DEF 14A 1 nc10007007x1_def14a.htm DEF14A

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.    )
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Bristol-Myers Squibb Company
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2020 Annual Meeting of Shareholders


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430 E. 29th Street, 14th Floor
New York, New York 10016
Notice of Annual Meeting of Shareholders
Notice is hereby given that the 2020 Annual Meeting of Shareholders will be held at Bristol-Myers Squibb Company, 3401 Princeton Pike, Lawrence Township, New Jersey, on May 5, 2020, at 10:00 a.m. for the following purposes as set forth in the accompanying Proxy Statement:
to elect to the Board of Directors the 12 persons nominated by the Board, each for a term of one year;
to conduct an advisory vote to approve the compensation of our Named Executive Officers;
to ratify the appointment of Deloitte & Touche LLP as the company’s independent registered public accounting firm for 2020;
to consider two shareholder proposals, if presented at the meeting; and
to transact such other business as may properly come before the meeting or any adjournments thereof.
Holders of record of our common and preferred stock at the close of business on March 16, 2020 will be entitled to vote at the meeting.
We are monitoring developments regarding the coronavirus or COVID-19, including protocols that federal, state and local governments have imposed. We are sensitive to the health and safety concerns related to this ongoing pandemic and our top priority is to protect the health and well-being of our shareholders, employees and the general public. In the event we determine it is necessary or appropriate to hold the meeting by remote communication, we will announce this decision in advance, and details will be posted on our company website and filed with the Securities and Exchange Commission.
By Order of the Board of Directors

Katherine R. Kelly
Vice President, Associate General Counsel
and Corporate Secretary
Dated: March 25, 2020
YOUR VOTE IS IMPORTANT
Regardless of the number of shares you own, your vote is important. If you do not attend the Annual Meeting to vote in person, your vote will not be counted unless a proxy representing your shares is presented at the meeting. To ensure that your shares will be voted at the meeting, please vote in one of these ways:
(1) Go to www.proxyvote.com and vote via the Internet;
(2) Call the toll free telephone number (800) 690-6903 (this call is toll-free in the United States); or
(3) Mark, sign, date and promptly return the enclosed proxy card in the postage-paid envelope.
If you do attend the Annual Meeting, you may revoke your proxy and vote by ballot.

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Dear BMS shareholders,
At the time that we are issuing this Proxy Statement, we are in the midst of a global pandemic. COVID-19 is taking a significant human toll, and our hearts go out to those who have been impacted and everyone managing through this difficult and uncertain time. As a responsible global citizen, we are taking steps to protect the health and safety of the public and our global workforce, contribute to relief efforts in communities deeply affected by the virus, and carry out our mission of providing life-saving medicines to the patients who depend on us.
At Bristol Myers Squibb (“BMS”), our vision is to transform patients’ lives through science. To do this, we must continually innovate – we must find novel ways to treat some of the most complex and devastating diseases, like cancer. After welcoming our new colleagues from Celgene Corporation (“Celgene”), we are in a better place than ever to do so. Over the last year, we have achieved:
Excellent initial results from our Celgene integration efforts;
Strong business performance across our portfolio;
A 16% increase in Total Revenues, with 10% attributable to the legacy BMS business;
A (33%) decrease in GAAP diluted earnings per share (EPS) and an 18% increase in non-GAAP diluted EPS;
One-year total shareholder return of 28%;
Implementation of a 10% increase in our dividend, marking an increase in dividends for the 11th year in a row; and
Strong external recognition of the excellence of our governance, environmental, and social programs.
We demonstrate ethics, integrity and quality in everything we do. We have evolved our company behaviors for 2020 into six company values: passion, innovation, urgency, accountability, integrity and inclusion. These core values align with our new culture and aspirational ways of working, engaging employees and strengthening performance. Our ability to innovate is amplified by our talent, passion for science, curiosity for discovery, commitment to quality, and determination to translate scientific and technological advances into new medicines that make a difference for patients and their families. Through company-wide programs, we foster a culture of diversity and inclusion. It is only through the diverse experiences and perspectives of our employees that we elicit the best ideas, drive innovation, and achieve transformative business results.
For example, we have eight People and Business Resource Groups (PBRGs), each focused on a specific element of diversity, which empower employees to apply their perspectives and experiences to drive our patient-focused mission within BMS and in the communities where we live and work. Our more than 15,000 PBRG members have helped to improve health outcomes across several disease areas and populations through work both inside and outside the company, and inspired and worked with young people from diverse backgrounds on STEM education and initiatives. We invite you to read our 2019 Annual Report on our website for additional stories on the impact of these groups.
The result of our efforts, and the milestones we achieved in 2019, reinforce the value of our investments in the business and our culture. I am proud of all that we have accomplished in 2019 and am excited as we further expand the important work we do for patients, embed a new culture and build a leading biopharma company in 2020 and beyond.
We ask for your support for our directors and our pay plans that have carefully designed features governing each of our distinct integration timeframes as well as our long-term operations and sustainability. We also invite your feedback, your participation in our annual meeting, and your future investment. Thank you for helping to enable our work and supporting our patients and all our people. We hope you and your loved ones stay safe and healthy during this uncertain time.
Sincerely,

Giovanni Caforio, M.D.
Chairman of the Board and Chief Executive Officer
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Dear Fellow shareholders and stakeholders,
In the letter from our Chairman and CEO Giovanni Caforio, you read about how we at Bristol Myers Squibb (BMS) successfully managed a momentous and transformative year, including our approximately $80.3 billion acquisition of Celgene Corporation, and our steady integration of the two companies.
As BMS’s Lead Independent Director, I want to thank everyone from both companies who helped make our 2019 possible. I also want to thank my fellow directors: each of us, as well as every committee of the Board, was actively involved in the Celgene transaction and our ongoing integration.
We started the year with a strong governance foundation that we believe helped support these actions: we have majority voting; 3/3/20/20 proxy access; annual director elections; one share, one vote; special meeting rights; no super majority voting provisions; proactive shareholder engagement; and emphasis on board refreshment and effectiveness. Our environmental and social programs focus on our critical risks and opportunities, with targets to accelerate innovation, enhance patient access to medicines, be an employer of choice, and reduce our environmental footprint. Our Board will continue to provide critical oversight of our management team as they execute our strategy to create long-term shareholder value and support the pursuit of our Mission.
But these facts tell only part of our governance story. No governance structure is as important as the people it surrounds, so I want to draw your attention in this short letter to the caliber of the people who served on the BMS Board in 2019.
First, we will use this opportunity to thank Michael Grobstein and Alan Lacy for their many years of dedicated service to the Bristol Myers Squibb Board of Directors and our shareholders. The Board is extremely grateful to Mr. Grobstein and Mr. Lacy for their contributions. Mr. Grobstein and Mr. Lacy will retire from the Board of Directors effective after this Annual Meeting.
Consistent with our focus on bringing together the best in biotech with the best of pharma, we have been fortunate with our new directors, Julia Haller, M.D., Michael Bonney and Phyllis Yale, to further enhance our board’s expertise in gene therapy, biotech and critically important payor matters. Over a third of our Board is diverse by gender or race, and represents the diverse skills and experiences most relevant to our future. Our steady refreshment reflects our commitment to anticipating, leading, and benefitting from evolving science, an ever-changing environment, and simply the value of fresh eyes. We will continue our pro-active engagement with our shareholders as we focus on executing a successful integration and delivering the value of the combined company.
You will read in the compensation sections of this Proxy Statement how we have created plans that are aligned with the completion of our integration, the unique needs of 2020, and our opportunities from 2021 onward.
Our pay plans, our principles, our governance, and our broader valuing of good environmental and social practices reflect our belief that if we take care of our people, they will take care of our patients, which enables us to do well for you, our shareholders.
I ask for your support for the items our company has put forth in this Proxy Statement and encourage you to read the following pages to inform your vote. Thank you for your faith and investment in us, which we work hard to earn.

Vicki L. Sato, Ph.D.
Lead Independent Director
Chair, Committee on Directors and Corporate Governance
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Bristol Myers Squibb:
The Story
Our vision is to transform patients’ lives through science.
At Bristol Myers Squibb, we are in the business of breakthroughs. Each day, our employees strive to discover, develop, and deliver innovative medicines that help patients prevail over serious diseases. Patients are at the center of everything we do. They inspire us. They are the reason we come to work each day.

Patients depend on our medicines to help battle serious diseases such as cancer, cardiovascular disease, and rheumatoid arthritis. And through our science, we are pursuing new treatments for diseases including more forms of cancer, heart failure, fibrosis, multiple sclerosis, psoriasis, IBD and neurological disease. Our goal is to transform patients' lives through science.

We are a biopharma leader.
We combine the agility of a biotech company with the reach and resources of an established pharmaceutical company to create a global leading biopharma company. We are a differentiated biopharma company focused on innovative medicines. For us, that means being a company that leads scientific innovation, collaborates at the center of the biotech ecosystem, leverages our global scale and agility, and is driven by the best employees in the industry.

We are committed to quality, integrity, and ethics in everything we do.
Above all else, we value our integrity and we hold ourselves accountable to the highest ethical standards. Our people, patients, and communities are at the center of everything that we do. We strive to deliver transformative medicines, increase access to treatment, and create a positive impact in the communities where we live, work, and serve patients.

Our patients depend on us. They need our very best in every treatment - every dose, every day. We focus on quality and accountability across the entire company: in our laboratory practices, clinical practices, manufacturing processes, and distribution networks.

We value diversity and inclusion.
We embrace a diverse workforce and promote an inclusive culture. We believe that the diverse experiences and perspectives of all our employees help to bring out our best ideas, drive innovation and achieve transformative business results. The health, safety, professional development, work-life balance, and equitable and respectful treatment of our workforce are among our highest priorities.

We touch the lives of those you love.
You, or one of your loved ones, likely know us through the medicines we make. Our top medicines include Revlimid, used to treat patients with a form of cancer called multiple myeloma; Eliquis, used to treat and prevent blood clots and stroke; Opdivo, used to treat multiple forms of cancer; and Orencia, a treatment for rheumatoid arthritis.

We are more than just our medicines. We are more than 30,000 dedicated employees who come to work each day with one mission: To discover, develop, and deliver innovative medicines that help patients prevail over serious diseases.
We Made Great Progress in 2019
2019 was a transformative year for Bristol Myers Squibb, as we acquired Celgene in one of the largest mergers ever in our sector. Though we have only been working together for a few months, we are already realizing benefits from the transaction. Those benefits include:

• An even stronger commercial presence in key disease franchises of oncology, hematology, immunology and cardiovascular disease, led by high-performing commercial teams;
•  Multiple near-term opportunities to launch exciting new medicines for patients;
•  A significantly enhanced early-stage pipeline and new scientific platforms;
• A broader range of discovery modalities
that further strengthen the pipeline; 
•  Opportunities to improve collaboration and scale among research and development
teams; and 
•  Improved global manufacturing and distribution.

As a combined company, we continue to innovate. Among other achievements, in 2019, we launched INREBIC® (fedratinib) and REBLOZYL® (luspatercept-aamt) for the treatment of certain blood disorders in the U.S., continued to strengthen the profile of Eliquis through multiple, robust real-world studies, submitted regulatory filings for luspatercept and ozanimod in the U.S. and Europe, completed two positive first-line lung cancer trials, and laid the groundwork for regulatory submission for CC-486, which showed a significant improvement in overall survival for some leukemia patients.

Financially, it was also a strong year. We delivered strong business performance across the portfolio. We strengthened our balance sheet through the sale of Otezla. We increased our dividend for the eleventh year in a row and implemented a robust accelerated share repurchase program. And we made great strides integrating Celgene.

