversaw Verily’s clinical
and science efforts, focusing on translating technological innovations and scientific insights into partnerships and programs that
improve patient outcomes. Dr. Mega’s clinical background and experience re-imagining how clinical trial data is collected
and analyzed offer valuable insights for Danaher, given our strategic focus on life sciences and healthcare applications.
|
|
|
Skills and Qualifications: |
|
Committees: |
|
|
|
• Life Sciences |
• Digital Technology |
• Compensation |
• Healthcare Management |
• Government, legal or regulatory |
• Science & Technology |
2024
Notice of Annual Meeting and Proxy Statement |
13 |
Mitchell P. Rales |
Director Since: |
Other Public Directorships: |
(Age 67) |
1983 |
ESAB Corporation |
Chairman of the Executive Committee |
|
|
|
|
|
Mr. Rales is a co-founder of Danaher and has served
as Chairman of the Executive Committee of Danaher since 1984. He was also President of the Company from 1984 to 1990. Mr. Rales
is a brother of Steven M. Rales. Within the past five years, Mr. Rales served on the board of directors of Fortive Corporation.
The strategic vision and leadership of Mr. Rales
and his brother, Steven Rales, helped create the Danaher Business System and have guided Danaher down a path of consistent, profitable
growth that continues today. In addition, as a result of his substantial ownership stake in Danaher, he is well-positioned to understand,
articulate and advocate for the rights and interests of the Company’s shareholders.
|
|
|
Skills and Qualifications: |
|
Committees: |
|
|
|
• Global/International
• M&A
|
• Public
Company CEO and/or President
• Finance
|
• Executive
(Chair)
• Finance
(Chair)
|
|
|
|
|
|
|
Steven M.
Rales |
Director Since: |
Other Public Directorships: |
(Age 72) |
1983 |
None |
Chairman of the Board |
|
|
|
|
|
Mr. Rales is a co-founder of Danaher and has served
as Danaher’s Chairman of the Board since 1984. He was also CEO of the Company from 1984 to 1990. Mr. Rales is a brother of
Mitchell P. Rales. Within the past five years, Mr. Rales served on the board of directors of Fortive Corporation.
The strategic vision and leadership of Mr. Rales
and his brother, Mitchell Rales, helped create the Danaher Business System and have guided Danaher down a path of consistent, profitable
growth that continues today. In addition, as a result of his substantial ownership stake in Danaher, he is well-positioned to understand,
articulate and advocate for the rights and interests of the Company’s shareholders.
|
|
|
Skills and Qualifications: |
|
Committees: |
|
|
|
• Global/International
• M&A
|
• Public
Company CEO and/or President
• Finance
|
• Executive
• Finance
• Science
& Technology
|
2024
Notice of Annual Meeting and Proxy Statement |
14 |
Pardis C. Sabeti,
MD,
D.PHIL (Age 48) |
Director Since:
2019 |
Other Public Directorships:
None |
|
|
|
Dr. Sabeti has served as an Investigator for the
Howard Hughes Medical Institute (“HHMI”), a non-profit medical research organization, since November 2015. Dr. Sabeti
is a professor at the Center for Systems Biology and the Department of Organismic and Evolutionary Biology at Harvard University
and the Department of Immunology and Infectious Disease at Harvard T.H. Chan School of Public Health. She is an Institute Member
of the Broad Institute of MIT and Harvard.
Dr. Sabeti is a computational geneticist with
expertise developing new experimental technologies and computational algorithms to investigate the genomes of humans and infectious
microbes. Her expertise in infectious disease research offers significant value to Danaher as we seek to develop research tools
for use in determining the causes of disease, identification of new therapies and testing of new drugs and vaccines.
|
|
|
Skills and Qualifications: |
|
Committees: |
|
|
|
• Life Sciences |
• Digital Technology |
• Science & Technology |
• Diagnostics |
|
|
|
|
|
|
|
|
A. Shane Sanders |
Director Since: |
Other Public Directorships: |
(Age 61) |
2021 |
Commvault |
Independent |
|
|
|
|
|
Mr. Sanders served in a series of progressively
more responsible leadership positions with Verizon Communications Inc., a telecommunications company, from 1997 until December
2022, including most recently as Senior Vice President of Business Transformation from March 2020 to December 2022 and as Senior
Vice President of Corporate Finance from 2015 to March 2020. Prior to joining Verizon, Mr. Sanders served in various finance roles
at Hallmark Cards, Inc., a retailer of greeting cards and gifts, and Safelite Group, Inc., a provider of vehicle glass repair,
and began his career at Grant Thornton, an audit, tax and advisory firm, in 1984.
Mr. Sanders’ leadership experiences in Verizon’s
accounting and finance organization have spanned a range of functional areas, including financial planning and analysis, risk management,
audit and public reporting and compliance. His broad and deep experience in a large, dynamic organization gives him a keen understanding
of the range of finance and accounting matters and judgments Danaher encounters. In addition, his business transformation experience
offers valuable perspectives as Danaher continues to grow and evolve its portfolio of businesses.
|
|
|
Skills and Qualifications: |
|
Committees: |
|
|
|
• Global/International |
• Accounting |
• Audit |
• Digital Technology |
• Finance |
• Nominating and Governance |
• M&A |
|
|
2024
Notice of Annual Meeting and Proxy Statement |
15 |
John T. Schwieters |
Director Since: |
Other Public Directorships: |
(Age 84) |
2003 |
Veralto Corporation |
Independent |
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Mr. Schwieters served as Principal of Perseus
TDC, a real estate investment and development firm, from July 2013 to May 2023. He also served as a Senior Executive of Perseus,
LLC, a merchant bank and private equity fund management company, from May 2012 to June 2016 and as Senior Advisor from March 2009
to May 2012.
In addition to his roles with Perseus, Mr. Schwieters
led the Mid-Atlantic region of one of the world’s largest accounting firms after previously leading that firm’s tax
practice in the Mid-Atlantic region, and has served on the boards and chaired the audit committees of several NYSE-listed public
companies. He brings to Danaher extensive knowledge and experience in the areas of public accounting, tax accounting and finance,
which are areas of critical importance to Danaher as a large, global and complex public company.
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Skills and Qualifications: |
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Committees: |
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• M&A |
• Accounting |
• Audit (Chair) |
• Finance |
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• Nominating and Governance |
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Alan
G. Spoon (Age 72) |
Director Since: |
Other Public Directorships: |
Independent |
1999 |
Fortive Corporation |
|
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IAC/InterActiveCorp |
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Match Group, Inc. |
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|
Mr. Spoon served as Partner Emeritus of Polaris
Partners from January 2016 to June 2018, Managing General Partner from 2000 to 2010 and Partner from 2000 to 2018. Within the past
five years, Mr. Spoon served on the board of directors of Cable One, Inc.
In addition to his leadership roles at Polaris
Partners, Mr. Spoon has previously served as president, chief operating officer and chief financial officer of one of the country’s
largest, publicly-traded education and media companies, and has served on the boards of numerous public and private companies.
His public company leadership experience gives him insight into business strategy, leadership and executive compensation and his
public company and private equity experience give him insight into technology and life science trends, acquisition strategy and
financing, each of which represents an area of key strategic opportunity for the Company.
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Skills and Qualifications: |
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Committees: |
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• Product
Innovation
• Digital
Technology
• M&A
|
• Public
Company CEO and/or President
• Finance
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• Compensation (Chair) |
2024
Notice of Annual Meeting and Proxy Statement |
16 |
Raymond C. Stevens,
PH.D. (Age 60) |
Director Since:
2017 |
Other Public Directorships:
Structure Therapeutics |
Independent |
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Professor Stevens has served as Chief Executive
Officer of Structure Therapeutics (formerly known as ShouTi), a biotechnology company, since May 2019. He also served as Provost
Professor of Biological Sciences and Chemistry, and Director of The Bridge Institute, at the University of Southern California,
a private research university, from July 2014 to August 2021. From 1999 until July 2014, he served as Professor of Molecular Biology
and Chemistry with The Scripps Research Institute, a non-profit research organization. Professor Stevens has also launched multiple
biotechnology companies focused on drug discovery.
Professor Stevens is considered among the world’s
most influential biomedical scientists in molecular research. A pioneer in human cellular behavior research, he has been involved
in the creation of therapeutic molecules that led to breakthrough drugs aimed at curing influenza, childhood diseases, neuromuscular
disorders and diabetes. Professor Stevens’ insights in the area of molecular research, as well as his experience bringing
industry and academia together to advance drug development, are highly beneficial to Danaher given our strategic focus on the development
of research tools used to understand the causes of disease, identify new therapies and test new drugs and vaccines. His extensive
experience living and working in China is also valuable to Danaher given China’s strategic significance to our business.
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Skills and Qualifications: |
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Committees: |
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• Global/International
• Life
Sciences
|
• Public
Company CEO and/or President
• Product
Innovation
|
• Audit
• Science
& Technology
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Elias A. Zerhouni,
MD |
Director Since: |
Other Public Directorships: |
(Age 72) |
2009 |
OPKO Health, Inc. |
Independent |
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Dr. Zerhouni has served as President and Vice
Chairman of OPKO Health, Inc. a medical test and medication company, since May 2022. He previously served as President, Global
Research & Development, for Sanofi S.A., a global pharmaceutical company, from 2011 to June 2018. From 2008 until 2011, Dr.
Zerhouni provided advisory and consulting services to various non-profit and other organizations as Chairman and President of Zerhouni
Holdings. From 2002 to 2008, he served as director of the National Institutes of Health, and from 1996 to 2002, he served as Chair
of the Russell H. Morgan Department of Radiology and Radiological Sciences, Vice Dean for Research and Executive Vice Dean of the
Johns Hopkins School of Medicine.
Dr. Zerhouni, a physician, scientist and world-renowned
leader in radiology research, is widely viewed as one of the leading authorities in the United States on emerging trends and issues
in medicine and medical care. These insights, as well as his deep, technical knowledge of the research and clinical applications
of medical technologies, are of considerable importance given Danaher’s strategic focus in the medical technologies markets.
Dr. Zerhouni’s government experience also gives him a strong understanding of how government agencies work, and his experience
growing up in North Africa, together with the global nature of the issues he faced at NIH and his role at France-based Sanofi,
give him a global perspective that is valuable to Danaher.
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Skills and Qualifications: |
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Committees: |
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• Global/International
• Life
Sciences
• Diagnostics
|
• Public
Company CEO and/or President
• Healthcare
management
• Government.
legal or regulatory
|
• Science
& Technology (Chair)
• Nominating
and Governance
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ü |
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
EACH OF THE FOREGOING
NOMINEES. |
|
2024
Notice of Annual Meeting and Proxy Statement |
17 |
Board Selection and Refreshment
Director Selection
The Board and its Nominating and Governance Committee
believe that it is important that our directors demonstrate:
• | personal and professional integrity and character; |
• | prominence and reputation in the director’s profession; |
• | skills, expertise and background (including business or other relevant experience) that in aggregate
are useful and appropriate in overseeing and providing strategic direction with respect to Danaher’s business and serving the long-term
interests of Danaher’s shareholders; |
• | the capacity and desire to represent the interests of the shareholders as a whole; and |
• | availability to devote sufficient time to the affairs of Danaher. |
The Nominating and Governance Committee is responsible
for recommending to the Board a slate of nominees for election at each annual meeting of shareholders. Nominees may be suggested by directors,
members of management, shareholders or by a third-party search firm engaged by the Committee. The Committee considers a wide range of
factors when assessing potential director nominees. This includes consideration of the current composition of the Board, any perceived
need for one or more particular areas of expertise, the balance of management and independent directors, the need for committee-specific
expertise, evaluations of other prospective nominees and the qualifications of each potential nominee relative to the attributes, skills
and experience described above.
When Danaher recruits a director candidate, either a
search firm engaged by the Committee or a member of the Board contacts the prospect to assess interest and availability. The candidate
will then meet with members of the Board and at the same time, the Committee with the support of the search firm will conduct such further
inquiries as the Committee deems appropriate. A background check is completed before a final recommendation is made to appoint a candidate
to the Board.
A shareholder who wishes to recommend a prospective nominee
for the Board should notify the Nominating and Governance Committee in writing using the procedures described below under “Other
Information – Communications with the Board of Directors” with whatever supporting material the shareholder considers appropriate.
If a prospective nominee has been identified other than in connection with a director search process initiated by the Committee, an initial
determination is made as to whether to conduct a full evaluation of the candidate based primarily on whether a new or additional Board
member is necessary or appropriate at such time, the likelihood that the prospective nominee can satisfy the evaluation factors described
above, any additional inquiries the Committee may, in its discretion, conduct and any other factors the Committee may deem appropriate.
Director Nominee Skills, Expertise, and Diversity
Diversity is an important consideration in the Board’s
decision-making with respect to Board composition. The Board does not have a formal or informal policy with respect to diversity but believes
that the Board, taken as a whole, should embody a diverse set of skills, knowledge, experiences and backgrounds appropriate in light of
the Company’s needs, and in this regard also subjectively takes into consideration the diversity (including with respect to age,
race, gender, national origin and U.S. military veteran status) of the Board when considering director nominees.
More than half of the Company’s director nominees
for the 2024 annual meeting are diverse from a gender and/or race/ethnicity perspective, two nominees are U.S. military veterans, and
our nominees represent a broad range of ages and national origins.
2024
Notice of Annual Meeting and Proxy Statement |
18 |
The chart that follows illustrates the diverse set of
skills, expertise and backgrounds represented by the Company’s 2024 director nominees.
Skills
and Expertise |
Blair |
Dewan |
Filler |
List |
Mega |
M.
Rales |
S.
Rales |
Sabeti |
Sanders |
Schwieters |
Spoon |
Stevens |
Zerhouni |
|
Global/International |
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Life Sciences |
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Diagnostics |
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Healthcare Management |
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Product Innovation |
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Digital Technology |
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M&A |
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Public Company Ceo and/or President |
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Accounting |
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Finance |
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Branding/Marketing |
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Government, Legal or Regulatory |
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Age |
59 |
47 |
64 |
61 |
49 |
67 |
72 |
48 |
61 |
84 |
72 |
60 |
72 |
Gender |
M |
M |
F |
F |
F |
M |
M |
F |
M |
M |
M |
M |
M |
Race/Ethnicity* |
C |
SA |
C |
C |
C |
C |
C |
M |
B |
C |
C |
C |
N |
Born Outside U.S. |
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U.S. Military Veteran |
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“B” refers to Black “C” refers to Caucasian (other than Middle Eastern or North African descent)
“M” refers to Middle Eastern descent “N” refers to North African descent “SA” refers to South Asian
Director
Nominee Age |
Director Nominees
Who Joined Board Within
Last 5 Years |
Gender and Racial/
Ethnic Diversity of
Director Nominees |
|
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2024
Notice of Annual Meeting and Proxy Statement |
19 |
Board Orientation
Our new director orientation program includes extensive
meetings with Danaher management and familiarizes new directors with Danaher’s businesses, strategies, policies and the Danaher
Business System; assists them in developing company and industry knowledge to optimize their Board service; and educates them with respect
to their fiduciary duties and legal responsibilities and Danaher’s sustainability framework.
Director Commitments
As noted above and as stated in our Corporate Governance
Guidelines, among other criteria required to serve on the Danaher Board, Danaher directors must have availability to devote sufficient
time to the affairs of the Company. The Guidelines further provide that directors should not serve on more than three boards of public
companies in addition to the Danaher Board, and that directors should advise the Chairman of the Board, the chair of the Nominating and
Governance Committee and the Company Secretary (1) before accepting membership on another board of directors or audit committee or any
other significant committee assignment, or establishing any significant relationship with any business, institution or other governmental
or regulatory entity, and (2) of any other material change in circumstance or relationship that may impact a director’s independence.
Our Nominating and Governance Committee reviews our Corporate Governance Guidelines annually, including the provisions above.
As part of our annual Board, committee and individual
director evaluation process (discussed below), our Board has evaluated and determined that each of our directors, including each of our
director nominees, has demonstrated the ability to commit sufficient time and capacity to Board duties and to otherwise fulfill the responsibilities
required of them as Danaher directors. Such ability is evidenced by Board and committee meeting attendance records and preparation, contribution
to Board discussions and decision-making and engagement with other members of the Board and management. Additionally, all of our directors
are in compliance with our Corporate Governance Guidelines relating to limitations on public company board service, as described above.
Board Refreshment
Our Board actively considers Board refreshment. Using
our Board skills matrix as a guide as well as the results of our annual Board and committee evaluation process (discussed below), the
Nominating and Governance Committee evaluates Board composition at least annually and identifies for Board consideration areas of expertise
that would complement and enhance our current Board. Given the critical role of acquisitions in our overall strategy as well as the diversity
of our portfolio, it is essential that our Board include members with the experience of having led the Company through a range of M&A
and economic cycles. However, the Board also seeks to thoughtfully balance the knowledge and experience that comes from longer-term Danaher
Board service with the fresh perspectives and new domain expertise that can come from adding new directors. We have added five new
directors over the past five years, which along with director retirements have reduced Danaher’s average director nominee tenure by more
than 20% over that period.
Proxy Access
Our Amended and Restated Bylaws (“Bylaws”)
permit a shareholder, or a group of up to twenty shareholders, owning three percent or more of the Company’s outstanding shares
of Common Stock continuously for at least three years to nominate and include in the Company’s annual meeting proxy materials a
number of director nominees up to the greater of (x) two, or (y) twenty percent of the Board (or, if such amount is not a whole number,
the closest whole number below twenty percent), provided that the shareholder(s) and nominee(s) satisfy the requirements specified in
the Bylaws.
2024
Notice of Annual Meeting and Proxy Statement |
20 |
Majority Voting Standard
General
Our Bylaws provide for majority voting in uncontested
director elections, and our Board has adopted a director resignation policy. Under the policy, our Board will not appoint or nominate
for election to the Board any person who has not tendered in advance an irrevocable resignation effective in such circumstances where
the individual does not receive a majority of the votes cast in an uncontested election and such resignation is accepted by the Board.
If an incumbent director is not elected by a majority of the votes cast in an uncontested election, our Nominating and Governance Committee
will submit for prompt consideration by the Board a recommendation whether to accept or reject the director’s resignation. The Board
expects the director whose resignation is under consideration to abstain from participating in any decision regarding that resignation.
Contested Elections
At any meeting of shareholders for which the Secretary
of the Company receives a notice that a shareholder has nominated a person for election to the Board of Directors in compliance with the
Company’s Bylaws and such nomination has not been withdrawn on or before the tenth day before the Company first mails its notice
of meeting to the Company’s shareholders, the directors will be elected by a plurality of the votes cast. This means that the nominees
who receive the most affirmative votes would be elected to serve as directors.
2024
Notice of Annual Meeting and Proxy Statement |
21 |
Corporate Governance
Corporate Governance Overview
Our Board of Directors recognizes that Danaher’s
success over the long-term requires a robust framework of corporate governance that serves the best interests of all our shareholders
and promotes robust risk oversight. Below are highlights of our corporate governance framework.
|
Board composition is critical, and Danaher continues to seek to optimize the
mix of skills, traits and tenure represented on our Board. Over the past five years our Board has added important new skills and
traits as average director nominee tenure has declined by more than 20%, and more than half of the Company’s 2024 director
nominees are diverse from a gender and/or race/ethnicity perspective. |
|
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Our Bylaws provide for proxy access by shareholders. |
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Our Chairman and CEO positions are separate. |
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Our Board has established a Lead Independent Director position. |
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All of our directors are elected annually. |
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In uncontested elections, our directors must be elected by a majority of the votes cast,
and we have a director resignation policy that applies to any incumbent director who fails to receive such a majority. |
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Our shareholders have the right to act by written consent. |
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Shareholders owning 25% or more of our outstanding shares may call a special meeting of shareholders. |
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We have never had a shareholder rights plan. |
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We have no supermajority voting requirements in our Certificate of Incorporation or Bylaws. |
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All members of our Audit, Compensation and Nominating and Governance Committees are independent
as defined by the New York Stock Exchange listing standards and applicable SEC rules. |
|
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|
Danaher (including its subsidiaries during the period we have owned them) has made no political
contributions in the last decade, has no intention of contributing any Danaher funds for political purposes, and discloses its
political expenditures policy on its public website. The 2023 CPA-Zicklin Index of Corporate Political Disclosure and Accountability
ranked Danaher as a First Tier company. |
Board Leadership Structure, Succession Planning and
Oversight
Board Leadership Structure
Chairman of the Board
The Board has separated the positions of Chairman and
CEO because it believes that, at this time, this structure best enables the Board to ensure that Danaher’s business and affairs
are managed effectively and in the best interests of shareholders. This is particularly the case in light of the fact that the Company’s
Chairman is Steven Rales, a co-founder of the Company who owns approximately 5.9% of the Company’s outstanding shares, served as
CEO of the company from 1984 to 1990 and continues to serve as an executive officer of the company. As a result of his substantial ownership
stake in the Company, the Board believes that Mr. Rales is uniquely able to understand, articulate and advocate for the rights and interests
of the Company’s shareholders. Moreover, Mr. Rales uses his management experience with the Company and Board tenure to help ensure
that the non-management directors have a keen understanding of the Company’s business as well as the strategic and other risks and
opportunities that the Company faces. This enables the Board to more effectively provide insight and direction to, and exercise oversight
of, the Company’s President and CEO and the rest of the management team responsible for the Company’s day-to-day business
(including with respect to risk management).
2024
Notice of Annual Meeting and Proxy Statement |
22 |
Lead Independent Director
Because Mr. Rales is not independent within the meaning
of the NYSE listing standards, our Corporate Governance Guidelines require the appointment of a “Lead Independent Director”
and our independent directors have appointed Ms. Filler as Lead Independent Director. As Lead Independent Director, Ms. Filler:
• | Presides at all meetings of the Board at which the Chairman of the Board and the Chairman of the Executive
Committee are not present, including the executive sessions of non-management directors, which are typically held at the end of each regularly
scheduled Board meeting. |
• | Has the authority to call meetings of the independent directors. Ms. Filler has exercised this authority
by typically requiring meetings of the non-management directors at the end of every regularly scheduled Board meeting. |
• | Serves as a liaison between the Chairman and the independent directors. Ms. Filler engages frequently
with Mr. Steven Rales on a range of topics relating to the Board and the Company’s governance program. |
• | Approves information sent to the Board. |
• | Approves meeting agendas for the Board. |
• | Approves meeting schedules to assure that there is sufficient time for discussion of all agenda items.
|
• | Engages with major shareholders, including direct communication, as appropriate. |
Our Board believes that having the same director serve
as both Lead Independent Director and chair of the Nominating and Governance Committee, as Ms. Filler does, offers valuable leadership
synergies. In particular, Ms. Filler’s role leading the annual Board, committee and individual director evaluation process, as chair
of the Nominating and Governance Committee, enhances her Lead Independent Director effectiveness in acting as a liaison between the Chairman
and the independent directors and engaging with the Chairman on governance matters.
Board Leadership Succession Planning
The Board addresses succession planning for key Board
leadership roles (such as Chairman of the Board, Lead Independent Director and Committee chairs) by seeking to ensure the depth of expertise
on the Board is sufficient to provide appropriate successors in the event of a succession event.
Board Oversight
Strategy
One of the Board’s primary responsibilities is
overseeing management’s development and execution of the Company’s strategy. At least quarterly, the CEO, our executive leadership
team and other business leaders provide detailed business and strategy updates to the Board. The Board annually conducts an even more
in-depth review of the Company’s overall strategy. At these reviews, the Board engages with our executive leadership team and other
business leaders regarding business objectives and the application of DBS, the competitive landscape, economic trends and other developments.
On an annual basis the Board also reviews the Company’s human capital, risk assessment/risk management, compliance and sustainability
programs as well as the Company’s operating budget, and at meetings occurring throughout the year the Board reviews acquisitions,
strategic investments and other capital allocation topics as well as the Company’s operating and financial performance, among other
matters. The Board also looks to the expertise of its committees to inform strategic oversight in their areas of focus.
2024
Notice of Annual Meeting and Proxy Statement |
23 |
Spotlight: Oversight
Of Strategic Acquisitions
The Board oversees Danaher’s strategic acquisition
and integration process. Danaher views acquisitions as an important element of our strategy to deliver long-term shareholder value.
Our Board includes nine members with extensive business combination experience. That depth of experience allows the Board to constructively
engage with management and effectively evaluate acquisitions for alignment with our strategy, culture and financial goals. Management
is charged with identifying potential acquisition targets, executing transactions and managing integration, and our Board’s oversight
extends to each of these elements. Management and the Board regularly discuss potential acquisitions and their role in the Company’s
overall business strategy. These discussions address acquisitions in process and potential future acquisitions, and cover a broad range
of matters which may include valuation, due diligence, risk and anticipated synergies with Danaher’s businesses and strategy. With
respect to more significant acquisitions, such as the Company’s 2020 acquisition of Cytiva, the 2021 acquisition of Aldevron and
the 2023 acquisition of Abcam, the Board typically discusses and evaluates the proposed opportunity over multiple meetings. The Board’s
acquisition oversight also extends across transactions and over time; at least annually the Board reviews and provides feedback regarding
the operational and financial performance of our historical acquisitions.
Spotlight: Oversight
Of Human Capital Management and CEO Succession Planning
| • | The
Board and Compensation Committee engage with our senior leadership team and human resources
executives on a regular basis across a range of human capital management topics. As discussed
above, Danaher is committed to attracting, developing, engaging and retaining the best people
from around the world to sustain and grow our science and technology leadership. Working
with management, the Board and Compensation Committee oversee matters including culture,
succession planning and development, compensation, benefits, talent recruiting and retention,
associate engagement and diversity, equity and inclusion. The Board reviews the Company’s
human capital strategy annually and at other times during the year in connection with significant
initiatives and acquisitions, supported by the Compensation Committee’s oversight of
our executive and equity compensation programs. |
| • | With
the support of our Nominating and Governance Committee, our Board also maintains and annually
reviews both a long-term succession plan and emergency succession plan for the CEO position.
The foundation of the long-term CEO succession planning process is a CEO development
model consisting of three dimensions: critical experiences, leadership capabilities and personal
characteristics/traits. The Board uses the development model as a guide in preparing candidates,
and also in evaluating candidates for the CEO and other executive positions at the Board’s
annual talent review and succession planning session. At the annual session, the Board evaluates
and compares candidates using the development model, and reviews each candidate’s development
actions, progress and performance over time. The candidate evaluations are supplemented with
periodic 360-degree performance appraisals, and the Board also regularly interacts with candidates
at Board dinners and lunches, through Board meeting presentations and at the Company’s
annual leadership conference. |
2024
Notice of Annual Meeting and Proxy Statement |
24 |
Risk
The Board’s role in risk oversight at the Company
is consistent with our leadership structure, with management having day-to-day responsibility for assessing and managing our risk exposure
and the Board and its committees overseeing those efforts, with particular emphasis on the most significant risks facing the Company.
The Board administers its risk oversight responsibilities both through active review and discussion of key risks facing the Company and
by delegating certain risk oversight responsibilities to the Board committees. Generally, the Board delegates risk oversight responsibility
to its committees where it believes the committee’s focused domain expertise will support efficient and effective oversight, and
each committee typically has responsibility with respect to risks that are associated with the purpose of, and responsibilities delegated
to, that committee. Each of the Audit, Compensation, Nominating and Governance, and Science and Technology Committees reports to the full
Board on a regular basis, including as appropriate with respect to the committee’s risk oversight activities. The timeframe over
which the Board and its committees evaluate risk typically varies depending on the nature of the risk. From time to time, the Board and/or
its committees may consider inputs from outside advisors with respect to certain risks and risk trends. With respect to the manner in
which the Board’s risk oversight function impacts the Board’s leadership structure, as described above, our Board believes
that Mr. Steven Rales’ management experience and tenure help the Board to more effectively exercise its risk oversight function.
The graphic below summarizes the primary areas of risk
overseen by the Board and by each of its committees.
Danaher’s disclosure controls and procedures documentation
specifically references our annual enterprise risk assessment process as an element of our disclosure controls and procedures, and requires
membership overlap between Danaher’s Disclosure Committee and Danaher’s Risk Committee.
2024
Notice of Annual Meeting and Proxy Statement |
25 |
Spotlight: Oversight
Of Cybersecurity Risk
Danaher’s cybersecurity strategy and risk management
program focuses on maintaining a secure environment for our data that complies with applicable legal requirements and effectively supports
our business objectives and customer needs. Our commitment to cybersecurity emphasizes cultivation of a security-minded culture through
education and training, and a programmatic and layered approach to prevention and detection of, and response to, cybersecurity threats.
Key elements of our program include:
| • | cybersecurity policies that articulate our expectations and requirements with respect to topics such
as acceptable use of technology and data, data privacy, risk management, education and awareness and event and incident management; |
| • | regular education of and sharing best practices with our associates to raise awareness of cybersecurity
threats; |
| • | assessment of information technology/cybersecurity risks as part of Danaher’s annual Enterprise
Risk Management program; |
| • | maintenance of cyber insurance in amounts and subject to coverage terms that are typical for companies
of our type and size (however, such insurance may not be sufficient in type or amount to cover us against claims related to security breaches,
cyber-attacks and other related breaches); and |
| • | periodic engagement of external consultants to assess our cybersecurity program. |
We also strive to implement and maintain layered controls
designed to prevent and, where necessary, detect and respond to cybersecurity threats, including controls designed to facilitate identification
of third-party cybersecurity risks.
At the management level, Danaher’s cybersecurity
program is led by the Company’s Chief Information Security Officer (“CISO”), who reports to Danaher’s Chief Information
Officer (“CIO”), who in turn reports to Danaher’s Chief Financial Officer. The CISO is supported by the Information
Risk Steering Committee (“IRSC”), a management committee comprising senior members of the information technology, legal, privacy,
finance, internal audit and communications functions. At the Board level, Danaher’s Board of Directors has delegated to the Audit
Committee of the Board responsibility for oversight of risks relating to cybersecurity, as set forth in the Committee’s charter.
Multiple members of Danaher’s Audit Committee have prior work experience overseeing or assessing a cybersecurity function. Danaher’s
CISO and CIO update the Audit Committee multiple times per year regarding Danaher’s cybersecurity program, including key program
metrics, initiatives and developments. The Audit Committee regularly briefs the full Board on these matters. In addition, in the event
of a significant cybersecurity incident, Danaher policy and process requires timely engagement of and consultation with the Audit Committee.
2024
Notice of Annual Meeting and Proxy Statement |
26 |
Board of Directors and Committees of the Board
General
The Board met seven times in 2023. All directors attended
at least 90% (and ten of the directors attended 100%) of the total number of meetings of the Board and of the committees of the
Board on which they served held during the period they served. Danaher typically schedules a Board meeting in conjunction with
each annual meeting of shareholders and as a general matter expects that the members of the Board will attend the annual meeting.
All of our directors at the time attended the Company’s annual meeting in May 2023.
The membership of each of the Board’s committees
as of March 8, 2024 is set forth below. While each of the committees is authorized to delegate its powers to sub-committees, none
of the committees did so during 2023. The Audit, Compensation, Nominating and Governance and Science & Technology Committees
report to the Board on their actions and recommendations at each regularly scheduled Board meeting. Each such committee typically
meets in executive session, without the presence of management, at its regularly scheduled meetings.
Name of Director |
|
Audit |
|
Compensation |
|
Nominating
and Governance |
|
Science &
Technology |
|
Executive |
|
Finance |
Rainer
M. Blair |
|
|
|
|
|
|
|
|
|
|
|
|
Feroz Dewan |
|
|
|
|
|
|
|
|
|
|
|
|
Linda Filler |
|
|
|
|
|
|
|
|
|
|
|
|
Teri List |
|
|
|
|
|
|
|
|
|
|
|
|
Walter G. Lohr, Jr. |
|
|
|
|
|
|
|
|
|
|
|
|
Jessica L. Mega, MD, MPH |
|
|
|
|
|
|
|
|
|
|
|
|
Mitchell P. Rales |
|
|
|
|
|
|
|
|
|
|
|
|
Steven M. Rales |
|
|
|
|
|
|
|
|
|
|
|
|
Pardis C. Sabeti, MD, D.Phil. |
|
|
|
|
|
|
|
|
|
|
|
|
A. Shane Sanders |
|
|
|
|
|
|
|
|
|
|
|
|
John T. Schwieters |
|
|
|
|
|
|
|
|
|
|
|
|
Alan G. Spoon |
|
|
|
|
|
|
|
|
|
|
|
|
Raymond C. Stevens, Ph.D. |
|
|
|
|
|
|
|
|
|
|
|
|
Elias
A. Zerhouni, MD |
|
|
|
|
|
|
|
|
|
|
|
|
# of Meetings Held in 2023 |
|
7 |
|
6 |
|
10 |
|
5 |
|
0 |
|
1 |
|
Chair |
|
Member |
Audit Committee |
Meetings
in 2023: 7 |
Members:
• John T. Schwieters
(Chair)
• Teri List
• A. Shane Sanders
• Raymond C. Stevens, Ph.D. |
Principal Responsibilities:
• assist the Board in overseeing
the:
- quality
and integrity of Danaher’s financial statements;
- effectiveness
of Danaher’s internal control over financial reporting;
- qualifications,
independence and performance of Danaher’s independent auditors;
- performance
of Danaher’s internal audit function;
- Company’s
compliance with legal and regulatory requirements;
- risks
described above under “Board Oversight - Risk”; and
- Company’s
swaps and derivatives transactions and related policies and procedures.
• prepare the Audit Committee
Report included in the Company’s annual Proxy Statement
The Board has determined that each of the members
of the Audit Committee is independent for purposes of Rule 10A-3(b) (1) under the Securities Exchange Act of 1934, as amended (“Exchange
Act”) and the NYSE listing standards and is financially literate within the meaning of the NYSE listing standards. In addition,
the Board has determined that Ms. List and Messrs. Schwieters and Sanders each qualifies as an audit committee financial expert
as that term is defined in Item 407(d)(5) of Regulation S-K under the Exchange Act. |
2024
Notice of Annual Meeting and Proxy Statement |
27 |
Compensation Committee |
Meetings
in 2023: 6 |
Members:
• Alan G. Spoon
(Chair)
• Teri
List
• Walter
G. Lohr, Jr.
• Jessica
L. Mega, MD, MPH |
Principal Responsibilities:
• discharge the Board’s responsibilities relating to the compensation of our executive
officers, including setting goals and objectives for, evaluating the performance of, and approving the compensation paid to, our
executive officers;
• review and make recommendations to the Board with respect to the adoption, amendment and termination of all executive incentive
compensation plans and all equity compensation plans, and exercise all authority of the Board (and all responsibilities assigned
by such plans to the Committee) with respect to the oversight and administration of such plans;
• review and consider the results of shareholder advisory votes on the Company’s executive compensation, and make recommendations
to the Board regarding the frequency of such advisory votes;
• monitor compliance by directors and executive officers with the Company’s stock ownership requirements;
• assist the Board in overseeing the risks described above under “Board Oversight of Risk”;
• review and discuss with Company management the Compensation Discussion and Analysis and recommend to the Board the inclusion of
the Compensation Discussion and Analysis in the annual meeting proxy statement;
Each member of the Compensation Committee is a
“non-employee director” for purposes of Rule 16b-3 under the Exchange Act and, based on the determination of the Board,
independent under the NYSE listing standards and under Rule 10C-1 under the Exchange Act. |
Management Role in Supporting the Compensation
Committee:
Members of our senior management generally attend
the Compensation Committee meetings. In addition, our CEO:
• |
provides background regarding the interrelationship
between our business objectives and executive compensation matters and advises on the alignment of incentive plan performance
measures with our overall strategy; |
• |
participates in the Committee’s discussions
regarding the performance and compensation of the other executive officers and provides recommendations to the Committee regarding
all significant elements of compensation paid to such officers, their annual, personal performance objectives and his evaluation
of their performance (the Committee gives considerable weight to our CEO’s evaluation of and recommendations with respect
to the other executive officers because of his direct knowledge of each such officer’s performance and contributions);
and |
• |
provides feedback regarding the companies
that he believes Danaher competes with in the marketplace and for executive talent. |
Our human resources and legal departments also assist
the Committee Chair in scheduling and setting the agendas for the Committee’s meetings, preparing meeting materials and providing
the Committee with data relating to executive compensation as requested by the Committee.
Independent Compensation Consultant Role in Supporting
the Compensation Committee:
Under the terms of its charter, the Committee has
the authority to engage the services of outside advisors and experts. The Committee has engaged Frederic W. Cook & Co., Inc.
(“FW Cook”) as its independent compensation consultant since 2008. The Committee engages FW Cook because it is considered
one of the premier independent compensation consulting firms and has never provided any services to the Company other than the
compensation-related services provided to or at the direction of the Compensation Committee and the Nominating and Governance Committee.
FW Cook takes its direction solely from the Committee (and with respect to matters relating to the non-management director compensation
program, the Nominating and Governance Committee). In addition to the director compensation advice provided to the Nominating and
Governance Committee, FW Cook’s primary responsibilities in 2023 were to:
• |
provide advice and data in connection with
the structuring of the executive and equity compensation programs and the compensation levels for the Company’s executive
officers compared to their peers; |
• |
assess the Company’s executive compensation
program in the context of compensation governance best practices; |
• |
update the Committee regarding legislative
and regulatory initiatives as well as emerging trends and investor views in the area of executive compensation; |
• |
provide data regarding the share dilution
costs attributable to the Company’s aggregate equity compensation program; |
• |
assist in the review of the Company’s
executive compensation public disclosures; and |
• |
provide advice and data in connection with
the structuring of the executive and equity compensation programs of Veralto Corporation, which Danaher spun-off as an independent,
publicly-traded company in 2023 (the “Veralto Spin-Off”), and the compensation levels for the executive officers
thereof compared to their anticipated peers, as well as general advice relating to executive and equity compensation matters
related to the Veralto Spin-Off. |
The Committee does not place any material limitations
on the scope of the feedback provided by FW Cook. In the course of discharging its responsibilities, FW Cook may from time to time
and with the Committee’s consent, request from management information regarding compensation amounts and practices, the interrelationship
between our business objectives and executive compensation matters, the nature of the Company’s executive officer responsibilities
and other business information. The Committee has considered whether the work performed for or at the direction of the Compensation
Committee and the Nominating and Governance Committee raises any conflict of interest, taking into account the factors listed in
Exchange Act Rule 10C-1(b)(4), and has concluded that such work does not create any conflict of interest.
2024
Notice of Annual Meeting and Proxy Statement |
28 |
Nominating and Governance Committee |
Meetings in 2023: 10 |
Members:
• Linda Filler
(Chair)
• Feroz Dewan
• Walter
G. Lohr, Jr.
• A.
Shane Sanders
• John
T. Schwieters
• Elias
A. Zerhouni, MD |
Principal Responsibilities:
• assist the Board in identifying individuals qualified to become Board members, and make recommendations
to the Board regarding all nominees for Board membership;
• make recommendations to the
Board regarding the size and composition of the Board and its committees;
• make recommendations to the Board regarding matters of corporate governance and oversee the operation of Danaher’s
Corporate Governance Guidelines and Related Person Transactions Policy;
• develop and oversee the annual evaluation process for the Board, its committees, and our directors;
• assist the Board in CEO succession planning;
• assist the Board in overseeing the risks described above under “Board Oversight - Risk”;
• review and make recommendations to the Board regarding non-management director compensation;
• oversee the orientation process for newly elected members of the Board and continuing director education; and
• oversee the Company’s sustainability program.
The Board has determined that all of
the members of the Nominating and Governance Committee are independent within the meaning
of the NYSE listing standards. |
Science & Technology Committee |
Meetings in 2023: 5 |
Members:
• Elias
A. Zerhouni, MD (Chair)
• Rainer M. Blair
• Feroz Dewan
• Linda Filler
• Jessica
L. Mega, MD, MPH
• Steven
M. Rales
• Pardis
C. Sabeti, MD, D.Phil.
• Raymond C. Stevens, Ph.D. |
Principal Responsibilities:
• review and assess the Company’s
science and technology innovation strategy and priorities;
• assess the competitive position
of the Company’s technology portfolio;
• review with management key programs, processes and organizational structures related to innovation, research and development
and the commercialization of technology; and
• assess, and advise the Board with respect to, potentially disruptive science and technology trends, opportunities and risks. |
2024
Notice of Annual Meeting and Proxy Statement |
29 |
Executive Committee
The Executive Committee exercises between meetings
of the Board any powers or authority as are specifically delegated to it by the Board from time to time, typically related to business
acquisition or capital raising transactions. The Executive Committee did not meet in 2023.
Finance Committee
The Finance Committee approves business acquisitions,
investments and divestitures up to the levels of authority delegated to it by the Board. The Finance Committee met one time in
2023.
Board, Committee and Individual Director Evaluations
Our Board recognizes that a rigorous and constructive
evaluation process is an essential component of good corporate governance and Board effectiveness. Under the leadership of our
Lead Independent Director, the Nominating and Governance Committee oversees the annual evaluation process and periodically reviews
the format of the process to help ensure it is eliciting actionable feedback with respect to the effectiveness of the Board, Board
committees and individual directors.
The annual Board, committee and individual director
evaluation process consists of the following components:
2024
Notice of Annual Meeting and Proxy Statement |
30 |
Shareholder Engagement and Alignment
Shareholder Engagement Program
General
We actively seek and highly value feedback from our
shareholders. During 2023, in addition to our traditional Investor Relations outreach efforts, we engaged with shareholders representing
approximately 25% of our outstanding shares on topics including our business strategy and financial performance, governance and
executive compensation programs and sustainability initiatives. Attendees included members of our senior management and, in some
cases, members of our Board of Directors. We shared feedback received during these meetings with the applicable Board committees,
informing their decision-making.
2023 Shareholder Proposals
At Danaher’s 2023 Annual Meeting, a majority
of the shares represented in person or by proxy and entitled to vote voted against:
• |
a shareholder proposal requesting
adoption of a policy separating the Chair and CEO roles and requiring an independent Board Chair whenever possible. Danaher’s
Nominating and Governance Committee annually reviews Danaher’s leadership structure, and the proposal, investor feedback
thereon and the voting results (in 2023 and in the prior years when a similar proposal has been brought) were taken into account
in considering whether a modification to Danaher’s leadership structure is warranted. It
was determined that the existing leadership structure (with Steven Rales as executive Chairman and Ms. Filler as Lead Independent
Director) achieves an appropriate balance of independent leadership and effective management oversight and continues to serve
the Company and its shareholders well. |
• |
a shareholder proposal requesting a report
to shareholders on the effectiveness of the Company’s diversity, equity, and inclusion efforts. As noted in further
detail in “Proposal 5 – Shareholder Proposal – Company’s Statement in Opposition,” Danaher has
demonstrated that diversity, equity and inclusion (“DE+I”) is a strategic priority with active support from the
Board and executive management; has set ambitious DE+I improvement goals and made meaningful progress toward achieving those
goals; and has been highly transparent in quantifying the performance of its DE+I program. After considering the foregoing
as well as the voting results for this proposal and the feedback investors have provided on Danaher’s DE+I program,
Danaher determined that the proponent’s request would be inefficient and costly without adding significant value to
our shareholders. |
Key Policies Aligning Company and Shareholder Interests
• |
Director and Executive Officer Stock Ownership Requirements. Our Board has adopted
stock ownership requirements for non-management directors. Under the requirements, each non-management director (within five
years of their initial election or appointment) is required to beneficially own Danaher shares with a market value of at least
five times their annual cash retainer (excluding the additional cash retainers paid to the committee chairs and the Lead Independent
Director). Once a director has acquired a number of shares that satisfies such ownership multiple, such number of shares then
becomes such director’s minimum ownership requirement (even if their retainer increases or the fair market value of
such shares subsequently declines). Under the policy, beneficial ownership includes time-vesting
restricted stock units (“RSUs”) held by the director, shares in which the director or their spouse or child has
a direct or indirect interest and phantom shares of Danaher Common Stock in the Non-Employee Directors’ Deferred Compensation
Plan, but does not include shares subject to unexercised stock options or pledged shares. Each Danaher director is in compliance
with the policy. We have also adopted stock ownership requirements for our executive officers; please see “Compensation
Discussion and Analysis – Stock Ownership-Related Policies.” |
• |
Clawback Policies. We have rigorous, “no-fault” compensation clawback
policies that apply to executive officers and other senior leaders. For additional details, please see “Compensation
Discussion and Analysis—Clawback Policies.” |
• |
Anti-Pledging/Hedging Policy. In 2013 Danaher’s Board adopted a policy that
prohibits any director or executive officer from pledging as security under any obligation any shares of Danaher Common Stock
that the director or officer directly or indirectly owns and controls, except for any shares that were pledged as of the date
the policy was adopted. Certain shares of Common Stock owned by Steven Rales and by Mitchell Rales were exempted from the
policy because such shares had been pledged for decades, to secure lines of credit that reduce the need to sell shares for
liquidity purposes. Messrs. Steven and Mitchell Rales |
2024
Notice of Annual Meeting and Proxy Statement |
31 |
|
acquired these pledged shares in cash purchase
transactions between 1983 and 1988 and did not receive them as compensation or purchase them from Danaher. These pledged shares
do not count toward the Company’s stock ownership requirements. |
Notwithstanding that these shares are exempted from
Danaher’s policy, as part of its risk oversight function the Audit Committee of Danaher’s Board reviews these share
pledges on a quarterly basis to assess whether such pledging poses an undue risk to the Company. The Committee has concluded that
such pledge arrangements do not pose an undue risk to the Company, based in particular on its consideration of the following factors:
• |
the amount by which the market value of the shares pledged as collateral exceeds the amount of secured indebtedness, which the Committee believes is a key factor in assessing the degree of risk posed by the pledging arrangements. At December 31, 2023, the maximum amount of secured indebtedness permitted under the lines of credit would not exceed 25% of the market value of the shares pledged as collateral; |
• |
the number of shares and percentage of total outstanding shares pledged; |
• |
the more than 15% reduction since 2013 in the aggregate number of shares pledged by Messrs. Steven Rales and Mitchell Rales; and |
• |
the number of days it would take to unwind the number of pledged shares equal in value to the amount of secured indebtedness outstanding at the end of the applicable calendar year (based on the average daily trading volume of Danaher common stock during such calendar year). |
|
• |
At each of December 31, 2023, 2022 and 2021,
to unwind the number of pledged shares equal in value to the amount of secured indebtedness outstanding as of such date under
lines of credit maintained by Mitchell Rales or Steven Rales would have required one day or less. |
From 2021 through 2023, members of Danaher’s
Board and management engaged regarding the pledge arrangements with shareholders representing more than 25% of Danaher’s
outstanding common shares, and at Danaher’s 2023 Annual Meeting a significant majority of these shares were voted in favor
of our Audit Committee members. During these discussions with investors, we answered questions and using the detail set forth above
explained the reasons why the Audit Committee believes it is in the best interest of Danaher and its shareholders to allow such
pledging arrangements subject to rigorous Audit Committee oversight. Additionally, we have incorporated input received from these
investor engagements into the above disclosures.
Danaher’s Insider Trading Policy also prohibits
Danaher directors and employees (including executive officers) from engaging in short sales of Danaher Common Stock, transactions
in any derivative of a Danaher security (including, but not limited to, buying or selling puts, calls or other options (except
for instruments granted under a Danaher equity compensation plan)) or any other forms of hedging transactions with respect to Danaher
securities.
• |
Shareholder
Right to Call Special Meeting. Shareholders owning 25% or more of Danaher’s outstanding shares may require the Company
to call a special meeting of shareholders. For additional information regarding Danaher shareholders’ right to call
a special meeting, please see “Proposal 4 — Shareholder Proposal — Company’s Statement in Opposition.” |
Sustainability
For an overview of Danaher’s sustainability
program, please see “Proxy Statement Summary – Sustainability.”
Corporate Governance Guidelines, Committee Charters
and Code of Conduct
As part of its ongoing commitment to good corporate
governance, our Board of Directors has codified its corporate governance practices into a set of Corporate Governance Guidelines
and has also adopted written charters for each of the committees of the Board. Danaher has also adopted a code of business conduct
and ethics for directors, officers (including our principal executive officer, principal financial officer and principal accounting
officer) and employees, known as the Code of Conduct. The Corporate Governance Guidelines, charters of each of the Audit, Compensation
and Nominating and Governance Committees and Code of Conduct are available in the “Investors – Corporate Governance”
section of our website at http://www.danaher.com.
2024
Notice of Annual Meeting and Proxy Statement |
32 |
Director Compensation
Non-Management Director Compensation Program
Non-Management Director Compensation Philosophy
We use a combination of cash and equity-based
compensation to attract and retain qualified candidates to serve on the Board. In setting director compensation, the Board and
the Nominating and Governance Committee are guided by the following principles:
• |
compensation should fairly pay directors for work required in a company of our size and scope, and differentiate among directors where appropriate to reflect different levels of responsibilities; |
• |
a significant portion of the total compensation should be paid in stock-based awards to align directors’ interests with the long-term interests of our shareholders; and |
• |
the structure of the compensation program should be simple and transparent. |
Process for Setting Non-Management Director Compensation
The Nominating and Governance Committee is responsible
for reviewing and making recommendations to the Board regarding non-management director compensation (although the Board makes
the final determination regarding the amounts and type of non-management director compensation). The Committee engages FW Cook,
the Board’s independent compensation consultant, to prepare regular reports on market non-management director compensation
practices and evaluate our program in light of the results of such reports. The Committee typically reviews, and seeks advice from
FW Cook regarding, the Company’s non-management director compensation on an annual basis.
Danaher’s 2007 Omnibus Incentive Plan (the “Plan”
or the “Omnibus Plan”) limits the amount of cash and equity compensation that we may pay to a non-management director
each year. Under the plan terms, an annual limit of $800,000 per calendar year applies to the sum of all cash and equity-based
awards (calculated based on the grant date fair value of such awards for financial reporting purposes) granted to each non-management
director for services as a member of the Board (plus an additional limit of $500,000 per calendar year with respect to any non-executive
Board chair or vice chair).
2024 Non-Management Director Compensation Structure
Director cash retainers are paid quarterly in arrears.
Director annual equity awards are divided equally (based on target award value) between options and RSUs. The options are fully
vested as of the grant date. The RSUs vest upon the earlier of (1) the first anniversary of the grant date, or (2) the date of,
and immediately prior to, the next annual meeting of Danaher’s shareholders following the grant date, but the underlying
shares are not issued until the earlier of the director’s death or the first day of the seventh month following the director’s
retirement from the Board. Danaher also reimburses directors for Danaher-related out-of-pocket expenses, including travel expenses.
2024
Notice of Annual Meeting and Proxy Statement |
33 |
Non-Management Directors’ Deferred Compensation
Plan
Each non-management director can elect to defer all
or part of the cash director fees that the director earns with respect to a particular year under the Non-Employee Directors’
Deferred Compensation Plan, which is a sub-plan under the Omnibus Plan. Amounts deferred under the plan are converted into a particular
number of phantom shares of Danaher Common Stock, calculated based on the closing price of Danaher’s Common Stock on the
date that such quarterly fees would otherwise have been paid, and are maintained in bookkeeping accounts. Dividends accrued on
phantom shares are also deemed invested in phantom shares of Danaher Common Stock. A director may elect to have their plan balance
distributed upon cessation of Board service, or one, two, three, four or five years after cessation of Board service. All distributions
from the plan are in the form of shares of Danaher Common Stock.
Director Summary Compensation Table
The table below summarizes the compensation
paid by Danaher to the non-management directors for the year ended December 31, 2023. Each of Steven Rales, Mitchell Rales
and Rainer M. Blair serves as a director and executive officer of Danaher but they have not received and do not receive any
additional compensation for services provided as a director. Neither Steven Rales nor Mitchell Rales is a named executive
officer. Details regarding the 2023 executive compensation provided to each of Steven Rales and Mitchell Rales is set forth
under “Director Independence and Related Person Transactions.”
Name |
|
Fees Earned or
Paid in Cash
($) |
|
Stock
Awards
($)(1) (2) |
|
Option
Awards
($)(1) (2) |
|
Total
($) |
Feroz Dewan(3) |
|
— |
|
221,730 |
|
96,403 |
|
318,133 |
Linda Filler |
|
189,000 |
|
96,730 |
|
96,403 |
|
382,133 |
Teri List |
|
125,000 |
|
96,730 |
|
96,403 |
|
318,133 |
Walter G. Lohr, Jr. |
|
135,000 |
|
96,730 |
|
96,403 |
|
328,133 |
Jessica L. Mega, MD, MPH |
|
125,000 |
|
96,730 |
|
96,403 |
|
318,133 |
Pardis C. Sabeti, MD, D. Phil.(3) |
|
— |
|
221,730 |
|
96,403 |
|
318,133 |
A. Shane Sanders(3) |
|
— |
|
223,730 |
|
96,403 |
|
320,133 |
John T. Schwieters |
|
158,000 |
|
96,730 |
|
96,403 |
|
351,133 |
Alan G. Spoon(3) |
|
— |
|
241,730 |
|
96,403 |
|
338,133 |
Raymond C. Stevens, Ph.D.(3) |
|
— |
|
221,730 |
|
96,403 |
|
318,133 |
Elias A. Zerhouni, MD(3) |
|
— |
|
241,730 |
|
96,403 |
|
338,133 |
(1) |
The amounts reflected in these columns
represent the aggregate grant date fair value of the applicable award computed in accordance with FASB ASC Topic 718. With
respect to stock awards, the grant date fair value under FASB ASC Topic 718 is calculated based on the number of shares of
Common Stock underlying the award, times the closing price of the Danaher Common Stock on the date of grant (but discounted
to account for the fact that RSUs do not accrue dividend rights prior to distribution). With respect to stock options, the
grant date fair value under FASB ASC Topic 718 has been calculated using the Black-Scholes option pricing model, based on
the following assumptions (and assuming no forfeitures): a 7.0 year option life; a risk-free interest rate of 3.48%; a stock
price volatility rate of 28.36%; and a dividend yield of 0.48% per share. |
2024
Notice of Annual Meeting and Proxy Statement |
34 |
(2) |
The table below sets
forth as to each non-management director the aggregate number of unvested RSUs and aggregate number of stock options outstanding
as of December 31, 2023. All of the stock options set forth in the table below are fully vested. The RSUs set forth in the
table below vest in accordance with the terms described above. |
|
Name of Director |
|
Aggregate Number of Danaher Stock
Options Owned as of December 31, 2023
(#) |
|
Aggregate Number of Unvested Danaher
RSUs Owned as of December 31, 2023
(#) |
|
Feroz Dewan |
|
2,277 |
|
485 |
|
Linda Filler |
|
22,239 |
|
485 |
|
Teri List |
|
25,528 |
|
485 |
|
Walter G. Lohr, Jr. |
|
25,528 |
|
485 |
|
Jessica L. Mega, MD, MPH |
|
6,750 |
|
485 |
|
Pardis C. Sabeti, MD, D. Phil. |
|
6,750 |
|
485 |
|
A. Shane Sanders |
|
3,757 |
|
485 |
|
John T. Schwieters |
|
25,528 |
|
485 |
|
Alan G. Spoon |
|
25,528 |
|
485 |
|
Raymond C. Stevens, Ph.D. |
|
5,546 |
|
485 |
|
Elias A. Zerhouni, MD. |
|
25,528 |
|
485 |
(3) |
Each of Messrs. Dewan, Sanders and
Spoon, Professor Stevens and Drs. Zerhouni and Sabeti deferred 100% of their 2023 cash director fees into phantom shares of
Danaher Common Stock under the Non-Employee Directors’ Deferred Compensation Plan. Since these phantom shares are accounted
for under FASB ASC Topic 718, they are reported under the “Stock Awards” column in the table above. |
|
Name of Director |
2023 Phantom Shares Received
Under
Deferred Compensation Plan
(#) |
|
Feroz Dewan |
553 |
|
Pardis C. Sabeti, MD, D. Phil. |
553 |
|
A. Shane Sanders |
561 |
|
Alan G. Spoon |
641 |
|
Raymond C. Stevens, Ph.D. |
553 |
|
Elias A. Zerhouni, MD. |
641 |
2024 Notice of Annual Meeting and Proxy Statement |
35 |
Director Independence and Related Person Transactions
Director Independence
At least a majority of the Board must qualify as independent
within the meaning of the listing standards of the NYSE. The Board has affirmatively determined that Mss. Filler and List, Messrs.
Dewan, Lohr, Sanders, Schwieters and Spoon, Professor Stevens and Drs. Mega and Zerhouni are independent within the meaning of
the listing standards of the NYSE. The Board concluded that none of these directors possesses any of the bright-line relationships
set forth in the listing standards of the NYSE that prevent independence, or except as discussed below, any other relationship
with Danaher other than Board membership.
In making its determination with respect to the independence
of the directors identified above as independent, the Board considered that in 2023, certain of the Company’s subsidiaries
sold products and/or services to and purchased products and/or services from organizations with whom certain of the independent
directors (or a member of their immediate family) are or were employed. In each such case, the amount of sales and the amount of
purchases were less than 1.5% of the annual revenues of such other organization and of Danaher’s 2023 revenues. The Board
also considered that all of the transactions referenced in the prior sentence were conducted in the ordinary course of business.
Danaher’s non-management directors meet in executive
session following the Board’s regularly-scheduled meetings. The sessions are chaired by the Lead Independent Director. In
addition, at least once each year Danaher’s independent directors meet in executive session following a regularly-scheduled
Board meeting, and the Lead Independent Director chairs such sessions as well.
Certain Relationships and Related Transactions
Policy
Under Danaher’s written Related Person Transactions
Policy, the Nominating and Governance Committee of the Board is required to review and if appropriate approve all related person
transactions prior to consummation. The Committee is required to review and consider all relevant information available to it about
each related person transaction, and a transaction is considered approved under the policy if the Committee authorizes it according
to the terms of the policy after full disclosure of the related person’s interests in the transaction. Related person transactions
of an ongoing nature are reviewed annually by the Committee. The definition of “related person transactions” for purposes
of the policy covers the transactions that are required to be disclosed under Item 404(a) of Regulation S-K under the Exchange
Act.
Relationships and Transactions
Steven and Mitchell Rales receive no cash incentive
compensation or equity awards for their service as executive officers. In 2023, each of Steven and Mitchell Rales received a salary
of $419,000 and was entitled to participate in all of the benefits made generally available to salaried employees as well as all
perquisites made generally available to Danaher’s executive officers. Steven Rales also received a 401(k) plan contribution
of $22,960 and Mitchell Rales received a 401(k) plan contribution of $3,771 and a contribution of $18,806 into his Excess Contribution
Program (“ECP”) account. In 2023, Danaher provided to the Rales’ tax and accounting services at a cost to Danaher
of approximately $340,425 in the form of one full-time employee (plus health and welfare benefits for such employee), allowed the
Rales’ to make personal use of designated Danaher office space at a cost to Danaher of approximately $306,732 and provided
Mr. Steven Rales with a personal car and parking at a cost to Danaher of approximately $3,985. The incremental cost to the Company
of the perquisites set forth above is based on the Company’s out-of-pocket costs. Danaher also provided a full-time executive
assistant to each of the Rales’ to support them in their roles as Danaher executive officers. In each case, their use of
a minority of their assistant’s time for non-Danaher matters resulted in no incremental cost to Danaher. Separately, in 2023,
Steven and Mitchell Rales in aggregate paid Danaher approximately $215,000 for providing benefits for, and as reimbursement for
paying a portion of the salaries of, persons who provide services to the Rales’.
2024 Notice of Annual Meeting and Proxy Statement |
36 |
FJ 900, Inc. (“FJ900”), an indirect, wholly-owned
subsidiary of Danaher, is party to an airplane management agreement with Joust Capital II, LLC (“Joust II”) and substantially
identical agreements with each of Joust Capital III, LLC (“Joust III”) and Stonehavens Global LLC (“Stonehavens”
and, together with the Joust II and Joust III, the “Joust entities”). Joust II and Stonehavens are controlled by Mitchell
Rales, and Joust III is controlled by Steven Rales. Under the management agreements, FJ900 performs management services for the
respective aircraft owned or leased by each of the Joust entities in like manner to the management services provided by FJ900 for
Danaher’s aircraft. The management services provided by FJ900 include the provision of aircraft management, pilot services,
maintenance, record-keeping, aircraft procurement and disposition and other aviation services. FJ900 receives no compensation for
its services under the management agreements. Having FJ900 perform management services for all of these aircraft enables Danaher
and the Joust entities to share certain fixed expenses relating to the use, maintenance, storage, operation and supervision of
their respective aircraft and utilize joint purchasing or joint bargaining arrangements where applicable and appropriate, allowing
each party to benefit from efficiencies of scale and cost savings. We believe that this cost-sharing arrangement results in lower
costs to Danaher than if we incurred these fixed costs on a stand-alone basis. Under the management agreements, FJ900 prorates
all shared expenses annually among the Joust entities and Danaher based primarily on each party’s flight hours logged for
the year. The Joust entities pre-pay FJ900 on a quarterly basis for their estimated, prorated portion of such shared expenses,
and the amounts are trued up at the end of the year. With respect to the year ended December 31, 2023, the Joust entities together
paid FJ900 approximately $4.2 million for the Joust entities’ share of the fixed airplane management expenses shared with
Danaher. Each Joust entity pays directly all expenses attributable to its aircraft that are not shared. Under the management agreements,
each party is also required to maintain a prescribed amount of comprehensive aviation liability insurance and name the other party
and its affiliates as additional named insureds, while the Joust entities must also maintain all-risk hull insurance for their
aircraft. If either party suffers any losses in connection with the arrangements set forth in the management agreement, and such
losses are due to the fault, negligence, breach or strict liability of the other party, the sole recourse of the party incurring
the loss against the other party is to the available insurance proceeds. Each management agreement may be terminated by any party
upon 30 days’ notice.
In addition, Danaher is party to substantially identical
airplane interchange agreements with each of the Joust entities with respect to each respective aircraft indirectly owned by Danaher
and by each of the Joust entities. Under each interchange agreement, the applicable Joust entity has agreed to lease its aircraft
to Danaher and Danaher has agreed to lease the respective Danaher aircraft to the applicable Joust entity, in each case on a non-exclusive
basis. Neither party is charged for its use of the other party’s aircraft, the intent being that over the life of the contract
each party’s usage of the other party’s aircraft will be generally equal. With respect to the year ended December 31,
2023, the incremental value of the use of the Joust entities’ aircraft by Danaher, net of the incremental value of the use
of the Danaher aircraft by the Joust entities, was approximately $130,000. The owner of each aircraft, as operator of the aircraft,
is responsible for providing a flight crew for all flights operated under the interchange agreement. Each owner/operator is required
to maintain standard insurance, including all-risk hull insurance and a prescribed amount of comprehensive aviation liability insurance,
and to name the other party and its affiliates as additional named insureds. With respect to any losses suffered by the party using
the owner/operator’s plane, the using party’s recourse against the owner/operator is limited to the amount of available
insurance proceeds. To the extent the using party and/or any third party suffers losses in connection with the using party’s
use of the owner/operator’s aircraft in an amount in excess of the insurance proceeds recovered from the owner/operator’s
insurance carrier, the using party will indemnify the owner/operator for all such excess amounts. The interchange agreements may
be terminated by either party upon 10 days’ notice.
Danaher licensed, at fair market value, a suite from
the Washington Commanders for the 2023-2024 NFL football season for approximately $560,000. Mitchell Rales is a greater-than-10%
owner of the Washington Commanders.
On September 29, 2023, we completed the Veralto Spin-Off.
Following the Veralto Spin-Off, Danaher and Veralto operate as separate publicly-traded companies and neither entity has any ownership
interest in the other. However, in 2023 subsequent to the Spin-Off Steven and Mitchell Rales collectively owned more than 10% of
the equity of Veralto. In connection with the Veralto Spin-Off, Danaher and Veralto entered into various agreements to effect the
transaction and provide a framework for their relationship after the transaction, including a transition services agreement, an
employee matters agreement, a tax matters agreement, an intellectual property matters agreement and a license agreement with respect
to the Danaher Business System, or DBS (a proprietary set of business processes and methodologies we use that are designed to continuously
improve business performance). These agreements provide for the allocation between Danaher and Veralto of assets, employees, liabilities
and obligations (including investments, property and employee benefits and tax-related assets and liabilities) attributable to
periods prior to, at and after Veralto’s spin-off from Danaher and govern certain relationships between Danaher and Veralto
after the Veralto Spin-Off. In addition, following the Veralto Spin-Off certain of our subsidiaries sell products and services
to Veralto from time to
2024
Notice of Annual Meeting and Proxy Statement |
37 |
time in the ordinary course of business. Following
the Veralto Spin-Off in 2023 through February 23, 2024, Danaher received approximately $26.8 million in payments from Veralto for
transition services provided to Veralto and paid approximately $80,000 to Veralto for transition services received from Veralto;
and following the Spin-Off in 2023 our subsidiaries sold approximately $735,000 of products and services to Veralto, which is less
than 1% of Veralto’s, and of Danaher’s, revenues for 2023. In addition, there is an outstanding receivable owed from
Veralto to Danaher in the amount of approximately $5.1 million for transition services provided by Danaher. Our subsidiaries intend
to sell products to and purchase products from Veralto in the future in the ordinary course of their businesses and on an arms’-length
basis.
2024
Notice of Annual Meeting and Proxy Statement |
38 |
Beneficial Ownership of Danaher Common Stock by Directors, Officers
and Principal Shareholders
The following table sets forth as of March 1, 2024
(unless otherwise indicated) the number of shares and percentage of Danaher Common Stock beneficially owned by (1) each person
who owns of record or is known to Danaher to beneficially own more than five percent of Danaher’s Common Stock, (2) each
of Danaher’s directors and named executive officers, and (3) all executive officers and directors of Danaher as a group.
Name | |
Number
of Shares
Beneficially Owned(1) | |
Percent of
Class(1) | |
Notes |
Rainer M.
Blair | |
342,626 | |
* | |
Includes options to acquire 270,560
shares and 14,284 shares attributable to his account in the Company’s deferred compensation program. |
Feroz
Dewan | |
3,142 | |
* | |
Includes
options to acquire 2,277 shares and 865 phantom shares attributable to his account under the Non-Employee Directors’ Deferred
Compensation Plan. |
Linda Filler | |
48,851 | |
* | |
Includes options to acquire 22,239 shares and
8,823 phantom shares attributable to her account under the Non-Employee Directors’ Deferred Compensation Plan. |
Teri
List | |
29,802 | |
* | |
Includes
options to acquire 22,239 shares and 7,563 phantom shares attributable to her account under the Non-Employee Directors’ Deferred
Compensation Plan. |
Walter G. Lohr, Jr. | |
449,989 | |
* | |
Includes options to acquire 22,239 shares, 36,750
shares held by a charitable foundation of which Mr. Lohr is president and 391,000 other shares held indirectly. Mr. Lohr disclaims
beneficial ownership of the shares held by the charitable foundation. |
Jessica L. Mega, MD, MPH | |
6,750 | |
* | |
Consists of options to acquire 6,750 shares. |
Mitchell P. Rales | |
35,135,714 | |
4.7% | |
Includes 25,671,000 shares owned by limited liability
companies of which a revocable trust controlled by Mr. Rales is the sole member, 356 shares attributable to Mr. Rales’ 401(k)
Plan account, 6,411 shares attributable to Mr. Rales’ account in the Company’s deferred compensation program, 6,947,937
shares attributable to a charitable foundation of which Mr. Rales is a director, and 2,510,010 other shares owned indirectly. Mr.
Rales disclaims beneficial ownership of those shares held by the charitable foundation. 26,521,000 of the shares held by the limited
liability companies or otherwise owned indirectly and 5,904,000 of the shares held by the charitable foundation are pledged to secure
lines of credit with certain banks and each of these entities and Mr. Rales is in compliance with these lines of credit. The business
address of Mitchell Rales, and of each of the limited liability companies, is 11790 Glen Rd., Potomac, MD 20854. |
Steven M. Rales | |
43,489,579 | |
5.9% | |
Includes 31,000,000 shares owned by limited
liability companies of which a revocable trust controlled by Mr. Rales is the sole member, 19,965 shares attributable to Mr.
Rales’ 401(k) Plan account, 6,429,437 shares attributable to a charitable foundation of which Mr. Rales is the director, and
6,040,177 other shares owned indirectly. Mr. Rales disclaims beneficial ownership of those shares held by the charitable foundation.