Bristol Myers Squibb has never been stronger.
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Who We Are:
2020 Director
Nominees
Our Board of Directors
Our Board of Directors has nominated 12 current directors, Peter J. Arduini, Robert Bertolini, Michael W. Bonney, Giovanni Caforio, M.D., Matthew W. Emmens, Julia A. Haller, M.D., Dinesh C. Paliwal, Theodore R. Samuels, Vicki L. Sato, Ph.D., Gerald L. Storch, Karen H. Vousden, Ph.D., and Phyllis R. Yale, to serve as directors of Bristol Myers Squibb. The directors will hold office from election until the 2021 Annual Meeting. We believe that tone is set at the top—not just for integrity, but for excellence, so we open this section on our Board of Directors by introducing you to who we are. We follow that with sections on how we are selected and elected, how we govern and are governed, how we are organized, how you can communicate with us and how we are paid. We ask in Item 1 for your voting support so we can continue our important work and build on our significant successes in 2020.
Item 1—Election of the Board of Directors
2020 Director Nominees
The following biographies of our director nominees reflect their Board Committee membership and Chair positions as of the date of this year’s Annual Meeting.
 
 


Giovanni Caforio, M.D.
Chairman and Chief Executive Officer of the Company

Director Since: 2014
Age: 55

Board Committees
• Integration Committee
Experience
• Bristol Myers Squibb Chief Executive Officer (May 2015-present); Chairman of the Board (May 2017-present); Chief Operating Officer (June 2014-May 2015); Executive Vice President and Chief Commercial Officer (November 2013-June 2014); President, U.S. (October 2011-November 2013); Senior Vice President, Global Commercialization and Immunology (May 2010-October 2011); Senior Vice President, Oncology, U.S. and Global Commercialization (March 2009-May 2010): Senior Vice President, U.S. Oncology (January 2007-March 2009): Senior Vice President, European Marketing and Brand Commercialization (May 2004-January 2007)

Key Skills and Experience
• Healthcare
• International
• Financial

Education
• University of Rome, M.D.

Other
• Member, Board of Trustees of Hun School of Princeton
• Member, Business Roundtable
• Member, CEO Roundtable on Cancer
• Chairman, Pharmaceutical Research and Manufacturers of America
• Member, The Prium
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Vicki L. Sato, Ph.D.
Lead Independent Director

Director Since: 2006
Age: 71

Board Committees
• Committee on Directors and Corporate Governance (Chair)
• Science & TechnologyCommittee

Other Public Boards
• Denali Therapeutics, Inc. (Chair)
• BorgWarner, Inc.
• Chairman of VIR Biotechnology, Inc. (Chair)

Former
• PerkinElmer Corporation
• Syros Pharmaceuticals
Experience
• President of Vertex Pharmaceuticals Incorporated (2000-2005); Chief Scientific Officer, Senior Vice President of Research and Development and Chair of the Scientific Advisory Board
• Professor of management practice at the Harvard Business School (July 2005-June 2017)
• Professor of the practice of molecular and cell biology at Harvard University (July 2005-October 2014)

Key Skills and Experience
• Academia / Non-Profit
• Science / Technology / Innovation
• Healthcare
• Risk Management
• International

Education
• Harvard and Radcliffe Colleges, A.B., Biology
• Harvard University, A.M. and Ph.D., Biology

Other
• Co-Chair on the Task Force on Science and Engineering at Harvard University
• Co-Chair on the Advisory Council of LifeSci NYC
 
 


Peter J. Arduini

Director Since: 2016
Age: 55

Board Committees
• Audit Committee
• Compensation and Management Development Committee
• Integration Committee

Other Public Boards
• Integra LifeSciences Holding Corporation
Experience
• President and Chief Executive Officer at Integra LifeSciences Holdings Corporation, a global medical technology company (January 2012-present), President and Chief Operating Officer (November 2010-January 2012)
• Corporate Vice President and President of Medication Delivery, Baxter Healthcare (2005-2010)
• Spent 15 years at General Electric Healthcare in a variety of management roles for domestic and global businesses, culminating in leading the global functional imaging business

Key Skills and Experience
• Public Company CEO/CFO
• Healthcare
• Financial
• Sales & Marketing
• Science / Technology / Innovation
• Risk Management
• International

Education
• Susquehanna University, B.S., Business Management
• Northwestern University, Kellogg School of Management, M.B.A.

Other
• Board of Directors of ADVAMED (the Advanced Medical Technology Association)
• Board of Directors of MDIC (the Medical Device Innovation Consortium)
• Board of Directors of the National Italian American Foundation
• Board of Trustees of Susquehanna University
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Robert Bertolini

Director Since: 2017
Age: 58

Board Committees
• Audit Committee (Chair)
• Committee on Directors and Corporate Governance

Other Public Boards
• Charles River Laboratories International, Inc.
• Idorsia Ltd.
Experience
• President and Chief Financial Officer of Bausch & Lomb Incorporated until its acquisition by Valeant Pharmaceuticals (February 2013-August 2013)
• Executive Vice President and Chief Financial Officer at Schering Plough Corp. through its merger with Merck & Co., Inc. (November 2003-November 2009) with responsibility for tax, accounting and financial asset management
• Spent 20 years at PricewaterhouseCoopers LLP, ultimately leading its global pharmaceutical industry practice

Key Skills and Experience
• Public Company CEO/CFO
• Financial
• Science / Technology / Innovation
• Sales & Marketing
• Risk Management
• Healthcare
• International

Education
• Rutgers, B.A., Economics
 
 


Michael W. Bonney

Director Since: 2019
Age: 61

Board Committees
• Audit Committee
• Science & Technology Committee

Other Public Boards
• Kaleido Biosciences, Inc. (Chair)
• Alnylam Pharmaceuticals (Chair)
• Magenta Therapeutics (Chair)

Former
• Celgene Corporation
• Global Blood Therapeutics, Inc.
• NPS Pharmaceuticals, Inc.
• Sarepta Therapeutics Inc.
• Syros Pharmaceuticals
Experience
• Executive Chair of the Board of Kaleido Biosciences, Inc. (August 2018-present); Chief Executive Officer and Chairman (June 2017-August 2018)
• Partner of Third Rock Ventures, LLC. (January-July 2016)
• Chief Executive Officer and a member of the Board of Directors of Cubist Pharmaceuticals Inc. until acquired by Merck & Co., Inc. (June 2003-December 2014)
• Vice President, Sales and Marketing at Biogen, Inc.
• Spent eleven years at Zeneca Pharmaceuticals
• Chair of the Board of Trustees of Bates College (2010-2019)

Key Skills and Experience
• Public Company CEO/CFO
• Healthcare
• Financial
• Science / Technology / Innovation
• Sales & Marketing
• Risk Management
• Academia / Non-Profit

Education
• Bates College, B.A., Economics

Other
• Director of Life Sciences Cares
• Director of Gulf of Maine Research Institute
• Board member of the non-profit Rare
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Matthew W. Emmens

Director Since: 2017
Age: 68

Board Committees
• Compensation and Management Development Committee
• Integration Committee
• Science & Technology Committee

Other Public Boards

Former
• Vertex Pharmaceuticals
Experience
• Chief Executive Officer of Shire PLC (2003-2008); Chairman of the Board (2008-2014)
• Chairman, President and Chief Executive Officer of Vertex Pharmaceuticals Incorporated (2009-2012)
• President, Worldwide Pharmaceuticals of Merck KGaA (1999-2003)
• Chief Executive Officer, Commercial Operations of Astra Merck Inc. (1992-1999)
Sales, Marketing and Administration positions for Merck & Co., Inc. (1974-1991)

Key Skills and Experience
• Public Company CEO/CFO
• Science / Technology / Innovation
• Healthcare
• Financial
• Risk Management
• Sales & Marketing
• International

Education
• Fairleigh Dickinson University, B.S., Business Administration
 
 


Julia A. Haller, M.D.

Director Since: 2019
Age: 65

Board Committees
• Science & Technology Committee
• Integration Committee

Other Public Boards

Former
• Celgene Corporation
Experience
• Ophthalmologist-in-Chief of Wills Eye Hospital in Philadelphia, PA, where she holds the William Tasman, M.D. Endowed Chair (2007-present)
• Professor and Chair of the Department of Ophthalmology at Sidney Kimmel Medical College at Thomas Jefferson University and Thomas Jefferson University Hospitals (present)
• Member of the Johns Hopkins faculty, where she held the Katharine Graham Chair in Ophthalmology (until 2007)
• Trained at the Wilmer Eye Institute at Johns Hopkins where she served as the first female Chief Resident

Key Skills and Experience
• Academia / Non-Profit
• Healthcare
• Science / Technology / Innovation
• Financial
• Risk Management

Education
• Princeton University, A.B., Philosophy
• Harvard Medical School, M.D.

Other
• Director (former President), Association of University Professors of Ophthalmology
• Board of Governors, ARVO Foundation for Eye Research (AFER)
• Vice Chair of Board of Trustees, The College of Physicians of Philadelphia
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Dinesh C. Paliwal

Director Since: 2013
Age: 62

Board Committees
• Integration Committee (Chair)
• Committee on Directors and Corporate Governance
• Compensation and Management Development Committee

Other Public Boards
• Nestlé S.A.
• Raytheon Company

Former
• ADT Corporation
Experience
• President and Chief Executive Officer at Harman International (2007-April 2020); Chairman until its acquisition by Samsung (July 2008-March 2017)
• Member of the Group Executive Committee of ABB Ltd. (January 2001-June 2007); President of Global Markets and Technology (January 2006-June 2007), Chairman and Chief Executive Officer of ABB North America (January 2004-June 2007), President and Chief Executive Officer of ABB Automation Technologies Division (October 2002-December 2005)

Key Skills and Experience
• Public Company CEO/CFO
• International
• Financial
• Science / Technology / Innovation
• Risk Management
• Sales & Marketing

Education
• St. Johns College, Agra University, India, B.S., Physics and Chemistry
• Indian Institute of Technology at Roorkee, Roorkee, India, M.S., Engineering
• Miami University, Oxford, Ohio, M.S., Applied Science and Engineering, M.B.A.

Other
• Member of the CEO Business Roundtable
• Member of the advisory board of the Woodrow Wilson Center
• Member of the Board of Directors of the Business Advisory Council of Farmer School of Business, Miami University of Ohio
• Member of the Board of Directors of the U.S. Indian Business Council
 
 


Theodore R. Samuels

Director Since: 2017
Age: 65

Board Committees
• Audit
• Compensation and Management Development Committee

Other Public Boards
• Perrigo Company plc
• Stamps.com
Experience
• President of the Capital Guardian Trust Company (2010-2016); Capital Group representative for Focusing Capital on the Long Term (2014-2015); Board member, Capital Group (2005-2009); Capital Group Audit Committee; Capital Group Finance Committee (2013-2016); Chair of Capital International (North America) Proxy Committee; Capital Guardian Trust Company (North American) Management Committee member; portfolio manager 1990-2016 and analyst 1981-1990

Key Skills and Experience
• Financial
• Sales & Marketing
• Risk Management
• International

Education
• Harvard University, A.B., Economics
• Harvard Business School, M.B.A.

Other
• Director of BJC Healthcare System
• Director of Children’s Hospital Los Angeles, where he served as Co-chair of the Board of Trustees from 2012 until 2015
• Director of the Edward Mallinckrodt, Jr. Foundation
• Director of The Fund for Partnership for Success!, where he also serves as an advisor.
• Director, Research Corporation Technologies, Inc.
• Trustee of the John Burroughs School
• Executive Committee, Harvard College Fund
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Gerald L. Storch

Director Since: 2012
Age: 63

Board Committees
• Audit
• Compensation and Management Development Committee (Chair)

Other Public Boards

Former
• Supervalu Inc.
Experience
• Chief Executive Officer of Storch Advisors (November 2017-present) and (November 2013-January 2015)
• Chief Executive Officer of Hudson’s Bay Company, a leading owner and operator of department stores, including Saks Fifth Avenue, Lord & Taylor, Hudson’s Bay Department Stores, Home Outfitters, Saks OFF 5th, Kaufhof, Inno and the e commerce business Gilt. (January 2015-November 2017)
• Toys “R” Us, Inc., Chairman (February 2006-November 2013), Chief Executive Officer (February 2006-May 2013)
• Target Corporation (1993-2006); joined as Senior Vice President of Strategy and served in roles of increasing seniority until Vice Chairman
• Partner at McKinsey & Company

Key Skills and Experience
• Public Company CEO/CFO
• International
• Financial
• Sales & Marketing
• Risk Management

Education
• Harvard University, A.B., Government & Economics
• Harvard University, M.B.A.
• Harvard University, J.D.