The shares held by the limited liability companies and 3,000,000 of the shares held by the charitable foundation are pledged to
secure lines of credit with certain banks and each of these entities and Mr. Rales is in compliance with these lines of credit. The
business address of Steven Rales, and of each of the limited liability companies, is 2200 Pennsylvania Avenue, N.W., Suite 800W,
Washington, D.C. 20037-1701. |
Pardis C. Sabeti, MD,
D.Phil | |
9,178 | |
* | |
Consists of options to acquire 6,750 shares and
2,429 phantom shares attributable to her account under the Non-Employee Directors’ Deferred Compensation Plan. |
A. Shane Sanders | |
5,193 | |
* | |
Consists of options to acquire 3,757 shares and
1,437 phantom shares attributable to his account under the Non-Employee Directors’ Deferred Compensation Plan. |
John T. Schwieters | |
61,187 | |
* | |
Includes options to acquire 25,528 shares and
33,659 other shares held indirectly. |
2024
Notice of Annual Meeting and Proxy Statement |
39 |
Name | |
Number
of Shares Beneficially Owned(1) | |
Percent of
Class(1) | |
Notes |
Alan G. Spoon | |
104,514 | |
* | |
Includes options to acquire 25,528 shares and 8,700 other shares
owned indirectly. |
Raymond C. Stevens, Ph.D. | |
11,394 | |
* | |
Includes options to acquire 5,546 shares and 5,849 phantom shares attributable
to his account under the Non-Employee Directors’ Deferred Compensation Plan. |
Elias A. Zerhouni, MD | |
35,836 | |
* | |
Includes options to acquire 25,528 shares and 7,500 other shares held indirectly. |
Matthew R. McGrew | |
201,869 | |
* | |
Includes options to acquire 169,819 shares, 2,058 shares attributable to his
account in the Company’s deferred compensation program and 8,789 shares attributable to his 401(k) account. |
Joakim Weidemanis | |
380,369 | |
* | |
Includes options to acquire 321,015 shares and 21,407 shares attributable to
his account in the Company’s deferred compensation program. |
Georgeann Couchara | |
29,750 | |
* | |
Includes options to acquire 28,077 shares and 1,062 shares attributable to her
account in the Company’s deferred compensation program |
Jose-Carlos Gutierrez-Ramos | |
11,583 | |
* | |
Includes options to acquire 8,001 shares and 931 shares attributable to his account
in the Company’s deferred compensation program. |
The Vanguard Group | |
55,935,935 | |
7.6% | |
Derived from a Schedule 13G filed February 13, 2024 by The Vanguard Group, which
sets forth their beneficial ownership as of December 31, 2023. According to the Schedule 13G, The Vanguard Group has shared
voting power over 836,503 shares, sole dispositive power over 53,131,279 shares and shared dispositive power over 2,804,656
shares. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. |
BlackRock, Inc. | |
50,771,463 | |
6.9% | |
Derived from a Schedule 13G filed January 26, 2024 by BlackRock, Inc., which
sets forth their beneficial ownership as of December 31, 2023. According to the Schedule 13G, BlackRock has sole voting power
over 45,891,457 shares and sole dispositive power over 50,771,463 shares. The address of BlackRock, Inc. is 50 Hudson Yards,
New York, New York 10001. |
All current executive officers and directors as a group (22 persons) | |
80,977,329 | |
10.9% | |
Includes options to acquire 1,443,377 shares, 29,122 shares attributable to executive
officers’ 401(k) accounts, 120,529 shares attributable to executive officers’ accounts in the Company’s
deferred compensation program and 26,101 phantom shares attributable to directors’ accounts under the Non-Employee Directors’
Deferred Compensation Plan. |
(1) |
Except as otherwise indicated and subject to community property
laws where applicable, each person or entity included in the table above has sole voting and investment power with respect
to the shares beneficially owned by that person or entity. |
* |
Represents less than 1% of the outstanding Danaher Common Stock. |
2024
Notice of Annual Meeting and Proxy Statement |
40 |
PROPOSAL 2
Ratification of Independent Registered Public Accounting Firm
The Audit Committee on behalf of Danaher has selected
Ernst & Young LLP, an international accounting firm of independent certified public accountants, to act as the independent
registered public accounting firm for Danaher and its consolidated subsidiaries for the year ending December 31, 2024. Representatives
of Ernst & Young LLP are expected to be present at the Annual Meeting, will have the opportunity to make a statement if
they desire to do so and will be available to respond to appropriate questions. Although shareholder approval of the selection
of Ernst & Young LLP is not required by law, Danaher’s Board believes that it is advisable to give shareholders
an opportunity to ratify this selection. If this proposal is not approved by Danaher’s shareholders at the 2024 Annual Meeting,
the Audit Committee will reconsider its selection of Ernst & Young LLP. Even if the selection of Ernst & Young
LLP is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at
any time during the year if it determines that such a change would be in the best interests of Danaher and its shareholders.
|
THE
BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR
RATIFICATION OF THE SELECTION
OF ERNST & YOUNG LLP TO SERVE AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR DANAHER FOR 2024. |
|
Audit Fees and All Other Fees
The following table sets forth the fees for audit,
audit-related, tax and other services rendered by Ernst & Young LLP to Danaher for 2023 and 2022.
|
|
Twelve Months Ended
December 31, 2023
($) |
|
Twelve Months Ended
December 31, 2022
($) |
Audit Fees. Fees for the audit of annual financial
statements and internal control over financial reporting, reviews of quarterly financial statements, and the services that
an independent auditor would customarily provide in connection with subsidiary audits, statutory requirements, regulatory
filings and similar engagements, such as comfort letters, attest services, consents, and assistance with review of documents
filed with the SEC. Audit fees also include advice about accounting matters that arose in connection with or as a result of
the annual audit or the review of quarterly financial statements and statutory audits that non-U.S. jurisdictions
require. |
|
22,872,502 |
|
23,328,284 |
Audit-Related Fees. Fees for assurance and related
services reasonably related to the performance of the audit or review of financial statements and internal control over financial
reporting that are not reported under “Audit Fees” above. This category may include fees related to the performance
of audits and attest services not required by statute or regulations; audits of our employee benefit plans; due diligence
related to mergers, acquisitions, and investments; accounting consultations about the application of GAAP to proposed transactions;
and includes audit and audit related services in connection with the Veralto Spin-Off. |
|
3,038,040 |
|
5,298,930 |
Tax Fees. Fees for professional services related
to tax compliance and return preparation, tax advice and tax planning.(1) |
|
6,069,836 |
|
7,141,691 |
All Other Fees. Fees for products and services
other than as reported under “Audit Fees,” “Audit-Related Fees” or “Tax Fees” above. |
|
— |
|
— |
2024
Notice of Annual Meeting and Proxy Statement |
41 |
(1) | The nature of the services comprising
the fees disclosed under “Tax Fees” is as follows: |
|
|
Twelve
Months Ended
December 31, 2023
($) |
|
Twelve
Months Ended
December 31, 2022
($) |
Tax Compliance.
Includes tax compliance fees for tax return review and preparation services and assistance related to tax audits by regulatory
authorities. |
|
3,305,209 |
|
4,437,661 |
Tax Consulting.
Includes tax consulting services, including assistance related to tax planning. |
|
2,764,627 |
|
2,704,030 |
The Audit Committee has considered whether the services
rendered by the independent registered public accounting firm with respect to the fees described above are compatible with maintaining
such firm’s independence and has concluded that such services do not impair such firm’s independence.
|
Audit Committee Pre-Approval of Audit and Permissible
Non-Audit Services of Independent Auditors
Under its charter, the Audit Committee must pre-approve
all auditing services and permitted non-audit services to be performed for Danaher by the independent registered public accounting
firm. Each year, the Committee approves the independent registered public accounting firm’s retention to audit Danaher’s
financial statements and internal control over financial reporting before the filing of the preceding year’s annual report
on Form 10-K. The Committee also establishes detailed pre-approved categories of non-audit services that may
be performed by the independent auditor during the year, subject to certain monetary limits. With respect to additional non-audit services
by the independent auditors that either are not covered by the pre-approved categories, or exceed the pre-approved monetary
limits, the Committee approves or rejects each engagement. In each case, the Committee takes into account whether the services
are permissible under applicable law and the possible impact of each non-audit service on the independent registered public accounting
firm’s independence from management. The Committee may delegate to a subcommittee of one or more members the authority to
grant preapprovals of audit and permitted non-audit services, and the decisions of such subcommittee to grant preapprovals must
be presented to the full Committee at its next scheduled meeting. The Committee has not made any such delegation as of the
date of this Proxy Statement.
Audit Committee Report
This report is not deemed to be “soliciting material”
or to be “filed” with the SEC or subject to the SEC’s proxy rules or to the liabilities of Section 18 of the Exchange
Act of 1934, and shall not be deemed to be incorporated by reference into any prior or subsequent filing by Danaher under the Securities
Act of 1933 or the Exchange Act of 1934, except to the extent Danaher specifically incorporates this report by reference therein.
The Audit Committee assists the Board in overseeing
the quality and integrity of Danaher’s financial statements, the effectiveness of Danaher’s internal control over financial
reporting, the qualifications, independence and performance of Danaher’s independent registered public accounting firm, the
performance of Danaher’s internal audit function, Danaher’s compliance with legal and regulatory requirements, Danaher’s
major financial risk exposures, significant legal, compliance, reputational, climate, cybersecurity and privacy risks and overall
risk assessment and risk management policies, and Danaher’s swaps and derivatives transactions and related policies and procedures.
The Audit Committee is directly responsible for the
appointment, compensation and oversight of the independent registered public accounting firm retained to audit Danaher’s
financial statements and has appointed Ernst & Young LLP as Danaher’s independent registered public accounting firm for
2024. The Audit Committee evaluates Ernst & Young’s performance at least annually. In evaluating Ernst & Young and
determining whether to reappoint the firm as Danaher’s independent registered public accounting firm, the Audit Committee
took into consideration a number of factors, including the firm’s tenure, independence, global capability and expertise and
performance. Ernst & Young has been retained as Danaher’s independent registered public accounting firm continuously
since 2002. The Audit Committee periodically considers the advisability and impact of rotating our independent registered public
accountants. In conjunction with the mandated rotation of Ernst & Young’s lead engagement
2024
Notice of Annual Meeting and Proxy Statement |
42 |
partner every five years, the Audit Committee (including
its chair) are directly involved in the selection of Ernst & Young’s new lead engagement partner. The Audit Committee
is also responsible for the audit fee negotiations associated with Danaher’s retention of Ernst & Young. Danaher’s
Board of Directors and Audit Committee believe they have undertaken appropriate steps with respect to oversight of Ernst &
Young’s independence and that the continued retention of Ernst & Young to serve as Danaher’s independent registered
public accounting firm is in the best interests of Danaher and its shareholders.
In fulfilling its responsibilities, the Audit Committee
has reviewed and discussed with Danaher’s management and Ernst & Young Danaher’s audited consolidated financial
statements and internal control over financial reporting.
The Audit Committee has discussed with Ernst &
Young those matters required to be discussed under the applicable requirements of the Public Company Accounting Oversight Board
(“PCAOB”) and the SEC. In addition, the Audit Committee has received the written disclosures and the letter from Ernst
& Young required by the PCAOB regarding the independent registered public accounting firm’s communications with the Audit
Committee concerning independence, and has discussed with Ernst & Young its independence. The Audit Committee has concluded
that Ernst & Young’s provision of non-audit services as described in the table above is compatible with Ernst & Young’s
independence.
Based on the reviews and discussions referred to above,
the Audit Committee recommended to the Board that the audited consolidated financial statements for Danaher for the fiscal year
ended December 31, 2023 be included in Danaher’s Annual Report on Form 10-K for the year ended December 31, 2023 for filing
with the SEC.
Audit Committee of the Board of Directors
John T. Schwieters (Chair)
Teri List
A. Shane Sanders
Raymond C. Stevens, PhD
2024
Notice of Annual Meeting and Proxy Statement |
43 |
Compensation Discussion and Analysis
The following section discusses and analyzes the compensation
provided to each of the executive officers set forth in the summary compensation table below, also referred to as the named executive
officers, or neos. The content of this compensation discussion and analysis is organized into six sections:
Executive Summary
Overview
In 2023, Danaher achieved critical milestones in its
transformation into a global life sciences and diagnostics innovator:
• |
We spun-off our Veralto business (consisting of Danaher’s former water quality and product identification businesses) into an independent, publicly-traded company, further sharpening our strategic focus on life sciences and diagnostics. |
• |
We acquired Abcam plc, a leading global supplier of protein consumables, for a cash purchase price of approximately $5.6 billion. Abcam is now included in our Life Sciences segment. |
Even while meaningfully advancing
our strategic transformation, we:
• |
Continued to invest aggressively in future growth, including investments of approximately $1.5 billion in research and development and $1.4 billion in capital expenditures. |
• |
Returned approximately $778 million to common shareholders through cash dividends (marking the 31st year in a row Danaher has paid a dividend on its common shares). |
• |
Generated $23.9 billion in sales, $5.2 billion in operating profit and $6.5 billion in operating cash flow. |
For a further discussion of Danaher’s business
performance in 2023 and over the long term, please see “Proxy Statement Summary – Business Highlights.”
Executive Compensation Program Objectives
With the goal of building long-term value
for our shareholders, we maintain an executive compensation program designed to:
• |
attract and retain executives with the leadership skills, attributes and experience necessary to succeed
in an enterprise with Danaher’s size, diversity and global footprint; |
• |
motivate executives to demonstrate exceptional personal performance and perform consistently at or above
the levels that we expect, over the long-term and through a range of economic cycles; and |
• |
link compensation to the achievement of goals and objectives that we believe best correlate with the creation
of long-term shareholder value, including financial and strategic as well as sustainability-related objectives. |
2024
Notice of Annual Meeting and Proxy Statement |
44 |
To achieve these objectives our compensation program
combines annual and long-term components, cash and equity, and fixed and variable elements, with a bias toward long-term equity
awards tied closely to shareholder returns and subject to significant vesting and/or holding periods. Our executive compensation
program rewards our executive officers when they help increase long-term shareholder value, achieve annual business goals and build
long-term careers with Danaher.
The science and technology markets in which we operate
are competitive, with demand sometimes exceeding the supply of talent, resulting in significant increases in compensation paid
by the companies with whom we compete for this talent. The same conditions exist in the market for executive-level talent that
can provide innovative leadership while managing at a global scale across multiple complex businesses. These trends require us
to regularly and proactively assess our executive compensation program to ensure it remains competitive in light of market conditions.
Key Recent Changes to Executive Compensation Program
Danaher’s Compensation Committee regularly reviews
our executive compensation program with a view toward continuous improvement and consideration of investor feedback. As a result
of these regular reviews, in recent years, the Committee has made several enhancements to the program to reinforce the already-strong
linkages (1) between pay and performance, (2) between the interests of our shareholders and the interests of our executive officers,
and (3) between the Company’s strategic plan and executive compensation program. These improvements have included:
• |
the adoption of an incremental, additional compensation clawback policy to complement our already-rigorous clawback policy (as discussed in further detail below); |
• |
shortening of the vesting period for stock options granted to executive officers to four years, to most effectively balance retention considerations with the traditional, long-term focus of our program; |
• |
introduction of a core revenue growth performance metric in our executive short-term incentive compensation program; and |
• |
making our executive long-term incentive compensation program entirely performance-based. |
The Committee has enhanced our executive compensation
program over the last several years to reinforce our performance-oriented culture and expects to continue to improve the program
as appropriate, but also believes that consistent use of best-practice designs is important in effectively communicating
key messages to our executives. As a result, the Committee does not revise the program to align with emerging trends unless it
sees a clear business rationale for Danaher.
2023 Say-On-Pay Vote
We provide our shareholders the opportunity to cast an annual
advisory vote with respect to our NEO compensation as disclosed in our annual proxy statement (the “say on pay proposal”).
At our annual meeting of shareholders in May 2023, 95% of the votes cast on the say on pay proposal were voted in favor of the proposal.
The Committee believes this result affirms shareholders’ support of the Company’s NEO compensation and did not make changes
to the Company’s executive compensation program as a result of such vote.
2023 Annual Executive Compensation
The chart below summarizes key information with respect
to each pay element represented in Danaher’s 2023 annual executive compensation program:
2024
Notice of Annual Meeting and Proxy Statement |
45 |
Pay
Element:
Annual Long-Term Incentive Compensation (Equity) |
|
|
Pay
Element:
Annual Cash Incentive Compensation |
Primary Objectives:
•
Attract,
retain and motivate skilled executives
•
Align
the interests of management and shareholders by ensuring that realized compensation is:
-
in
the case of stock options, commensurate with long-term changes in share price; and
-
in
the case of PSUs, tied to (1) long-term changes in share price at all performance levels, and (2) relative TSR performance and
attainment of average ROIC performance goals.
Performance Requirement:
•
4-year,
time-based vesting schedule and a 10-year term
•
Options
only have/increase in value if Danaher stock price increases
•
3-year
relative TSR (and average ROIC performance as a modifier)
•
2-year
holding period (incremental to 3-year performance period)
Key Committee Considerations in Determining
2023 Compensation:
•
This
pay element represented the most significant component of compensation for each NEO for 2023.
•
This
pay element has the heaviest weighting of all our executive compensation program elements because it best supports our retention
and motivation objectives and most directly aligns the interests of our executives with shareholders.
•
From
time to time, we also grant time-vesting RSUs to executive officers, such as for retention purposes or in connection with new hires
or promotions.
|
|
|
Primary Objectives:
•
Motivate
executives to achieve near-term operational and financial goals that support our long-term business objectives and strategic priorities
•
Attract,
retain and motivate skilled executives
•
Allow
for meaningful pay differentiation tied to annual performance of individuals and groups
Form: Cash
Performance Requirement:
Key Committee Considerations in Determining
2023 Compensation:
•
This
pay element represented the second-most significant component of compensation for each NEO for 2023. Its focus on near-term performance
and the cash nature of the award complements the longer-term, equity- based compensation elements of our program.
|
|
|
|
|
Pay
Element:
Fixed Annual Compensation |
|
|
Pay
Element:
Other Compensation |
Primary Objectives
•
Provide
sufficient fixed compensation to (1) mitigate incentive to pursue inappropriate risk-taking to maximize variable pay, and (2) allow
a reasonable standard of living relative to peers
Form: Cash
Performance Requirement:
N/A
Key Committee Considerations in Determining
2023 Compensation:
•
Base
salary should be sufficient to avoid competitive disadvantage while facilitating a sustainable fixed cost structure.
•
We
also periodically use fixed cash bonuses for recruitment and retention purposes to attract and retain high-performing executives.
|
|
|
Primary Objectives:
•
Make
our total executive compensation plan competitive
•
Improve
cost-effectiveness by delivering perceived value that exceeds our actual costs
Form:
Employee
benefit plans; limited perquisites; severance benefits
Performance Requirement:
N/A
Key Committee Considerations in Determining
2023 Compensation:
•
We
believe these elements of compensation make our total executive compensation plan competitive and are generally commensurate with
the benefits offered by our peers.
•
We
believe the limited perquisites we offer are cost-effective in that the perceived value is higher than our actual cost, and they
help to maximize the amount of time and focus that executives spend on Danaher business.
|
2024
Notice of Annual Meeting and Proxy Statement |
46 |
(1) |
Adjusted EPS, Adjusted
Free Cash Flow-to-Adjusted Net Income Ratio (which we also refer to as “Free Cash Flow Ratio”) and Core Revenue
Growth are financial measures that do not comply with generally accepted accounting principles (“GAAP”). Appendix
A to this Proxy Statement quantifies and reconciles these measures to the comparable 2023 GAAP financial measures. |
|
“Adjusted Diluted
Earnings Per Share” or “Adjusted EPS” means the Company’s “Adjusted Diluted Net Earnings Per
Common Share” from continuing operations for the fiscal year ended December 31, 2023 as reported on a Current Report
on Form 8-K furnished by the Company on January 30, 2024 (“Form 8-K”), but excluding: (1) the impact of any change
in accounting principles that occurred during the performance period and the cumulative effect thereof, to the extent such
change was not considered in establishing target performance levels (the Committee may either apply the changed accounting
principle to the performance period, or exclude the impact of the change in accounting principle from the period); and (2)(i)
all transaction and financing costs directly related to the acquisition of any whole or partial interest in a business, (ii)
all restructuring charges directly related to or arising from any business as to which the Company acquired a whole or partial
interest and incurred within two years of the acquisition date, (iii) all charges and gains arising from the resolution of
contingent liabilities identified as of the acquisition date and related to any business as to which the Company acquired
a whole or partial interest, (iv) all other charges directly related to the acquisition of any whole or partial interest in
a business and incurred within two years of the acquisition date, and (v) all gains or charges associated with the operation
of any business as to which the Company acquired a whole or partial interest on or after January 1, 2023; provided, that with
respect to the gains and charges referred to in sections (2)(iii) and (2)(iv) above, only gains or charges that individually
or as part of a series of related items exceeded $10 million during the performance period are excluded. |
|
“Core Revenue
Growth” is defined as sales from continuing operations calculated according to GAAP but excluding (1) sales from acquired
businesses; and (2) the impact of currency translation. Sales attributable to acquired businesses refers to sales from acquired
businesses recorded prior to the first anniversary of the acquisition less the amount of sales attributable to divested product
lines not considered discontinued operations. The portion of revenue attributable to currency translation is calculated as
the difference between (i) the period-to-period change in revenue (excluding sales from acquired businesses); and (ii) the
period-to-period change in revenue (excluding sales from acquired businesses) after applying current period foreign exchange
rates to the prior year period. |
|
“Adjusted Free
Cash Flow-to-Adjusted Net Income Ratio” or “Free Cash Flow Ratio” is defined as (A) the Company’s
GAAP operating cash flow from continuing operations for the year ended December 31, 2023, less 2023 purchases of property,
plant and equipment from continuing operations (net of proceeds from the sale of property, plant and equipment); but excluding
the cash flow impact of any discrete tax item in excess of $10 million or any other item that is excluded from Adjusted EPS,
divided by (B) the Company’s Adjusted Net Income. “Adjusted Net Income” means the Company’s net income
from continuing operations for the year ended December 31, 2023 as determined pursuant to GAAP, but excluding the same adjustment
items reflected in the calculation of Adjusted EPS. |
2024
Notice of Annual Meeting and Proxy Statement |
47 |
Compensation Governance
The Committee recognizes that the success of our
executive compensation program over the long-term requires a robust framework of compensation governance. As a result, the Committee
regularly reviews external executive compensation practices and trends and incorporates best practices into our executive compensation
program. Below are highlights of our 2023 executive compensation program:
|
What We Do |
|
|
What We Don’t Do |
|
|
|
|
|
|
Four-year
vesting requirement for stock options; three-year performance period plus further two-year holding period for PSUs |
|
|
No
tax gross-up provisions (except as applicable to management employees generally such as relocation policy) |
|
|
|
|
|
|
Incentive
compensation programs feature multiple, different performance measures aligned with the Company’s strategic performance
metrics |
|
|
No
dividend/dividend equivalents paid on unvested equity awards |
|
|
|
|
|
|
Short-term
and long-term performance metrics that balance our absolute performance and our relative performance versus peer companies |
|
|
No
“single trigger” change of control benefits |
|
|
|
|
|
|
Rigorous,
no-fault clawback policies that are triggered even in the absence of wrongdoing |
|
|
No
defined benefit pension program for any NEO |
|
|
|
|
|
|
Minimum
one-year vesting requirement for 95% of shares granted under the Company’s stock plan |
|
|
No
hedging of Danaher securities permitted |
|
|
|
|
|
|
Stock
ownership requirements for all executive officers |
|
|
No
long-term incentive compensation is denominated or paid in cash (other than PSU dividend accruals) |
|
|
|
|
|
|
Limited
perquisites and a cap on CEO/CFO personal aircraft usage |
|
|
No
above-market returns on deferred compensation plans |
|
|
|
|
|
|
Independent
compensation consultant that performs no other services for the Company |
|
|
No
overlapping performance metrics between short-term and long-term incentive compensation programs |
2024
Notice of Annual Meeting and Proxy Statement |
48 |
Risk Considerations
Risk-taking is a necessary part of growing a business,
and prudent risk management is necessary to deliver long-term, sustainable shareholder value. The Committee believes that the Company’s
executive compensation program supports the objectives described above without encouraging inappropriate or excessive risk-taking.
In reaching this conclusion, the Committee considered in particular the following risk-mitigation attributes of our 2023 executive
compensation program.
Attribute |
|
Key Risk Mitigating Effect |
•
Emphasis on
long-term, equity-based compensation
•
Four-year
vesting requirement for stock options, and three-year performance period plus further two-year mandatory holding period
for PSUs
•
Rigorous,
no-fault clawback policies that are triggered even in the absence of wrongdoing and were expanded in 2023
|
|
•
Discourages
risk-taking that produces short-term results at the expense of building long-term shareholder value
•
Helps
ensure executives realize their compensation over a time horizon consistent with achieving long-term shareholder value
•
Helps
deter inappropriate actions and decisions that could harm Danaher and its key stakeholders
|
•
Incentive
compensation programs feature multiple, complementary performance measures aligned
with business strategy |
|
•
Mitigates incentive to over-perform with respect to any particular metric at the expense of other metrics |
•
Cap
on annual cash incentive compensation plan payments and on number of shares that may
be earned under equity awards |
|
• Mitigates incentive to over-perform with respect to any particular performance period at the expense of future periods |
•
Stock
ownership requirements for all executive officers
•
No
hedging of Danaher securities permitted |
|
•
Aligns executives’ economic interests with the long-term interests of our shareholders |
•
Annual
cash incentive compensation awards are subject to Compensation Committee discretion |
|
•
Mitigates
risks associated with a strictly formulaic program, which could unintentionally incentivize an undue focus on certain performance
metrics or encourage imprudent risk taking
•
Provides
Compensation Committee the opportunity as appropriate to adjust awards based on how results are achieved
|
•
Independent
compensation consultant |
|
•
Helps ensure advice will not be influenced by conflicts of interest |
Analysis of 2023 Named Executive Officer Compensation
Overview
In determining the appropriate mix and amount
of compensation elements for each NEO for 2023, the Committee considered the factors referred to under “– Named Executive
Officer Compensation Framework” (without assigning any particular weight to any factor), exercised its judgment and adopted
the compensation elements described above under “Executive Summary –2023 Executive Compensation.” The graphics
below illustrate, for Mr. Blair and separately for the other NEOs in aggregate, the percentage of 2023 compensation that each element
of compensation accounted for (based on the amounts reported in the 2023 Summary Compensation Table):
Amounts may not total 100% due to rounding.
2024
Notice of Annual Meeting and Proxy Statement |
49 |
Long-Term Incentive Awards
Target Award Values
In February 2023, the Committee subjectively determined
the target dollar value of annual equity compensation to be delivered to each NEO in 2023, taking into account the following factors
(none of which was assigned a particular weight by the Committee):
• |
the relative complexity and importance of the officer’s position; |
• |
the officer’s performance record and potential to contribute to future Company performance and assume additional leadership responsibility; |
• |
the risk/reward ratio of the award amount compared to the length of the related vesting and holding provisions, including the fact that the combined vesting and holding periods applicable to our executive awards are longer than typical for our peer group; |
• |
the amount of equity compensation necessary to provide sufficient retention value and long-term performance incentives in light of (1) compensation levels within the Company’s peer group, and (2) the officer’s historical compensation; |
• |
the competitive demand for our executives; and |
• |
the lack of a defined benefit pension plan for Danaher executives, and therefore the significance of long-term incentive awards as a capital accumulation opportunity. |
In determining Mr. Blair’s annual equity
compensation in February 2023, the Committee considered in particular Mr. Blair’s effective leadership of the Company as
the COVID-19 pandemic transitioned to endemic status; the Company’s strong financial and operational performance during his
tenure; and his progress in further refining and improving the Company’s strategy planning and development processes.
Equity Award Mix
Annual Equity Awards
With respect to each of the NEO’s 2023 annual
equity awards, one-half of the target award value was delivered as stock options and one-half as PSUs. Please see “Grants
of Plan-Based Awards” table for the grant date fair value of the awards granted to each NEO.
The Committee believes that the combination of
stock options and PSUs incentivizes and rewards shareholder value creation while supporting our talent retention objectives:
• |
Stock options and PSUs inherently incentivize shareholder value creation since option holders realize no value unless our stock price rises after the option grant date and the value of PSUs is tied directly to the Company’s TSR performance relative to the S&P 500. |
• |
Our 2023 NEO stock options vest over four years and have a ten-year term and our 2023 NEO PSUs are subject to a three-year performance period and a further two-year holding period. In aggregate, these periods promote stability and encourage officers to take a long-term view of our performance. |
• |
The Committee believes our stock option award program in particular has contributed significantly to our strong performance record, which in turn has generally made our stock option awards valuable over the long-term and highly effective in recruiting, motivating and retaining highly skilled officers. |
Special Equity Awards
In 2023, in addition to their annual equity awards,
each of Dr. Gutierrez-Ramos and Ms. Couchara received a special equity grant, with the target award value split evenly between
stock options and time-vesting RSUs. Please see the “Grants of Plan-Based Awards” table for the grant date fair value
of the special equity awards granted to each of these NEOs. Since Dr. Gutierrez-Ramos and Ms. Couchara are relatively new executive
officers, the Committee intended for these additional grants to enhance the amount and retention value of their Danaher equity
stakes. In addition to the benefits of stock options highlighted above, the Committee believes the use of RSUs on a selective basis
supports the Company’s executive officer retention objectives while also reinforcing long-term shareholder value creation.
While RSUs offer more modest upside potential than stock options or PSUs, during periods of stock market declines or modest growth
they are more likely to support our talent retention objectives. In addition, RSUs inherently incentivize shareholder value creation
since their value is tied directly to our stock price at all valuation levels, and the four-year vesting period promotes stability
and encourages officers to take a long-term view of our performance.
2024
Notice of Annual Meeting and Proxy Statement |
50 |
PSU Performance Criteria
The executive officer PSUs granted in 2023 are
subject to two performance criteria:
Relative TSR
The number of shares of Common Stock that vest
pursuant to the PSU award is based primarily on the Company’s total shareholder return (TSR) ranking relative to the S&P
500 Index over an approximately three-year performance period. The Committee established threshold, target and maximum relative
TSR performance levels and developed a payout curve that requires above-median performance to earn the target opportunity and upper
quartile results to earn the maximum number of shares, as illustrated in the table below:
Performance
Level (Relative TSR Rank Within S&P 500 Index) |
Payout
Percentage |
Below 35th percentile |
0% |
35th percentile |
50% |
55th percentile |
100% |
75th percentile or above |
200% |
The payout percentages
for performance between the performance levels indicated above are determined by linear interpolation. The Committee selected the
S&P 500 Index as the relative TSR comparator group because the index consists of a broad and stable group of companies that
represents investors’ alternative capital investment opportunities, reinforcing
the linkage between our executive compensation program and the long-term interests of our shareholders.
ROIC
The Company’s three-year average ROIC performance
beginning with the year of grant, compared to the Company’s ROIC for the year immediately preceding the year of grant (the
“baseline year”), can increase or decrease the number of shares that would otherwise vest by 10% (but cannot cause
the payout percentage to exceed 200%), as illustrated in the table below:
Three-Year
Average ROIC Change(2) (Compared to Baseline Year ROIC) |
ROIC
Modifier Factor |
At or above + 200 basis points |
110% |
Below + 200 basis points and above zero basis points |
100% |
At or below zero basis points |
90% |
|
|
(2) |
“Three-Year Average ROIC Change” means (1) the quotient of (a) the Company’s Adjusted Net Income for the three-year ROIC performance period divided by three, divided by (b) the Company’s Adjusted Invested Capital for the ROIC performance period, less (2) the quotient of (x) the Company’s Adjusted Net Income for the year immediately preceding the date of grant (the “baseline year”), divided by (y) the Company’s Adjusted Invested Capital for the baseline year. “Adjusted Invested Capital” means the average of the quarter-end balances for each fiscal quarter of the ROIC performance period of (a) the sum of (i) the Company’s GAAP total stockholders’ equity and (ii) the Company’s GAAP total short-term and long-term debt; less (b) the Company’s GAAP cash and cash equivalents; but excluding in all cases the impact of (1) any business acquisition by the Company for a purchase price equal to or greater than $250 million and consummated during the ROIC performance period, (2) any business sale, divestiture or disposition by the Company during the ROIC performance period, and (3) all Company investments in marketable or non-marketable securities that are consummated during the ROIC performance period. “Adjusted Net Income” is calculated in a manner similar to the definition set forth in the preceding footnote, except that (i) only transaction costs and operating gains/charges associated with acquisitions consummated during the ROIC performance period with a purchase price equal to or greater than $250 million are excluded, (ii) gains/charges associated with discontinued operations are not excluded, and (iii) gains/charges related to Company strategic investments as well as all after-tax interest expense are excluded. |
Notwithstanding the above, if the Company’s
absolute TSR performance for the period is negative no more than 100% of the target PSUs will vest (regardless of how strong the
Company’s performance is on a relative basis), and if the Company’s absolute TSR performance for the period is positive,
a minimum of 25% of the target PSUs will vest.
2024
Notice of Annual Meeting and Proxy Statement |
51 |
Vesting and Holding Period
With respect to the PSUs granted in 2023, any
PSUs that vest following the three-year performance period are subject to an additional two-year holding period and are paid out
in shares of Company Common Stock following the fifth anniversary of the commencement of the performance period. Any dividends
paid on the Company’s Common Stock during the performance and holding periods are credited to PSU accounts, but are only
paid out (in cash) to the extent the underlying PSUs vest based on performance and are not paid until the shares underlying the
vested PSUs are issued.
PSUs Earned for 2021 – 2023 Performance Period
PSUs for the 2021 – 2023 performance period,
which ended December 31, 2023, were earned and certified in February 2024 based on an earned payout percentage of 66%, resulting
from (1) the Company’s three-year absolute TSR of 9.59% ranking at the 39th percentile relative to the TSRs of the companies
in the S&P 500 index as of the beginning of the performance period (February 24, 2021), and (2) a Three-Year Average ROIC Change
of 519 basis points. These PSUs remain subject to a further mandatory holding period that runs through 2025.
Annual Incentive Awards
Overview
The diagram below illustrates the 2023 annual
incentive award opportunities the Committee determined for the Company’s NEOs in May 2023 under the Omnibus Plan, each element
of which is further described below.
Target Bonus Percentage and Personal Payout Percentage
In May 2023, the Committee established NEO target
bonus percentages (as a multiple of base salary) and the personal performance objectives described below, including quantitative
and qualitative objectives as well as objectives based on financial and non-financial measures. The Committee did not assign a
particular weighting to any of the objectives. The Committee set the quantitative objectives at levels that, while achievable,
would in its opinion require personal performance appreciably above the executive’s prior year performance level.