Other
• Director of Fanatics, Inc.
 
 


Karen H. Vousden, Ph.D.

Director Since: 2018
Age: 62

Board Committees
• Science & Technology Committee (Chair)
• Compensation and Management Development Committee
• Integration Committee
Experience
• Senior Group Leader at the Francis Crick Institute in London (February 2017-present)
• Chief Scientist of Cancer Research UK (July 2016-present)
• Director of the Cancer Research—UK (CRUK) Beatson Institute in Glasgow (2002-2016)
• Held leadership roles at the National Cancer Institute in Maryland (1995-2002)

Key Skills and Experience
• Public Company CEO/CFO
• Academia / Non-Profit
• Healthcare
• Science / Technology / Innovation
• International

Education
• Queen Mary College-University of London, B.Sc., Genetics & Microbiology
• Queen Mary College-University of London, Ph.D., Genetics

Other
• Member of the Science Advisory Board of Oncode Institute, the Gurdon Institute, The Netherlands Cancer Institute, the University Cancer Center Frankfurt, Grail, Inc., Ludwig Institute for Cancer Research, PMV Pharma, Raze Therapeutics and Swiss Institute for Experimental Cancer Research
• Council member of the European Molecular Biology Organization
• President of the British Association of Cancer Research
• Fellow of the Royal Society and a Foreign Associate of the National Academy of Sciences
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Phyllis R. Yale

Director Since: 2019
Age: 62

Board Committees
• Committee on Directors and Corporate Governance

Other Public Boards
• DaVita, Inc.
Experience
• With Bain & Company (1982-present); Advisory Partner
• Has served in a number of leadership roles and has been a leader in building Bain's healthcare practice

Key Skills and Experience
• Financial
• Risk Management
• Healthcare
• Academia / Non-Profit

Education
• Harvard and Radcliffe Colleges, A.B., Economics
• Harvard Business School, M.B.A.

Other
• Chair of the Board of Blue Cross Blue Shield of Massachusetts
• Member of the advisory board of Harvard Business School Healthcare Initiative
• Member of the advisory board of the Health Policy and Management Department at the Harvard Chan School of Public Health
• Member of the board of The Bridgespan Group
• Member of the board of The Trustees of Reservations, a conservation and preservation organization
How We Are
Selected and
Elected
Our executives and employees put a great deal of thought into talent recruitment and retention, and we at the Board level are similarly committed to identifying and attracting the best directors for our company. In the subsections that follow we describe our standards, policies and processes to achieving this goal.
Majority Vote Standard and Mandatory Resignation Policy
A majority of the votes cast is required to elect directors. Any current director who does not receive a majority of votes cast must tender their resignation as a director within 10 business days after the certification of the shareholder vote. The Committee on Directors and Corporate Governance, without participation by any director tendering their resignation, will consider the resignation offer and recommend to the Board whether to accept it. The Board, without participation by any director tendering their resignation, will act on the Committee’s recommendation at its next regularly scheduled meeting to be held within 60 days after the certification of the shareholder vote. We will promptly disclose the Board’s decision and the reasons for that decision in a broadly disseminated press release that will also be furnished to the U.S. Securities and Exchange Commission (SEC) on Form 8-K. If any nominee is unable to serve, proxies will be voted in favor of the remainder of those nominated and may be voted for substitute nominees, unless our Board of Directors provides for a lesser number of directors.
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Criteria for Board Membership
As specified in our Corporate Governance Guidelines, members of our Board should be persons with broad experience in areas important to the operation and long-term success of our company. These include areas such as business, science, medicine, finance/accounting, law, business strategy, crisis management, corporate governance, education or government. Board members should possess qualities reflecting integrity, independence, leadership, good business judgment, wisdom, an inquiring mind, vision, a proven record of accomplishment and an ability to work well with others. The Corporate Governance Guidelines also express the Board’s belief that its membership should continue to reflect a diversity of gender, race, ethnicity, age, sexual orientation and gender identity.
All Director Nominees Possess:

Director Independence
11 of our 12 director nominees are currently independent
Our Corporate Governance Guidelines provide that a substantial majority of Board members be independent from management, and the Board has adopted independence standards that meet the listing standards of the New York Stock Exchange. Our Board has determined that, except for Giovanni Caforio, M.D., who is our Chief Executive Officer, each of our directors and each director nominee for election at this Annual Meeting is independent of Bristol Myers Squibb and its management.
Process for Determining Independence
In accordance with our Corporate Governance Guidelines, our Board undertakes an annual review of director independence. In February 2020, the Board considered all commercial and charitable relationships of our independent directors and director nominees, including the following relationships, which were deemed immaterial under our categorical standards (see Exhibit A):
Messrs. Bertolini, Paliwal and Samuels and Ms. Yale are directors of companies that received payment from the company for property or services in an aggregate amount that did not exceed the greater of $1 million or 2% of such other company’s consolidated gross revenues. For each transaction, the Board determined that the director did not initiate or negotiate the transaction and that the transaction was entered into in the ordinary course of business.
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Drs. Sato, Haller and Vousden, Mr. Samuels and Ms. Yale, or one of their immediate family members, is employed by, or serves as a director of, a business or educational or medical institution with which we engage in ordinary course business transactions. The directors did not initiate or negotiate any transaction with such institutions and the payments made did not exceed the greater of $1 million or 2% of such institutions’ respective consolidated gross revenues.
Mr. Samuels is a director of a charitable or nonprofit organization to which the Bristol Myers Squibb Foundation made charitable contributions, which, in the aggregate, did not exceed the greater of $1 million or 2% of such organizations’ respective consolidated gross revenues.
The Board determined that none of these relationships impair the independence of these directors under the New York Stock Exchange’s independence standards or otherwise.
Director Succession Planning and Identification of Board Candidates
Regular Assessment of Our Board Composition
The Committee on Directors and Corporate Governance regularly assesses the appropriate size and composition of our Board. This assessment incorporates the results of the Board’s annual evaluation process, which was recently enhanced in 2017 as described more fully under “Annual Evaluation Process” beginning on page 13. The Committee also considers succession planning for its directors.
Identification and Selection of Director Nominees
In connection with the Board’s ongoing director identification process, the Committee on Directors and Corporate Governance, in consultation with the Chairman, conducts an initial evaluation of prospective nominees against the established Board membership criteria discussed above. The Committee also reviews the skills of the current directors and compares them to the particular skills of potential candidates, keeping in mind the Board’s commitment to maintain members of diverse experience and background. In particular, the Board is committed to identifying and evaluating
highly qualified women and underrepresented ethnic group candidates as well as candidates with other diverse backgrounds, industry experience and other unique characteristics. Candidates may come to the attention of the Committee on Directors and Corporate Governance through current Board members, third-party search firms, management, shareholders or others. Search firms together with management and directors develop a candidate profile that includes the relevant skills and experiences being sought at that time and incorporates the Board membership criteria. Prospective candidates are identified based on the profile. Additional information relevant to the qualifications of prospective nominees may be requested from third-party search firms, other directors, management or other sources. After this initial evaluation, prospective nominees may be interviewed by telephone or in person by the members of the Committee on Directors and Corporate Governance, the Chairman, the Lead Independent Director and other directors, as applicable. After completing this evaluation and interview process, the Committee on Directors and Corporate Governance makes a recommendation to the full Board as to the persons who should be nominated by our Board, and the full Board determines the nominees after considering the recommendation and any additional information it may deem appropriate. In connection with the Celgene Transaction, the company agreed to add two members of the Celgene Board effective at the closing of the transaction. Dr. Haller and Mr. Bonney were elected to join the Board, effective November 20, 2019, and were identified as a potential candidates for
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election to our Board from among the existing Celgene board members and were interviewed by members of the Board and vetted by a third party search firm retained by the Committee on Directors and Corporate Governance. Ms. Yale, who was elected to serve on the Board, effective November 20, 2019, was identified and vetted as a potential candidate for election to our Board by a third-party search firm retained by the Committee on Directors and Corporate Governance and was interviewed by members of the Board.
Shareholder Nominations for Director
The Committee on Directors and Corporate Governance considers and evaluates shareholder recommendations of nominees for election to our Board of Directors in the same manner as other director nominees. Shareholder recommendations must be accompanied by disclosure, including written information about the recommended nominee’s business experience and background with consent in writing signed by the recommended nominee that he or she is willing to be considered as a nominee and, if nominated and elected, he or she will serve as a director. Shareholders should send their written recommendations of nominees accompanied by the required documents to: Bristol-Myers Squibb Company, 430 East 29th Street—14th Floor, New York, New York 10016, Attention: Corporate Secretary.
Proxy Access Shareholder Right
Following extensive engagement with our shareholders, our Board determined to adopt proxy access in 2016, permitting a shareholder or group of up to 20 shareholders holding 3% of our outstanding shares of common stock for at least three years to nominate a number of directors constituting the greater of two directors or 20% of the number of directors on our Board, as set forth in detail in our Bylaws. If you wish to propose any action pursuant to our proxy access bylaw provision, you must deliver a notice to BMS containing certain information set forth in our Bylaws, not less than 120 but not more than 150 days before the anniversary of the prior year’s filing of the proxy materials. For our 2021 Annual Meeting, we must receive this notice between October 27, 2020 and November 25, 2020. Shareholders should send their notices to: Bristol-Myers Squibb Company, 430 East 29th Street—14th Floor, New York, New York 10016, Attention: Corporate Secretary.
Annual Evaluation Process
Our Board recognizes the critical role Board and Committee evaluations play in ensuring the effective functioning of our Board. It also believes in the importance of continuously improving the functioning of our Board and committees. Under the leadership and guidance of our Lead Independent Director, the Committee on Directors and Corporate Governance continuously assesses the Board evaluation process. In 2017, following discussions with and input from the full Board of Directors, the Committee enhanced the Board assessment process to include a written questionnaire. This year, the directors completed the questionnaire electronically. The formal 2019 Board and Committee evaluation processes are as follows:
Board: Directors completed an electronic questionnaire on an unattributed basis responding to questions about the Board and Committee structure and responsibilities, Board culture and dynamics, adequacy of information to the Board, Board skills and effectiveness, and Committee effectiveness. The robust feedback and comments from the directors were anonymously compiled and then were presented by the Chairman and the Lead Independent Director to the full Board for discussion and action. The 2019 Board evaluation was completed in February 2020.
Committees: Committee chairs selected a list of topics for their respective committees to evaluate and discuss, covering both substantive and process aspects of committee performance. The list of discussion topics for each committee was distributed to committee members in advance for consideration. Committee chairs led discussions in executive sessions of their respective committees. Committee chairs then reported to the full Board the results of their respective committee’s evaluation and any follow-up actions. The 2019 Committee evaluations were completed in the beginning of 2019 and reported to the Board in February 2020.
The formal annual Board and Committee evaluations are supplemented by regular informal one-on-one discussions between the Chairman and Chief Executive Officer and each director throughout the year. The Lead Independent Director actively conveys directors’ feedback on an ongoing basis to our Chairman and Chief Executive Officer and has regular one-on-one discussions with the other members of the Board.
In response to feedback received from the annual evaluation process, we completed rotations in our committee memberships.
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How We
Govern and
Are Governed
Director Orientation and Continuing Education
Director education is an ongoing, year-round process, which begins when a director joins our Board. Upon joining our Board, new directors are provided with a comprehensive orientation to our company, including our business, strategy and governance. New directors participate in an orientation program with senior business and functional leaders from all areas of the company, during which there is discussion on strategic priorities and key risks and opportunities, and participate in site visits to one or more of our locations. On an ongoing basis, directors receive presentations on a variety of topics related to their work on the Board and within the biopharmaceutical industry, both from senior management and from experts outside of the company. We also encourage directors to enroll in continuing education programs sponsored by third parties at our expense.
Active Board Oversight of Our Governance
Our business is managed under the direction of our Board of Directors pursuant to the Delaware General Corporation Law and our Bylaws. The Board has responsibility for establishing broad corporate policies and for the overall performance of our company. The Board keeps itself informed of company business through regular written reports and analyses and discussions with the Chief Executive Officer and other officers of Bristol Myers Squibb; by reviewing materials provided to Board members by management and by outside advisors; and by participating in Board and Board Committee meetings.
The Committee on Directors and Corporate Governance continually reviews corporate governance issues and is responsible for identifying and recommending the adoption of corporate governance initiatives. In addition, our Compensation and Management Development Committee regularly reviews compensation issues and recommends adoption of policies and procedures that strengthen our compensation practices. The “Compensation Discussion and Analysis” beginning on page 33 discusses many of these policies and procedures.
The Board of Directors has adopted Corporate Governance Guidelines that govern its operation and that of its Committees. Our Board annually reviews the Corporate Governance Guidelines and, from time to time, our Board revises them in response to changing regulatory requirements, evolving best practices and the concerns of our shareholders and other constituents. Our Corporate Governance Guidelines may be viewed on our website at www.bms.com/ourcompany/governance.
Board’s Role in Strategic Planning and Risk Oversight
Our Board meets regularly to discuss the strategic direction and the issues and opportunities facing our company in light of trends and developments in the biopharmaceutical industry and general business environment. Our Board has been instrumental in determining our next steps as a company.
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The Board plays a critical role in the determination of the types and appropriate levels of risk undertaken by the company.
Annual strategy deep-dive. Each year, typically during the second quarter, the Board holds an extensive meeting with senior management dedicated to discussing and reviewing our long-term operating plans and overall corporate strategy. A discussion of key risks to the plans and strategy as well as risk mitigation plans and activities is led by our Chief Executive Officer as part of the meeting.
Constant focus on strategy. Throughout the year, our Board provides guidance to management on strategy and helps to refine operating plans to implement the strategy. This was especially true in 2019. The Board was consistently involved and met 8 times between June 2018 and January 2019 to discuss the merits and risk of the opportunity to acquire Celgene.
Dedicated to oversight of risk management. Our Board is responsible for risk oversight as part of its fiduciary duty of care to monitor business operations effectively.
For further discussion on how our Board administers its strategic planning and risk oversight function as a whole and through its Board Committees, please see the discussion under the header “How We Are Organized” beginning on page 20.
Risk Assessment of Compensation Policies and Practices
The Compensation and Management Development Committee annually conducts a worldwide review of our material compensation policies and practices. Based on this review, we have concluded that our material compensation policies and practices are not reasonably likely to have a material adverse effect on the company. On a global basis, our compensation programs contain many design features that mitigate the likelihood of inducing excessive or inappropriate risk-taking behavior. These features include:
Balance of fixed and variable compensation, with variable compensation tied both to short-term objectives and the long-term value of our stock price
Clawback and recoupment provisions and policies pertaining to annual incentive payouts and long-term incentive awards
Multiple metrics in our incentive programs that balance top-line, bottom-line and pipeline performance
Share ownership and retention guidelines applicable to our senior executives
Caps in our incentive program payout formulas
Equity award policies that limit risk by having fixed annual grant dates
Reasonable goals and objectives in our incentive programs
Prohibition of speculative and hedging transactions by all employees and directors
Payouts modified based upon individual performance, inclusive of assessments against our BMS Behaviors
All non-sales managers and executives worldwide participate in the same annual plan program that pertains to our Named Executive Officers and that has been approved by the Compensation and Management Development Committee
The Compensation and Management Development Committee’s ability to exercise downward discretion in determining incentive program payouts
Mandatory training on our Principles of Integrity: BMS Standards of Business Conduct and Ethics (the Principles of Integrity) and other policies that educate our employees on appropriate behaviors and the consequences of taking inappropriate actions
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Meetings of Our Board
Our Board meets on a regularly scheduled basis during the year to review significant developments affecting Bristol Myers Squibb and to act on matters requiring Board approval. It also holds special meetings when important matters require Board action between scheduled meetings. Members of senior management regularly attend Board meetings to report on and discuss their areas of responsibility. In 2019, the Board met 12 times. The average aggregate attendance of directors at Board and committee meetings was over 99%. No director attended fewer than 93% of the aggregate number of Board and committee meetings during the period he or she served. In addition, our independent directors met 10 times during 2019 to discuss such topics as our independent directors determined, including the evaluation of the performance of our current Chief Executive Officer.
Annual Meeting of Shareholders
Directors are strongly encouraged, but not required, to attend the Annual Meeting of Shareholders. All of the 2019 nominees for director attended our 2019 Annual Meeting of Shareholders except for Mr. Arduini, who had a long-standing previous commitment.
Codes of Conduct
The Principles of Integrity adopted by our Board of Directors set forth important company policies and procedures in conducting our business in a legal, ethical and responsible manner. These standards are applicable to all of our employees, including the Chief Executive Officer, the Chief Financial Officer and the Controller.
In addition, the Audit Committee has adopted the Code of Ethics for Senior Financial Officers that supplements the Principles of Integrity by providing more specific requirements and guidance on certain topics. The Code of Ethics for Senior Financial Officers applies to the Chief Executive Officer, the Chief Financial Officer, the Controller, the Treasurer and the heads of major operating units.
Our Board has also adopted the Code of Business Conduct and Ethics for Directors that applies to all directors and sets forth guidance with respect to recognizing and handling areas of ethical issues.
The Principles of Integrity, the Code of Ethics for Senior Financial Officers and the Code of Business Conduct and Ethics for Directors are available on our website at www.bms.com/ourcompany/governance. We will post any substantive amendments to, or waivers from, applicable provisions of our Principles, our Code of Ethics for Senior Financial Officers, and our Code of Business Conduct and Ethics for Directors on our website at www.bms.com/ourcompany/governance within two days following the date of such amendment or waiver.
Employees are required to report any conduct they believe in good faith to be an actual or apparent violation of our Codes of Conduct. In addition, as required under the Sarbanes-Oxley Act of 2002, the Audit Committee has established procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by company employees of concerns regarding questionable accounting or auditing matters.
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Related Party Transactions
The Board has adopted a written policy and procedures for the review and approval of transactions involving the company and related parties, such as directors, executive officers and their immediate family members. The policy covers any transaction or series of transactions (an “interested transaction”) in which the amount involved exceeds $120,000, the company is a participant, and a related party has a direct or indirect material interest (other than solely as a result of being a director or less than 10% beneficial owner of another entity). All interested transactions are subject to approval or ratification in accordance with the following procedures:
Management will be responsible for determining whether a transaction is an interested transaction requiring review under this policy, in which case the transaction will be disclosed to the Committee on Directors and Corporate Governance (the “Governance Committee”).
The Governance Committee will review the relevant facts and circumstances, including, among other things, whether the interested transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or ordinary circumstances and the related party’s interest in the transaction.
If it is impractical or undesirable to wait until a Governance Committee meeting to complete an interested transaction, the Chair of the Governance Committee, in consultation with the General Counsel, may review and approve the transaction, which approval must be ratified by the Governance Committee at its next meeting.
In the event the company becomes aware of an interested transaction that has not been approved, the Governance Committee will evaluate all options available to the company, including ratification, revision or termination of such transaction and take such course of action as the Governance Committee deems appropriate under the circumstances.
No director will participate in any discussion or approval of the interested transaction for which he or she is a related party, except that the director will provide all material information concerning the interested transaction to the Governance Committee.
If an interested transaction is ongoing, the Governance Committee may establish guidelines for management to follow in its ongoing dealings with the related party and will review and assess such ongoing relationships on at least an annual basis.
Certain types of interested transactions are deemed to be pre-approved or ratified by the Governance Committee, as applicable, even if the amount involved will exceed $120,000, including the employment of executive officers, director compensation, certain transactions with other companies or charitable contributions, transactions where all shareholders receive proportional benefits, transactions involving competitive bids, regulated transactions and certain banking-related services.
BlackRock, Inc. (BlackRock) and The Vanguard Group (Vanguard) are each considered a “Related Party” under our related party transaction policy because they each beneficially own more than 5% of our outstanding common stock. The Governance Committee ratified and approved the following related party transactions in accordance with our policy and Bylaws:
Certain of our retirement plans use BlackRock and its affiliates to provide investment management services. In addition, we have certain investments in BlackRock managed investment funds. In connection with these services, we paid BlackRock approximately $4.5 million in fees during 2019.