2024
Notice of Annual Meeting and Proxy Statement |
52 |
Executive
Officer |
|
Target
Bonus
Percentage |
|
2023
Personal Performance Objectives |
Rainer M. Blair
President and Chief Executive Officer |
|
200% |
|
Consisted of the degree
of Danaher’s year-over-year improvement with respect to core revenue growth, operating
profit margin expansion, earnings per share and free cash flow; and qualitative goals
relating to the Veralto Spin-Off, the integration of Danaher’s Cytiva and Pall Life Sciences businesses
and other key strategic initiatives; capital allocation and deployment; senior talent recruitment,
development and succession planning; and the Company’s DE+I objectives. |
Matthew R. McGrew
Executive Vice President and
CFO |
|
125% |
|
Consisted of the degree
of Danaher’s year-over-year improvement with respect to core revenue growth, operating
profit margin expansion, earnings per share performance and free cash flow growth; and
qualitative goals relating to the Veralto Spin-Off, further strengthening engagement, talent
management, talent development and succession planning in the finance organization, the Company’s
DE+I objectives, DBS excellence with respect to finance processes, the Company’s information
technology organization, capital deployment, the Company’s sustainability positioning and
the further development of the Company’s investor base. |
Joakim Weidemanis
Executive Vice President |
|
125% |
|
Consisted of the degree
of year-over-year improvement in his business units with respect to core revenue growth,
operating profit margin expansion and working capital turnover; return-on-invested-capital
performance achieved with respect to acquisitions by his business units; quantitative
goals for his business units relating to turnover rate, internal fill rate, on-time delivery, manufacturing
quality, associate engagement, talent development and succession planning, and the Company’s
DE+I objectives; and qualitative goals relating to capital deployment, sustainability,
strategic plans and initiatives, and innovation and science capabilities, processes, and
organization. |
Georgeann Couchara
Senior Vice President, Human
Resources |
|
115% |
|
Consisted of quantitative
goals relating to internal fill rate, engagement and retention of employees; and qualitative
goals relating to talent development and succession planning, the Veralto Spin-Off, change
management capabilities, further strengthening the human resources organization and operations,
DBS excellence in the human resources function, the talent acquisition organization and
processes, capital deployment support, the Company’s DE+I objectives and the programs
and processes supporting achievement of such objectives. |
Jose-Carlos Gutierrez-Ramos
Senior Vice President and Chief
Science Officer |
|
115% |
|
Consisted of qualitative
goals relating to science and technology culture and talent development, strategic initiatives,
DBS excellence and innovation in the research and development (R&D) function, engagement
with external thought leaders, strengthening capital allocation processes and further
incorporating sustainability considerations into the Company’s R&D function; and quantitative
goals relating to capital allocation. |
Determining Target Bonus Percentage
In determining the target bonus percentage for
each NEO, the Committee considered the relative complexity and importance of the executive’s position and the amount of annual
cash incentive compensation that peer companies typically pay to executives serving in comparable roles. With respect to Mr. Blair
in particular, although the Committee did not target the performance-based portion of the CEO’s annual cash compensation
at any particular percentage of total annual cash compensation, the Committee strategically set the base salary at a level lower,
and target annual bonus opportunity at a level higher, than typical among the Company’s peer companies to help ensure that
the CEO’s annual cash compensation is meaningfully performance-based.
Determining Personal Payout Percentage
Following the end of 2023, the Committee used
its judgment and determined for each NEO a Personal Payout Percentage between 0% and 200%. The Committee believes that its ability
to exercise discretion in connection with the annual executive cash incentive compensation awards is an important element in reaching
balanced compensation decisions that are consistent with our strategy, reward both current year performance and sustained long-term
value creation, and reward achievements that advance our sustainability strategy. The Committee’s ability to exercise discretion:
• |
helps mitigate the risks associated with a rigid and strictly formulaic compensation program, which could unintentionally create incentives for our executives to focus only on certain performance metrics or encourage imprudent risk taking; |
• |
gives the Committee flexibility to address changes in economic conditions and our operating environment that occur during the performance period; and |
2024
Notice of Annual Meeting and Proxy Statement |
53 |
• |
allows the Committee to adjust compensation based on factors that would not be appropriately reflected by a strictly formulaic approach focused solely on Company performance, such as advancing sustainability-related goals, championing Danaher’s culture and values and recognition of individual performance levels. |
Without assigning any particular weight to any
individual factor, the Committee took into account the executive’s execution against their personal performance objectives
for the year, the executive’s performance with respect to each of the Company’s four “Core Behaviors” (which
are a set of standards and behaviors that Danaher associates are expected to aspire to and are assessed against), the executive’s
overall performance for the year, the size of the Company Payout Percentage for the year, and the amount of annual cash incentive
compensation that peer companies typically pay to executives serving in comparable roles. Without limiting the foregoing, with
respect to the executive officer team’s 2023 performance as a whole the Committee considered in particular the Company’s
2023 financial performance relative to the challenging macro-economic environment impacting most of the Company’s businesses;
portfolio optimization achievements, including successful completion of the Veralto Spin-Off and Abcam acquisition; and the Company’s
proactiveness during the year in identifying and executing upon opportunities to invest in the Company’s future financial,
strategic and competitive positioning. The average Personal Payout Percentage of the NEOs (other than Mr. Blair) was 156%.
The Company awarded
Mr. Blair a Personal Payout Percentage of 165% for 2023, based primarily on the Company’s financial and operational performance
relative to the challenging macro-economic environment impacting most of the Company’s businesses; portfolio optimization
achievements, including successful completion of the Veralto Spin-Off and Abcam acquisition; progress in further enhancing the
Company’s innovation and strategy development processes, strategic direction and science and technology organization and
capabilities; and leadership recruitment and development and
progress against the Company’s DE+I objectives.
Company Payout Percentage
The Company Payout Percentage is formulaic, based
on the Company’s 2023 performance against the Adjusted EPS, Free Cash Flow Ratio and Core Revenue Growth metrics described
above and below and in Appendix A (the “Metrics”). The Committee weights Adjusted EPS most heavily in the formula because
it believes Adjusted EPS correlates strongly with shareholder returns, particularly since Adjusted EPS is calculated in a manner
that focuses on gains and charges the Committee believes are most directly related to Company operating performance during the
period. The Committee also uses the Free Cash Flow Ratio to help validate the quality of the Company’s earnings, and Core
Revenue Growth to incentivize an appropriate balance between profitability and growth.
For each of the Metrics, the Committee established
threshold, target and maximum levels of Company performance, as well as a payout percentage curve that related each level of performance
to a payout expressed as a percentage of target bonus. The payout percentage was 0% for below-threshold performance, 50% for threshold
performance, 100% for target performance and 200% for performance that equaled or exceeded the maximum. The payout percentages
for performance between threshold and target, or between target and maximum, respectively, were determined by linear interpolation.
In determining the
target performance level and payout percentage curve for the Metrics, the Committee considered historical performance data for
the Company and its peer group, analyst estimates for the Company’s peer group, the Company’s annual budget and macroeconomic/end-market
trends. The Committee set the 2023 threshold, target and maximum performance values for the Metrics lower than for 2022 primarily
because the elevated levels of COVID-19 related customer
and end-user demand in 2022 were not expected to (and did not) repeat in 2023, as the pandemic’s evolution to endemic status
diminished demand and as many customers re-purposed pandemic-period inventory. However, the Compensation Committee believes the
performance values it established for 2023 appropriately reflected the applicable economic and operating environment and incentivized
attractive, relative performance. Specifically, for each Metric, the Committee set the performance target at a level it believed
would represent attractive financial performance within our industry and would require a high (but achievable) level of Company
performance, while requiring what it believed would be outstanding performance to achieve the maximum payout level. In addition,
when the Committee established the 2023 award opportunity, it also provided that upon the consummation of the Veralto Spin-Off in
2023, the threshold, target and maximum levels would be adjusted as applicable to exclude the Veralto business, and the Company’s
2023 performance would be evaluated excluding any contributions from Veralto. The performance values set forth below reflect such
adjustment.
2024
Notice of Annual Meeting and Proxy Statement |
54 |
Following the end of 2023, the Company Payout
Percentage was calculated as follows:
|
|
2023
Performance/Payout Matrix |
|
|
|
|
Metric |
|
Threshold
Performance Level |
|
Target
Performance Level |
|
Maximum
Performance Level |
|
Payout
%
(Before Weighting) |
|
Metric
Weighting |
|
Weighted
Payout % |
Adjusted EPS |
|
|
|
97.8% |
|
|
|
59% |
Free Cash Flow Ratio |
|
|
|
107.0% |
|
|
|
21% |
Core Revenue Growth |
|
|
|
66.7% |
|
|
|
13% |
|
|
|
|
Company Payout
Percentage: 93%
(as rounded) |
Composite Payout Percentage
The Company Payout Percentage and Personal Payout
Percentage were calculated for each NEO, weighted accordingly and added to yield the officer’s Composite Payout Percentage.
The Composite Payout Percentage was multiplied by the NEO’s target bonus amount to yield the executive’s award amount
for the year. The 2023 annual cash incentive compensation awards for each of the NEOs are set forth in the Summary Compensation
Table.
Base Salaries
The Committee typically reviews base salaries
for executive officers in February of each year and in connection with promotions and new hires. In February 2023, the Committee
subjectively determined 2023 base salaries for the NEOs. In each case the Committee used the officer’s prior base salary
as the initial basis of consideration and then considered the individual factors described under “– Named Executive
Officer Compensation Framework,” focusing on the relative complexity and importance of the executive’s role within
Danaher, the market value of the executive’s role and the executive’s performance in the prior year (without giving
specific weight to any particular factor). Given that base salary is one of the elements in the formula for determining annual
cash incentive compensation, the Committee also considered how changes in base salary would impact annual cash incentive compensation.
Other Compensation
Severance Benefits
We have entered into Proprietary Interest Agreements
with each of our NEOs that include post-employment restrictive covenant obligations. Danaher’s Senior Leader Severance Pay
Plan, which each of the NEOs participates in, provides for severance payments under certain circumstances. Mr. Blair’s Proprietary
Interest Agreement entitles him to certain additional cash payments if the Company terminates his employment without cause. We
believe the post-employment restrictive covenant obligations included in these agreements are critical in protecting our proprietary
assets, and that the severance payments payable upon a termination without cause are generally commensurate with the severance
rights our peers offer executives in comparable roles. There is no change-in-control provision in the Senior Leader Severance Pay
Plan or in any NEO employment agreement.
2024
Notice of Annual Meeting and Proxy Statement |
55 |
EDIP, ECP and DCP
As discussed in more detail under “Summary
of Employment Agreements and Plans – Supplemental Retirement Program,” each NEO (1) participates in either the Amended
and Restated Executive Deferred Incentive Program (“EDIP”), or the ECP, and (2) is eligible to participate in the voluntary
Deferred Compensation Plan (“DCP”):
• |
The EDIP and ECP are each non-qualified, unfunded excess contribution programs available to selected members of our management. We use these programs to tax-effectively contribute amounts to executives’ and other participants’ retirement accounts and provide an opportunity to realize tax-deferred, market-based notional investment growth on these contributions. |
• |
The DCP allows each participant to voluntarily defer, on a pre-tax basis, up to 85% of their salary and/or up to 85% of their non-equity annual incentive compensation with respect to a given plan year. The DCP gives our executives and other participants an opportunity to defer taxes on cash compensation and realize tax-deferred, market-based notional investment growth on their deferrals. |
Other Benefits and Perquisites
All of our executives are eligible to participate
in our U.S. employee benefit plans, including our group medical, dental, vision, disability, accidental death and dismemberment,
life insurance, flexible spending and 401(k) plans. These plans are generally available to all U.S. salaried employees and do not
discriminate in favor of executive officers. In addition, the Committee makes certain perquisites available to the NEOs that we
believe help maximize the amount of time and focus that executives spend on Danaher business; please see the footnotes to the Summary
Compensation Table for additional details. The Committee has also adopted a policy prohibiting any tax reimbursement or gross-up
provisions in our executive compensation program (except under a policy applicable to management employees generally such as a
relocation policy).
Peer Group Compensation Analysis
The Committee does not target a specific competitive
position versus the market or peer companies in determining the compensation of our executives because in light of the Company’s
diverse mix of businesses, strict targeting of a specified compensation posture would not appropriately reflect the unique nature
of our business portfolio or the degree of difficulty in leading the Company and key businesses and functions. However, the Committee
believes it is important to clearly understand the relevant market for executive talent to inform its decision-making and ensure
that our executive compensation program supports our recruitment and retention needs and is fair and efficient. As a result, the
Committee has worked with FW Cook to develop a peer group for purposes of assessing competitive compensation practices, and periodically
reviews compensation data for the peer group derived from publicly filed proxy statements. The Committee periodically reviews the
companies included in the peer group to ensure that the peer group remains appropriate.
Executive Compensation Peer Group Prior to November
2023
Prior to November 2023, the Company’s peer
group (for purposes of all 2023 executive compensation decisions) consisted of the companies set forth below:
3M Company |
Boston Scientific Corporation |
IQVIA Holdings Inc. |
Abbott Laboratories |
Bristol-Myers Squibb Company |
Johnson & Johnson |
AbbVie Inc. |
Ecolab Inc. |
Medtronic Inc. |
Amgen Inc. |
Eli Lilly and Company |
Stryker Corporation |
Baxter International, Inc. |
Honeywell International Inc. |
Thermo Fisher Scientific Inc. |
Becton Dickinson & Co. |
|
|
The Committee selected companies for inclusion
in this peer group based on (1) the extent to which they compete with us in one or more lines of business, for executive talent
and for investors, and (2) comparability of revenues, market capitalization, net income, total assets and number of employees.
2024
Notice of Annual Meeting and Proxy Statement |
56 |
The table below sets forth for this peer group
and Danaher information regarding revenue, net income and total assets (based on the most recently reported four quarters for each
company as of September 15, 2022), market capitalization (as of September 15, 2022) and employee headcount (based on each
company’s most recent fiscal year end as of September 15, 2022), in each case derived from the Standard & Poor’s
Capital IQ database.
($ IN MILLIONS, EXCEPT NUMBER OF EMPLOYEES) | |
Revenue | | |
Market Capitalization | | |
Net Income (From continuing operations excluding extraordinary items) | | |
Total Assets | | |
Employees | |
75th percentile | |
$ | 43,502 | | |
$ | 192,052 | | |
$ | 6,823 | | |
$ | 90,080 | | |
| 96,000 | |
Median | |
$ | 30,070 | | |
$ | 119,799 | | |
$ | 5,143 | | |
$ | 56,247 | | |
| 67,500 | |
25th percentile | |
$ | 16,770 | | |
$ | 63,462 | | |
$ | 1,715 | | |
$ | 35,071 | | |
| 44,750 | |
Danaher | |
$ | 30,816 | | |
$ | 205,074 | | |
$ | 6,206 | | |
$ | 81,806 | | |
| 80,000 | |
Danaher Percentile Rank | |
| 52% | | |
| 78% | | |
| 64% | | |
| 70% | | |
| 60% | |
The peer group compensation data that the Committee
reviewed in 2023 in connection with its named executive officer compensation decisions estimated the 25th, median and
75th percentile positions among our peers with respect to base salary, annual cash incentive compensation (target and
actual), total annual cash compensation (target and actual), long-term incentive compensation, total direct compensation (target
and actual), all other compensation, annual change in pension value and above-market interest on non-qualified deferred compensation,
and actual total compensation, in each case with respect to each respective NEO position.
Executive Compensation Peer Group as of November 2023
The Committee periodically reviews the companies
included in the peer group to ensure that the peer group remains appropriate. In November 2023, the Committee evaluated the existing
peer group with the assistance of FW Cook (using the same selection criteria described above) and replaced 3M, Baxter, Ecolab and
Honeywell with Agilent, Gilead and Merck. The Committee made these updates to the peer group to better reflect the Company’s
size and portfolio of businesses following the September 2023 Veralto Spin-Off. Set forth below is the Company’s peer group
as of November 2023:
Abbott Laboratories |
Boston Scientific Corporation |
Johnson & Johnson |
AbbVie Inc. |
Bristol-Myers Squibb Company |
Medtronic Inc. |
Agilent Technologies |
Eli Lilly and Company |
Merck & Co. |
Amgen Inc. |
Gilead Sciences |
Stryker Corporation |
Becton Dickinson & Co. |
IQVIA Holdings Inc. |
Thermo Fisher Scientific Inc. |
The table below sets forth for this updated peer
group and Danaher information regarding revenue, net income and total assets (based on the most recently reported four quarters
for each company as of September 1, 2023), market capitalization (as of September 1, 2023) and employee headcount (based on each
company’s most recent fiscal year end as of September 1, 2023), in each case derived from the Standard & Poor’s
Capital IQ database. The financial data for Danaher reflects estimates of what such data would be on a basis that excludes Veralto.
($ IN MILLIONS, EXCEPT NUMBER OF EMPLOYEES) | |
Revenue | | |
Market Capitalization | | |
Net Income (From continuing operations excluding extraordinary items) | | |
Total Assets | | |
Employees | |
75th percentile | |
$ | 44,356 | | |
$ | 239,780 | | |
$ | 7,230 | | |
$ | 93,797 | | |
| 90,500 | |
Median | |
$ | 29,516 | | |
$ | 129,566 | | |
$ | 5,140 | | |
$ | 73,354 | | |
| 51,000 | |
25th percentile | |
$ | 19,251 | | |
$ | 88,145 | | |
$ | 2,146 | | |
$ | 45,213 | | |
| 36,650 | |
Danaher | |
$ | 25,200 | | |
$ | 176,099 | | |
$ | 4,900 | | |
$ | 79,500 | | |
| 63,600 | |
Danaher Percentile Rank | |
| 34% | | |
| 64% | | |
| 49% | | |
| 53% | | |
| 55% | |
2024
Notice of Annual Meeting and Proxy Statement |
57 |
Named Executive Officer Compensation Framework
Danaher’s compensation program is grounded on the
principle that each executive must consistently demonstrate exceptional personal performance in order to remain a Danaher executive. Within
the framework of this principle and the other objectives discussed above, the Committee exercises its judgment in making executive compensation
decisions. The factors that generally shape particular executive compensation decisions (none of which are assigned any particular weight
by the Committee) are the following:
• |
The relative complexity and importance of the executive’s position
within Danaher. To ensure that the most senior executives are held most accountable
for long-term operating results and changes in shareholder value, the Committee believes that both the amount and “at-risk”
nature of compensation should increase with the relative complexity and significance of an executive’s position. |
• |
The executive’s record of performance, long-term leadership potential and tenure. |
• |
Danaher’s performance. Our
cash incentive compensation varies annually to reflect near-term changes in operating and financial results. Our long-term compensation
is closely aligned with long-term shareholder value creation, both by tying the ultimate value of the awards to long-term shareholder
returns and because of the length of time executives are required to hold the awards before realizing their value. |
• |
Our assessment of pay levels and practices in the competitive marketplace. The
Committee considers market practice in determining pay levels and compensation design to ensure that our costs are sustainable relative
to peers and compensation is appropriately positioned to attract and retain talented executives. As noted above, the market for executive-level
talent is highly competitive. We also have a history of successfully applying the Danaher Business System, or DBS, to deliver strong
operating performance and create shareholder value, and we devote significant resources to training our executives in DBS. As a result
of these factors, we believe that our executives are particularly valued by other companies, which creates a high degree of retention
risk. |
The philosophy and goals of our compensation program
have remained consistent over time, although the Committee considers the factors above within the context of the then-prevailing economic
environment and may adjust the terms and/or amounts of compensation accordingly so that they continue to support our objectives.
For a description of the role of the Company’s
executives and the Committee’s independent compensation consultant in the executive compensation process, please see “Corporate
Governance – Board of Directors and Committees of the Board –Compensation Committee.”
Other Compensation Policies and Information
Long-Term Incentive Compensation Grant Practices
Equity awards are granted under Danaher’s Omnibus
Plan, which is described in “Summary of Employment Agreements and Plans – 2007 Omnibus Incentive Plan.” Executive
equity awards are typically granted as of one of the Company’s four, standardized grant dates during the year, and may also be granted
at the time of an executive hire or promotion or upon identification of a specific retention concern. The grant date is either the date
of grant approval or a specified date subsequent to the approval date. The timing of equity awards has not been coordinated with the release
of material non-public information. The Committee’s general practice is to approve annual equity awards to executive officers at
the Committee’s regularly scheduled meeting in February, when the Committee reviews the performance of the executive officers and
typically determines most or all of the other components of executive compensation.
The target dollar award value attributable to PSUs and
RSUs, respectively, has been translated into a target number of PSUs or a number of RSUs, as applicable, based on fair market value. The
target dollar award value attributable to stock options has been translated into a number of stock options based on the actual Black Scholes
value used in the Company’s financial statements with respect to the particular grant. The exercise price for stock option awards
granted under the Omnibus Plan equals the closing price of Danaher’s Common Stock on the date of grant (or on the immediately preceding
trading day if the date of grant is not a trading day).
2024
Notice of Annual Meeting and Proxy Statement |
58 |
Stock Ownership-Related Policies
Stock Ownership Requirements
To further align management and shareholder interests
and discourage inappropriate or excessive risk-taking, our stock ownership policy requires each executive officer to obtain a substantial
equity stake in Danaher within five years of their appointment to an executive position, as follows:
Title |
Stock
Ownership Multiple |
Chief Executive Officer |
6 times base salary |
Executive Vice President |
3 times base salary |
Senior Vice President |
2 times base salary |
What Counts as Ownership: |
|
What Does Not Count as Ownership: |
• |
Shares in which the executive or their spouse or child has a direct or indirect interest |
|
• |
Unexercised stock options |
• |
Notional shares of Danaher stock in the EDIP, ECP or DCP |
|
• |
Unvested PSUs |
• |
Shares held in a 401(k) plan |
|
|
|
• |
Unvested RSUs |
|
|
|
• |
Vested PSUs |
|
|
|
Once an executive officer has acquired a number of Company
shares that satisfies the applicable ownership multiple, such number of shares then becomes the officer’s minimum ownership requirement
(even if the officer’s salary increases or the fair market value of such shares subsequently changes) until the officer is promoted
to a higher level. Each NEO employed by Danaher as of December 31, 2023, was in compliance with the stock ownership requirements as of
such date.
Pledging Policy
Danaher’s Board has adopted a policy that prohibits
any director or executive officer from pledging as security under any obligation any shares of Danaher Common Stock that the director
or officer directly or indirectly owns and controls (other than shares pledged as of the date the policy was adopted), and provides that
pledged shares of Danaher Common Stock do not count toward Danaher’s stock ownership requirements. No NEO has pledged any shares
of Danaher Common Stock.
Hedging Policy
Under our insider trading policy, Danaher directors and
employees (including executive officers) are prohibited from engaging in short sales of Danaher Common Stock, transactions in any derivative
of a Danaher security (including, but not limited to, buying or selling puts, calls or other options (except for instruments granted under
a Danaher equity compensation plan)) or any other forms of hedging transactions with respect to Danaher securities.
Clawback Policies
To further discourage inappropriate or excessive risk-taking,
the Committee has adopted rigorous, “no-fault” clawback policies that comply with the clawback policy requirements of the
New York Stock Exchange. Danaher’s clawback policies provide for recovery of incentive-based compensation erroneously received by
current or former executive officers during the three completed fiscal years immediately preceding the year in which the company is required
to prepare an accounting restatement due to material noncompliance with financial reporting requirements. “Incentive-based compensation”
is defined as any compensation that is granted, earned, or vested based wholly or in part upon the attainment of any financial reporting
measure, and “financial reporting measure” is defined to include both GAAP and non-GAAP financial measures, stock price and
total shareholder return. The policies provide for limited exceptions to the Company’s obligation to enforce the NYSE-required
terms due to impracticability of recovery.
2024
Notice of Annual Meeting and Proxy Statement |
59 |
The Company’s clawback policies extend beyond the
terms required by the NYSE listing standards. These extended terms apply to a broader group of senior management than just executive officers
and provide that in the event of a material accounting restatement (not required pursuant to a change in accounting rules) the Company
may recover from a covered person:
• |
the portion of annual incentive compensation awarded during specified periods
that would not have been awarded had the affected financial statements been correctly stated; and |
• |
all annual incentive compensation awarded to, gains from stock option exercises by and other stock
compensation-related benefits received by the covered person during specified periods if such person’s fraud or intentional
misconduct alone or with others caused such restatement. |
In addition, the stock plans in which Danaher’s
executive officers participate contain provisions for recovering awards upon certain circumstances. Under the terms of the Company’s
Omnibus Plan, if an employee is terminated for gross misconduct, the administrator may terminate up to all of the participant’s
unexercised or unvested equity awards. In addition, under the terms of each of the EDIP and the ECP, if the administrator determines that
the circumstances of a participant’s termination constitute gross misconduct, the administrator may determine that the participant’s
vesting percentage is as low as zero with respect to all balances that were contributed by Danaher.
Regulatory Considerations
Section 162(m) generally disallows a tax deduction to
public corporations for compensation in excess of $1 million paid for any fiscal year to certain executive officers. We review the tax
impact of our executive compensation on the Company as well as on the executive officers. In addition, we review the impact of our compensation
programs against other considerations, such as accounting impact, shareholder alignment, market competitiveness, effectiveness and perceived
value to employees. Because many different factors influence a well-rounded, comprehensive and effective executive compensation program,
some of the compensation we provide to our executive officers is not deductible under Section 162(m).
Treatment of Equity-Based Compensation Upon Veralto
Spin-Off
In connection with the Veralto Spin-Off and pursuant
to the anti-dilution provisions of the Omnibus Plan and deferred compensation plans, as applicable, the Company made certain adjustments
to the share reserves and limits set forth thereunder, as well as the exercise price and the number of shares underlying the stock-based
compensation awards held by our directors, executive officers and other employees, with the intention of preserving the intrinsic value
of the awards prior to the Veralto Spin-Off. All disclosures in this Proxy Statement reflect such adjustments. The stock-based compensation
awards continue to vest over their original vesting period. Stock-based compensation awards that were held by employees who transferred
to Veralto in connection with the Veralto Spin-Off were canceled and replaced by awards issued by Veralto.
Compensation Committee Report
This report is not deemed to be “soliciting
material” or to be “filed” with the SEC or subject to the SEC’s proxy rules or to the liabilities of Section 18
of the Exchange Act of 1934, and shall not be deemed to be incorporated by reference into any prior or subsequent filing by Danaher under
the Securities Act of 1933 or the Exchange Act of 1934, except to the extent Danaher specifically incorporates this report by reference
therein.
The Compensation Committee of Danaher Corporation’s
Board of Directors has reviewed and discussed with management the Compensation Discussion and Analysis set forth above and, based on such
review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis
be included in this Proxy Statement.
Compensation
Committee of the Board of Directors
Alan G. Spoon (Chair)
Teri List
Jessica L. Mega, MD, MPH
Walter G. Lohr, Jr.
2024 Notice of Annual Meeting and Proxy Statement |
60 |
Compensation Tables and Information
2023 Summary Compensation Table
The following table sets forth the 2023 compensation
of (i) our President and Chief Executive Officer, (ii) our Executive Vice President and Chief Financial Officer, and (iii) our three other
most highly compensated executive officers who were serving as executive officers as of December 31, 2023, known as our “named executive
officers.”
Name and
Principal Position |
|
Year |
|
Salary
($)(1) |
|
Bonus
($) |
|
Stock
Awards
($)(2) |
|
Option
Awards
($)(2) |
|
Non-Equity
Incentive Plan
Compensation
($)(1) |
|
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
($)(3) |
|
All Other
Compensation
($)(4) |
|
Total
($) |
Rainer M. Blair,
President and CEO |
|
2023 |
|
1,300,000 |
|
0 |
|
8,068,474 |
|
7,509,417 |
|
3,541,200 |
|
0 |
|
484,191 |
|
20,903,282 |
|
2022 |
|
1,300,000 |
|
0 |
|
7,239,213 |
|
7,029,061 |
|
4,222,400 |
|
0 |
|
405,353 |
|
20,196,027 |
|
2021 |
|
1,200,000 |
|
0 |
|
5,124,383 |
|
6,260,494 |
|
4,128,000 |
|
0 |
|
439,390 |
|
17,152,267 |
Matthew R. McGrew,
Executive Vice President and CFO |
|
2023 |
|
966,310 |
|
0 |
|
2,555,306 |
|
2,377,957 |
|
1,350,418 |
|
0 |
|
246,087 |
|
7,496,078 |
|
2022 |
|
878,460 |
|
0 |
|
2,197,854 |
|
2,133,848 |
|
1,783,270 |
|
0 |
|
189,912 |
|
7,183,344 |
|
2021 |
|
798,600 |
|
0 |
|
1,537,702 |
|
1,877,996 |
|
1,697,025 |
|
0 |
|
188,184 |
|
6,099,507 |
Joakim Weidemanis,
Executive Vice President |
|
2023 |
|
1,008,480 |
|
0 |
|
2,958,575 |
|
2,753,420 |
|
1,535,411 |
|
0 |
|
215,799 |
|
8,471,685 |
|
2022 |
|
972,400 |
|
0 |
|
2,585,694 |
|
2,510,454 |
|
1,951,750 |
|
0 |
|
206,319 |
|
8,226,617 |
|
2021 |
|
936,000 |
|
0 |
|
2,049,947 |
|
2,504,501 |
|
1,965,600 |
|
0 |
|
157,966 |
|
7,614,014 |
Georgeann Couchara,
Senior Vice President, Human Resources |
|
2023 |
|
660,000 |
|
0 |
|
1,840,043 |
|
1,745,775 |
|
878,922 |
|
0 |
|
125,077 |
|
5,249,817 |
Jose-Carlos
Gutierrez-Ramos, |
|
2023 |
|
784,160 |
|
0 |
|
2,604,987 |
|
2,503,057 |
|
1,116,409 |
|
0 |
|
188,572 |
|
7,197,185 |
Senior Vice President and Chief
Science Officer |
|
2022 |
|
754,000 |
|
0 |
|
1,835,920 |
|
1,205,025 |
|
1,408,170 |
|
0 |
|
81,942 |
|
5,285,057 |
(1) |
The following table sets forth the amount, if any, of salary and/or non-equity incentive compensation that each named executive officer deferred into the DCP with respect to each of the years reported above: |
|
| |
Amount
of Salary Deferred Into DCP ($) | |
Amount
of Non-Equity Incentive Compensation Deferred Into DCP ($) |
|
Name
of Officer | |
2023 | |
2022 | |
2021 | |
2023 | |
2022 | |
2021 |
|
Rainer M. Blair | |
– | |
0 | |
0 | |
– | |
– | |
– |
|
Matthew R. McGrew | |
– | |
0 | |
0 | |
– | |
– | |
– |
|
Joakim Weidemanis | |
– | |
0 | |
0 | |
– | |
– | |
– |
|
Georgeann Couchara | |
32,942 | |
N/A | |
N/A | |
43,946 | |
N/A | |
N/A |
|
Jose-Carlos Gutierrez-Ramos | |
– | |
– | |
N/A | |
– | |
– | |
N/A |
2024 Notice of Annual Meeting and Proxy Statement |
61 |
(2) |
The amounts reflected in these columns represent
the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for equity grants made in the applicable year:
With respect to stock options, the grant date fair value under FASB ASC Topic 718 has been calculated using the Black-Scholes option
pricing model, based on the following assumptions (and assuming no forfeitures): |
|
| |
| |
| |
| |
| |
|
|
Name
of Officer | |
Date
of Grant | |
Risk-Free
Interest Rate | |
Stock
Price
Volatility Rate | |
Dividend
Yield | |
Option
Life |
|
Couchara | |
May 15, 2023 | |
3.48% | |
28.36% | |
0.48% | |
7.0 years |
|
Blair, McGrew, Weidemanis, Couchara, Gutierrez-Ramos | |
February 24, 2023 | |
4.10% | |
28.02% | |
0.43% | |
7.0 years |
|
Blair, McGrew, Weidemanis, Gutierrez-Ramos | |
February 24, 2022 | |
1.94% | |
30.23% | |
0.37% | |
7.5 years |
|
Blair, McGrew, Weidemanis | |
February 24, 2021 | |
1.08% | |
31.39% | |
0.38% | |
7.5 years |
All stock awards reflected in the table above were
granted in the form of performance stock units (PSUs), except that a portion of Dr. Gutierrez-Ramos’ 2023 and 2022 stock awards
and a portion of Ms. Couchara’s 2023 stock award were granted in the form of RSUs. With respect to RSUs, the grant date fair value
under FASB ASC Topic 718 was calculated based on the number of shares of Common Stock underlying the RSU, times the closing price of the
Common Stock on the date of grant (but discounted to account for the fact that RSUs do not accrue dividend rights prior to vesting and
distribution). With respect to PSUs, the grant date fair value under FASB ASC Topic 718 has been calculated based on the probable outcome
of the applicable performance conditions and a Monte Carlo simulation valuation model modified to reflect an illiquidity discount (as
a result of the mandatory two-year post-vesting holding period), using the following significant assumptions (since the performance criteria
applicable to the performance stock units are considered a “market condition,” footnote disclosure of the award’s potential
maximum value is not required):
|
| |
| |
Monte
Carlo Simulation | |
Illiquidity discount |
|
Name of Officer | |
Date of Grant | |
Danaher’s expected volatility | |
Average volatility of peer group | |
Risk-free interest rate | |
Dividend yield | |
Danaher’s expected volatility | |
Risk-free interest rate | |
Dividend yield |
|
Blair, McGrew, Weidemanis, Couchara, Gutierrez-Ramos | |
February 24, 2023 | |
27.77% | |
34.14% | |
4.51% | |
0.00% | |
29.01% | |
4.72% | |
0.43% |
|
Blair, McGrew, Weidemanis, Gutierrez-Ramos | |
February 24, 2022 | |
27.01% | |
38.88% | |
1.69% | |
0.00% | |
29.72% | |
1.53% | |
0.37% |
|
Blair, McGrew, Weidemanis | |
February 24, 2021 | |
26.20% | |
38.62% | |
0.22% | |
0.00% | |
27.76% | |
0.12% | |
0.38% |
(3) |
We do not provide any above-market or preferential earnings on compensation
that is deferred by any NEO. |
(4) |
The following table describes the elements of compensation included in “All Other
Compensation” for 2023: |
|
Name | |
Company 401(k) Contributions ($) | |
Company EDIP/ECP Contributions ($) | |
Other ($) | |
Total 2023 All Other Compensation ($) |
|
Rainer M. Blair | |
22,960 | |
312,000 | |
149,231(a) | |
484,191 |
|
Matthew R. McGrew | |
22,960 | |
118,592 | |
104,535(b) | |
246,087 |
|
Joakim Weidemanis | |
22,960 | |
175,219 | |
17,620(c) | |
215,799 |
|
Georgeann Couchara | |
22,960 | |
59,289 | |
42,828(d) | |
125,077 |
|
Jose-Carlos Gutierrez-Ramos | |
14,400 | |
121,506 | |
52,666(e) | |
188,572 |
|
(a) |
Includes $88,836 relating to personal use of the Company’s aircraft
and $39,067 related to tickets for entertainment events, plus amounts related to tax preparation/professional services and parking
expenses. The incremental cost to the Company of the personal aircraft use is calculated by multiplying the total number of personal
flight hours times the average direct variable operating costs (including costs related to fuel, on-board catering, maintenance expenses
related to operation of the plane during the year, landing and parking fees, navigation fees, related ground transportation, crew
accommodations and meals and supplies) per flight hour for the particular aircraft for the year, net of any applicable employee reimbursement.
The aircraft fleet is maintained primarily for business travel. We do not include in the average direct variable operating costs
any fixed costs that do not change based on usage, such as crew salaries, aircraft insurance premiums, hangar lease payments, the
lease or acquisition cost of the aircraft, exterior paint and other maintenance, inspection and capital improvement costs intended
to cover a multi-year period. Mr. Blair’s perquisite allowance for personal use of the Company aircraft is limited to $125,000
annually and Mr. Blair is required to reimburse the Company for any personal use of the aircraft in a particular year in excess of
$125,000. The incremental cost to the Company of tickets for entertainment events is calculated based on the Company’s out-of-pocket
costs for such tickets. |
2024 Notice of Annual Meeting and Proxy Statement |
62 |
|
(b) |
Includes $50,000 relating to personal use of Danaher’s aircraft
and $32,681 related to tickets for entertainment events, plus amounts related to tax preparation/professional services and parking
expenses. The incremental cost to the Company of the personal aircraft use and tickets to entertainment events are calculated in
the same manner as set forth in Footnote 4(a) above. Mr. McGrew’s perquisite allowance for personal use of the Company aircraft
is limited to $50,000 annually and Mr. McGrew is required to reimburse the Company for any personal use of the aircraft in a particular
year in excess of $50,000. |
|
(c) |
Consists of amounts related to tax preparation/professional services. |
|
(d) |
Consists of amounts related to tax preparation/professional services, tickets to entertainment
events and parking expenses. |
|
(e) |
Consists of $27,147 related to tax preparation/professional services and $25,518 related
to commuting expenses and lodging. The incremental cost to the Company of the tax preparation/professional services and commuting
expenses/lodging is calculated based on the Company’s out-of-pocket costs for such services. |
Grants of Plan-Based Awards for Fiscal 2023
The following table sets forth certain information regarding
grants of plan-based awards to each of our named executive officers in 2023. As discussed in further detail in “Compensation Discussion
and Analysis—Treatment of Equity-Based Compensation Upon Veralto Spin-Off,” all of the share amounts and option exercise prices
set forth below reflect adjustments pursuant to the anti-dilution provisions of the Omnibus Plan to account for the Veralto Spin-Off and
preserve the intrinsic value of each award.
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
All other
Option
Awards:
Number of
Securities
Underlying | |
| |
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
|
| |
Grant
Date Fair
Value of
stock And
Option |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
|
| |
| |
| |
| |
| |
Estimated Possible Payouts | |
Estimated Future Payouts | |
|
Exercise or
Base Price
of Option | |
| |
| |
| |
| |
Under Non-Equity Incentive | |
Under Equity Incentive Plan | |
|
|
| |
| |
| |
Committee | |
Plan
Awards(1) | |
Awards(2) | |
|
|
| |
| |
Grant | |
Approval | |
Threshold | |
Target | |
Maximum | |
Threshold | |
Target | |
Maximum | |
Options | |
Awards | |
Awards |
Name | |
| |
Date | |
Date | |
($) | |
($) | |
($) | |
(#) | |
(#) | |
(#) | |
(#)(2) | |
($/Share) | |
($)(3) |
Rainer M. Blair | |
Annual cash incentive compensation | |
5/9/2023 | |
5/9/2023 | |
1,300,000 | |
2,600,000 | |
5,200,000 | |
— | |
— | |
— | |
— | |
— | |
— |
| |
Stock options(4) | |
2/24/2023 | |
2/22/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
91,602 | |
221.29 | |
7,509,417 |
| |
Performance stock units(5) | |
2/24/2023 | |
2/22/2023 | |
— | |
— | |
— | |
8,474 | |
33,893 | |
67,786 | |
— | |
— | |
8,068,474 |
Matthew R. McGrew | |
Annual cash incentive compensation | |
5/9/2023 | |
5/9/2023 | |
603,944 | |
1,207,888 | |
2,415,776 | |
— | |
— | |
— | |
— | |
— | |
— |
| |
Stock options(4) | |
2/24/2023 | |
2/22/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
29,007 | |
221.29 | |
2,377,957 |
| |
Performance stock units(5) | |
2/24/2023 | |
2/22/2023 | |
— | |
— | |
— | |
2,684 | |
10,734 | |
21,468 | |
— | |
— | |
2,555,306 |
Joakim Weidemanis | |
Annual cash incentive compensation | |
5/9/2023 | |
5/9/2023 | |
630,300 | |
1,260,600 | |
2,521,200 | |
— | |
— | |
— | |
— | |
— | |
— |
| |
Stock options(4) | |
2/24/2023 | |
2/22/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
33,587 | |
221.29 | |
2,753,420 |
| |
Performance stock units(5) | |
2/24/2023 | |
2/22/2023 | |
— | |
— | |
— | |
3,107 | |
12,428 | |
24,856 | |
— | |
— | |
2,958,575 |
Georgeann Couchara | |
Annual cash incentive compensation | |
5/9/2023 | |
5/9/2023 | |
379,500 | |
759,000 | |
1,518,000 | |
— | |
— | |
— | |
— | |
— | |
— |
| |
Stock options(4) | |
2/24/2023 | |
2/22/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
15,267 | |
221.29 | |
1,251,569 |
| |
Stock options(6) | |
5/15/2023 | |
5/9/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
6,890 | |
201.59 | |
494,206 |
| |
Restricted stock units(7) | |
5/15/2023 | |
5/9/2023 | |
— | |
— | |
— | |
— | |
2,482 | |
— | |
— | |
— | |
495,020 |
| |
Performance stock units(5) | |
2/24/2023 | |
2/22/2023 | |
— | |
— | |
— | |
1,413 | |
5,650 | |
11,300 | |
— | |
— | |
1,345,023 |
Jose-Carlos Gutierrez-Ramos | |
Annual cash incentive compensation | |
5/9/2023 | |
5/9/2023 | |
450,892 | |
901,784 | |
1,803,568 | |
— | |
— | |
— | |
— | |
— | |
— |
|
Stock options(4) | |
2/24/2023 | |
2/22/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
18,320 | |
221.29 | |
1,501,851 |
| |
Stock options(6) | |
2/24/2023 | |
2/22/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
12,213 | |
221.29 | |
1,001,206 |
| |
Restricted stock units(7) | |
2/24/2023 | |
2/22/2023 | |
— | |
— | |
— | |
— | |
4,521 | |
— | |
— | |
— | |
990,959 |
| |
Performance stock
units(5) | |
2/24/2023 | |
2/22/2023 | |
— | |
— | |
— | |
1,695 | |
6,780 | |
13,560 | |
— | |
— | |
1,614,028 |
2024 Notice of Annual Meeting and Proxy Statement |
63 |
(1) |
These columns relate to 2023 cash award opportunities under the Omnibus
Plan. Please see “Summary of Employment Agreements and Plans – 2007 Omnibus Incentive Plan” for a description of
such plan. The amounts actually paid pursuant to these 2023 award opportunities are set forth in the “Non-Equity Incentive
Plan Compensation” column of the Summary Compensation Table. |
(2) |
These columns relate to equity awards granted under the Omnibus Plan, the terms of which
apply to all of the equity awards described in this table. |
(3) |
Reflects the grant date fair value calculated in accordance with FASB ASC Topic 718. For
the assumptions used in determining the grant date fair value under FASB ASC Topic 718, please see Footnote 2 to the Summary
Compensation Table. |
(4) |
For a description of the vesting terms of the award, please see Footnote 3 to the Outstanding
Equity Awards at 2023 Fiscal Year-End Table. |
(5) |
For a description of the vesting terms of the award, please see Footnote 5 to the Outstanding
Equity Awards at 2023 Fiscal Year-End Table. |
(6) |
For a description of the vesting terms of the award, please see Footnote 9 to the Outstanding
Equity Awards at 2023 Fiscal Year-End Table. |
(7) |
For a description of the vesting terms of the award, please see Footnote 11 to the Outstanding
Equity Awards at 2023 Fiscal Year-End Table. |
2024 Notice of Annual Meeting and Proxy Statement |
64 |
Outstanding Equity Awards at 2023 Fiscal Year-End
The following table summarizes outstanding equity awards
for each named executive officer as of December 31, 2023. All of the awards set forth in the table below are governed by the terms and
conditions of the Omnibus Plan. As discussed in further detail in “Compensation Discussion and Analysis—Treatment of Equity-Based
Compensation Upon Veralto Spin-Off,” all of the share amounts and option exercise prices set forth below reflect adjustments pursuant
to the anti-dilution provisions of the Omnibus Plan to account for the Veralto Spin-Off and preserve the intrinsic value of each award.
| |
| |
Option
Awards | |
Stock
Awards |
Name | |
Grant
Date | |
Number
of Securities Underlying Unexercised Options (#) Exercisable | |
Number
of Securities Underlying
Unexercised
Options (#) Unexercisable(1) | |
Option
Exercise Price ($) | |
Option
Expiration Date | |
Number
of Shares or Units of Stock
That Have Not Vested (#)(1) | |
Market
Value of Shares or
Units of Stock That Have Not Vested
($)(2) | |
Equity
Incentive Plan Awards: Number
of Unearned Shares, Units or
Other Rights That Have Not Vested
(#)(1) | |
Equity
Incentive Plan Awards: Market
or Payout Value of Unearned Shares,
Units or Other Rights That Have Not
Vested ($)(2) |
Rainer M. Blair | |
2/24/2023 | |
— | |
91,602(3) | |
$221.29 | |
2/24/2033 | |
— | |
— | |
— | |
— |
| |
2/24/2022 | |
— | |
82,912(3) | |
$241.22 | |
2/24/2032 | |
— | |
— | |
— | |
— |
| |
2/24/2021 | |
— | |
92,809(4) | |
$198.09 | |
2/24/2031 | |
— | |
— | |
— | |
— |
| |
5/15/2020 | |
— | |
19,937(4) | |
$145.55 | |
5/15/2030 | |
— | |
— | |
— | |
— |
| |
2/24/2020 | |
— | |
53,485(4) | |
$139.30 | |
2/24/2030 | |
— | |
— | |
— | |
— |
| |
2/24/2019 | |
37,195 | |
37,196(4) | |
$100.81 | |
2/24/2029 | |
— | |
— | |
— | |
— |
| |
2/24/2018 | |
52,157 | |
— | |
$88.24 | |
2/24/2028 | |
— | |
— | |
— | |
— |
| |
2/24/2017 | |
60,015 | |
— | |
$76.47 | |
2/24/2027 | |
— | |
— | |
— | |
— |
| |
2/24/2016 | |
39,477 | |
— | |
$58.59 | |
2/24/2026 | |
— | |
— | |
— | |
— |
| |
11/15/2015 | |
17,778 | |
— | |
$62.85 | |
11/15/2025 | |
— | |
— | |
— | |
— |
| |
2/24/2023 | |
— | |
— | |
— | |
| |
— | |
— | |
33,893(5) | |
$7,876,394 |
| |
2/24/2022 | |
— | |
— | |
— | |
| |
— | |
— | |
29,020(5) | |
$6,772,978 |
| |
2/24/2021 | |
— | |
— | |
— | |
| |
— | |
— | |
19,698(6) | |
$4,613,792 |
Matthew R. McGrew | |
2/24/2023 | |
— | |
29,007(3) | |
$221.29 | |
2/24/2033 | |
— | |
— | |
— | |
— |
|
2/24/2022 | |
— | |
25,170(3) | |
$241.22 | |
2/24/2032 | |
— | |
— | |
— | |
— |
| |
2/24/2021 | |
— | |
27,840(4) | |
$198.09 | |
2/24/2031 | |
— | |
— | |
— | |
— |
| |
2/24/2020 | |
— | |
37,882(4) | |
$139.30 | |
2/24/2030 | |
— | |
— | |
— | |
— |
| |
2/24/2019 | |
21,491 | |
21,491(4) | |
$100.81 | |
2/24/2029 | |
— | |
— | |
— | |
— |
| |
2/24/2018 | |
34,775 | |
— | |
$88.24 | |
2/24/2028 | |
— | |
— | |
— | |
— |
| |
2/24/2017 | |
15,603 | |
— | |
$76.47 | |
2/24/2027 | |
— | |
— | |
— | |
— |
| |
11/15/2015 | |
48,275 | |
— | |
$62.85 | |
11/15/2025 | |
— | |
— | |
— | |
— |
| |
2/24/2015 | |
9,243 | |
— | |
$58.48 | |
2/24/2025 | |
— | |
— | |
— | |
— |
| |
2/24/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
10,734(5) | |
$2,494,474 |
| |
2/24/2022 | |
— | |
— | |
— | |
— | |
— | |
— | |
8,811(5) | |
$2,056,399 |
| |
2/24/2021 | |
— | |
— | |
— | |
— | |
— | |
— | |
5,911(6) | |
$1,384,524 |
2024 Notice of Annual Meeting and Proxy Statement |
65 |
| |
| |
Option
Awards | |
Stock
Awards |
Name | |
Grant
Date | |
Number
of Securities Underlying Unexercised Options (#) Exercisable | |
Number
of Securities Underlying
Unexercised Options (#)
Unexercisable(1) | |
Option
Exercise Price ($) | |
Option
Expiration Date | |
Number
of Shares or Units of
Stock That Have Not Vested
(#)(1) | |
Market
Value of Shares
or Units of Stock That Have Not
Vested ($)(2) | |
Equity
Incentive Plan Awards:
Number of Unearned Shares, Units
or Other Rights That
Have Not Vested (#)(1) | |
Equity
Incentive Plan Awards:
Market or Payout Value of Unearned
Shares, Units or Other Rights
That Have Not Vested ($)(2) |
Joakim Weidemanis | |
2/24/2023 | |
— | |
33,587(3) | |
$221.29 | |
2/24/2033 | |
— | |
— | |
— | |
— |
| |
2/24/2022 | |
— | |
29,612(3) | |
$241.22 | |
2/24/2032 | |
— | |
— | |
— | |
— |
| |
2/24/2021 | |
— | |
37,128(4) | |
$198.09 | |
2/24/2031 | |
— | |
— | |
— | |
— |
| |
5/15/2020 | |
19,295 | |
38,592(7) | |
$145.55 | |
5/15/2030 | |
— | |
— | |
— | |
— |
| |
2/24/2020 | |
— | |
47,913(4) | |
$139.30 | |
2/24/2030 | |
— | |
— | |
— | |
— |
| |
2/24/2019 | |
33,064 | |
33,064(4) | |
$100.81 | |
2/24/2029 | |
— | |
— | |
— | |
— |
| |
2/24/2018 | |
45,200 | |
— | |
$88.24 | |
2/24/2028 | |
— | |
— | |
— | |
— |
| |
2/24/2017 | |
48,014 | |
— | |
$76.47 | |
2/24/2027 | |
— | |
— | |
— | |
— |
| |
11/15/2016 | |
43,353 | |
— | |
$70.74 | |
11/15/2026 | |
— | |
— | |
— | |
— |
| |
2/24/2016 | |
13,159 | |
— | |
$58.59 | |
2/24/2026 | |
— | |
— | |
— | |
— |
| |
2/24/2016 | |
39,477 | |
— | |
$58.59 | |
2/24/2026 | |
— | |
— | |
— | |
— |
| |
2/24/2015 | |
22,433 | |
— | |
$58.48 | |
2/24/2025 | |
— | |
— | |
— | |
— |
| |
2/24/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
12,428(5) | |
$2,888,143 |
| |
2/24/2022 | |
— | |
— | |
— | |
— | |
— | |
— | |
10,366(5) | |
$2,419,321 |
| |
2/24/2021 | |
— | |
— | |
— | |
— | |
— | |
— | |
7,880(6) | |
$1,845,672 |
| |
5/15/2020 | |
— | |
— | |
— | |
— | |
13,896(8) | |
$3,214,701 | |
| |
|
Georgeann Couchara | |
5/15/2023 | |
— | |
6,890(9) | |
$201.59 | |
5/15/2033 | |
— | |
— | |
— | |
— |
|
2/24/2023 | |
— | |
15,267(3) | |
$221.29 | |
2/24/2033 | |
— | |
— | |
— | |
— |
| |
2/24/2022 | |
— | |
7,699(3) | |
$241.22 | |
2/24/2032 | |
— | |
— | |
— | |
— |
| |
2/24/2021 | |
1,782 | |
2,676(10) | |
$198.09 | |
2/24/2031 | |
— | |
— | |
— | |
— |
| |
2/24/2020 | |
3,012 | |
2,008(10) | |
$139.30 | |
2/24/2030 | |
— | |
— | |
— | |
— |
| |
7/15/2019 | |
12,743 | |
— | |
$125.35 | |
7/15/2029 | |
— | |
— | |
— | |
— |
| |
2/24/2019 | |
3,572 | |
897(10) | |
$100.81 | |
2/24/2029 | |
— | |
— | |
— | |
— |
| |
2/24/2018 | |
4,176 | |
— | |
$88.24 | |
2/24/2028 | |
— | |
— | |
— | |
— |
| |
2/24/2017 | |
1,778 | |
— | |
$76.47 | |
2/24/2027 | |
— | |
— | |
— | |
— |
| |
2/24/2016 | |
844 | |
— | |
$58.59 | |
2/24/2026 | |
— | |
— | |
— | |
— |
| |
2/24/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
5,650(5) | |
$1,313,004 |
| |
2/24/2022 | |
— | |
— | |
— | |
— | |
— | |
— | |
2,696(5) | |
$629,219 |
| |
5/15/2023 | |
— | |
— | |
— | |
— | |
2,482(11) | |
$574,186 | |
— | |
— |
| |
2/24/2021 | |
— | |
— | |
— | |
— | |
862(12) | |
$199,415 | |
— | |
— |
| |
2/24/2020 | |
— | |
— | |
— | |
— | |
624(12) | |
$144,356 | |
— | |
— |
| |
2/24/2019 | |
— | |
— | |
— | |
— | |
277(12) | |
$64,081 | |
— | |
— |
2024 Notice of Annual Meeting and Proxy Statement |
66 |
| |
| |
Option
Awards | |
Stock
Awards |
Name | |
Grant
Date | |
Number
of Securities Underlying Unexercised Options (#) Exercisable | |
Number
of Securities Underlying
Unexercised Options (#) Unexercisable(1) | |
Option
Exercise Price ($) | |
Option
Expiration Date | |
Number
of Shares or Units of
Stock That Have Not Vested
(#)(1) | |
Market
Value of Shares
or Units of Stock That Have Not
Vested ($)(2) | |
Equity
Incentive Plan Awards:
Number of Unearned Shares, Units
or Other Rights That
Have Not Vested (#)(1) | |
Equity
Incentive Plan Awards:
Market or Payout Value of Unearned
Shares, Units or Other Rights
That Have Not Vested ($)(2) |
Jose-Carlos
Gutierrez-Ramos | |
2/24/2023 | |
— | |
12,213(9) | |
$221.29 | |
2/24/2033 | |
— | |
— | |
— | |
— |
|
2/24/2023 | |
— | |
18,320(3) | |
$221.29 | |
2/24/2033 | |
— | |
— | |
— | |
— |
| |
2/24/2022 | |
— | |
14,214(3) | |
$241.22 | |
2/24/2032 | |
— | |
— | |
— | |
— |
| |
2/24/2021 | |
— | |
14,849(7) | |
$198.09 | |
2/24/2031 | |
— | |
— | |
— | |
— |
| |
2/24/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
6,780(5) | |
$1,575,604 |
| |
2/24/2022 | |
— | |
— | |
— | |
— | |
— | |
— | |
4,975(5) | |
$1,161,115 |
| |
2/24/2021 | |
— | |
— | |
— | |
— | |
— | |
— | |
3,154(6) | |
$738,794 |
| |
2/24/2023 | |
— | |
— | |
— | |
— | |
4,521(11) | |
$1,045,888 | |
— | |
— |
| |
2/24/2022 | |
— | |
— | |
— | |
— | |
1,659(13) | |
$383,793 | |
— | |
— |
| |
2/24/2021 | |
— | |
— | |
— | |
— | |
956(13) | |
$221,161 | |
— | |
— |
|
|
(1) |
With respect to the unexercisable options and unvested PSUs and RSUs reflected
in the table above, the footnotes below describe the vesting terms applicable to the entire award of which such options, PSUs or
RSUs are a part. |
(2) |
Market value is calculated based on (a) the closing price of Danaher’s Common Stock on
December 31, 2023 as reported on the NYSE ($231.34 per share) times the number of shares, plus (b) in the case of PSUs, the amount
of cash dividend equivalent rights attached to the respective PSUs and accrued as of December 31, 2023. |
(3) |
The option award was granted subject to time-based vesting conditions such that one-half of the
award became or becomes exercisable on each of the third and fourth anniversaries of the grant date. |
(4) |
The option award was granted subject to time-based vesting conditions such that one-half of the
award became or becomes exercisable on each of the fourth and fifth anniversaries of the grant date. |
(5) |
The number of shares of Common Stock that vest pursuant to the PSU award is based on the Company’s
total shareholder return (TSR) ranking relative to the S&P 500 Index over an approximately three-year performance period. Payout
at 100% of the target level requires that the Company achieve above-median performance and rank at the 55th percentile of the S&P
500 Index, while the PSUs pay out at 200% for performance that equals or exceeds the 75th percentile, 50% for performance at the
35th percentile and zero percent for performance below the 35th percentile. The payout percentages for performance between the performance
levels are determined by linear interpolation. The Company’s three-year average ROIC beginning with the year of grant, compared to the
Company’s ROIC for the immediately preceding year (the “baseline year”), can increase or decrease the number of
shares that would otherwise vest by 10% (but cannot cause the payout percentage to exceed 200%). Notwithstanding the above, if the
Company’s absolute TSR performance for the period is negative a maximum of 100% of the target PSUs will vest (regardless of
how strong the Company’s performance is on a relative basis), and if the Company’s absolute TSR performance for the period
is positive a minimum of 25% of the target PSUs will vest. Any PSUs that vest following the three-year performance period are subject
to an additional two-year holding period and are paid out in shares of Company Common Stock following the fifth anniversary of the
commencement of the performance period. For purposes of this table, the number of PSU shares and payout value reported in the table
reflect target-level performance for PSUs granted in 2022 and 2023; the 2021 PSUs are addressed separately in Footnote 6 below. |
(6) |
The number of shares and market value reported in the table reflect actual performance, since
the three-year performance period for these PSU awards has concluded. These PSU awards were subject to the performance criteria set
forth in Footnote 5, vested when the Company’s Compensation Committee certified the level of performance achieved, and remain
subject to a holding period that concludes on the fifth anniversary of the commencement of the applicable performance period. |
2024
Notice of Annual Meeting and Proxy Statement |
67 |
(7) |
The option award was granted subject to time-based vesting conditions
such that one-third of the award became or becomes exercisable on each of the third, fourth and fifth anniversaries of the grant
date. |
(8) |
The RSU award was granted subject to time-based vesting conditions such that one-third
of the award vests or vested on each of the third, fourth and fifth anniversaries of the grant date. |
(9) |
The option award was granted subject to time-based vesting conditions such that one-fourth
of the award became or becomes exercisable on each of the first four anniversaries of the grant date. |
(10) |
The option award was granted subject to time-based vesting conditions such that one-fifth
of the award became or becomes exercisable on each of the first five anniversaries of the grant date |
(11) |
The RSU award was granted subject to time-based vesting conditions such that one-fourth
of the award vests or vested on each of the first four anniversaries of the grant date. |
(12) |
The RSU award was granted subject to time-based vesting conditions such that one-fifth
of the award vests or vested on each of the first five anniversaries of the grant date. |
(13) |
The RSU award was granted subject to time-based vesting conditions such that one-third
of the award vests or vested on each of the first three anniversaries of the grant date. |
Option Exercises and Stock Vested During Fiscal 2023
The following table summarizes stock option exercises
and the vesting of stock awards with respect to our named executive officers in 2023. As discussed in further detail in “Compensation
Discussion and Analysis—Treatment of Equity-Based Compensation Upon Veralto Spin-Off,” all of the share amounts and option
exercise prices set forth below reflect adjustments pursuant to the anti-dilution provisions of the Omnibus Plan to account for the Veralto
Spin-Off and preserve the intrinsic value of each award.
| Option Awards | |
Stock Awards |
Name | |
Number of Shares Acquired on Exercise (#) | |
Value Realized on
Exercise ($)(1) | |
Number of Shares
Acquired on Vesting (#)(2) | |
Value Realized
on Vesting ($)(2) |
Rainer M. Blair | |
— | |
— | |
51,824 | |
11,589,738 |
Matthew R. McGrew | |
— | |
— | |
25,790 | |
5,767,535 |
Joakim Weidemanis | |
36,444 | |
6,499,874 | |
40,388 | |
8,876,365 |
Georgeann Couchara | |
— | |
— | |
1,152 | |
254,850 |
Jose-Carlos Gutierrez-Ramos | |
— | |
— | |
1,784 | |
394,606 |
(1) |
Calculated by multiplying the number of shares acquired times the difference
between the exercise price and the market price of Danaher Common Stock at the time of exercise. |
(2) |
Includes the PSU award shares set forth in the table below, which (together with the related
cash dividend equivalent rights) following vesting remain subject to a mandatory holding period that extends until the end of 2024.
“Value Realized on Vesting” is calculated based on (a) the number of shares vested times the closing price of Danaher’s
Common Stock as reported on the NYSE on the vesting date (or on the last trading day prior to the vesting date if the vesting date
was not a trading day), plus (b) in the case of PSUs, the amount of cash dividend equivalent rights attached to the respective PSUs
and accrued as of the vesting date. |
Name | |
Number of PSU Shares That
Vested
(#) | |
Value Realized on Vesting
($) |
Rainer M. Blair | |
47,520 | |
10,637,352 |
Matthew R. McGrew | |
23,496 | |
5,259,580 |
Joakim Weidemanis | |
29,710 | |
6,650,584 |
Georgeann Couchara | |
— | |
— |
Jose-Carlos Gutierrez-Ramos | |
— | |
— |
2024
Notice of Annual Meeting and Proxy Statement |
68 |
Potential Payments Upon Termination or Change-of-Control
as of 2023 Fiscal Year-End
The following table describes the payments and
benefits that each named executive officer would be entitled to receive upon termination of employment or in connection with a
change-of-control of Danaher. The amounts set forth below assume that the triggering event occurred on December 31, 2023. Where
benefits are based on the market value of Danaher’s Common Stock, we have used the closing price of Danaher’s Common
Stock as reported on the NYSE on December 31, 2023 ($231.34 per share). In addition to the amounts set forth below, upon any termination
of employment each officer would also be entitled to:
• |
receive all payments generally provided to salaried employees on a non-discriminatory basis upon termination, such as accrued salary, life insurance proceeds (for any termination caused by death), unused vacation and 401(k) Plan distributions; |
• |
potentially receive an annual cash incentive compensation award pursuant to the Omnibus Plan, since under the terms of the award a participant who remains employed through the end of the annual performance period is eligible for an award under the plan; |
• |
receive accrued, vested balances under the EDIP, ECP and DCP, if applicable (provided that under the EDIP and the ECP, if the administrator determines that the circumstances of a participant’s termination constitute gross misconduct, the administrator may determine that the participant’s vesting percentage is as low as zero with respect to all balances that were contributed by Danaher); and |
• |
exercise vested stock options (provided that under the terms of the Omnibus Plan, if an employee is terminated for gross misconduct, the administrator may terminate up to all of the participant’s unexercised or unvested equity awards). |
The terms of the EDIP, ECP, DCP and Omnibus Plan
are described under “Summary of Employment Agreements and Plans.”
| |
Termination/Change-of-Control
Event(1) |
Named Executive
Officer | |
Benefit | |
Termination Without Cause ($) | |
Retirement ($) | |
Death
($)(2) |
Rainer M. Blair | |
Accelerated or continued vesting of stock options(3) | |
— | |
13,469,527 | |
15,494,848 |
| |
Accelerated or continued vesting of RSUs/PSUs(3) | |
— | |
21,639,966 | |
14,131,533 |
| |
Benefits continuation(4) | |
21,962 | |
— | |
— |
| |
Cash payments under Proprietary Interest Agreement/Senior Leader Severance Pay Plan(4) | |
6,500,000 | |
— | |
— |
| |
TOTAL: | |
6,521,962 | |
35,109,493 | |
29,626,381 |
Matthew R. McGrew | |
Accelerated or continued vesting of stock options | |
— | |
— | |
7,509,080 |
| |
Accelerated or continued vesting of RSUs/PSUs | |
— | |
— | |
4,300,188 |
| |
Benefits continuation(4) | |
25,027 | |
— | |
— |
| |
Cash payments under Proprietary Interest
Agreement/Senior Leader Severance Pay Plan(4) | |
966,310 | |
— | |
— |
| |
Value of unvested EDIP balance that would be accelerated(5) | |
— | |
— | |
635,261 |
| |
TOTAL: | |
991,337 | |
— | |
12,444,529 |
Joakim Weidemanis | |
Accelerated or continued vesting of stock options | |
— | |
— | |
13,608,619 |
| |
Accelerated or continued vesting of RSUs/PSUs | |
— | |
— | |
8,265,591 |
| |
Benefits continuation(4) | |
26,535 | |
— | |
— |
| |
Cash payments under Senior Leader Severance Pay Plan(4) | |
1,008,480 | |
— | |
— |
| |
Value of unvested EDIP balance that would be accelerated(5) | |
— | |
— | |
463,945 |
| |
TOTAL: | |
1,035,015 | |
— | |
22,338,155 |
Georgeann Couchara | |
Accelerated or continued vesting of stock options | |
— | |
— | |
749,290 |
|
Accelerated or continued vesting of RSUs/PSUs | |
— | |
— | |
1,507,292 |
| |
Benefits continuation(4) | |
24,055 | |
— | |
— |
| |
Cash payments under Senior Leader Severance Pay Plan(4) | |
660,000 | |
— | |
— |
| |
Value of unvested ECP balance that would be accelerated(5) | |
— | |
— | |
58,796 |
| |
TOTAL: | |
684,055 | |
— | |
2,315,378 |
2024
Notice of Annual Meeting and Proxy Statement |
69 |
| |
| |
Termination/Change-of-Control
Event(1) |
Named Executive Officer | |
Benefit | |
Termination Without Cause ($) | |
Retirement ($) | |
Death
($)(2) |
Jose-Carlos Gutierrez-Ramos | |
Accelerated or continued vesting of stock options | |
— | |
— | |
800,586 |
|
Accelerated or continued vesting of RSUs/PSUs | |
— | |
— | |
3,504,651 |
| |
Benefits continuation(4) | |
29,021 | |
— | |
— |
| |
Cash payments under Senior Leader Severance Pay Plan(4) | |
784,160 | |
— | |
— |
| |
Value of unvested ECP balance that would be accelerated(5) | |
— | |
— | |
120,465 |
| |
TOTAL: | |
813,181 | |
— | |
4,425,702 |
The values reflected in the table above and the
footnotes below relating to the acceleration of stock options, RSUs and PSUs reflect the intrinsic value (that is, the value based
on the price of Danaher’s Common Stock, and in the case of stock options minus the exercise price) of the options, RSUs and
PSUs (with respect to PSUs, assuming (a) target-level performance in the case of death before the end of the relevant performance
period, (b) actual performance in the case of death at the conclusion of the relevant performance period, and (c) in the case of
retirement or termination without cause, assuming actual performance for the 2021 PSUs and target-level performance for the 2022
and 2023 PSUs) that would vest or would have vested as a result of the specified event of termination occurring as of December
31, 2023. The level of PSU performance assumed for purposes of this table is consistent with the methodology applied for purposes
of the “Outstanding Equity Awards at 2023 Fiscal Year-End” table. With respect to PSUs, the values reflected in the
table above and the footnotes below also include the amount of cash dividend equivalent rights attached to the respective PSUs
and accrued as of December 31, 2023.
(1) |
For a description of the treatment upon a change-of-control of outstanding equity awards granted under the Omnibus Plan, please see “Summary of Employment Agreements and Plans.” |
(2) |
The terms of the Omnibus Plan provide for accelerated vesting of a participant’s stock options and a pro rata portion of a participant’s RSUs and PSUs (at target value) if the participant dies during employment. For a description of these provisions under the Omnibus Plan, please see “Summary of Employment Agreements and Plans.” |
(3) |
If Mr. Blair had retired as of December 31, 2023, he would have qualified for “early retirement” treatment under the terms of the Omnibus Plan, which provides for, among other terms, continued vesting of certain of the participant’s stock options, RSUs and PSUs (based on the actual performance level achieved) following early retirement. For a description of these provisions under the Omnibus Plan, please see “Summary of Employment Agreements and Plans.” |
(4) |
Please see “Summary of Employment Agreements and Plans” for a description of the respective benefits and cash payments each officer would be entitled to if Danaher terminates the officer’s employment without cause, as well as a description of the post-employment restrictive covenant obligations of each officer. The amounts set forth in the table assume that the officer would have executed Danaher’s standard release in connection with any termination without cause. |
(5) |
Under the terms of the EDIP and ECP,
upon a participant’s death the unvested portion of the Company contributions that have been credited to the
participant’s account would immediately vest. |
2024
Notice of Annual Meeting and Proxy Statement |
70 |
2023 Nonqualified Deferred Compensation
The table below sets forth for each named
executive officer information regarding (1) participation in the EDIP and the ECP, as applicable, (2) participation in the
DCP (if any) and (3) PSUs that vested in 2023 and remain subject to a mandatory holding period that extends until the end of
2024. There were no withdrawals by or distributions to any of the named executive officers from the EDIP, ECP or DCP in 2023.
For a description of the EDIP, ECP and DCP, please see “Summary of Employment Agreements and Plans –
Supplemental Retirement Program”; for a description of the PSUs, please see “Compensation Discussion and
Analysis – Analysis of 2023 Named Executive Officer Compensation – Long-Term Incentive Awards.”