Vanguard acts as an investment manager with respect to certain investment options under our savings and thrift plans. Participants in the plans pay Vanguard’s investment management fees if they invest in investment options managed by Vanguard; neither the plans themselves nor the company pays fees directly to Vanguard. In connection with these services, Vanguard received approximately $594,118 in fees during 2019.
The Governance Committee ratified the above relationships on the basis that these entities’ ownership of our stock plays no role in the business relationship between us and them, and that the engagement of each entity was on terms no more favorable to them than terms that would be available to unaffiliated third parties under the same or similar circumstances.
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Disclosure Regarding Political Activities
We provide semi-annual disclosure on our website at the link noted below of all political contributions to political committees, parties or candidates on both state and federal levels that are made by our employee political action committee, as well as annual disclosure of the portion of our dues or other payments made to trade associations to which we give $50,000 or more that can be attributed to lobbying expenditures. Please see the company's website at: https://www.bms.com/about-us/sustainability/economic-responsibility/political-contributions.html under “Political Contributions.”
Global Corporate Citizenship & Sustainability
Patients are at the center of everything we do. Our work is focused on the discovery and development of medicines that transform patients’ lives in a way that incorporates good corporate citizenship, environmental stewardship and social responsibility. This year, we celebrate our 10th year as a member of the UN Global Compact and 20 years’ of setting global Sustainability Goals. These commitments reflect our comprehensive approach toward protecting human and natural resources, now and in the future. For us, Sustainability is much more than meeting targets – it is integrated into our culture and is part of our daily thought process. This includes ensuring our clinical trials reflect real world patient populations and the incorporation of innovative technologies to drive our R&D and manufacturing operations. We continue to bring hope to patients with serious disease by building capacity and strengthening community services to ensure no patient is left behind. Our Sustainability 2020 Goals are:
Accelerate innovation to develop transformative medicines—By 2020, enable Speed to Patients by optimizing development timelines such as R&D processes, regulatory review and data packaging. The goal also focuses on improving clinical trial patient diversity and satisfaction. For example, by 2020, we will recruit clinical trial patients representing the real world patient population and will conduct R&D programs with transparency, through public disclosure of all ongoing clinical trials and trial results for approved products.
Enhance patient access to medicines—Use existing approaches such as tiered pricing, voluntary licensing, reimbursement support, patient assistance programs and our Bristol-Myers Squibb Foundation partnerships to provide greater access to our medicines in global markets. For example, by 2020 all marketed products will have access plans.
Be the employer of choice and the champion of safety—Empower and engage our people by improving safe behaviors and building a more globally diverse and inclusive workforce; being a recognized employer of choice. For example, by 2020, we will engage our people in a culture of diversity and inclusion that drives business performance through the value chain, and leverages their insights to better meet patient needs.
Drive supply chain leadership on quality and integrity—Ensure reliable supply, engaging with our critical suppliers and assessing those in high-risk countries for conformance with labor and integrity standards. As an example, all critical manufacturing suppliers will be assessed for risk and risk mitigation performance, with results incorporated in sourcing decisions.
Innovate to support a green, healthy planet—Continue to improve our environmental footprint with greenhouse gas and water reduction goals and integrate green design and reduce waste throughout our product portfolio. Among Bristol Myers Squibb’s Sustainability 2020 Goal targets is to reduce water use and greenhouse gas emissions by 5 percent (absolute) or more from the 2015 baseline and integrate green design and reduce waste throughout our portfolio.
While we are pleased with the progress we have made to date, we know there is still much more work to do to ensure the health of the planet and its people. We are actively engaged with our shareholders and other key stakeholders on our environmental, social and governance performance relative to our financial results and on the development of our next generation sustainability strategy and goals for the integrated company. Our Board remains actively engaged on these issues with direct oversight by our Committee on Directors and Corporate Governance. For more information and to provide feedback, please see the company’s website at https://www.bms.com/about-us/sustainability.html under “Sustainability.”
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Responsible Drug Pricing Strategy & Transparency
Our Commitment
We firmly believe that prescription medicines are such a vital part of human healthcare that everyone who needs them should have access to them. We have been, and remain, committed to facilitating access to our medicines, and to furthering our Mission to help patients prevail over serious diseases. We price our medicines based on a number of factors, including, among others, the value of scientific innovation for patients and society in the context of overall healthcare spend; economic factors impacting the healthcare systems’ capacity to provide appropriate, rapid and sustainable access to patients; and the necessity to sustain our research and development (R&D) investment in innovative, high-quality medicines that address the unmet medical needs of patients with serious diseases and improve their life needs.
At Bristol Myers Squibb, we believe in the value our medicines bring to patients and society and our role in transforming care to help patients live longer, healthier and more productive lives. We focus on medicines that meaningfully change patient outcomes and improve quality of life, and over the last 30 years, we have made significant contributions in areas such as HIV, hepatitis, cardiovascular disease and, most recently, immuno-oncology. After our acquisition of Celgene Corporation, we are now moving to the next generation of treatment options, such as CAR-T. We are pursuing medicines with transformational potential in diseases such as cancer, hematology, heart failure, fibrosis, multiple sclerosis, psoriasis and neuroscience. Many of our medicines are breakthroughs in innovation, truly differentiated medicines that have changed the standard of care and help patients live longer and healthier lives. For example, in melanoma, prior to the availability of immuno-oncology treatment options, 25% of patients diagnosed with metastatic melanoma survived one (1) year. This increased to 74% with immuno-oncology therapies. Through Revlimid and Pomalyst, we transformed the treatment of multiple myeloma. Advances like these have transformed the treatment of certain cancers and changed survival expectations for patients. Collectively, we have delivered nine (9) new products in the past five (5) years, including 18 major market approvals in 2019. These breakthrough medicines are possible because of our consistent investment in research and development. We have emerged as an industry leader in R&D investment, investing approximately $6 billion annually over the last three years, roughly 27% of our revenue. Therefore, our goal is to ensure access to currently approved medicines while continuing to fuel the development of medicines for the future.
Governance/Transparency
We take a thoughtful approach to pricing our products and have internal processes and controls in place to ensure that pricing decisions are thoroughly and appropriately vetted prior to implementation with involvement from the highest levels of management. This process includes routine presentations to the Board on drug pricing strategies. In addition, on balance, over the last few years, our revenue growth has been primarily attributable to increased volume arising from increased demand for our products rather than price increases. We have and continue to disclose in our annual report on Form 10-K and our quarterly reports on Form 10-Q, the average net selling price increase for our legacy BMS products. Our average net selling price increase for 2015, 2016, 2017, 2018 and 2019 was approximately, 3%, 5%, 2%, 0% and 0%, respectively. We believe we have the appropriate governance mechanisms and internal controls and processes in place to ensure that pricing decisions are made in line with our values and commitment.
In addition, the Compensation Management and Development Committee (“Committee”) annually completes a thoughtful and rigorous evaluation of our executive compensation program to ensure that the program is aligned with our Mission and delivers shareholder value, while not encouraging excessive or inappropriate risk-taking by our executives. When setting incentive plan targets each year, the Committee is aware of the risks associated with drug pricing, among other things, and ensures our plans do not incentivize risky behavior in order to meet targets.
Access/Regulatory Reform
We remain committed to working with policymakers, thought leaders, patient advocates and other stakeholders to shape a comprehensive system that provides accessible and affordable health care with the goal of achieving universal coverage and quality patient care, while continuing to fuel innovation. We support efforts to make medicines more affordable, from access assistance to innovative ways to address costs more directly. Individuals who cannot afford our medicines and have no other means of coverage, public or private, may be eligible to be provided with our medicines, at no charge, through a number of programs, including various independent charitable organizations, including the Bristol-Myers Squibb Patient Assistance Program Foundation, Inc., an independent 501(c)(3) charitable organization, and other company sponsored patient assistance programs. We estimate that in 2019 alone, we donated more than $1.3 billion worth of medicines to assist more than 100,000 patients in the United States at no cost to these patients.
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We promote health equity globally and strive to increase access to life-saving medicines for populations disproportionately affected by serious diseases and conditions, giving new hope and help to some of the world’s most vulnerable people. Indeed, increasing access to patients is one of our 2020 Sustainability Goals. In addition to our patient assistance programs in the U.S. and outside of the U.S., we have different mechanisms of patient assistance programs, rebates and co-pay assistance programs in each country. For example, we support the use of tiered pricing between distinct groups of countries, in instances of disproportionate disease impact. For instance, for over a decade, Bristol Myers Squibb has maintained a policy of tiered pricing and voluntary licensing for our HIV and HCV medicines in an attempt to reduce barriers that delay broad and accelerated access to treatment for patients around the world. In addition, as part of our commitment to helping patients prevail over serious diseases, we also drive and support a number of programs designed to build capacity, raise patient awareness, including prevention and diagnosis and access to treatment and care. Through the Bristol-Myers Squibb Foundation, an independent 501(c)(3) charitable organization, we support community-based programs that promote cancer awareness, screening, care and support among high-risk populations in the United States, as well as China, Brazil and sub-Saharan Africa. Several examples are: SECURE THE FUTURE and Delivering Hope.
As a company, we have made remarkable improvements in delivering life-saving medicines to patients and offering creative solutions for access; however, we understand concerns that our healthcare system as a whole is too expensive, and we are interested in finding ways to improve our system. Therefore, we re-assert our commitment to proactively work with governments, payers, health care providers and other stakeholders around the world to develop sustainable solutions that will better assist patients in need.
How We Are
Organized
Board Leadership Structure
The company’s governance documents provide the Board with flexibility to select the appropriate leadership structure for the company. They establish well-defined responsibilities with respect to the Chairman and Lead Independent Director roles, including the requirement that the Board have a Lead Independent Director if the Chairman is not an independent director. This information is set forth in more detail on our website at www.bms.com/ourcompany/governance.
Our Board has dedicated significant consideration to our leadership structure, particularly in connection with the election of Dr. Caforio as the Chairman of the Board at the 2017 Annual Meeting. The Board’s analysis of our leadership structure took into account many factors, including the specific needs of the Board and the company, the strong role of our Lead Independent Director, our Corporate Governance Guidelines (including our governance practices that provide for independent oversight of management), the acquisition of Celgene and integration of Celgene businesses into our company, the challenges specific to our company, and the best interests of our shareholders. After thoughtful and rigorous consideration, the Board determined that combining the Chairman and Chief Executive Officer positions and electing Dr. Caforio as the Chairman of the Board continues to be in the best interest of the company and our shareholders, and is the best leadership for the company and its shareholders at this time. Specifically, our Board believes that to have Dr. Caforio serve in the combined role of Chairman and Chief Executive Officer confers distinct advantages at this time, including:
having a Chairman who can draw on detailed institutional knowledge of the company and industry experience from serving as Chief Executive Officer, providing the Board with focused leadership, particularly in discussions about the company’s strategy;
a combined role ensures that the company presents its message and strategy to all stakeholders, including shareholders, employees and patients, with a unified voice; and
the structure allows for efficient decision-making and focused accountability.
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The Board recognizes the importance of appointing a strong Lead Independent Director to maintain a counterbalancing structure to ensure that the Board functions in an appropriately independent manner. The Lead Independent Director is selected annually by the independent directors. The independent directors have elected Dr. Vicki Sato to serve in that position.
The Lead Independent Director’s responsibilities include, among others:
Serving as liaison between the independent directors and the Chairman and Chief Executive Officer
Approving the quality, quantity and timeliness of information sent to the Board
Reviewing and approving meeting agendas and sufficiency of time
Serving a key role in Board and Chief Executive Officer evaluations
Calling meetings of the independent directors
Responding directly to shareholder and stakeholder questions, as appropriate
Presiding at all meetings of the independent directors and any Board meeting when the Chairman and Chief Executive Officer is not present, including executive sessions of the independent directors
Providing feedback from executive sessions of the independent directors to the Chairman and Chief Executive Officer and other senior management
Engaging with major shareholders, as appropriate
Recommending advisors and consultants
The Board believes this structure provides an effective, high-functioning Board, as well as appropriate safeguards and oversight. Our Board will continue to evaluate its leadership structure in light of changing circumstances and will evaluate the Board’s leadership structure on at least an annual basis and make changes at such times as it deems appropriate.
Our Board administers its strategic planning and risk oversight function as a whole and through its Board Committees. The following are examples of how our Board Committees are involved in this process:
Audit Committee
Regularly reviews and discusses with management our process to assess and manage enterprise risks, including those related to market/environmental, strategic, financial, operational, legal, compliance, cyber security and reputation.
Compensation and
Management
Development
Committee
Annually evaluates our incentive compensation programs to determine whether incentive pay encourages excessive or inappropriate risk-taking. In particular, the Committee evaluates the components of our executive compensation program that work to minimize excessive or inappropriate risk-taking, including, the use of different forms of long-term equity incentives, linking payout to each executive’s demonstration of our BMS Behaviors, placing caps on our incentive award payout opportunities, following equity grant practices that limit potential for timing awards and having stock ownership and retention requirements.
Committee on Directors
and Corporate
Governance
Regularly considers and makes recommendations to the Board concerning the appropriate size, function and needs of the Board, determines the criteria for Board membership, provides oversight of our corporate governance affairs and reviews corporate governance practices and policies. Oversees the company’s political activities and routinely considers matters relating to the company’s responsibilities as a global corporate citizen pertaining to corporate social responsibility and corporate public policy and the impact on the company’s employees and shareholders.
Science and
Technology Committee
Regularly reviews our pipeline and potential business development opportunities to evaluate our progress in achieving our near-term and long-term strategic research and development goals and objectives, and assures that we make well-informed choices in the investment of our research and development resources, among other things.
Integration Committee
Regularly oversees the overall integration of the respective businesses and operations of BMS and Celgene, including integration planning prior to Closing and providing regular reports to the Board on the progress of the Integration. Serves as an advisory committee to company management to provide input in connection with the integration. Oversees and monitors management’s plans for integration, including key milestones, timelines, organization, cost synergies and the budget for achieving such synergies, as well as the company’s progress in achieving its integration plans. Collaborates with the Audit Committee, Compensation and Management Development Committee and Science and Technology Committee to oversee and assess progress against key integration items relating to integration of systems, processes and controls, our pipeline, and our compensation programs and talent capabilities, respectively.
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Committees of Our Board
Our Bylaws specifically provide for an Audit Committee, Compensation and Management Development Committee, and Committee on Directors and Corporate Governance, all of which are composed entirely of independent directors. Our Bylaws also authorize the establishment of additional committees of the Board and, under this authorization, our Board of Directors established the Science and Technology Committee. Our Board has appointed individuals from among its members to serve on these four standing committees and each committee operates under a written charter adopted by the Board, as amended from time to time. These charters are published on our website at http://bms.com/ourcompany/governance/Pages/board_committees_charters.aspx. Each of these Board Committees has the necessary resources and authority to discharge its responsibilities, including the authority to retain consultants or experts to advise the committee.
The table below indicates the current members of our standing Board Committees and the Integration Committee and the number of meetings held in 2019:
Director
Audit(1)
Committee on
Directors
and Corporate
Governance
Compensation
and
Management
Development
Science
and
Technology
Integration
Peter J. Arduini
X
X
X
Robert Bertolini
C
X
Michael W. Bonney(2)
X
X
Giovanni Caforio, M.D.
X
Matthew W. Emmens
X
X
X
Michael Grobstein(3)
X
C
Julia A. Haller, M.D.(2)
X
Alan J. Lacy(3)
X
X
Dinesh C. Paliwal
X
X
C
Theodore R. Samuels(4)
X
X
Vicki L. Sato, Ph.D.
C
X
Gerald L. Storch(4)
X
X
Karen H. Vousden, Ph.D.(5)
X
C
X
Phyllis R. Yale(2)
X
Number of 2019 Meetings
10
5
10
10
4
“C”
indicates Chair of the committee.
1)
Our Board of Directors has determined, in its judgment, that all members of the Audit Committee are financially literate and that all members of the Audit Committee meet additional, heightened independence criteria applicable to directors serving on audit committees under the New York Stock Exchange listing standards. In addition, our Board has determined that Messrs. Arduini, Bertolini, Bonney, Grobstein, Lacy, Samuels and Storch each qualify as an “audit committee financial expert” under the applicable SEC rules.
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2)
Mr. Bonney, Dr. Haller and Ms. Yale, each joined the Board on November 20, 2019. On January 1, 2020, Mr. Bonney became a member of our Audit Committee and our Integration Committee, Dr. Haller became a member of our Science & Technology Committee and Ms. Yale became a member of our Committee on Directors and Corporate Governance. Effective May 5, 2020, Mr. Bonney will rotate from our Integration Committee to the Science & Technology Committee and Dr. Haller will become a member of our Integration Committee.
3)
Mr. Grobstein and Mr. Lacy will retire from our Board effective after the 2020 Annual Meeting.
4)
Effective May 5, 2020, Mr. Storch will become Chair of our Compensation and Management Development Committee and Mr. Samuels will rotate from our Committee on Directors and Corporate Governance to our Compensation and Management Development Committee.
5)
Dr. Karen H. Vousden became a member of the Compensation and Management Development Committee effective May 29, 2019.
The following descriptions reflect each standing Board Committee’s membership and Chair effective as of May 5, 2020.
Audit Committee
 