Name | |
Plan Name | |
Executive Contributions
In Last FY ($)(1) | |
Registrant Contributions
In Last FY ($)(2) | |
Aggregate Earnings In
Last FY ($)(3) | |
Aggregate Balance
At Last FYE ($)(4) |
Rainer M. Blair | |
EDIP | |
— | |
312,000 | |
(43,778 | ) |
2,989,571 |
| |
Vested PSUs(5) | |
— | |
10,637,352 | |
527,472 | |
11,164,824 |
Matthew R. McGrew | |
EDIP | |
— | |
118,592 | |
(15,467 | ) |
1,058,768 |
| |
Vested PSUs(5) | |
— | |
5,259,580 | |
260,806 | |
5,520,385 |
Joakim Weidemanis | |
EDIP | |
— | |
175,219 | |
162,854 | |
4,921,781 |
| |
DCP | |
— | |
— | |
43,812 | |
860,162 |
| |
Vested PSUs(5) | |
— | |
6,650,584 | |
329,781 | |
6,980,365 |
Georgeann Couchara | |
DCP | |
85,214 | |
— | |
54,537 | |
299,442 |
| |
ECP | |
— | |
59,289 | |
(1,938 | ) |
156,659 |
Jose-Carlos Gutierrez-Ramos | |
DCP | |
— | |
— | |
44,426 | |
414,104 |
|
ECP | |
— | |
121,506 | |
(1,711 | ) |
165,843 |
(1) |
Consists of contributions to the DCP of the following amounts reported in the Summary Compensation Table: |
|
Name | |
2023 Salary
(Reported in Summary Compensation Table for 2023) ($) | |
Non-Equity
Incentive Plan Compensation Earned With Respect to 2022 but Deferred in 2023 (Reported in Summary Compensation Table
for 2022) ($) |
|
Rainer M. Blair | |
— | |
— |
|
Matthew R. McGrew | |
— | |
— |
|
Joakim Weidemanis | |
— | |
— |
|
Georgeann Couchara | |
32,942 | |
52,272 |
|
Jose-Carlos Gutierrez-Ramos | |
— | |
— |
(2) |
The EDIP or ECP amounts set forth in this column (as applicable) are included as 2023 compensation under the “All Other Compensation” column in the 2023 Summary Compensation Table. The PSU amounts set forth in this column (including related cash dividend equivalent rights) are included in the “Stock Awards-Value Realized on Vesting” column in the “Option Exercises and Stock Vested During Fiscal 2023” table. |
2024
Notice of Annual Meeting and Proxy Statement |
71 |
(3) |
None of the amounts set forth in this column are included as compensation in the 2023 Summary Compensation Table. For a description of the EDIP/ECP/DCP earnings rates, please see “Summary of Employment Agreements and Plans.” The table below shows each notional earnings option that was available under the EDIP, ECP and/or DCP as of December 31, 2023 and the rate of return for each such option for the calendar year ended December 31, 2023 (the rate of return is net of investment management fees, fund expenses and administrative charges, as applicable): |
Investment Option | |
Rate of Return from January
1, 2023 Through
December 31, 2023 (%) | |
Investment Option | |
Rate of Return
from January 1, 2023 Through
December 31, 2023 (%) |
Active International Equity
Fund | |
19.27% | |
Bond Fund | |
6.62% |
Active Small Cap Equity Fund | |
19.62% | |
Bond Index Fund | |
5.55% |
BlackRock LifePath® Index 2025 Fund | |
12.02% | |
Cohen & Steers Realty Shares Fund | |
12.67% |
BlackRock LifePath® Index 2030 Fund | |
14.30% | |
Diversified Real Return Fund | |
7.55% |
BlackRock LifePath® Index 2035 Fund | |
16.22% | |
International Equity Index Fund | |
15.50% |
BlackRock LifePath® Index 2040 Fund | |
18.29% | |
Large Cap Equity Index Fund | |
26.28% |
BlackRock LifePath® Index 2045 Fund | |
20.10% | |
Managed Income Portfolio II Class 3 | |
1.96% |
BlackRock LifePath® Index 2050 Fund | |
21.20% | |
Small/Mid Cap Equity Index Fund | |
17.33% |
BlackRock LifePath® Index 2055 Fund | |
21.49% | |
T. Rowe Price Large Cap Core Growth Separate Account | |
50.08% |
BlackRock LifePath® Index 2060 Fund | |
21.49% | |
The Danaher Corporation Stock Fund | |
(1.23)% |
BlackRock LifePath® Index 2065 Fund | |
21.56% | |
The London Company Income Equity Separate Account | |
4.80% |
BlackRock LifePath® Index Retirement
Fund | |
11.06% | |
| |
|
(4) |
Of these balances, the following amounts were reported in the Summary Compensation Table for previous years: Mr. Blair, $864,000; Mr. McGrew, $324,413; Mr. Weidemanis, $465,210; Ms. Couchara, $59,289; and Dr. Gutierrez-Ramos, $170,806. |
(5) |
Represents PSUs that vested in February 2023 but remain subject to a mandatory holding period that extends until the end of 2024. The dollar value reported under “Registrant Contributions in Last FY” is based on (a) the number of PSU shares vested times the closing price of Danaher’s Common Stock as reported on the NYSE on the vesting date (or on the last trading day prior to the vesting date if the vesting date was not a trading day), plus (b) the amount of cash dividend equivalent rights attached to the respective PSUs and accrued as of the vesting date. The dollar value reported under “Aggregate Balance at Last FYE” is based on (x) the number of PSU shares vested times the closing price of Danaher’s Common Stock as reported on the NYSE on December 31, 2023, plus (y) the amount of cash dividend equivalent rights attached to the respective PSUs and accrued as of December 31, 2023. The dollar value reported under “Aggregate Earnings in Last FY” is equal to the difference between the award value as of December 31, 2023 and the award value as of respective vesting date. |
2024
Notice of Annual Meeting and Proxy Statement |
72 |
Equity Compensation Plan Information
All data set forth in the table below is as of
December 31, 2023.
Plan Category(1) | |
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(a) | |
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights(b)(2) | |
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a))(c) |
Equity compensation plans approved by security holders(3) | |
19,677,736(4) | |
$147.02 | |
51,971,578(5) |
Equity compensation plans not approved by security holders(6) | |
89,922 | |
— | |
2,142,567 |
TOTAL | |
19,767,658 | |
$147.02 | |
54,114,145 |
(1) |
Table does not include 6,107 shares of Danaher Common Stock issuable pursuant to outstanding restricted stock units granted under the Pall Corporation 2012 Stock Compensation Plan, as amended (the “Pall Plan”), which Danaher assumed in connection with the acquisition of Pall Corporation in 2015. No further awards may be granted under the Pall Plan. |
(2) |
The PSUs and RSUs that have been issued under our equity compensation plans (and under the Pall Plan) do not require a payment by the recipient to us at the time of vesting. The phantom shares of Danaher common stock under the Non-Employee Directors’ Deferred Compensation Plan and the ECP (which are sub-plans under the Omnibus Plan) and the DCP at distribution are converted into shares of Danaher Common Stock and distributed to the participant at no additional cost. Under the EDIP, if a participant receives their distribution in shares of Danaher Common Stock, the participant’s balance is converted into shares of Danaher Common Stock and distributed to the participant at no additional cost. As such, the weighted-average exercise price in column (b) does not take these awards into account. |
(3) |
Consists of the Omnibus Plan (including the Non-Employee Directors’ Deferred Compensation Plan and the ECP) and the EDIP. With respect to PSUs that are outstanding under the Omnibus Plan, if the related performance criteria have not been certified as of the date of the table, this column reflects the maximum number of shares issuable pursuant to these awards; and if the performance criteria have been certified as of the date of the table, this column reflects the earned number of shares issuable pursuant to such awards. |
(4) |
Consists of 18,911,856 shares attributable to the Omnibus Plan and 765,880 shares attributable to the EDIP. Under the terms of the EDIP, upon distribution of a participant’s EDIP balance the participant may elect to receive their distribution in cash, shares of Danaher Common Stock or a combination of cash and shares of Danaher Common Stock (except that any portion of a participant’s account that is subject to the Danaher Common Stock earnings rate must be distributed in shares of Danaher Common Stock). For purposes of this table, we have assumed that all EDIP balances as of December 31, 2023 would be distributed in Danaher Common Stock. |
(5) |
Consists of 49,682,090 shares available for future issuance under the Omnibus Plan and 2,289,488 shares available for future issuance under the EDIP. See “Summary of Employment Agreements and Plans” for a description of the types of awards issuable under the Omnibus Plan. |
(6) |
Consists of the DCP; for a summary of the DCP, please see “Summary of Employment Agreements and Plans – Supplemental Retirement Program.” Under the terms of the DCP, any portion of a participant’s account that is subject to the Danaher Common Stock earnings rate must be distributed in shares of Danaher Common Stock (all other balances are distributed in cash). |
2024
Notice of Annual Meeting and Proxy Statement |
73 |
Pay Versus Performance
The disclosure in this section shall not be
deemed to be incorporated by reference into any prior or subsequent filing by Danaher under the Securities Act of 1933 or the Exchange
Act of 1934, except to the extent Danaher specifically incorporates it by reference therein.
Provided below is the Company’s “pay
versus performance” disclosure as required pursuant to Item 402(v) of Regulation S-K promulgated under the Exchange Act.
As required by Item 402(v), we have included:
• |
A list of the most important measures that our Compensation Committee used in 2023 to link a measure of pay calculated in accordance with Item 402(v) (referred to as “compensation actually paid”, or “CAP”) to Company performance; |
• |
A table that compares the total compensation of our named executive officers’ (also known as NEOs) as presented in the Summary Compensation Table (“SCT”) to CAP and that compares CAP to specified performance measures; and |
• |
Graphs that describe: |
|
• |
the relationships between CAP and our cumulative total shareholder return (“TSR”), GAAP Net Income, and our Company selected measure, non-GAAP adjusted diluted net earnings per common share from continuing operations (“Adjusted EPS”); and |
|
• |
the relationship between our TSR and the TSR of the S&P 500 Health Care Index (“Peer Group TSR”). |
Salary, Bonus, Non-Equity Incentive Plan Compensation,
Nonqualified Deferred Compensation Earnings and All Other Compensation are each calculated in the same manner for purposes of both
CAP and SCT. There are two primary differences between the calculation of CAP and SCT total compensation:
| |
SCT Total | |
CAP |
Pension | |
Year over year change in the actuarial present value of pension benefits | |
Current year service cost and any prior year service cost (if a plan amendment occurred during the year) |
Stock and Option Awards | |
Grant date fair value of stock and option awards granted during the year | |
Year over year change in the fair value of stock and option awards
that are unvested as of the end of the year, or vested or were forfeited during the year(1) |
(1) |
Includes any dividends paid on equity awards in the fiscal year prior to the vesting date that are not otherwise reflected in the fair value of such award. |
This disclosure has been prepared in accordance
with Item 402(v) and does not necessarily reflect value actually realized by the executives or how our Committee evaluates compensation
decisions in light of Company or individual performance. In particular, our Committee has not used CAP as a basis for making executive
compensation decisions, nor does it use GAAP Net Income or Peer Group TSR for purposes of determining executive incentive compensation.
Please refer to our Compensation Discussion and Analysis on pages 44 to 60 for a discussion of our executive compensation program
objectives and the ways in which we align executive compensation with performance.
Our Most Important Metrics Used for
Linking Pay and Performance. As required by Item 402(v), below are the most important
metrics our Committee used to link executive pay to performance for 2023. Our stock price performance, as reflected by our absolute TSR,
directly impacts the value of the equity compensation awards we grant to executive officers. Each of the other metrics below are used
for purposes of determining payouts under either our executive annual cash incentive compensation program or our executive PSU program.
• |
Absolute TSR |
• |
Relative TSR compared to S&P 500 TSR |
• |
Adjusted EPS (non-GAAP) |
• |
Adjusted Free Cash Flow to Adjusted Net Income Ratio (non-GAAP) |
• |
Core Revenue Growth (non-GAAP) |
2024
Notice of Annual Meeting and Proxy Statement |
74 |
Adjusted EPS is the most heavily weighted metric
used to determine Company performance under our executive annual cash incentive compensation program. The Committee weights Adjusted
EPS most heavily in the Company performance formula because it believes Adjusted EPS correlates strongly with shareholder returns,
particularly since Adjusted EPS is calculated in a manner that focuses on gains and charges the Committee believes are most directly
related to Company operating performance during the period. Accordingly, Adjusted EPS is the Company-selected measure included
in the table and graphs that follow.
Pay Versus Performance Table.
In accordance with Item 402(v), we provide below the tabular disclosure for the Company’s
President and Chief Executive Officer (“CEO”) (our Principal Executive Officer) and the average of our NEOs other than the
CEO for 2023, 2022, 2021 and 2020.
| |
| |
| |
| |
| |
| |
| |
Value of Initial Fixed $100 Investment
Based On: | |
| |
|
Fiscal
Year(1) (a) | |
Summary Compensation Table Total for First PEO (b1) | |
Compensation
Actually Paid to
First PEO(2) (c1) | |
Summary Compensation Table Total for Second PEO (b2) | |
Compensation
Actually Paid to
Second
PEO(2) (c2) | |
Average Summary Compensation Table Total for Non-PEO
NEOs (d) | |
Average
Compensation Actually
Paid to Non-PEO
NEOs(2) (e) | |
Total
Share- holder
Return(3) (f) | |
Peer
Group Total
Share- holder
Return(3) (g) | |
Net
Income(4) (h) | |
Adjusted
EPS(5) (i) |
2023 | |
$20,903,282 | |
$5,213,515 | |
$0 | |
$0 | |
$7,103,560 | |
$2,603,239 | |
$173 | |
$143 | |
$4,764 | |
$7.63 |
2022 | |
$20,196,027 | |
$190,304 | |
$0 | |
$0 | |
$6,641,306 | |
$(930,613) | |
$175 | |
$140 | |
$7,209 | |
$10.97 |
2021 | |
$17,152,267 | |
$59,455,992 | |
$0 | |
$0 | |
$6,225,036 | |
$26,481,836 | |
$216 | |
$143 | |
$6,433 | |
$10.00 |
2020 | |
$10,396,761 | |
$32,944,487 | |
$16,763,956 | |
$83,394,550 | |
$6,786,580 | |
$20,676,667 | |
$145 | |
$113 | |
$3,646 | |
$5.11 |
(1) |
For 2020, 2021, 2022 and 2023, the First PEO is Rainer
Blair. In 2020, the Second PEO is Thomas Joyce. The other NEOs in 2020 were Messrs. Weidemanis, McGrew and Brian Ellis, and
Angela Lalor; in 2021, the other NEOs were Messrs. Weidemanis and McGrew and Mss. Lalor and Jennifer Honeycutt; in 2022, the
other NEOs were Messrs. Weidemanis and McGrew, Dr. Gutierrez-Ramos and Ms. Honeycutt; and in 2023 the other NEOs were Messrs.
Weidemanis and McGrew, Dr. Gutierrez-Ramos and Ms. Couchara. |
(2) |
To calculate CAP (columns (c1), (c2) and (e)), the following amounts were deducted
from and added to the applicable SCT total compensation: |
|
|
PEO 1 |
Prior FYE
Current FYE
Fiscal Year |
|
12/31/2019
12/31/2020
2020 |
|
12/31/2020
12/31/2021
2021 |
|
12/31/2021
12/31/2022
2022 |
|
12/31/2022
12/31/2023
2023 |
SCT Total |
|
$10,396,761 |
|
$17,152,267 |
|
$20,196,027 |
|
$20,903,282 |
— |
|
Grant Date Fair Value of Option Awards and Stock Awards Granted
in Fiscal Year |
|
$ (6,585,590 |
) |
$ (11,384,877 |
) |
$ (14,268,274 |
) |
$ (15,577,891) |
+ |
|
Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock
Awards Granted in Fiscal Year |
|
$12,507,143 |
|
$22,940,973 |
|
$14,744,612 |
|
$14,802,411 |
+ |
|
Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards
Granted in Prior Fiscal Year |
|
$15,738,917 |
|
$30,678,296 |
|
$ (14,993,297 |
) |
$ (12,577,667) |
+ |
|
Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That
Vested During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted
in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
$887,256 |
|
$69,332 |
|
$ (5,488,764 |
) |
$ (2,336,620) |
— |
|
Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted
in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
Compensation Actually Paid |
|
$32,944,487 |
|
$59,455,992 |
|
$190,304 |
|
$5,213,515 |
2024
Notice of Annual Meeting and Proxy Statement |
75 |
|
|
PEO 2 |
Prior FYE
Current FYE
Fiscal Year |
|
12/31/2019
12/31/2020
2020 |
|
12/31/2020
12/31/2021
2021 |
|
12/31/2021
12/31/2022
2022 |
|
12/31/2022
12/31/2023
2023 |
SCT Total |
|
$16,763,956 |
|
$0 |
|
$0 |
|
$0 |
— |
|
Grant Date Fair Value
of Option Awards and Stock Awards Granted in Fiscal Year |
|
$ (11,748,524) |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Fair Value at Fiscal Year-End of Outstanding
and Unvested Option Awards and Stock Awards Granted in Fiscal Year |
|
$24,040,706 |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Change in Fair Value of Outstanding and Unvested Option
Awards and Stock Awards Granted in Prior Fiscal Year |
|
$53,508,940 |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Fair Value at Vesting of Option Awards and Stock Awards
Granted in Fiscal Year That Vested During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Change in Fair Value as of Vesting Date of Option Awards
and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
$829,471 |
|
$0 |
|
$0 |
|
$0 |
— |
|
Fair Value as of Prior Fiscal Year-End of Option Awards
and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
Compensation Actually Paid |
|
$83,394,550 |
|
$0 |
|
$0 |
|
$0 |
|
|
Non-PEO NEOs |
Prior
FYE
Current FYE
Fiscal Year |
|
12/31/2019
12/31/2020
2020 |
|
12/31/2020
12/31/2021
2021 |
|
12/31/2021
12/31/2022
2022 |
|
12/31/2022
12/31/2023
2023 |
SCT Total |
|
$6,786,580 |
|
$6,225,036 |
|
$6,641,306 |
|
$7,103,560 |
— |
|
Grant Date Fair Value of Option Awards and
Stock Awards Granted in Fiscal Year |
|
$(4,178,109) |
|
$(3,370,721) |
|
$(3,945,270) |
|
$(4,834,780) |
+ |
|
Fair Value at Fiscal Year-End of Outstanding and Unvested
Option Awards and Stock Awards Granted in Fiscal Year |
|
$7,853,538 |
|
$6,792,180 |
|
$4,069,305 |
|
$4,666,149 |
+ |
|
Change in Fair Value of Outstanding and Unvested Option
Awards and Stock Awards Granted in Prior Fiscal Year |
|
$9,403,554 |
|
$16,443,088 |
|
$(5,970,277) |
|
$(3,255,395) |
+ |
|
Fair Value at Vesting of Option Awards and Stock Awards
Granted in Fiscal Year That Vested During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Change in Fair Value as of Vesting Date of Option Awards
and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
$811,104 |
|
$392,253 |
|
$(1,725,677) |
|
$(1,076,295) |
— |
|
Fair Value as of Prior Fiscal Year-End of Option Awards
and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
Compensation Actually Paid |
|
$20,676,667 |
|
$26,481,836 |
|
$(930,613) |
|
$2,603,239 |
The fair value of performance stock units (PSUs)
used in the calculation of CAP (columns (c1), (c2) and (e)) was determined using a Monte Carlo simulation valuation model, in accordance
with ASC 718. The fair value of option awards used in the calculation of CAP was determined using the Black-Scholes option pricing
model, in accordance with ASC 718. In both cases, the assumptions used in these calculations are not materially different than
those used for purposes of the Summary Compensation Table.
(3) |
Reflects TSR indexed to $100 for each of the Company
and the S&P 500 Health Care Index, which is an industry line peer group reported in the performance graph included in
the Company’s 2023 Annual Report on Form 10-K. |
(4) |
Values shown are in millions. |
(5) |
Please see page 47 for a definition of Adjusted EPS. Values shown reflect Adjusted
EPS as calculated for purposes of our executive compensation program for the applicable reporting year. |
2024
Notice of Annual Meeting and Proxy Statement |
76 |
Relationship between CAP and TSR.
The chart below reflects the relationship between the PEO1, PEO2 and Average NEO CAP versus
our TSR and the Peer Group TSR. As reflected in the graph below, the Company’s 4-year cumulative TSR exceeds the Peer Group
TSR.
Danaher & Peer TSR vs. Compensation Actually
Paid
2024
Notice of Annual Meeting and Proxy Statement |
77 |
Relationship between CAP and GAAP
Net Income. The chart below reflects the relationship between the PEO and Average NEO CAP
and our GAAP Net Income.
Danaher Net Income vs. Compensation Actually
Paid
2024
Notice of Annual Meeting and Proxy Statement |
78 |
Relationship between CAP and Adjusted
EPS (our Company-Selected Measure). The chart below reflects the relationship between the
PEO CAP and Average NEO CAP and our Adjusted EPS.
Danaher Adjusted EPS vs. Compensation Actually
Paid
Pay Ratio Disclosure
Provided below is information about the relationship
of the annual total compensation of Rainer M. Blair, our President and Chief Executive Officer, and the annual total compensation
of the median of our employees other than Mr. Blair.
We identified the median employee as of October
31, 2023 based on (1) annual base salary (for all Company salaried employees, other than Mr. Blair) and hourly rate multiplied
by scheduled annual work hours (for all Company hourly employees), and (2) the target annual cash incentive compensation for each
employee entitled thereto (other than Mr. Blair). The calculation included all employees whether employed full time, part time
or on a seasonal basis.
The pay ratio set forth below is a reasonable
estimate calculated in a manner consistent with applicable SEC rules. In light of the numerous different methodologies, assumptions,
adjustments and estimates that companies may apply as permitted under the SEC rules, this information should not be used as a basis
for comparison between different companies.
For 2023, our last completed fiscal year:
• |
the annual total compensation of Mr. Blair, as reported in the Summary Compensation Table presented elsewhere in this Proxy Statement, was $20,903,282; |
• |
the annual total compensation of the median of all Danaher employees (other than Mr. Blair) was $65,010; and |
• |
the ratio of the annual total compensation of Mr. Blair to the annual total compensation of the median of all other Company employees was 322 to 1. |
2024
Notice of Annual Meeting and Proxy Statement |
79 |
Summary of Employment Agreements and Plans
Following is a description of (1) named executive
officer employment-related agreements, and (2) the cash incentive compensation, equity compensation, non-qualified deferred compensation
and severance pay plans in which Danaher’s named executive officers participate. Each of these plans allows the plan administrator
to exercise certain discretion in the administration of the plan, and as a result the plan administrator may administer the plan
in a different manner from period to period, or in a different manner with respect to different plan participants, in each case
to the extent permitted under the applicable plan.
Employment Agreements
Named Executive Officer Proprietary Interest
Agreements
In connection with Mr. Blair’s promotion
to the role of President and CEO in 2020, Danaher and Mr. Blair entered into an Amended and Restated Agreement Regarding Competition
and Protection of Proprietary Interests (the “Blair Agreement”). Under the Blair Agreement, during and for two years
after Mr. Blair’s employment with us, subject to certain customary exceptions, he is prohibited from disclosing or improperly
using any of our confidential information; making any disparaging comments about us; competing with us; selling to or soliciting
purchases from our customers and prospective customers with respect to products and services about which he has particular knowledge;
or hiring or soliciting any of our current or recent employees, and during and for one year after his employment with us he is
prohibited from working for any Danaher customers or vendors in any role in which he would use or disclose or threaten to use or
disclose any of our confidential information. In addition, with limited exceptions all intellectual property that Mr. Blair develops
in connection with his employment with us belongs to us. The Blair Agreement further provides that if we terminate Mr. Blair’s
employment without “cause” or if he terminates his employment for “good reason” (each as defined in the
Blair Agreement), he will be entitled to (1) a cash amount equal to twelve months of base salary at the rate in effect on the date
of termination (the “Termination Date,” and the year in which the Termination Date occurs is referred to as the “Termination
Year”), (2) the annual cash incentive compensation award for service in the calendar year prior to the Termination Year,
if it has not been paid prior to the Termination Date (the “Accrued Obligation”), (3) a cash amount equal to his target
annual cash incentive compensation award for the Termination Year, and (4) a cash amount equal to the product of (x) his target
annual cash incentive compensation award for the Termination Year, times (y) a fraction, the numerator of which is the number of
calendar days from the beginning of the Termination Year through the Termination Date, and the denominator of which is 365; provided
in each case he signs and does not revoke a release of all claims. Any cash severance payments paid under any other Danaher plan
or agreement will diminish the severance payments under the Blair Agreement on a dollar-for-dollar basis (except for the Accrued
Obligation).
We have also entered into an agreement with each
of the other NEOs under which each such officer is subject to certain covenants designed to protect Danaher’s proprietary
interests (each, a “Proprietary Interest Agreement”). Except for differences in the duration of certain restrictive
covenants, the terms of such agreements are substantially the same. During and for specified periods after the officer’s
employment with us, subject to certain customary exceptions, the officer is prohibited from disclosing or improperly using any
of our confidential information; making any disparaging comments about us; competing with us; selling to or soliciting purchases
from our customers and prospective customers with respect to products and services about which the officer has particular knowledge;
or hiring or soliciting any of our current or recent employees. Each officer also agrees that with limited exceptions all intellectual
property that the officer develops in connection with the officer’s employment with us belongs to us. Certain of the agreements
also restrict interfering with our vendor relationships, and certain of the agreements prohibit the officer for a specified period
of time from working for any Danaher customers or vendors in any role in which the officer would use or disclose or threaten to
use or disclose any of our confidential information.
2024
Notice of Annual Meeting and Proxy Statement |
80 |
Directors’ and Officers’ Indemnification
and Insurance
Danaher’s Certificate of Incorporation requires
it to indemnify to the full extent authorized or permitted by law any person made, or threatened to be made a party to any action
or proceeding by reason of their service as a director or officer of Danaher, or by reason of serving at Danaher’s request
as a director or officer of any other entity, subject to certain exceptions. Danaher’s Bylaws provide for similar indemnification
rights. In addition, each of Danaher Corporation’s directors and executive officers has executed an indemnification agreement
with Danaher that provides for substantially similar indemnification rights and under which Danaher has agreed to pay expenses
in advance of the final disposition of any such indemnifiable proceeding. Danaher also has in effect directors and officers liability
insurance covering all of Danaher’s directors and officers.
2007 Omnibus Incentive Plan
The Compensation Committee of the Board of Directors
of Danaher (the “Administrator”) administers the Omnibus Plan. The following awards may be granted under the Omnibus
Plan: stock options, SARs, restricted stock, RSUs and other stock-based awards (including PSUs), as such terms are defined in the
Omnibus Plan, as well as cash-based awards (collectively, all such awards are referred to as “awards”).
Award Limits
135,443,592 shares of Common Stock have been authorized
for issuance under the Omnibus Plan (the “Maximum Share Limit”). Under the terms of the plan, (1) each share of Common
Stock subject to a full value award and granted before February 28, 2017 counts against the Maximum Share Limit as one share
of Common Stock, (2) each share of Common Stock subject to a full value award and granted after February 28, 2017 counts against
the Maximum Share Limit as 3.56 shares of Common Stock, and (3) if after February 28, 2017 any full value award expires, is canceled,
forfeited, cash-settled, exchanged or assumed by a third party or terminates for any other reason, in each case without a distribution
of shares of Common Stock to the participant, each share of Common Stock available under that award is added back to the pool of
shares available for grant as 3.56 shares of Common Stock. The plan caps the number of shares of Common Stock that may be awarded
to any individual in any calendar year under options or SARs at 1,000,000 and under any other stock-based award at 500,000, provided
that this cap is doubled in the initial year of hire. Cash-based awards under the plan are subject to an annual limit of $10 million
(which amount is doubled in the initial year of hire) per employee participant. The plan also caps the annual cash and equity compensation
(based on grant date fair value) that may be awarded to any individual, non-management director at $800,000 ($1,300,000 for any
non-management Board chair or vice chair (or similar role)).
Prohibition on Share Recycling
The following shares of Common Stock do not again
become available for awards or increase the number of shares available for grant under the plan: shares of Common Stock (1) tendered
by the participant or withheld by the Company in payment of the purchase price of an option or SAR, (2) tendered by the participant
or withheld by the Company to satisfy any tax withholding obligation under the plan, (3) repurchased by the Company with proceeds
received from the exercise of an option, or (4) subject to a SAR that are not issued in connection with the stock settlement of
that SAR upon its exercise.
Minimum Vesting Requirement
All equity awards granted following the date of
the Company’s 2017 annual meeting are subject to a minimum one-year vesting or performance requirement, except that (1) up
to five percent (5%) of the Maximum Share Limit may be issued without regard to this minimum vesting period, (2) this minimum vesting
period does not apply in the event of death, disability, retirement or other terminations of employment or service, and (3) the
Administrator may waive the minimum vesting requirement in the event of a substantial corporate change.
2024
Notice of Annual Meeting and Proxy Statement |
81 |
Retirement and Other Terminations of Employment
Subject to certain terms and conditions set forth
in the Omnibus Plan or the applicable award agreement (including the overall term of the award), in general:
• |
upon retiring after reaching age 65, (1) a participant’s unvested options held for
at least six months prior to retirement continue to vest and, together with any options that are vested as of the retirement
date, remain outstanding and (once vested) may be exercised until the fifth anniversary of the retirement date (or the tenth
anniversary with respect to grants made on or after January 1, 2022), (2) any RSUs that are unvested as of the retirement
date (and, for grants on or after January 1, 2022, held for at least six months prior to retirement) continue to vest according
to their terms, (3) for PSUs granted prior to January 1, 2022, the participant receives a prorated portion of the shares actually
earned based on the Company’s performance over the performance period, and (4) for PSUs granted on or after January
1, 2022 and held for at least six months prior to retirement, the participant receives the shares actually earned based on
the Company’s performance over the performance period; and |
• |
upon retiring after reaching age 55 and completing ten years of service with Danaher: |
|
• |
with respect to grants on or after February 23, 2015 and prior to January 1, 2022, (1) a
pro rata portion of the participant’s unvested options held for at least six months prior to retirement continue to
vest and, together with any options that are vested as of the retirement date, remain outstanding and (once vested) may be
exercised until the fifth anniversary of the retirement date, (2) a pro rata portion of any RSUs that are unvested as of the
retirement date continue to vest according to their terms, and (3) with respect to PSUs, the participant receives a prorated
portion of the shares actually earned based on the Company’s performance over the performance period. |
|
• |
with respect to grants on or after January 1, 2022 and held for at least six months prior
to retirement, (1) the participant’s unvested options continue to vest and, together with any options that are vested
as of the retirement date, remain outstanding and (once vested) may be exercised until the fifth anniversary of the retirement
date, (2) any RSUs that are unvested as of the retirement date continue to vest according to their terms, and (3) the participant
receives the PSU shares actually earned based on the Company’s performance over the performance period. |
Upon terminations of employment other than retirement
(as defined under the Omnibus Plan), unless the Administrator determines otherwise any options or SARs that are vested as of a
participant’s termination of employment (including any options or SARs the vesting of which accelerates as a result of the
participant’s death) will remain exercisable until the earlier of the expiration of the award’s term or (1) 12 months
after termination, if the termination results from the participant’s death or disability, (2) in the Administrator’s
discretion, at the time of termination if the participant’s employment is terminated for gross misconduct, or (3) 90
days following the termination date, in all other non-retirement situations. If an award survives for any period of time following
termination of employment, it will nonetheless terminate as of the date that the participant violates any post-employment covenant
between Danaher and the participant. In addition, upon termination of a participant’s employment or service due to death,
generally (1) all of the participant’s outstanding stock options granted under the Omnibus Plan become fully vested, (2)
the vesting of a pro rata portion of the participant’s outstanding RSUs is accelerated as of the date of death, and (3) with
respect to PSUs as to which the death occurs prior to conclusion of the performance period, the participant’s estate receives
a pro rata portion of the target number of shares underlying the PSUs.
Substantial Corporate Change
Upon a Substantial Corporate Change (which is
defined in the Omnibus Plan and includes a change-of-control of Danaher as defined therein), the Administrator has sole discretion
with respect to the treatment of outstanding awards. The Administrator may provide for the assumption and continuation of, or substitution
for, outstanding awards by a successor entity or may provide that the forfeitable portions of outstanding awards terminate. In
the latter case, the Administrator may provide that participants may exercise any unexercised awards prior to termination, may
provide for payments to participants in relation to the terminating awards, or may provide for neither of the above.
2024
Notice of Annual Meeting and Proxy Statement |
82 |
Clawback Terms
All awards granted under the Omnibus Plan are
subject to the Company’s clawback policies in the form or forms approved by the Administrator from time to time, if and to
the extent such policies apply according to their terms, as well as any clawback terms required by applicable law.
Term of Plan
Unless the Board extends the plan’s term,
the Administrator may not grant awards under the plan after May 9, 2027.
Supplemental Retirement Program
Company Contributions
Danaher uses the Executive Deferred Incentive
Program, or EDIP, and the Excess Contribution Program, or ECP (which is a sub-plan under the 2007 Omnibus Plan) to provide supplemental
retirement benefits on a pre-tax basis in excess of qualified plan limitations to select management associates of Danaher and its
subsidiaries (including each of the named executive officers, as applicable). Prior to January 1, 2019, the EDIP was the sole plan
used by the Company to provide supplemental retirement benefits (and also served as a voluntary deferred compensation program).
The ECP became effective as of January 1, 2019 and prior to such date, EDIP participants made a one-time election to either continue
participating in the EDIP or participate in the ECP. All participants who join Danaher’s supplemental retirement program
at or after January 1, 2019 receive Company contributions under the ECP. All amounts that Danaher contributes to a participant’s
account in the EDIP and ECP are deemed invested on a notional basis in Danaher Common Stock. If termination of an employee’s
participation in the EDIP or ECP resulted from the employee’s gross misconduct, the Administrator may reduce the employee’s
vested interest with respect to all Danaher contributions to as low as zero percent.
EDIP
Under the EDIP, on or about February 1 of each
plan year, Danaher credits to the account of each EDIP participant an amount equal to the product of (1) the sum of the participant’s
base salary and target bonus as of the end of the prior year; and (2) a percentage determined by the Administrator that is based
on the participant’s years of participation in the EDIP, namely 6% for employees who have participated in the EDIP for less
than 10 years, 8% after 10 years of EDIP participation and 10% after 15 years of EDIP participation.
A participant vests in the amounts that Danaher
credits to their EDIP account as follows:
• |
If the participant has both reached age 55 and completed at least five years of service with
Danaher or its subsidiaries, the participant immediately vests 100% in each Danaher contribution. |
• |
If the participant does not satisfy the conditions described under the preceding bullet,
the participant’s vesting percentage is 10% for each full calendar year of participation in the EDIP (after the participant
has first completed five years of participation in the EDIP). |
• |
If a participant dies while employed by Danaher, their vesting percentage equals 100%. |
2024
Notice of Annual Meeting and Proxy Statement |
83 |
ECP
Under the ECP, on or about February
1 after the applicable year of participation, Danaher credits to the account of each participant an excess matching contribution
and excess non-elective contribution based on the formulas in the Company’s 401(k) plan for matching and non-elective contributions.
As a result, each participant can receive the following contributions in the ECP:
• |
a matching contribution to the ECP equal
to the sum of (a) 100% of the amount deferred into the Danaher Deferred Compensation Plan, or DCP for the year of participation,
up to 3% of the greater of (1) the participant’s compensation that is deferred into the DCP or (2) the participant’s
compensation above the IRS compensation limit for qualified retirement plans (“match compensation”), plus (b)
50% of the amount deferred into the DCP for the year of participation in excess of 3%, but not in excess of 5%, of the participant’s
match compensation; and |
• |
a non-elective contribution equal to 4% of
the participant’s rate of base salary and target bonus amount as of December 31 prior to the year of participation in
excess of the IRS compensation limit for qualified retirement plans. |
A participant vests in the matching contribution
in the ECP made each year on the first anniversary after it is credited to the participant’s account. A participant vests
in the non-elective contribution in the ECP made each year on the later of the first anniversary after it is credited to the participant’s
account, or the date the participant has completed three years of service with Danaher. If a participant dies while employed by
Danaher, their vesting percentage equals 100%.
Voluntary Deferrals
Each DCP participant is permitted to voluntarily
defer into the program, on a pre-tax basis, up to 85% of their salary and/ or up to 85% of their non-equity incentive compensation
with respect to a given plan year. Notional earnings on amounts deferred under the program are credited to participant accounts
based on the market rate of return of the applicable benchmark investment alternatives offered under the program, which are generally
the same as the investment alternatives offered under our 401(k) Plan (except for any investment options that may only be offered
under the tax qualified 401(k) Plan). Each participant allocates the amounts the participant voluntarily defers among the available
investment alternatives. Participants may change their allocations at any time, provided that any portion of a participant’s
account that is subject to the Danaher Common Stock investment alternative must remain allocated to that investment alternative
until the account is distributed to the participant. Participants are at all times fully vested in amounts they voluntarily defer
into their DCP accounts.
2024
Notice of Annual Meeting and Proxy Statement |
84 |
Distributions
In general, a participant may not receive a distribution
of their vested EDIP or ECP account balance (including any amounts voluntarily deferred) until after their employment with Danaher
terminates. A participant generally may elect to receive a distribution of their DCP account balance following their termination
of employment or on a specified future date prior to their termination of employment. The following chart generally describes the
timing and manner of distribution of EDIP, ECP and DCP account balances:
Name
of Plan |
|
|
|
Timing
of Beginning
of Distribution |
|
Period
of Distribution |
|
Form
of Distribution |
EDIP |
|
Not 100% vested in Danaher contributions
100% vested in Danaher contributions |
|
6 months following termination
Subject to certain exceptions, a distribution is payable no earlier than 6 months following termination of employment, and a participant may elect to begin receiving distributions 6 months, 1 year or 2 years following termination. |
|
Lump sum
Participant may elect lump sum, or if at least age 55, annual installments over two, five or ten years |
|
Participant may elect to receive distribution in cash, shares of Danaher Common Stock or a combination thereof (but all balances subject to the Danaher Common Stock investment alternative must be distributed in shares of Danaher Common Stock) |
|
|
|
|
|
|
|
|
ECP |
|
|
|
Participant will begin receiving distributions immediately following termination. A six-month delay may apply if the participant is a “key employee” under applicable tax rules |
|
Lump sum |
|
Shares of Danaher common stock (for balances subject to the Danaher Common Stock investment alternative) or cash (for balances not subject to the Danaher Common Stock investment alternative) |
DCP |
|
|
|
Participant may elect to begin receiving distributions on the earlier of a fixed date or termination of employment. Distributions on a fixed date must be at least 3 years after the date of election. Distribution elections upon a termination of employment are the same as under the EDIP |
|
Participant may elect lump sum or annual installments over a period of up to 10 years |
|
All balances subject to the Danaher Common Stock investment alternative must be distributed in shares of Danaher Common Stock, and all other balances must be paid in cash |
Certain events, such as the participant’s
death or an unforeseeable emergency, may impact the timing of a distribution under the EDIP, the ECP or the DCP.
General
Under the EDIP, the ECP and the DCP, Danaher contributions
and amounts voluntarily deferred are unfunded and unsecured obligations of Danaher, receive no preferential standing and are subject
to the same risks as any of Danaher’s other general obligations.
2024
Notice of Annual Meeting and Proxy Statement |
85 |
Senior Leader Severance Pay Plan
Each of Danaher’s executive officers (in
addition to certain other categories of employees as specified in the plan) is entitled to certain benefits under Danaher’s
Senior Leader Severance Pay Plan. If a covered employee is terminated without “cause” (as defined below) and except
in certain circumstances as specified in the plan, subject to execution of Danaher’s standard form of release the employee
is entitled to severance equal to a minimum of three months of annual base salary plus an additional month for each year of service
(provided that the three months plus all additional months cannot exceed twelve months in aggregate) paid out over the applicable
severance period according to the normal payroll cycle, as well as the opportunity to continue coverage under specified welfare
benefit plans of the Company for the duration of the severance period at the same cost as an active employee in a position similar
to that held by the employee at termination. There is no change-in control provision in the Senior Leader Severance Pay Plan. To
the extent a covered employee is entitled to severance or other post-termination compensation pursuant to the terms of an individual
agreement, payments and benefits will only be provided under the plan to the extent they are not duplicative of the payments and
benefits provided under the individual agreement.
Under the plan, “cause” is defined
as (1) the employee’s dishonesty, fraud, misappropriation, embezzlement, willful misconduct or gross negligence with respect
to, or any other action in willful disregard of the interests of, Danaher or its affiliates; (2) the employee’s conviction
of, or pleading guilty or no contest to (i) a felony, (ii) any misdemeanor (other than a traffic violation), or (iii) any other
crime or activity that would impair the employee’s ability to perform duties or impair the business reputation of Danaher
or its affiliates; (3) the employee’s willful failure or refusal to satisfactorily perform any duties assigned to the employee;
(4) the employee’s failure or refusal to comply with Company standards, policies or procedures, including without limitation
the Code of Conduct as amended from time to time; (5) the employee’s violation of any restrictive covenant agreement with
Danaher or its affiliates; (6) the employee’s engaging in any activity that is in conflict with the business purposes
of Danaher or its affiliates (as determined in the sole discretion of Danaher and its affiliates); or (7) a material misrepresentation
or a breach of any of the employee’s representations, obligations or agreements under the plan.
2024
Notice of Annual Meeting and Proxy Statement |
86 |
PROPOSAL 3
Advisory Vote on Named Executive Officer Compensation
In accordance with Section 14A of the Exchange
Act, we are asking our shareholders to vote at the 2024 Annual Meeting to approve, on an advisory basis, the compensation of our
named executive officers as disclosed in this Proxy Statement. Our shareholder advisory vote on executive compensation occurs on
an annual basis.
As discussed in detail under the heading “Compensation
Discussion and Analysis,” our executive compensation program is designed to attract and retain executives with the leadership
skills, attributes and experience necessary to succeed in an enterprise with Danaher’s size, diversity and global footprint;
motivate executives to demonstrate exceptional personal performance and perform consistently at or above the levels that we expect,
over the long-term and through a range of economic cycles; and link compensation to the achievement of goals and objectives that
we believe best correlate with the creation of long-term shareholder value.
We believe our executive compensation
program has been highly effective in achieving these objectives, both in 2023 and historically:
2023 Performance. In
2023, Danaher achieved critical milestones in its transformation into a global life sciences and diagnostics innovator:
• |
We spun-off our Veralto business (consisting of Danaher’s former water quality and product identification businesses) into an independent, publicly-traded company, further sharpening our strategic focus on life sciences and diagnostics. |
• |
We acquired Abcam plc, a leading global supplier of protein consumables, for a cash purchase price of approximately $5.6 billion. Abcam is now included in our Life Sciences segment. |
Even while meaningfully advancing our strategic
transformation, we:
• |
Continued to invest aggressively in future growth, including investments of approximately $1.5 billion in research and development and $1.4 billion in capital expenditures. |
• |
Returned approximately $778 million to common shareholders through cash dividends (marking the 31st year in a row Danaher has paid a dividend on its common shares). |
• |
Generated $23.9 billion in sales, $5.2 billion in operating profit and $6.5 billion in operating cash flow. |
Long-Term Performance.
• |
As of December 31, 2023, out of the 220 companies in the S&P 500 that have been publicly traded since the beginning of 1985, Danaher’s annualized total shareholder return (“TSR”) ranks fourth. |
• |
Danaher is the only company in its peer group whose TSR outperformed the S&P 500 Index by more than 1,600 basis points over every rolling 5-year period from and including 1999-2023. |
• |
Danaher’s compounded average annual shareholder return has outperformed the S&P 500 Index over each of the last five-, ten-, fifteen-, twenty- and twenty-five year periods. |
2024
Notice of Annual Meeting and Proxy Statement |
87 |
Our executive compensation program operates within
a strong framework of compensation governance. Our Compensation Committee regularly reviews external executive compensation practices
and trends and incorporated best practices into our 2023 executive compensation program:
|
What
We Do |
|
|
What
We Don’t Do |
|
|
|
|
|
|
Four-year vesting requirement
for stock options; three-year performance period plus further two-year holding period for PSUs |
|
|
No tax gross-up provisions (except as applicable
to management employees generally such as relocation policy) |
|
Incentive compensation programs
feature multiple, different performance measures aligned with the Company’s strategic performance metrics |
|
|
No dividend/dividend equivalents paid on unvested equity
awards |
|
Short-term and long-term
performance metrics that balance our absolute performance and our relative performance versus peer companies |
|
|
No “single trigger” change of control benefits
|
|
Rigorous, no-fault clawback
policies that are triggered even in the absence of wrongdoing |
|
|
No defined benefit pension program for any NEO |
|
Minimum one-year vesting
requirement for 95% of shares granted under the Company’s stock plan |
|
|
No hedging of Danaher securities permitted |
|
Stock ownership requirements
for all executive officers |
|
|
No long-term incentive compensation is denominated or
paid in cash (other than PSU dividend accruals) |
|
Limited perquisites
and a cap on CEO/CFO personal aircraft usage |
|
|
No above-market returns on deferred compensation plans |
|
Independent compensation
consultant that performs no other services for the Company |
|
|
No overlapping performance metrics between short-term
and long-term incentive compensation programs |
We are asking our shareholders to indicate their
support for our named executive officer compensation as described in this Proxy Statement. Accordingly, we are asking our shareholders
to vote on an advisory basis “FOR” the following non-binding resolution:
“RESOLVED, that the compensation paid
to the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and
Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby
approved.”
Although this advisory vote is non-binding, our Board and Compensation Committee will review the voting results
and take them into consideration when making future decisions regarding our named executive officer compensation programs.
|
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE RESOLUTION SET FORTH IN PROPOSAL 3. |
|
2024
Notice of Annual Meeting and Proxy Statement |
88 |
PROPOSAL 4
Shareholder Proposal
The Company has been informed that John Chevedden, 2215 Nelson Avenue, No. 205, Redondo
Beach, CA, 90278, a beneficial owner of 150 shares of Danaher common stock, intends to present the proposal set forth below at
the Annual Meeting. The Company is not responsible for any inaccuracies it may contain.
Proposal
4 -Special Shareholder Meeting Improvement
Shareholders ask our board to take the steps necessary to amend the appropriate company
governing documents to give the owners of a combined 15% of our outstanding common stock the power to call a special shareholder
meeting.
Currently it takes a theoretical 25% of all shares outstanding to call for a special
shareholder meeting. This theoretical 25% of all shares outstanding translates into 30% of the shares that vote at our annual
meeting.
It would be hopeless to expect that shares that do not have the time to vote would have
the time to go through the special procedural steps to call for a special shareholder meeting.
This proposal won 43%-support at the 2022 Danaher annual meeting for a lower 10% of shares
to be able to call for a special shareholder meeting. This 43% support likely represented close to or more than 51% support from
the shareholders who have access to independent proxy voting advice and are not forced to overly depend on the anti-shareholder
rights voting advice of management.
In reflecting on the 43%-support it is important to remember that it takes more shareholder
conviction to ignore management’s recommendation and vote for this proposal topic than to simply vote as management directs.
Since a special shareholder meeting can be useful in replacing a director, this proposal
may be an incentive for the Danaher directors to improve their performance. Danaher stock has gone downhill since its $290 price
in December 2021.
Four Danaher directors each received more than 156 million against votes in 2023:
Teri List
Shane Sanders
John Schwieters
Raymond Steven
This compares to 3 Danaher directors who each received less than 10 million against votes.
Calling a special shareholder meeting is hardly ever used by shareholders but the main
point of calling a special shareholder meeting is that it gives shareholders at least significant standing to engage effectively
with management.
With the widespread use of online shareholder meetings it is much easier for management
to conduct a special shareholder meeting and our bylaws thus need to be updated accordingly.
Please vote yes:
Special
Shareholder Meeting Improvement - Proposal 4
2024
Notice of Annual Meeting and Proxy Statement |
89 |
Company’s Statement in Opposition
The Board recommends that you vote against this shareholder proposal for the following
reasons:
Currently, shareholders of 25% of our outstanding Common Stock have the right to call
a special meeting, pursuant to a Company proposal previously approved by our shareholders. Our Board continues to believe that
this threshold ensures a reasonable number of shareholders consider a matter important enough to merit a special meeting.
Preparing for and holding a special meeting (even in a virtual format) would be time-consuming
and expensive. If adopted, this proposal would have the effect of allowing a relatively small percentage of shareholders with
potentially narrow interests to call special meetings to consider matters that may not be in the best interests of all of our
shareholders. Even if they are ultimately not able to obtain support from a majority of shares, those who might seek to call a
special shareholders’ meeting could subject us to considerable expense, distract management and the Board from important
business initiatives, or seek self-interested concessions in exchange for avoiding a special meeting.
Danaher’s Nominating and Governance Committee and Company management annually review
Danaher’s special meeting threshold, taking into account investor feedback as well as voting results in prior years when
similar proposals to reduce the threshold has been brought. Based on this review and these inputs, it was determined that the
existing 25% threshold continues to strike an appropriate balance between avoiding waste of Danaher and shareholder resources
on addressing narrow or special interests, while at the same time ensuring that shareholders holding a significant minority of
our outstanding shares have an appropriate mechanism to call a special meeting if they deem it appropriate.
The Board also believes that Danaher’s current robust governance practices provide
shareholders with numerous avenues to voice their opinions and ensure Board accountability. We maintain open and regular communications
with shareholders and financial analysts, and our shareholders can and do effectively use our Annual Meeting of Shareholders to
communicate their views to management, the Board, and other shareholders.
In the best interests of our shareholders and Company, we recommend that you vote against
this shareholder proposal.
THE
BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST PROPOSAL
4 |
2024
Notice of Annual Meeting and Proxy Statement |
90 |
PROPOSAL 5
Shareholder Proposal
The Company has been informed that As You Sow, on behalf of Eliana Fishman, 1833 9th
Street, NW, Washington, DC 20001, beneficial owner of 36 shares of Danaher common stock, and Minnesota Valley National Wildlife
Refuge Trust, 3815 East American Boulevard, Bloomington, MN, 55425, beneficial owner of 129 shares of Danaher common stock, intends
to present the proposal set forth below at the Annual Meeting. The Company is not responsible for any inaccuracies it may contain.
RESOLVED: Shareholders request that Danaher
Corp. (Danaher) report to shareholders on the effectiveness of the Company’s diversity, equity, and inclusion efforts. The
report should be done at reasonable expense, exclude proprietary information, and provide transparency on outcomes, using quantitative
metrics for workforce diversity, hiring, promotion, and retention of employees, including data by gender, race, and ethnicity.
SUPPORTING STATEMENT: Quantitative data
is sought so that investors can assess and compare the effectiveness of companies’ diversity, equity, and inclusion programs.
It is advised that this content be provided through Danaher’s existing sustainability
reporting infrastructure. An independent report specific to this topic is not requested.
WHEREAS: Companies that release, or have
committed to release, more inclusion data than Danaher include Baxter International, Biogen, CVS Health, Gilead Sciences, Pfizer,
and UnitedHealth Group.
As You Sow and Whistle Stop Capital released research in November 2023 that reviewed
over 4,500 EEO-1 reports, which show corporate workforce diversity.1 The data shows a positive correlation between
manager diversity and corporate performance. Within the healthcare sector, statistically significant positive correlations were
found between increased manager diversity and free cash flow per share, income after tax, and ten-year revenue growth rate.
The Company states it “sincerely hopes that [its] marginalized and underrepresented
associates feel supported and a sense of belonging...”2 However, as of the date of the filing of this proposal,
Danaher had not yet shared sufficient hiring, retention, or promotion data to allow investors to determine the effectiveness of
its diversity and inclusion programs.
As detailed below, inclusion indicators are important in assessing Danaher’s workplace
equity efforts and if the Company is successfully building, utilizing, and maintaining a diverse management team.
Hiring: Studies conducted by economists
at the University of Chicago and UC Berkeley found that “discriminating companies tend to be less profitable,” stating
“it is costly for firms to discriminate against productive workers.”3
Promotion: Without equitable promotional
practices, companies will be unable to build the necessary employee pipelines for diverse management. Women and employees of color
experience “a broken rung” in their careers; for every 100 men who are promoted, only 87 women are. Whereas women
of color comprise 18 percent of the entry-level workforce and only 6 percent of executives.4
Retention: Retention rates indicate if
employees believe a company represents their best opportunity. Morgan Stanley has found that employee retention above industry
average can indicate a competitive advantage and higher levels of future profitability.5
Investors have reason to be
concerned with Danaher as the Company was sued by a pension fund for its lack of diverse leadership.6 Investors want
to be sure that Danaher’s diversity and inclusion actions are more than performative and that the Company is, in its words,
“working hard to build an organization that celebrates difference, learns from diverse perspectives, and values inclusion…”7
|
1 |
https://www.asyousow.org/report-page/2023-positive-relationships-linking-workforce-diversity-and-financial-performance |
|
2 |
https://www.danaher.com/who-we-are/diversity-inclusion |
|
3 |
https://www.nytimes.com/2021/07/29/business/economy/hiring-racial-discrimination.html |
|
4 |
https://www.mckinsey.com/featured-insights/diversity-and-inclusion/women-in-the-workplace |
|
5 |
https://www.morganstanley.com/im/publication/insights/articles/article_culturequantframework_us.pdf |
|
6 |
https://news.bloomberglaw.com/social-justice/new-to-racial-justice-movement-a-pension-fund-sues-danaher |
|
7 |
https://news.bloomberglaw.com/social-justice/new-to-racial-justice-movement-a-pension-fund-sues-danaher |
2024
Notice of Annual Meeting and Proxy Statement |
91 |
Company’s Statement in Opposition
• |
Overview |
|
• |
Danaher has demonstrated that diversity, equity and inclusion (“DE+I”) is a strategic
priority with active support from the Board and executive management; has set ambitious DE+I improvement goals and made meaningful
progress toward achieving those goals; and has been highly transparent in quantifying the performance of its DE+I program.
We encourage you to review the extensive details regarding Danaher’s DE+I program included in our most recent sustainability
report, which is available in the “Sustainability” section of Danaher’s website at http://www.danaher.com. |
|
• |
Given that Danaher’s extensive disclosures already give investors the data they need
to assess the effectiveness of our DE+I program, the proponents’ request for additional reporting – including
additional demographic data that few companies publish -- would be an unnecessary and inefficient use of resources that would
serve only the limited interests of a small group of shareholders. |
|
• |
Though the proponent suggests Danaher’s public information
is insufficient to assess the effectiveness of our DE+I program, As You Sow’s own Public 3000 Workplace
Diversity, Equity, and Inclusion Disclosure Scorecard ranked Danaher in the top 5% of the 3000 surveyed companies (and
top 5% of the Health Care sector) as of December 31, 2023. |
|
• |
Leadership support. Danaher’s annual sustainability
report demonstrates a strategic commitment to DE+I at the highest levels of our organization. Among other initiatives, we
require every people leader (including our executive officers) to have a DE+I-related personal performance or development
objective as part of our annual performance review process, and for the third straight year in 2023 we have deployed one of
our most powerful DBS tools, Policy Deployment (“PD”), to drive continued progress toward our DE+I goals. PD’s
rigorous “plan-do-check-adjust” approach has driven significant progress toward achievement of our DE+I goals,
as evidenced by the results noted below. |
• |
Goals and progress. We have set ambitious, public goals to improve our gender and People of Color (“POC”) diversity and have demonstrated meaningful progress toward achieving these goals: |
|
• |
2025 goal: 40% female representation in global workforce. As of December 31, 2023, 40% of Danaher’s employees were women. |
|
• |
2025 goal: 38% POC representation in U.S. workforce. As of December 31, 2023, 43% of Danaher’s U.S. employees were POCs. |
• |
Transparency and quantitative data. We have been highly transparent in quantifying the performance of our DE+I program. We publicly disclose in our annual sustainability report: |
|
• |
Employee demographic data by gender, race and age |
|
|
• |
For each of gender and race, we disclose data on an overall basis and in sub-categories based
on job level (and in the case of gender, by geography) |
|
|
|
– |
For the U.S., we provide even further granularity by disclosing job level
detail for each EEOC race/ethnicity category. We also disclose our most recent U.S. Federal Employer Information Report (Form
EEO-1) Employment Data. |
|
• |
New hire data by gender and (for the U.S.) People of Color |
|
• |
U.S. pay equity by gender and race |
|
|
• |
Since 2020, we have maintained pay equity for women and for racial and ethnic minorities
in the U.S. with respect to salary and short-term incentive compensation. In 2022, we expanded our base pay analysis to cover
approximately 95% of our global associates across 24 countries and achieved base pay equity for women. |
|
|
|
|
|
• |
Voluntary and involuntary turnover |
|
• |
Internal fill rate |
|
• |
Full-time, part-time and temporary employees |
• |
Conclusion. We are devoting significant time and resources to advancing our DE+I strategy and achieving our strategic DE+I objectives. Diverting those resources to address the proponents’ interest in additional reporting and additional demographic data that few companies publish would be inefficient and costly without adding significant value to our shareholders. In addition, As You Sow’s own top-5% ranking of Danaher’s DE+I disclosure practices suggest that Danaher’s disclosures already reflect the best practices espoused by the proponents. |
|
THE
BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST PROPOSAL
5 |
2024
Notice of Annual Meeting and Proxy Statement |
92 |
General Information About the Annual Meeting
Purpose of the Meeting
This Proxy Statement is furnished in connection with the solicitation by the Board of
Directors of Danaher Corporation, a Delaware corporation, of proxies for use at the 2024 Annual Meeting of Shareholders and at
any and all postponements or adjournments thereof.
Who Can Vote
You are entitled to vote at the Annual Meeting if you owned any shares of Danaher Common
Stock at the close of business on March 8, 2024, which is referred to as the “record date.” A list of registered
shareholders entitled to vote at the meeting will be available at Danaher’s offices, 2200 Pennsylvania Avenue, N.W., Suite
800W, Washington, D.C. 20037-1701 during the ten days prior to the meeting.
Proxy Materials are Available on the Internet
We are furnishing proxy materials to our shareholders primarily via the Internet, instead
of mailing printed copies of those materials to each shareholder. By doing so, we save costs and reduce the environmental impact
of our Annual Meeting. On or about March 27, 2024, we mailed a Notice of Internet Availability to certain of our shareholders.
The Notice contains instructions about how to access our proxy materials and vote online. If you would like to receive a paper
copy of our proxy materials, please follow the instructions included in the Notice of Internet Availability. If you previously
chose to receive our proxy materials electronically, you will continue to receive access to these materials via email unless you
elect otherwise.
Attending the Meeting
You or your authorized proxy can attend the Annual Meeting if you were a registered or
beneficial shareholder of Danaher Common Stock as of the close of business on March 8, 2024 or if you hold a valid proxy
for the Annual Meeting. Please be prepared to present government-issued photo identification for admittance. If your shares are
registered in your name with Danaher’s stock registrar and transfer agent, Computershare Trust Company, N.A. (“Computershare”)
or you hold your shares through the Danaher Corporation & Subsidiaries Savings Plan (the “Savings Plan”), your
name will be verified against the list of shareholders of record or plan participants on the record date prior to your being admitted
to the Annual Meeting. If you are not a shareholder of record or a Savings Plan participant but hold shares through a bank, broker,
trustee or other intermediary (i.e., in street name), you should also be prepared to provide proof of beneficial ownership as
of the record date, such as a recent brokerage account statement showing your ownership, a copy of the voting instruction form
provided by your bank, broker, trustee or other intermediary, or other similar evidence of ownership.
Quorum for the Meeting
Under the Company’s Bylaws, we can conduct business at the Annual Meeting only
if the holders of a majority of the issued and outstanding shares of Danaher Common Stock entitled to vote at the Annual Meeting
as of the record date are present either in person or by proxy. The presence of at least that number of shares constitutes a “quorum.”
Abstentions and broker non-votes will be counted as present in determining whether the quorum requirement is satisfied. As of
the record date, 740,544,214 shares of Danaher Common Stock were outstanding, excluding shares held by or for the account of Danaher.
2024
Notice of Annual Meeting and Proxy Statement |
93 |
How to Vote
Shares Owned Directly
If you own shares directly in your name…
If your shares are registered directly in your name with our transfer agent, you are
considered the registered holder of those shares. As the registered shareholder, you may vote in several different
ways:
• |
Vote on the Internet. You can vote online at: www.proxyvote.com. |
• |
Vote by Telephone. In the United States or Canada, you can vote by telephone
by calling the number included in the printed proxy materials, if you received printed proxy materials. Easy-to-follow
voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded.
Internet and telephone voting facilities will be available 24 hours a day until
11:59 p.m. Eastern Time on May 6, 2024 (except for participants in the Savings Plan, who must submit voting instructions
earlier, as described below). To authenticate your Internet or telephone vote, you will need to enter your confidential
voter control number as shown on the voting materials you received. If you vote online or by telephone, you do not need
to return a proxy card.
|
• |
Vote by Mail. You can mail the proxy card enclosed with your printed proxy materials,
if you received printed proxy materials. Mark, sign and date your proxy card and return it in the postage-paid envelope provided,
or in an envelope addressed to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Please allow sufficient
time for delivery of your proxy card if you decide to vote by mail. |
Shares Held in Danaher Savings Plan
If you hold shares in the Danaher Savings Plan…
You can direct Fidelity Management Trust Company (“Fidelity”), the trustee
of the Savings Plan, to vote your proportionate interest in the shares of Common Stock held under the Savings Plan by returning
a voting instruction form or by providing voting instructions via the Internet or by telephone. Fidelity will vote your Savings
Plan shares as of the record date in the manner directed by you. Because Fidelity is designated to vote on your behalf, you will
not be able to vote your shares held in the Savings Plan in person at the meeting. If Fidelity does not receive voting instructions
from you by 11:59 p.m. Eastern time on May 3, 2024, Fidelity will not vote your Savings Plan shares on any of the proposals
brought at the Annual Meeting.
Shares Owned in Street Name
If you own your shares through an account with a bank, broker, trustee or other intermediary,
sometimes referred to as owning in “street name”…
Your intermediary will provide instructions on how to access proxy materials electronically,
or send you printed copies of the proxy materials if you so elect. You are entitled to direct the intermediary how to vote your
shares by following the voting instructions it provides to you.
Voting in Person at the Meeting
Shareholders who hold shares directly with the Company may attend the meeting and vote
in person, or may execute a proxy designating a representative to attend and vote on their behalf. If you do not hold your shares
directly with us and they are instead held for you in a brokerage, bank or other institutional account, you may attend and vote
in person if you obtain a proxy from that institution in advance of the meeting and bring it with you to hand in along with the
ballot that will be provided.
2024
Notice of Annual Meeting and Proxy Statement |
94 |
Revoking a Proxy or Voting Instructions
If you hold shares of Common Stock registered in your name, you may revoke your proxy:
• |
by filing a written notice of revocation with the Secretary of Danaher; |
• |
if you submitted your proxy by telephone or via the Internet, by accessing those voting methods
and following the instructions given for revoking a proxy; |
• |
if you submitted a signed proxy card, by submitting a new proxy card with a later date (which
will override your earlier proxy card); or |
• |
by voting at the Annual Meeting. |
If you hold your shares in “street name,” you must follow the directions
provided by your bank, broker, trustee or other intermediary for revoking or modifying your voting instructions.
Voting Procedures
Each outstanding share of Danaher Common Stock entitles the holder to one vote on each
directorship and other matter brought before the Annual Meeting. Your shares will be voted in accordance with your instructions.
The Board has selected Steven M. Rales, Mitchell P. Rales, Brian W. Ellis and James F. O’Reilly, or any of them, to act
as proxies with full power of substitution. All votes will be counted by the inspector of election appointed for the meeting.
In addition, if you have returned a signed proxy card or submitted voting instructions
by telephone or online, the proxy holders will have, and intend to exercise, discretion to vote your shares (other than shares
held in the Savings Plan) in accordance with their best judgment on any matters not identified in this Proxy Statement that are
properly brought to a vote at the Annual Meeting. As of the date of this Proxy Statement, we do not know of any such additional
matters.
If your shares are registered in your name and you sign and return a proxy card or vote
by telephone or online but do not give voting instructions on a particular matter, the proxy holders will be authorized to vote
your shares on that matter in accordance with the Board’s recommendation. If you hold your shares through an account with
a bank, broker, trustee or other intermediary and do not give voting instructions on a matter, we expect that under the rules
of the New York Stock Exchange the bank, broker, trustee or other intermediary will be permitted to vote in its discretion only
on Proposal 2 and will not be permitted to vote on any of the other Proposals, resulting in a so-called “broker non-vote.”
The impact of abstentions and broker non-votes on the overall vote is shown in the following table. Broker non-votes will not
affect the attainment of a quorum since the bank, broker, trustee or other intermediary has discretion to vote on Proposal 2 and
these votes will be counted toward establishing a quorum.
2024
Notice of Annual Meeting and Proxy Statement |
95 |
Votes Required and Effect of Abstentions and Broker Non-Votes
Matter |
|
Required Vote |
|
Impact of Abstentions |
|
Impact
of Broker Non-Votes |
PROPOSAL
1 –
Election of directors (page 11) |
|
Votes cast FOR a nominee must exceed
number of votes cast AGAINST that nominee. |
|
Not counted as votes cast; no impact on
outcome. |
|
Not counted as votes cast; no impact on
outcome. |
PROPOSAL
2 –
Ratification of the appointment of the independent
registered public accounting firm (page 41) |
|
Approval by a majority of shares of Danaher
Common Stock represented in person or by proxy and entitled to vote
on the proposal. |
|
Counted for purposes of determining minimum
number of affirmative votes required for approval; impact is the same
as a vote AGAINST. |
|
Not applicable. |
PROPOSAL
3 –
Advisory vote to approve named executive officer compensation
(page 87) |
|
Approval by a majority of shares of Danaher
Common Stock represented in person or by proxy and entitled to vote
on the proposal. |
|
Counted for purposes of determining minimum
number of affirmative votes required for approval; impact is the same
as a vote AGAINST. |
|
Not counted as shares of Danaher Common
stock represented in person or by proxy and entitled to vote on the proposal;
no impact on outcome. |
PROPOSAL
4 –
Shareholder Proposal (page 89) |
|
Approval by a majority of shares of Danaher
Common Stock represented in person or by proxy and entitled to vote
on the proposal. |
|
Counted for purposes of determining minimum
number of affirmative votes required for approval; impact is the same
as a vote AGAINST. |
|
Not counted as shares of Danaher Common
stock represented in person or by proxy and entitled to vote on the proposal;
no impact on outcome. |
PROPOSAL
5 –
Shareholder Proposal (page 91) |
|
Approval by a majority of shares of Danaher
Common Stock represented in person or by proxy and entitled to vote
on the proposal. |
|
Counted for purposes of determining minimum
number of affirmative votes required for approval; impact is the same
as a vote AGAINST. |
|
Not counted as shares of Danaher Common
stock represented in person or by proxy and entitled to vote on the proposal;
no impact on outcome. |
Information About Proxy Solicitation
The proxies being solicited hereby are being solicited by Danaher’s Board. Employees
of Danaher may solicit proxies on behalf of the Board of Directors by mail, email, in person and by telephone. These employees
will not receive any additional compensation for these activities. Danaher will bear the cost of soliciting proxies and will reimburse
banks, brokers, trustees and other intermediaries for their reasonable out-of-pocket expenses for forwarding proxy materials to
shareholders. We have retained Broadridge Financial Services, Inc. to aid in distributing proxy materials and the solicitation
of proxies. For these services, we expect to pay Broadridge a fee of less than $15,000 and reimburse it for certain out-of-pocket
disbursements and expenses.
Eliminating Duplicate Mailings
Danaher has adopted the “householding” procedure approved by the SEC, which
allows us to deliver one set of documents to a household of shareholders instead of delivering a set to each shareholder in a
household, unless we have been instructed otherwise. This procedure is more environmentally friendly and cost-effective because
it reduces the number of copies to be printed and mailed. Shareholders who receive proxy materials in paper form will continue
to receive separate proxy cards/voting instruction forms to vote their shares. Shareholders who receive the Notice of Internet
Availability will receive instructions on submitting their proxy cards/voting instruction form via the Internet.
If you would like to change your householding election, request that a single copy of
the proxy materials be sent to your address, or request a separate copy of the proxy materials, please contact our transfer agent
at 800-568-3476. We will promptly deliver the proxy materials to you upon receipt of your request. If you own your shares in “street
name,” please contact your broker, bank, trustee or other intermediary to make your request.
If you receive more than one proxy card/voting instruction form, your shares probably
are registered in more than one account or you may hold shares both as a registered shareholder and through the Savings Plan.
You should vote each proxy card/voting instruction form you receive.
2024
Notice of Annual Meeting and Proxy Statement |
96 |
Other Information
Information Relating to Forward-Looking Statements
Certain statements included in this Proxy Statement are “forward-looking statements”
within the meaning of the United States federal securities laws. All statements other than historical factual information are
forward-looking statements, including without limitation statements regarding strategic plans and plans for growth, innovation
and future operations; financial or operating targets or projections; future capital allocation, acquisitions and the integration
thereof; plans and strategies relating to corporate governance, succession planning, executive compensation, director compensation
and sustainability; goals and targets relating to talent recruitment, engagement and retention, greenhouse gas emission reduction
and other sustainability topics; the goals, objectives and anticipated benefits of our executive compensation and director compensation
programs (including Company and individual performance goals and targets); the tax impact of executive or equity compensation;
political contributions; the effect of an event of termination or change-of-control; Board oversight of strategy and risk; Company
risks and risk mitigation efforts; the expected roles and responsibilities of the Board’s committees; plans with respect
to shareholder engagement and alignment, Board recruitment, selection and refreshment; the anticipated benefits to the Company
of particular director skills and attributes; anticipated commercial activity; anticipated benefits of certain related person
transactions; general economic and capital markets conditions; the timing of any of the foregoing; assumptions underlying any
of the foregoing; and any other statements that address events or developments that Danaher intends or believes will or may occur
in the future. Terminology such as “believe,” “anticipate,” “should,” “could,”
“intend,” “will,” “plan,” “expect,” “estimate,” “project,”
“target,” “may,” “possible,” “potential,” “forecast” and “positioned”
and similar references to future periods are intended to identify forward-looking statements, although not all forward-looking
statements are accompanied by such words. Forward-looking statements are based on assumptions and assessments made by our management
in light of their experience and perceptions of historical trends, current conditions, expected future developments and other
factors they believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including
but not limited to the risks and uncertainties set forth under “Item 1A. Risk Factors” in the accompanying Annual
Report on Form 10-K for the year ended December 31, 2023. Forward-looking statements are not guarantees of future performance
and actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking
statements. Accordingly, you should not place undue reliance on any such forward-looking statements. Forward-looking statements
included in this Proxy Statement speak only as of the date of this Proxy Statement. Except to the extent required by applicable
law, we do not assume any obligation to update or revise any forward-looking statement, whether as a result of new information,
future events and developments or otherwise.