 

  
Committee Chair
Robert Bertolini

Additional Members
Peter J. Arduini
Michael W. Bonney
Theodore R. Samuels
Gerald L. Storch
Key Responsibilities
• Overseeing and monitoring the quality of our accounting and auditing practices, including, among others, reviewing and approving the internal audit charter, audit plan, audit budget and decisions regarding appointment and replacement of Chief Audit Officer
• Appointing, compensating and providing oversight of the performance of our independent registered public accounting firm for the purpose of preparing or issuing audit reports and related work regarding our financial statements and the effectiveness of our internal control over financial reporting
• Assisting the Board in fulfilling its responsibilities for general oversight of (i) compliance with legal and regulatory requirements, (ii) the performance of our internal audit function and (iii) enterprise risk assessment and risk management policies and guidelines
• Reviewing our disclosure controls and procedures, periodic filings with the SEC, earnings releases and earnings guidance
• Producing the required Audit Committee Report for inclusion in our Proxy Statement
• Overseeing the implementation and effectiveness of our compliance and ethics program
• Reviewing our information security and data protection program
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Committee on Directors and Corporate Governance
 
 

  
Committee Chair
Vicki L. Sato, Ph.D.

Additional Members
Robert Bertolini
Dinesh C. Paliwal
Phyllis R. Yale
Key Responsibilities
• Providing oversight of our corporate governance affairs and reviewing corporate governance practices and policies, including annually reviewing the Corporate Governance Guidelines and recommending any changes to the Board
• Identifying individuals qualified to become Board members and recommending that our Board select the director nominees for the next annual meeting of shareholders
• Reviewing and recommending annually to our Board the compensation of non-employee directors
• Considering questions of potential conflicts of interest involving directors and senior management and establishing, maintaining and overseeing related party transaction policies and procedures
• Evaluating and making recommendations to the Board concerning director independence and defining specific categorical standards for director independence
• Providing oversight of the company’s political activities
• Considering matters relating to the company’s responsibilities as a global corporate citizen pertaining to corporate social responsibility and corporate public policy and the impact on the company’s employees and shareholders
• Overseeing the annual evaluation process of the Board and its Committees
Compensation and Management Development Committee
 
 

  
Committee Chair
Gerald L. Storch

Additional Members
Peter J. Arduini
Mathew W. Emmens
Dinesh C. Paliwal
Theodore R. Samuels
Karen H. Vousden
Key Responsibilities
• Reviewing, approving and reporting to our Board on our major compensation and benefits plans, policies and programs
• Reviewing corporate goals and objectives relevant to CEO compensation, evaluating the CEO’s performance in light of those goals and objectives and recommending for approval by at least three-fourths of the independent directors of our Board the CEO’s compensation based on this evaluation
• Reviewing and evaluating the performance of senior management; approving the compensation of executive officers and certain senior management
• Overseeing our management development programs, performance assessment of our most senior executives and succession planning
• Reviewing and discussing with management the Compensation Discussion and Analysis and related disclosures required for inclusion in our Proxy Statement, recommending to the Board whether the Compensation Discussion and Analysis should be included in our Proxy Statement, and producing the Compensation and Management Development Committee Report required for inclusion in our Proxy Statement
• Establishing and overseeing our compensation recoupment policies
• Reviewing incentive compensation programs to determine whether incentive pay encourages inappropriate risk-taking throughout our business
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Science and Technology Committee
 
 

  
Committee Chair
Karen H. Vousden, Ph.D.

Additional Members
Michael W. Bonney
Matthew W. Emmens
Julia A. Haller, M.D.
Vicki L. Sato, Ph.D.
Key Responsibilities
• Reviewing and advising our Board on the strategic direction of our research and development (R&D) programs and our progress in achieving near term and long term R&D objectives
• Reviewing and advising our Board on our internal and external investments in science and technology
• Identifying and discussing significant emerging trends and issues in science and technology and considering their potential impact on our company
•  Providing assistance to the Compensation and Management Development Committee in setting any pipeline performance metric under the company’s incentive compensation programs and reviewing the performance results
Integration Committee
 
 