Website Disclosure
We may provide disclosure in the “Investor – Corporate Governance”
section of our corporate website, http://www.danaher.com, of any of the following: (1) the identity of the presiding director
at meetings of non-management or independent directors, or the method of selecting the presiding director if such director changes
from meeting to meeting; (2) the method for interested parties to communicate directly with the Board or with individual directors,
the Lead Independent Director or the non-management or independent directors as a group; (3) the identity of any member of Danaher’s
Audit Committee who also serves on the audit committees of more than three public companies and a determination by the Board that
such simultaneous service will not impair the ability of such member to effectively serve on Danaher’s Audit Committee;
and (4) contributions by Danaher to a tax exempt organization in which any non-management or independent director serves as an
executive officer if, within the preceding three years, contributions in any single fiscal year exceeded the greater of $1 million
or 2% of such tax exempt organization’s consolidated gross revenues. We also intend to disclose any amendment to the Code
of Conduct that relates to any element of the code of ethics definition enumerated in Item 406(b) of Regulation S-K under the
Exchange Act, and any waiver from a provision of the Code of Conduct granted to any of our directors, principal executive officer,
principal financial officer, principal accounting officer, or any other executive officer, in the “Investor – Corporate
Governance” section of our corporate website, http://www.danaher.com, within four business days following the date of such
amendment or waiver.
Information contained on or connected to any of the websites referenced in this Proxy
Statement is not incorporated by reference into this Proxy Statement and should not be considered a part of this Proxy Statement
or any other filing that we make with the U.S. Securities and Exchange Commission.
2024
Notice of Annual Meeting and Proxy Statement |
97 |
Communications with the Board of Directors
Shareholders and other parties interested in communicating directly with the Board or
with individual directors, the Lead Independent Director or the non-management or independent directors as a group may do so by
addressing communications to the Board of Directors, to the specified individual director or to the non-management or independent
directors, as applicable, c/o Corporate Secretary, Danaher Corporation, 2200 Pennsylvania Avenue, N.W., Suite 800W, Washington,
D.C. 20037-1701.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our officers and directors, and persons who
own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the
SEC. Officers, directors and greater-than-10% shareholders are required by SEC regulations to furnish us with copies of all reports
they file pursuant to Section 16(a).
Based solely on a review of the copies of such reports furnished to us, or written representations
from certain reporting persons that no other reports were required for those persons, we believe that, during the year ended December
31, 2023, all Section 16(a) filing requirements applicable to our officers, directors and greater-than-10% shareholders were satisfied.
Annual Report on Form 10-K for 2023
Danaher will provide, without charge, a copy of the Danaher Annual Report on Form 10-K
for 2023 filed with the SEC to any shareholder upon request directed to: Investor Relations, Danaher Corporation, 2200 Pennsylvania
Avenue, N.W., Suite 800W, Washington, D.C., 20037-1701 or by email to: investor.relations@danaher.com.
Shareholder Proposals and Nominations for 2025 Annual Meeting
A shareholder who wishes to include a proposal in Danaher’s proxy statement for
the 2025 Annual Meeting of shareholders pursuant to Rule 14a-8 under the Exchange Act must submit the proposal in writing to Danaher’s
Corporate Secretary at Danaher’s principal executive offices, 2200 Pennsylvania Avenue, N.W., Suite 800W, Washington, D.C.
20037-1701, for receipt no later than November 27, 2024 in order to be considered for inclusion.
In order to be properly brought at the 2025 Annual Meeting, a shareholder’s notice
of nomination of one or more director candidates to be included in the Company’s proxy statement pursuant to Article II,
Section 11 of our Bylaws (a “proxy access nomination”) must be received by Danaher’s Corporate Secretary at
the above address no earlier than October 28, 2024 and no later than November 27, 2024. If the date of the 2025 Annual
Meeting is more than 30 days before or after the anniversary of the previous year’s annual meeting, notice by the shareholder
to be timely must be so received not later than the later of the 120th day prior to such annual meeting or the 10th day following
the day on which public disclosure of the date of such meeting is first made.
Shareholders intending to present a proposal at the 2025 Annual Meeting without having
it included in the Company’s proxy statement, or making a nomination of one or more director candidates without having such
candidates included in the Company’s proxy statement, must comply with the advance notice requirements set forth in the
Company’s Bylaws, including providing the information required by Rule 14a-19. If a shareholder fails to provide timely
notice of a proposal to be presented at the 2025 Annual Meeting, the proxies provided to Danaher’s Board will have discretionary
authority to vote on any such proposal which may properly come before the meeting. In order to comply with the advance notice
requirements set forth in the Company’s Bylaws, appropriate notice would need to be provided to Danaher’s Secretary
at the address noted above no earlier than December 27, 2024 and no later than January 26, 2025. If the date of the
2025 Annual Meeting is more than 30 days before or after the anniversary of the previous year’s annual meeting, notice by
the shareholder to be timely must be so received not later than the later of the 90th day prior to such annual meeting
or the 10th day following the day on which notice of the date of such annual meeting was mailed or public disclosure
of the date of such annual meeting was made, whichever mailing or disclosure first occurs.
|
BY ORDER OF THE BOARD OF DIRECTORS |
|
JAMES F. O’REILLY |
|
Senior Vice President, Deputy General Counsel and Secretary |
Dated: March 27, 2024 |
|
2024
Notice of Annual Meeting and Proxy Statement |
98 |
APPENDIX A
Reconciliation of GAAP to Non-GAAP Financial Measures
As described in more detail in the Compensation Discussion and Analysis section of the
Company’s 2024 Proxy Statement, the 2023 annual cash incentive awards paid to the Company’s named executive officers
were based in part on the Company’s 2023 performance with respect to three metrics, Adjusted EPS, Free Cash Flow Ratio and
Core Revenue Growth. Each of these metrics is a non-GAAP financial measure. Set forth below are reconciliations of each of these
metrics to the comparable GAAP financial measure, based on the Company’s actual 2023 performance.
RECONCILIATION OF 2023 ADJUSTED DILUTED EARNINGS PER SHARE (ADJUSTED EPS)
($ in millions, except
per-share amounts) |
|
Net Income |
|
|
Diluted
Net Earnings Per Share |
|
2023 Net Income from Continuing Operations (for the Calculation of Diluted Net Earnings Per Common Share) or Diluted Net Earnings Per Common Share from Continuing Operations, as applicable (GAAP) |
|
|
$4,200 |
|
|
|
$5.65 |
|
Amortization of acquisition-related intangible assets |
|
|
1,491 |
|
|
|
2.00 |
|
Fair value net losses on investments |
|
|
182 |
|
|
|
0.24 |
|
Acquisition-related items |
|
|
95 |
|
|
|
0.13 |
|
Impairments and other charges |
|
|
77 |
|
|
|
0.10 |
|
Litigation gains |
|
|
(10 |
) |
|
|
(0.01 |
) |
Tax effect of the above adjustments |
|
|
(354 |
) |
|
|
(0.47 |
) |
Discrete tax adjustments |
|
|
(47 |
) |
|
|
(0.06 |
) |
Impact of MCPS securities on an “as converted” basis |
|
|
21 |
|
|
|
0.01 |
|
Rounding |
|
|
— |
|
|
|
(0.01 |
) |
2023 Adjusted Net Income or Adjusted Diluted Net Earnings Per Common Share from Continuing
Operations, as applicable (non-GAAP) (as disclosed in the Current Report on Form 8-K furnished by the Company
on January 30, 2024) |
|
|
5,655 |
|
|
|
7.58 |
|
Additional acquisition-related gains and losses, including related after-tax operating profit
and transaction costs |
|
|
32 |
|
|
|
0.05 |
|
2023 Adjusted Net Income or Adjusted Diluted Net Earnings Per Common Share from Continuing
Operations, as applicable (as calculated in accordance with the Company Payout Percentage formula pursuant
to the Company’s 2023 executive cash incentive compensation program) (non-GAAP) |
|
|
$5,687 |
|
|
|
$7.63 |
|
2024
Notice of Annual Meeting and Proxy Statement |
99 |
RECONCILIATION OF 2023 ADJUSTED FREE CASH FLOW TO ADJUSTED NET INCOME RATIO (FREE
CASH FLOW RATIO)
($ in millions) |
|
|
|
|
Total cash provided by operating activities from continuing operations (GAAP) |
|
$ |
6,490 |
|
Total cash used in investing activities from continuing operations (GAAP) |
|
$ |
(7,048 |
) |
Total cash provided by financing activities from continuing operations (GAAP) |
|
$ |
154 |
|
Total cash provided by operating activities from continuing operations (GAAP) |
|
$ |
6,490 |
|
Purchases of property, plant and equipment |
|
|
(1,383 |
) |
Sales of property, plant and equipment |
|
|
12 |
|
Cash flow impact of Adjustment Items |
|
|
59 |
|
Adjusted Free Cash Flow (non-GAAP) |
|
$ |
5,178 |
|
Total cash provided by operating activities from continuing operations (GAAP) |
|
$ |
6,490 |
|
Net earnings from continuing operations (GAAP) |
|
$ |
4,221 |
|
Operating cash flow from continuing operations to net earnings from continuing operations
conversion ratio |
|
|
153.8% |
|
Adjusted Free Cash Flow (non-GAAP) |
|
$ |
5,178 |
|
Adjusted Net Income (non-GAAP) |
|
$ |
5,687 |
|
Adjusted Free Cash Flow to Adjusted Net Income Ratio (non-GAAP) |
|
|
91.0% |
|
RECONCILIATION OF 2023 CORE REVENUE GROWTH
|
|
|
2023 vs. 2022 |
Total sales growth (GAAP) |
|
|
-10.5 |
% |
Less the impact of: |
|
|
|
|
Acquisitions and other |
|
|
-0.5 |
% |
Currency exchange rates |
|
|
1.0 |
% |
Core revenue growth (non-GAAP) |
|
|
-10.0 |
% |
2024
Notice of Annual Meeting and Proxy Statement |
100 |
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v3.24.1
Pay vs Performance Disclosure
|
12 Months Ended |
Dec. 31, 2023
USD ($)
$ / shares
|
Dec. 31, 2022
USD ($)
$ / shares
|
Dec. 31, 2021
USD ($)
$ / shares
|
Dec. 31, 2020
USD ($)
$ / shares
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Pay vs Performance [Table Text Block] |
|
Pay Versus Performance Table.
In accordance with Item 402(v), we provide below the tabular disclosure for the Company’s
President and Chief Executive Officer (“CEO”) (our Principal Executive Officer) and the average of our NEOs other than the
CEO for 2023, 2022, 2021 and 2020.
| |
| |
| |
| |
| |
| |
| |
Value of Initial Fixed $100 Investment
Based On: | |
| |
|
Fiscal
Year(1) (a) | |
Summary Compensation Table Total for First PEO (b1) | |
Compensation
Actually Paid to
First PEO(2) (c1) | |
Summary Compensation Table Total for Second PEO (b2) | |
Compensation
Actually Paid to
Second
PEO(2) (c2) | |
Average Summary Compensation Table Total for Non-PEO
NEOs (d) | |
Average
Compensation Actually
Paid to Non-PEO
NEOs(2) (e) | |
Total
Share- holder
Return(3) (f) | |
Peer
Group Total
Share- holder
Return(3) (g) | |
Net
Income(4) (h) | |
Adjusted
EPS(5) (i) |
2023 | |
$20,903,282 | |
$5,213,515 | |
$0 | |
$0 | |
$7,103,560 | |
$2,603,239 | |
$173 | |
$143 | |
$4,764 | |
$7.63 |
2022 | |
$20,196,027 | |
$190,304 | |
$0 | |
$0 | |
$6,641,306 | |
$(930,613) | |
$175 | |
$140 | |
$7,209 | |
$10.97 |
2021 | |
$17,152,267 | |
$59,455,992 | |
$0 | |
$0 | |
$6,225,036 | |
$26,481,836 | |
$216 | |
$143 | |
$6,433 | |
$10.00 |
2020 | |
$10,396,761 | |
$32,944,487 | |
$16,763,956 | |
$83,394,550 | |
$6,786,580 | |
$20,676,667 | |
$145 | |
$113 | |
$3,646 | |
$5.11 |
(1) |
For 2020, 2021, 2022 and 2023, the First PEO is Rainer
Blair. In 2020, the Second PEO is Thomas Joyce. The other NEOs in 2020 were Messrs. Weidemanis, McGrew and Brian Ellis, and
Angela Lalor; in 2021, the other NEOs were Messrs. Weidemanis and McGrew and Mss. Lalor and Jennifer Honeycutt; in 2022, the
other NEOs were Messrs. Weidemanis and McGrew, Dr. Gutierrez-Ramos and Ms. Honeycutt; and in 2023 the other NEOs were Messrs.
Weidemanis and McGrew, Dr. Gutierrez-Ramos and Ms. Couchara. |
(2) |
To calculate CAP (columns (c1), (c2) and (e)), the following amounts were deducted
from and added to the applicable SCT total compensation: |
(3) |
Reflects TSR indexed to $100 for each of the Company
and the S&P 500 Health Care Index, which is an industry line peer group reported in the performance graph included in
the Company’s 2023 Annual Report on Form 10-K. |
(4) |
Values shown are in millions. |
(5) |
Please see page 47 for a definition of Adjusted EPS. Values shown reflect Adjusted
EPS as calculated for purposes of our executive compensation program for the applicable reporting year. |
(1) |
For 2020, 2021, 2022 and 2023, the First PEO is Rainer
Blair. In 2020, the Second PEO is Thomas Joyce. The other NEOs in 2020 were Messrs. Weidemanis, McGrew and Brian Ellis, and
Angela Lalor; in 2021, the other NEOs were Messrs. Weidemanis and McGrew and Mss. Lalor and Jennifer Honeycutt; in 2022, the
other NEOs were Messrs. Weidemanis and McGrew, Dr. Gutierrez-Ramos and Ms. Honeycutt; and in 2023 the other NEOs were Messrs.
Weidemanis and McGrew, Dr. Gutierrez-Ramos and Ms. Couchara. |
(2) |
To calculate CAP (columns (c1), (c2) and (e)), the following amounts were deducted
from and added to the applicable SCT total compensation: |
|
|
PEO 1 |
Prior FYE
Current FYE
Fiscal Year |
|
12/31/2019
12/31/2020
2020 |
|
12/31/2020
12/31/2021
2021 |
|
12/31/2021
12/31/2022
2022 |
|
12/31/2022
12/31/2023
2023 |
SCT Total |
|
$10,396,761 |
|
$17,152,267 |
|
$20,196,027 |
|
$20,903,282 |
— |
|
Grant Date Fair Value of Option Awards and Stock Awards Granted
in Fiscal Year |
|
$ (6,585,590 |
) |
$ (11,384,877 |
) |
$ (14,268,274 |
) |
$ (15,577,891) |
+ |
|
Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock
Awards Granted in Fiscal Year |
|
$12,507,143 |
|
$22,940,973 |
|
$14,744,612 |
|
$14,802,411 |
+ |
|
Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards
Granted in Prior Fiscal Year |
|
$15,738,917 |
|
$30,678,296 |
|
$ (14,993,297 |
) |
$ (12,577,667) |
+ |
|
Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That
Vested During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted
in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
$887,256 |
|
$69,332 |
|
$ (5,488,764 |
) |
$ (2,336,620) |
— |
|
Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted
in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
Compensation Actually Paid |
|
$32,944,487 |
|
$59,455,992 |
|
$190,304 |
|
$5,213,515 |
|
|
PEO 2 |
Prior FYE
Current FYE
Fiscal Year |
|
12/31/2019
12/31/2020
2020 |
|
12/31/2020
12/31/2021
2021 |
|
12/31/2021
12/31/2022
2022 |
|
12/31/2022
12/31/2023
2023 |
SCT Total |
|
$16,763,956 |
|
$0 |
|
$0 |
|
$0 |
— |
|
Grant Date Fair Value
of Option Awards and Stock Awards Granted in Fiscal Year |
|
$ (11,748,524) |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Fair Value at Fiscal Year-End of Outstanding
and Unvested Option Awards and Stock Awards Granted in Fiscal Year |
|
$24,040,706 |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Change in Fair Value of Outstanding and Unvested Option
Awards and Stock Awards Granted in Prior Fiscal Year |
|
$53,508,940 |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Fair Value at Vesting of Option Awards and Stock Awards
Granted in Fiscal Year That Vested During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Change in Fair Value as of Vesting Date of Option Awards
and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
$829,471 |
|
$0 |
|
$0 |
|
$0 |
— |
|
Fair Value as of Prior Fiscal Year-End of Option Awards
and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
Compensation Actually Paid |
|
$83,394,550 |
|
$0 |
|
$0 |
|
$0 |
|
|
Non-PEO NEOs |
Prior
FYE
Current FYE
Fiscal Year |
|
12/31/2019
12/31/2020
2020 |
|
12/31/2020
12/31/2021
2021 |
|
12/31/2021
12/31/2022
2022 |
|
12/31/2022
12/31/2023
2023 |
SCT Total |
|
$6,786,580 |
|
$6,225,036 |
|
$6,641,306 |
|
$7,103,560 |
— |
|
Grant Date Fair Value of Option Awards and
Stock Awards Granted in Fiscal Year |
|
$(4,178,109) |
|
$(3,370,721) |
|
$(3,945,270) |
|
$(4,834,780) |
+ |
|
Fair Value at Fiscal Year-End of Outstanding and Unvested
Option Awards and Stock Awards Granted in Fiscal Year |
|
$7,853,538 |
|
$6,792,180 |
|
$4,069,305 |
|
$4,666,149 |
+ |
|
Change in Fair Value of Outstanding and Unvested Option
Awards and Stock Awards Granted in Prior Fiscal Year |
|
$9,403,554 |
|
$16,443,088 |
|
$(5,970,277) |
|
$(3,255,395) |
+ |
|
Fair Value at Vesting of Option Awards and Stock Awards
Granted in Fiscal Year That Vested During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Change in Fair Value as of Vesting Date of Option Awards
and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
$811,104 |
|
$392,253 |
|
$(1,725,677) |
|
$(1,076,295) |
— |
|
Fair Value as of Prior Fiscal Year-End of Option Awards
and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
Compensation Actually Paid |
|
$20,676,667 |
|
$26,481,836 |
|
$(930,613) |
|
$2,603,239 |
The fair value of performance stock units (PSUs)
used in the calculation of CAP (columns (c1), (c2) and (e)) was determined using a Monte Carlo simulation valuation model, in accordance
with ASC 718. The fair value of option awards used in the calculation of CAP was determined using the Black-Scholes option pricing
model, in accordance with ASC 718. In both cases, the assumptions used in these calculations are not materially different than
those used for purposes of the Summary Compensation Table.
(3) |
Reflects TSR indexed to $100 for each of the Company
and the S&P 500 Health Care Index, which is an industry line peer group reported in the performance graph included in
the Company’s 2023 Annual Report on Form 10-K. |
(4) |
Values shown are in millions. |
(5) |
Please see page 47 for a definition of Adjusted EPS. Values shown reflect Adjusted
EPS as calculated for purposes of our executive compensation program for the applicable reporting year. |
|
|
|
|
Company Selected Measure Name |
|
Adjusted EPS
|
|
|
|
Named Executive Officers, Footnote [Text Block] |
|
(1) |
For 2020, 2021, 2022 and 2023, the First PEO is Rainer
Blair. In 2020, the Second PEO is Thomas Joyce. The other NEOs in 2020 were Messrs. Weidemanis, McGrew and Brian Ellis, and
Angela Lalor; in 2021, the other NEOs were Messrs. Weidemanis and McGrew and Mss. Lalor and Jennifer Honeycutt; in 2022, the
other NEOs were Messrs. Weidemanis and McGrew, Dr. Gutierrez-Ramos and Ms. Honeycutt; and in 2023 the other NEOs were Messrs.
Weidemanis and McGrew, Dr. Gutierrez-Ramos and Ms. Couchara. |
|
|
|
|
Peer Group Issuers, Footnote [Text Block] |
|
Reflects TSR indexed to $100 for each of the Company
and the S&P 500 Health Care Index, which is an industry line peer group reported in the performance graph included in
the Company’s 2023 Annual Report on Form 10-K.
|
|
|
|
Adjustment To PEO Compensation, Footnote [Text Block] |
|
|
|
PEO 1 |
Prior FYE
Current FYE
Fiscal Year |
|
12/31/2019
12/31/2020
2020 |
|
12/31/2020
12/31/2021
2021 |
|
12/31/2021
12/31/2022
2022 |
|
12/31/2022
12/31/2023
2023 |
SCT Total |
|
$10,396,761 |
|
$17,152,267 |
|
$20,196,027 |
|
$20,903,282 |
— |
|
Grant Date Fair Value of Option Awards and Stock Awards Granted
in Fiscal Year |
|
$ (6,585,590 |
) |
$ (11,384,877 |
) |
$ (14,268,274 |
) |
$ (15,577,891) |
+ |
|
Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock
Awards Granted in Fiscal Year |
|
$12,507,143 |
|
$22,940,973 |
|
$14,744,612 |
|
$14,802,411 |
+ |
|
Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards
Granted in Prior Fiscal Year |
|
$15,738,917 |
|
$30,678,296 |
|
$ (14,993,297 |
) |
$ (12,577,667) |
+ |
|
Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That
Vested During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted
in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
$887,256 |
|
$69,332 |
|
$ (5,488,764 |
) |
$ (2,336,620) |
— |
|
Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted
in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
Compensation Actually Paid |
|
$32,944,487 |
|
$59,455,992 |
|
$190,304 |
|
$5,213,515 |
|
|
PEO 2 |
Prior FYE
Current FYE
Fiscal Year |
|
12/31/2019
12/31/2020
2020 |
|
12/31/2020
12/31/2021
2021 |
|
12/31/2021
12/31/2022
2022 |
|
12/31/2022
12/31/2023
2023 |
SCT Total |
|
$16,763,956 |
|
$0 |
|
$0 |
|
$0 |
— |
|
Grant Date Fair Value
of Option Awards and Stock Awards Granted in Fiscal Year |
|
$ (11,748,524) |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Fair Value at Fiscal Year-End of Outstanding
and Unvested Option Awards and Stock Awards Granted in Fiscal Year |
|
$24,040,706 |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Change in Fair Value of Outstanding and Unvested Option
Awards and Stock Awards Granted in Prior Fiscal Year |
|
$53,508,940 |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Fair Value at Vesting of Option Awards and Stock Awards
Granted in Fiscal Year That Vested During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Change in Fair Value as of Vesting Date of Option Awards
and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
$829,471 |
|
$0 |
|
$0 |
|
$0 |
— |
|
Fair Value as of Prior Fiscal Year-End of Option Awards
and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
Compensation Actually Paid |
|
$83,394,550 |
|
$0 |
|
$0 |
|
$0 |
|
|
|
|
Non-PEO NEO Average Total Compensation Amount |
[1] |
$ 7,103,560
|
$ 6,641,306
|
$ 6,225,036
|
$ 6,786,580
|
Non-PEO NEO Average Compensation Actually Paid Amount |
[1],[2] |
$ 2,603,239
|
(930,613)
|
26,481,836
|
20,676,667
|
Adjustment to Non-PEO NEO Compensation Footnote [Text Block] |
|
|
|
Non-PEO NEOs |
Prior
FYE
Current FYE
Fiscal Year |
|
12/31/2019
12/31/2020
2020 |
|
12/31/2020
12/31/2021
2021 |
|
12/31/2021
12/31/2022
2022 |
|
12/31/2022
12/31/2023
2023 |
SCT Total |
|
$6,786,580 |
|
$6,225,036 |
|
$6,641,306 |
|
$7,103,560 |
— |
|
Grant Date Fair Value of Option Awards and
Stock Awards Granted in Fiscal Year |
|
$(4,178,109) |
|
$(3,370,721) |
|
$(3,945,270) |
|
$(4,834,780) |
+ |
|
Fair Value at Fiscal Year-End of Outstanding and Unvested
Option Awards and Stock Awards Granted in Fiscal Year |
|
$7,853,538 |
|
$6,792,180 |
|
$4,069,305 |
|
$4,666,149 |
+ |
|
Change in Fair Value of Outstanding and Unvested Option
Awards and Stock Awards Granted in Prior Fiscal Year |
|
$9,403,554 |
|
$16,443,088 |
|
$(5,970,277) |
|
$(3,255,395) |
+ |
|
Fair Value at Vesting of Option Awards and Stock Awards
Granted in Fiscal Year That Vested During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
+ |
|
Change in Fair Value as of Vesting Date of Option Awards
and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
$811,104 |
|
$392,253 |
|
$(1,725,677) |
|
$(1,076,295) |
— |
|
Fair Value as of Prior Fiscal Year-End of Option Awards
and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
Compensation Actually Paid |
|
$20,676,667 |
|
$26,481,836 |
|
$(930,613) |
|
$2,603,239 |
|
|
|
|
Compensation Actually Paid vs. Total Shareholder Return [Text Block] |
|
Relationship between CAP and TSR.
The chart below reflects the relationship between the PEO1, PEO2 and Average NEO CAP versus
our TSR and the Peer Group TSR. As reflected in the graph below, the Company’s 4-year cumulative TSR exceeds the Peer Group
TSR.
Danaher & Peer TSR vs. Compensation Actually
Paid
|
|
|
|
Compensation Actually Paid vs. Net Income [Text Block] |
|
Relationship between CAP and GAAP
Net Income. The chart below reflects the relationship between the PEO and Average NEO CAP
and our GAAP Net Income.
Danaher Net Income vs. Compensation Actually
Paid
|
|
|
|
Compensation Actually Paid vs. Company Selected Measure [Text Block] |
|
Relationship between CAP and Adjusted
EPS (our Company-Selected Measure). The chart below reflects the relationship between the
PEO CAP and Average NEO CAP and our Adjusted EPS.
Danaher Adjusted EPS vs. Compensation Actually
Paid
|
|
|
|
Total Shareholder Return Vs Peer Group [Text Block] |
|
Relationship between CAP and TSR.
The chart below reflects the relationship between the PEO1, PEO2 and Average NEO CAP versus
our TSR and the Peer Group TSR. As reflected in the graph below, the Company’s 4-year cumulative TSR exceeds the Peer Group
TSR.
Danaher & Peer TSR vs. Compensation Actually
Paid
|
|
|
|
Tabular List [Table Text Block] |
|
Our Most Important Metrics Used for
Linking Pay and Performance. As required by Item 402(v), below are the most important
metrics our Committee used to link executive pay to performance for 2023. Our stock price performance, as reflected by our absolute TSR,
directly impacts the value of the equity compensation awards we grant to executive officers. Each of the other metrics below are used
for purposes of determining payouts under either our executive annual cash incentive compensation program or our executive PSU program.
• |
Absolute TSR |
• |
Relative TSR compared to S&P 500 TSR |
• |
Adjusted EPS (non-GAAP) |
• |
Adjusted Free Cash Flow to Adjusted Net Income Ratio (non-GAAP) |
• |
Core Revenue Growth (non-GAAP) |
|
|
|
|
Total Shareholder Return Amount |
[1],[3] |
$ 173
|
175
|
216
|
145
|
Peer Group Total Shareholder Return Amount |
[1],[3] |
143
|
140
|
143
|
113
|
Net Income (Loss) Attributable to Parent |
[1],[4] |
$ 4,764,000,000
|
$ 7,209,000,000
|
$ 6,433,000,000
|
$ 3,646,000,000
|
Company Selected Measure Amount | $ / shares |
[1],[5] |
7.63
|
10.97
|
10.00
|
5.11
|
Additional 402(v) Disclosure [Text Block] |
|
Pay Versus Performance
The disclosure in this section shall not be
deemed to be incorporated by reference into any prior or subsequent filing by Danaher under the Securities Act of 1933 or the Exchange
Act of 1934, except to the extent Danaher specifically incorporates it by reference therein.
Provided below is the Company’s “pay
versus performance” disclosure as required pursuant to Item 402(v) of Regulation S-K promulgated under the Exchange Act.
As required by Item 402(v), we have included:
• |
A list of the most important measures that our Compensation Committee used in 2023 to link a measure of pay calculated in accordance with Item 402(v) (referred to as “compensation actually paid”, or “CAP”) to Company performance; |
• |
A table that compares the total compensation of our named executive officers’ (also known as NEOs) as presented in the Summary Compensation Table (“SCT”) to CAP and that compares CAP to specified performance measures; and |
• |
Graphs that describe: |
|
• |
the relationships between CAP and our cumulative total shareholder return (“TSR”), GAAP Net Income, and our Company selected measure, non-GAAP adjusted diluted net earnings per common share from continuing operations (“Adjusted EPS”); and |
|
• |
the relationship between our TSR and the TSR of the S&P 500 Health Care Index (“Peer Group TSR”). |
Salary, Bonus, Non-Equity Incentive Plan Compensation,
Nonqualified Deferred Compensation Earnings and All Other Compensation are each calculated in the same manner for purposes of both
CAP and SCT. There are two primary differences between the calculation of CAP and SCT total compensation:
| |
SCT Total | |
CAP |
Pension | |
Year over year change in the actuarial present value of pension benefits | |
Current year service cost and any prior year service cost (if a plan amendment occurred during the year) |
Stock and Option Awards | |
Grant date fair value of stock and option awards granted during the year | |
Year over year change in the fair value of stock and option awards
that are unvested as of the end of the year, or vested or were forfeited during the year(1) |
(1) |
Includes any dividends paid on equity awards in the fiscal year prior to the vesting date that are not otherwise reflected in the fair value of such award. |
This disclosure has been prepared in accordance
with Item 402(v) and does not necessarily reflect value actually realized by the executives or how our Committee evaluates compensation
decisions in light of Company or individual performance. In particular, our Committee has not used CAP as a basis for making executive
compensation decisions, nor does it use GAAP Net Income or Peer Group TSR for purposes of determining executive incentive compensation.
Please refer to our Compensation Discussion and Analysis on pages 44 to 60 for a discussion of our executive compensation program
objectives and the ways in which we align executive compensation with performance.
|
|
|
|
Non-PEO NEO [Member] | - Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
$ (4,834,780)
|
$ (3,945,270)
|
$ (3,370,721)
|
$ (4,178,109)
|
Non-PEO NEO [Member] | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
4,666,149
|
4,069,305
|
6,792,180
|
7,853,538
|
Non-PEO NEO [Member] | + Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
(3,255,395)
|
(5,970,277)
|
16,443,088
|
9,403,554
|
Non-PEO NEO [Member] | + Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
0
|
0
|
0
|
0
|
Non-PEO NEO [Member] | + Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
(1,076,295)
|
(1,725,677)
|
392,253
|
811,104
|
Non-PEO NEO [Member] | - Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
0
|
0
|
0
|
0
|
Rainer Blair |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
PEO Total Compensation Amount |
[1] |
20,903,282
|
20,196,027
|
17,152,267
|
10,396,761
|
PEO Actually Paid Compensation Amount |
[1],[2] |
$ 5,213,515
|
$ 190,304
|
$ 59,455,992
|
$ 32,944,487
|
PEO Name |
|
Rainer
Blair
|
Rainer
Blair
|
Rainer
Blair
|
Rainer
Blair
|
Rainer Blair | PEO [Member] | - Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
$ (15,577,891)
|
$ (14,268,274)
|
$ (11,384,877)
|
$ (6,585,590)
|
Rainer Blair | PEO [Member] | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
14,802,411
|
14,744,612
|
22,940,973
|
12,507,143
|
Rainer Blair | PEO [Member] | + Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
(12,577,667)
|
(14,993,297)
|
30,678,296
|
15,738,917
|
Rainer Blair | PEO [Member] | + Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
0
|
0
|
0
|
0
|
Rainer Blair | PEO [Member] | + Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
(2,336,620)
|
(5,488,764)
|
69,332
|
887,256
|
Rainer Blair | PEO [Member] | - Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
0
|
0
|
0
|
0
|
Thomas Joyce |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
PEO Total Compensation Amount |
[1] |
0
|
0
|
0
|
16,763,956
|
PEO Actually Paid Compensation Amount |
[1],[2] |
0
|
0
|
0
|
$ 83,394,550
|
PEO Name |
|
|
|
|
Thomas Joyce
|
Thomas Joyce | PEO [Member] | - Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
0
|
0
|
0
|
$ (11,748,524)
|
Thomas Joyce | PEO [Member] | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
0
|
0
|
0
|
24,040,706
|
Thomas Joyce | PEO [Member] | + Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
0
|
0
|
0
|
53,508,940
|
Thomas Joyce | PEO [Member] | + Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
0
|
0
|
0
|
0
|
Thomas Joyce | PEO [Member] | + Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
0
|
0
|
0
|
829,471
|
Thomas Joyce | PEO [Member] | - Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Adjustment to Compensation Amount |
|
$ 0
|
$ 0
|
$ 0
|
$ 0
|
Measure [Axis]: 1 |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Measure Name |
|
Absolute TSR
|
|
|
|
Measure [Axis]: 2 |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Measure Name |
|
Relative TSR compared to S&P 500 TSR
|
|
|
|
Measure [Axis]: 3 |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Measure Name |
|
Adjusted EPS (non-GAAP)
|
|
|
|
Non-GAAP Measure Description [Text Block] |
|
Adjusted EPS is the most heavily weighted metric
used to determine Company performance under our executive annual cash incentive compensation program. The Committee weights Adjusted
EPS most heavily in the Company performance formula because it believes Adjusted EPS correlates strongly with shareholder returns,
particularly since Adjusted EPS is calculated in a manner that focuses on gains and charges the Committee believes are most directly
related to Company operating performance during the period. Accordingly, Adjusted EPS is the Company-selected measure included
in the table and graphs that follow.
|
|
|
|
Measure [Axis]: 4 |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Measure Name |
|
Adjusted Free Cash Flow to Adjusted Net Income Ratio (non-GAAP)
|
|
|
|
Measure [Axis]: 5 |
|
|
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
|
|
Measure Name |
|
Core Revenue Growth (non-GAAP)
|
|
|
|
|
|
X |
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