  
Committee Chair
Dinesh C. Paliwal

Additional Members
Peter J. Arduini
Giovanni Caforio, M.D.
Matthew W. Emmens
Julia A. Haller, M.D.
Karen H. Vousden, Ph.D.
Key Responsibilities
• Overseeing the overall integration of the respective businesses and operations of the BMS and Celgene, including integration planning prior to Closing
• Serving as an advisory committee to company management to provide input in connection with the integration
• Overseeing and monitoring management’s plans for integration, including key milestones, timelines, organization, cost synergies and the budget for achieving such synergies, as well as the company’s progress in achieving its integration plans
• Overseeing the company’s progress in achieving launch readiness and commercial execution for the near-term product launch opportunities
• Together with the Science and Technology Committee of the Board, overseeing the company’s progress towards integrating the company’s and Celgene’s pipelines and alliances into a combined portfolio, and monitoring portfolio prioritization and execution
• Together with the Compensation and Management Development Committee, overseeing and monitoring the retention of critical talent and capabilities and approving any integration performance metric under the company’s incentive compensation programs and reviewing the performance results
• Together with the Audit Committee, overseeing and monitoring the company’s progress on integrating systems, processes, and controls
• Providing regular reports to the Board on the progress of the Integration
In addition, in 2019, the Board established an ad hoc Board Finance Committee to oversee and approve additional acquisition finance-related matters, including, final terms of the notes issuance and debt exchange transactions that were contemplated by the Celgene transaction as well as future debt exchanges or other related financing transactions, among other things. The members of the Board Finance Committee were Peter J. Arduini, Giovanni Caforio, M.D., Theodore R. Samuels and Gerald L. Storch. The Board Finance Committee met two times during 2019.
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How to
Communicate
With Us
We value input and offer many means to provide it.
We, members of the Board of Directors, know that we must actively seek information from a wide variety of sources—and not just from individuals and entities that work for us—to do our jobs optimally. We therefore create multiple means to hear from shareholders, employees at all levels, patients, medical professionals, policy experts and others to inform our work.
You can communicate with us via many of these means. You can provide us comments on your proxy when you are voting. You can attend our annual meeting and speak with us. You can accept our invitations to engage or ask us for a meeting when that is of value to you. You can participate in our various Investor Relations functions which we listen to both directly and indirectly. You can write to us via mail or use any of our reporting functions such as so-called Whistle Blower hotlines. And, of course, we pay close attention to your voting and investment decisions as well.
Written Communication
Our Board has created a process for anyone to communicate directly with our Board, any committee of the Board, the non-employee directors of the Board collectively or any individual director, including our Chairman and Lead Independent Director. Any interested party wishing to contact our Board may do so in writing by sending a letter to Bristol-Myers Squibb Company, 430 East 29th Street—14th Floor, New York, New York 10016, Attention: Corporate Secretary.
Any matter relating to our financial statements, accounting practices or internal controls should be addressed to the Chair of the Audit Committee. All other matters should be addressed to the Chair of the Governance Committee.
Our Corporate Secretary or her designee reviews all correspondence and forwards to the addressee all correspondence determined to be appropriate for delivery. Our Corporate Secretary periodically forwards to the Governance Committee a summary of all correspondence received. Directors may at any time review a log of the correspondence we receive that is addressed to members of the Board as well as copies of any such correspondence. Our process for handling communications to our Board has been approved by the independent directors.
Proactive Shareholder Engagement
We continued to place a high priority on our proactive engagement with our shareholders in 2019, reaching out to over 50 of our top shareholders, representing nearly 58% of our shares outstanding. In 2019, management and members of the Board, including our Lead Independent Director, met with many of our shareholders and had a productive dialogue on a number of topics, including board composition, company strategy and execution, sustainability and risk oversight, as well as executive compensation.
The feedback received was generally positive and was shared with the entire Board and members of senior management. In addition, we continued to engage with shareholders, seeking active feedback and offering additional insights on shareholder proposals included in our most recent Proxy Statements, including those related to drug pricing and executive compensation and the threshold to call special shareholder meetings.
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We encourage our registered shareholders to use the space provided on the proxy card to let us know your thoughts about BMS or to bring a particular matter to our attention. If you hold your shares through an intermediary or received the proxy materials electronically, please feel free to write directly to us.
Responsiveness to Shareholder Feedback
Through our outreach efforts, we actively solicited feedback from shareholders and offered additional insights on shareholder proposals that were included in our recent Proxy Statements, including those related to drug pricing and executive compensation and the threshold to call special shareholder meetings. The results of these discussions are noted below:
Proposal
Proponent
Shareholder Outreach Feedback
Company Response
Lower threshold to call a special meeting of shareholders from 25% to 15%
James McRitchie
Most shareholders deferred to Board’s determination of an appropriate threshold
The Board believes the current 25% threshold is reasonable, appropriate and aligned with our shareholders’ interests
Some shareholders inquired whether Board would consider lowering threshold if proposal received substantial support
The current threshold is designed to strike a balance between assuring that shareholders have the ability to call a special meeting and protecting against the risk that a small minority of shareholders could trigger the expense and distraction of a special meeting to pursue matters that do not need immediate attention
Board continues to evaluate the appropriateness of the current threshold, taking into account: (i) shareholder’s interest, (ii) shareholder support for the proposal, and (iii) continued feedback from our shareholders
How risks related to public concern over drug pricing strategies are integrated into the Company’s incentive compensation policies, plans and programs for senior executives
UAW Retiree Medical Benefits Trust, Trinity Health and multiple other co-filers
Robust engagement with proponents and other shareholders; proponents requested additional disclosure, including related to (i) key drivers for pricing and (ii) governance around price increases and Board’s oversight of pricing
Company collaborated with the proponents to include additional disclosure that was responsive to the proponents’ feedback and consistent with our shared desired outcome, which is included in this Proxy Statement beginning on page 19.
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How We
Are Paid
Compensation of Directors
Director Compensation Program
We aim to provide a competitive compensation program to attract and retain high quality directors. The Committee on Directors and Corporate Governance (when used in this Compensation of Directors’ section, the “Committee”) annually reviews our directors’ compensation program, including a review of the director compensation programs at our executive compensation peer groups. Furthermore, for 2019 planning, we again engaged an outside consultant, Frederic W. Cook & Co., Inc. (“FWC”), to review market data and competitive information on director compensation. FWC recommended, and the Committee determined, that our executive compensation peer groups should be the primary source for determining director compensation.
Upon reviewing FWC’s analysis in December 2018, the Committee determined to make no changes to the director compensation program for service as a director in 2019. However, in June 2019, in light of the substantial efforts of certain directors related to the acquisition and integration of Celgene Corporation, the Committee determined to increase the Lead Independent Director annual retainer by $15,000 and to establish committee chair and member annual retainers for the Celgene Integration Committee at $25,000 for the committee chair and $15,000 for the other committee members.
The Committee also engaged FWC to conduct an updated market assessment of our director compensation program in December 2019. In light of the fact that our core director compensation program had been unchanged since 2018 and was between the 25th percentile and median of our peer groups, among other reasons, the Committee determined to increase the annual equity award for service as a director for 2020 by $5,000 and the member annual retainer for service on the Committee on Directors and Corporate Governance by $7,500. The Committee submitted its recommendations for director compensation to the full Board for approval. Giovanni Caforio, M.D. does not receive any additional compensation for serving as a director.
The Committee believes the total compensation package for directors we offered in 2019 was reasonable, and appropriately aligned the interests of directors with the interests of our shareholders by ensuring directors have a proprietary stake in our company.
The Components of Our Director Compensation Program
In 2019, non-employee directors who served for the entirety of 2019 received:
Component
Value of Award
Annual Retainer
$100,000
Annual Equity Award
Deferred Share Units valued at $185,000
Lead Independent Director Annual Retainer
$35,000, with increase to $50,000 in June 2019
Committee Chair Annual Retainer
$25,000
Committee Member (not Chair) Annual Retainer – Audit, Compensation and Management Development, Science and Technology and Integration Committees
$15,000
Committee Member (not Chair) Annual Retainer – Committee on Directors and Corporate Governance
$7,500
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Annual Equity Award
On February 1, 2019, all non-employee directors serving on the Board at that time received an annual award of deferred share units valued at $185,000 under the 1987 Deferred Compensation Plan for Non-Employee Directors. These deferred share units are non-forfeitable at grant and are settleable solely in shares of our common stock. A new member of the Board who is eligible to participate in the Plan receives, on the date the director joins the Board, a pro-rata number of deferred share units based on the number of share units payable to participants as of the prior February 1.
Compensation of our Lead Independent Director
Our Lead Independent Director received an additional annual retainer of $35,000, which was increased to $50,000 in June 2019. Our Board has determined to award this retainer in light of the increased duties and responsibilities demanded by this role, which duties and responsibilities are described in further detail on page 21.
Share Retention Requirements
All non-employee directors are required to acquire a minimum of shares and/or units of company stock valued at not less than five times their annual cash retainer within five years of joining the Board and to maintain this ownership level throughout their service as a Director. We require that at least 25% of the annual retainer be deferred and credited to a deferred compensation account, the value of which is determined by the value of our common stock, until a non-management director has attained our share retention requirements.
Deferral Program
A non-management director may elect to defer payment of all or part of the cash compensation received as a director under our company’s 1987 Deferred Compensation Plan for Non-Employee Directors. The election to defer is made in the year preceding the calendar year in which the compensation is earned. Deferred funds for compensation received in connection with service as a director in 2019 were credited to one or more of the following funds: a United States total bond index, a short term fund, a total market index fund or a fund based on the return on our common stock. Deferred portions are payable in a lump sum or in a maximum of 10 annual installments. Payments under the Plan begin when a participant ceases to be a director or at a future date previously specified by the director.
Charitable Contribution Programs
Each director who joined the Board prior to December 2009 participates in our Directors’ Charitable Contribution Program. Upon the death of a director, we will donate up to an aggregate of $500,000 to up to five qualifying charitable organizations designated by the director. Individual directors derive no financial or tax benefit from this program since the tax benefit of all charitable deductions relating to the contributions accrues solely to the company. In December 2009, the Board eliminated the Charitable Contributions Program for all new directors.
In addition, each director was able to participate in our company-wide matching gift program in 2019. We matched dollar for dollar a director’s contribution to qualified charitable and educational organizations up to $30,000. This benefit was also available to all company employees. In 2019, each of the following non-employee directors participated in our matching gift programs as indicated in the Director Compensation Table below: Drs. Haller, Sato and Vousden, Messrs. Arduini, Bertolini, Emmens, Grobstein, Lacy, Paliwal, Samuels and Ms. Yale.
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Director Compensation Table
The following table sets forth information regarding the compensation earned by our non-employee directors in 2019.
Name
Fees Earned or
Paid in Cash(1)
Stock
Awards(2)
Option
Awards(3)
All Other
Compensation(4)
Total
P. J. Arduini
$139,808
$185,000
$0
$30,000
$354,808
R. Bertolini
$132,500
$185,000
$0
$15,000
$332,500
M. W. Bonney
$11,413
$37,000
$0
$0
$48,413
M. W. Emmens
$139,808
$185,000
$0
$30,000
$354,808
M. Grobstein(5)
$140,000
$185,000
$0
$30,000
$355,000
J.A. Haller, M.D.
$11,413
$37,000
$0
$30,000
$78,413
A. J. Lacy(5)
$122,500
$185,000
$0
$30,000
$337,500
D. C. Paliwal
$138,846
$185,000
$0
$30,000
$353,846
T. R. Samuels
$122,500
$185,000
$0
$30,000
$337,500
V. L. Sato, Ph.D.
$183,241
$185,000
$0
$25,000
$393,241
G. L. Storch
$130,000
$185,000
$0
$0
$315,000
K.H. Vousden, Ph.D.
$143,668
$185,000
$0
$6,500
$335,168
P. R. Yale
$11,413
$37,000
$0
$30,000
$78,413
1)
Includes the annual retainer, committee chair retainers, committee membership retainers and Lead Independent Director retainer, as applicable. All or a portion of the cash compensation may be deferred until retirement or a date specified by the director, at the election of the director. The directors listed in the below table deferred the following amounts in 2019, which amounts are included in the figures above. Mr. Bonney, Dr. Haller and Ms. Yale joined the Board effective November 20, 2019.
Name
Dollar Amount
Deferred
Percentage
of Deferred
Amount
Allocated
to U.S. Total
Bond Index
Percentage
of Deferred
Amount
Allocated
to Short
Term Fund
Percentage
of Deferred
Amount
Allocated
to Total Market
Index Fund
Percentage
of Company
Deferred
Amount
Allocated
to Deferred
Share Units
Number of
Company
Deferred Share
Units Acquired
P. J. Arduini
$139,808
0%
0%
0%
100%
2,728
R. Bertolini
$132,500
0%
0%
0%
100%
2,594
M. W. Bonney
$8,103
0%
0%
0%
71%
126
M. W. Emmens
$139,808
0%
0%
0%
100%
2,728
M. Grobstein
$70,000
0%
0%
0%
50%
1,370
J.A. Haller, M.D.
$11,413
0%
0%
0%
100%
178
A. J. Lacy
$122,500
0%
0%
0%
100%
2,398
D. C. Paliwal
$138,846
0%
0%
0%
100%
2,703
T. R. Samuels
$122,500
0%
0%
0%
100%
2,398
G. L. Storch
$130,000
0%
0%
0%
100%
2,545
K.H. Vousden, Ph.D.
$143,668
0%
0%
0%
100%
2,792
P. R. Yale
$11,413
0%
0%
0%
100%
178
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2)
Represents aggregate grant date fair value under FASB ASC Topic 718 of deferred share unit and common stock awards granted during 2019. On February 1, 2019, each of the non-employee directors then serving as a director received a grant of 3,708.158 deferred share units valued at $185,000 based on the fair market value on the grant date of $49.89. On November 20, 2019, in connection with their appointment to the Board effective upon the closing of the Celgene transaction, Mr. Bonney, Dr. Haller and Ms. Yale received a pro-rated grant of 655.913 deferred share units valued at $37,000 based on the fair market value on the grant date of $56.41. The aggregate number of deferred share units held by each of these directors as of December 31, 2019, is set forth below. In some cases, these figures include deferred share units acquired through elective deferrals of cash compensation.
Name
# of Deferred Share Units
P. J. Arduini
22,030
R. Bertolini
16,870
M. W. Bonney
782
M. W. Emmens
17,105
M. Grobstein
83,212
J.A. Haller, M.D.
834
A. J. Lacy
74,031
D. C. Paliwal
29,907
T. R. Samuels
15,640
V. L. Sato, Ph.D.
66,968
G. L. Storch
52,630
K.H. Vousden, Ph.D.
10,543
P. R. Yale
834
3)
There have been no stock options granted to directors since 2006 and no non-employee Director had stock options outstanding as of December 31, 2019. On November 20, 2019 in connection with their appointment to the Board effective upon the closing of the Celgene transaction, Mr. Bonney and Dr. Haller’s stock options from Celgene have been converted into BMS stock options. The aggregate number of all stock options held by Mr. Bonney and Dr. Haller as of December 31, 2019 are set forth below:
Name
# of Stock Options
M. W. Bonney
102,269
J.A. Haller, M.D.
83,469
4)
Amounts include company matches of charitable contributions under our matching gift program.
5)
Mr. Grobstein and Mr. Lacy will retire from our Board effective after the 2020 Annual Meeting.
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Message from the Compensation
and Management Development
Committee Chair
2019 was an exciting year for Bristol Myers Squibb. The acquisition of Celgene Corporation has been a transformative event for our company, an important next step in our biopharma strategy. We believe that this combination will lead to great outcomes for our shareholders, patients, and employees.
Managing executive compensation through such a transaction is complex. The Compensation and Management Development Committee (when used in this CD&A, the “Committee” or “CMDC”) has been deeply involved in ensuring that the executive compensation programs, particularly during these transition years, align, support and reinforce the company’s business and people strategy. For our Named Executive Officers (or “NEOs”), our goal each year is to create an executive compensation framework that provides clear lines-of-sight into the key value drivers that we believe will create long-term value for our shareholders and patients.
From an executive compensation perspective, we had four distinct focus areas over the past year and these will also guide us in our work in 2020. As you read our Compensation Discussion & Analysis (“CD&A”), you will see these distinct focus areas reflected throughout. They include:
Formulating an effective and efficient compensation program for our legacy BMS executives for 2019, including adjusting the weighting of performance goals and measurement periods for outstanding long-term and annual incentive awards for these executives;
Honoring our commitments under the Celgene Transaction merger agreement;
Setting our 2020 compensation to motivate our executive team to continue to deliver on our core strategy while efficiently integrating Celgene. To achieve our synergy goals, this will require balancing investments in our pipeline and people; and
Planning for 2021 and beyond to unify compensation and benefit programs to be both competitive and sustainable across not only our NEOs but also our broader global employee population.
Our Committee also focuses on the development mandate outlined in our charter. In this regard, the Committee continued its longstanding practice of reviewing with the CEO the performance, potential and development opportunities for the senior executives who make up the leadership team, with a view toward prudent succession planning. As part of this effort, members of the Committee were involved in the interviews and onboarding of key Celgene executives who joined the BMS leadership team. Two of these executives are now NEOs.
During 2019 and into 2020, we have engaged with a large number of our shareholders on a variety of topics, including executive compensation as well as the impact of the Celgene Transaction. As we create the blueprint for the 2021 post-integration executive compensation program, we will continue to engage with shareholders and give full consideration to their feedback.
Finally, it has been an honor to serve as Chair of this Committee and as a member of your Board, advancing our mission for patients. It has been a pleasure to serve with such a dedicated and talented group of individuals, including Gerald Storch, who will succeed me as Chair of the Committee.
We welcome your input.

Michael Grobstein, Chair.
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Compensation Discussion
and Analysis
Business Overview and Evolution
BMS delivered strong financial results for our shareholders in 2019; the most direct sign of this was our total return to shareholders, which was 28%. Our strong performance allowed us to increase our dividend by 10%.
2019 was an exciting year for the company. In January, we entered into an agreement to acquire Celgene Corporation (as used in this CD&A, “Celgene,” and the acquisition, the “Celgene Transaction” or “Transaction”), which was approved by BMS and Celgene shareholders in April and closed in November, bringing together two innovative companies to create a leading biopharmaceutical company focused on transforming patients’ lives through science. Our new company leadership includes executives from both BMS and Celgene and we welcomed two Celgene directors to our Board upon the closing of the Transaction (as used in this CD&A, the “Closing” or the “Close”). More information on the Transaction is available in the “Celgene Transaction” section beginning on page 36.
Following the Closing, we have a stronger portfolio of marketed medicines, a broader and deeper pipeline, and significant free cash flow generation potential, which will further increase our financial flexibility. We already see that happening; in 2019, our revenues grew by 16%, 10% of which came from our legacy BMS business led by Eliquis and Opdivo, and 6% of which came from net sales of Celgene products from November 20 through the end of the year led by Revlimid.
Over time, that potential to drive increased free cash flow will allow us to deliver on our commitments to reduce our debt, and continue to invest in future innovation to do what we do best: find ways to transform patients’ lives through science.
Our mission to help patients is fueled by our ability to develop innovative new medicines, and each year we focus on building and renewing our robust development pipeline. We are focused on innovative medicines for patients with cancer and other serious diseases. As a combined company, our pipeline is considerably broader, with platforms and technologies that provide significant opportunities for new approaches to the treatment of serious diseases.
Guided by our continued vision of transforming patients’ lives through science, during 2019 we redesigned the R&D and Commercialization organizations to drive the continued growth of our highly successful marketed portfolio, maximize the multiple near-term launch opportunities and deliver the value of the combined pipeline.
Pay Program
2019 was a busy executive compensation year at BMS. The Celgene Transaction and the associated changes in the composition of our executive team, demanded extensive attention from the Committee. That attention included broad transaction-related shareholder outreach (in addition to our robust annual engagement program). Collectively, the Committee reviewed and approved: (i) adjustments to in-progress short-term and long-term awards to account for the Transaction and (ii) development of a transition pay program to focus executives on our people and realizing the synergy in the new combined entity, while ensuring focus on executing the core of our strategy. In addition, the Committee reviewed initial plans for unified compensation and benefits arrangements for our employee population, including our Named Executive Officers (or “NEOs”).
2019 is the first year in a multi-year integration journey to bring our NEOs together under a common compensation and benefits framework. The following is a high-level roadmap on our plan to execute on executive compensation integration for the Celgene Transaction.
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This Compensation Discussion and Analysis describes the actions taken by the Committee to develop the pre-acquisition BMS executive compensation program, including the adjustments to that program in light of the Celgene Transaction, the treatment of compensation for our new NEOs from Celgene, and the unified executive compensation program that we have put in place for our executive officers for 2020.
Over the next two years, we anticipate that you will continue to see the evolution of our executive compensation and benefits programs.
Named Executive Officers for 2019
This CD&A is intended to explain how our executive compensation program is designed and how it operates for our Named Executive Officers. The table below lists our 2019 NEOs, including both legacy BMS executives and former Celgene executives who joined our company on November 20, 2019, upon Closing.
Name
Principal Position
Giovanni Caforio, M.D.
Chairman & Chief Executive Officer
Charles A. Bancroft
EVP, Head of Integration and Strategy & Business Development (effective, November 20, 2019, former Chief Financial Officer)
David V. Elkins
EVP and Chief Financial Officer (effective November 20, 2019)
Christopher Boerner, Ph.D.
EVP and Chief Commercialization Officer
Sandra Leung
EVP and General Counsel
Rupert Vessey M.A, B.M., B.Ch., F.R.C.P., D.Phil.
EVP and President, Research and Early Development (effective November 20, 2019)
Thomas J. Lynch, Jr., M.D.
EVP and Chief Scientific Officer (through October 1, 2019)
In connection with the redesign of our R&D and Commercialization organizations as described above, we announced on June 5, 2019 that our then-Chief Scientific Officer, Thomas J. Lynch, Jr., M.D., would transition out of the company by October 1, 2019. At that time, we also announced that Rupert Vessey, M.A., B.M., B.Ch., F.R.C.P., D.Phil., was appointed EVP and President, Research & Early Development (“R&ED”) to lead R&ED as a cohesive unit across Discovery, Early Development and Translational Medicine to advance promising programs and assets from discovery through proof-of-concept. Samit Hirawat, M.D., joined BMS in June 2019 as EVP & Chief Medical Officer, Global Drug Development to lead late-stage product
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development, Global Regulatory Safety & Biometrics, Global Clinical Operations and R&D Strategy and Planning across all therapeutic areas. Our Global Drug Development organization is tasked with ensuring the progression of pipeline assets from proof-of-concept to commercialization through world-class clinical trial design and operations. In the commercialization organization, effective as of the Closing, Dr. Boerner assumed an expanded role, overseeing the combined company’s Oncology, Immunology and Cardiovascular global businesses, Worldwide Value, Access and Pricing, and Worldwide Commercial Operations. The Global Medical organization is also reporting to Dr. Boerner. In addition, Mr. Nadim Ahmed was appointed EVP and President, Hematology, overseeing the company’s Hematology business, including Cell Therapy.
We also announced that our then-Chief Financial Officer, Charles A. Bancroft would transition from his role as CFO to Executive Lead for Integration. On March 16, 2020, after 35 years of service, Mr. Bancroft retired from the company. David V. Elkins assumed the role of CFO, upon the Closing.
2019 Business Results
2019 was a transformative year for the company. We made great progress against the execution of our strategy, delivering strong operational and financial performance in key areas, including continued growth across our in-line portfolio, while also completing the Celgene Transaction and beginning to integrate the legacy BMS and Celgene businesses.
Completed Celgene Transaction and Advanced Integration
Created a new company, well positioned to become the leading biopharmaceutical company, with multiple near-term launch opportunities, a broad and diversified early-stage pipeline together with financial flexibility to continue to invest in research and development
Completed swift divestiture of Otezla, securing regulatory approval with minimal delay and attaining significant value at $13.4 billion
Accomplished, prior to Closing, important progress on integration, including finalizing the top three layers of leadership and identifying key geographic business sites, and maintained high level of employee engagement
Delivered Strong Business Performance Across In-line Portfolio in 2019
Net sales of Eliquis reached $7.9 billion and Opdivo reached $7.2 billion, 23% and 7% higher than 2018, respectively
Orencia, Yervoy and Empliciti net sales also grew by double digits, 10%, 12% and 45%, respectively
Revlimid sales from November 20th through December 31st were $1.3 billion
Achieved Positive Clinical and Regulatory Achievements
Received eight approvals for new medicines and additional indications and formulations of currently marketed medicines, including approval of (i) Opdivo + Yervoy in renal cell carcinoma (RCC) in the EU; (ii) Opdivo + Yervoy in first-line metastatic melanoma in U.S.; (iii) Empliciti + Pomalyst in second-line multiple myeloma in the EU and Japan; (iv) Sprycel + chemotherapy for pediatric patients with acute lymphoblastic leukemia in EU; (v) Opdivo for second-line head & neck cancer in China; and (vi) Breakthrough Therapy Designations in the U.S. for: Opdivo + Yervoy for advanced hepatocellular carcinoma (HCC) and for Orencia for moderate to severe acute graft-versus-host disease in hematopoietic stem cell transplants from unrelated donors
Pre-closing, Celgene received U.S. approval of Rebloyzyl (luspatercept) and Inrebic (fedratinib), realizing two of the near-term launch opportunities in our combined pipeline
Reported positive clinical trial results, including a number of late-stage clinical trials and submitted regulatory applications for initial indications for ozanimod and liso-cel as well as for additional indications for Opdivo + Yervoy, Reblozyl, and Revlimid
Increased number of potential near-term launch opportunities; the company’s overall pipeline performance and key pipeline milestones are described in more detail on page 46
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Key 2019 Financial Performance Highlights
Total revenues increased by 16%, with 10% attributable to the legacy BMS business
GAAP diluted earnings per share decreased by (33%), primarily due to taxes resulting from the Otezla divestiture, amortization of acquired intangible assets, the unwinding of inventory fair value adjustments and other costs and expenses resulting from the Celgene acquisition, partially offset by higher revenues; and non-GAAP diluted earnings per share increased by 18%, primarily as a result of higher revenues
Our strong operational and financial performance in 2019 continued to deliver value to our shareholders, as supported by our 28% one-year total shareholder return, which exceeded our primary peer group, while increasing our dividend by 10%, marking an increase in dividends for the 11th year in a row
Celgene Transaction
Under the terms of the merger agreement with Celgene (as used in this CD&A, the “Merger Agreement”), each outstanding Celgene share of common stock was exchanged for: one share of Bristol-Myers Squibb Company common stock; $50 cash; and one tradeable Contingent Value Right (“CVR”). The CVR entitles its holder to receive a one-time payment of $9.00 in cash upon approval by the U.S. Federal Drug Administration (“FDA”) in specified indications of all three of the following milestones: ozanimod (by December 31, 2020); liso-cel (JCAR017) (by December 31, 2020); and ide-cel (bb2121) (by March 31, 2021).
Outstanding Celgene equity compensation awards held by current and former Celgene employees were assumed by BMS at the time of the Transaction. In general, service-based awards (i.e., options and restricted stock units) were converted to BMS awards on a value-for-value basis while retaining their original vesting schedule. Performance-based Celgene awards were converted to service-based BMS restricted stock unit awards, with the number of shares converted determined by actual Celgene performance (the greater of either target performance or actual achievement above target) as of the close of the third quarter of 2019 and a value-for-value conversion ratio. Holders of certain outstanding equity compensation awards were granted and/or are eligible to receive CVRs upon the future vesting of such awards.
There was no single-trigger acceleration of vesting of outstanding equity awards held by continuing Celgene employees as a result of the Celgene Transaction. As noted, awards that were assumed and converted into BMS awards have continuing service-based vesting restrictions that match the original time vesting periods. For a more detailed discussion of the specific conversion elements for each award, shareholders are encouraged to read the Registration Statement on Form S-4 filed with the Securities and Exchange Commission on February 20, 2019.
Shareholder Engagement
In 2019, we reached out to more than 50 of our top shareholders, representing more than 58% of our total shares outstanding. As in previous years, we engaged on many important topics related to our executive compensation and corporate governance programs, including board composition, tenure, board assessment, risk oversight, and board and company-wide diversity and other sustainability and social responsibility topics. The feedback we received from shareholders was generally positive and supportive of our intended compensation adjustments related to the Celgene Transaction (see the discussion under “2019 Executive Compensation Program Overview” and “2020 Executive Compensation Program Overview, beginning on page 37). Our 2019 say-on-pay proposal was approved by 92% of our shareholders, confirming continued support for our executive compensation program.
In addition to our annual engagement efforts, in March and April 2019, we engaged shareholders regarding the Celgene Transaction, and solicited shareholder feedback on the treatment of executive compensation both during the Transaction year and over the expected integration period. Later in 2019, we engaged with shareholders on appropriate performance-based pay metrics to use during the integration period, and what time periods to evaluate those metrics over.
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We used the feedback from these engagement conversations as vital input into Committee discussions. The feedback from these discussions helped shape the Key Integration metrics discussed below, which focus on human capital management and synergy realization and reemphasize the need to keep management focused on delivering on our strategy.
The Committee remains committed to ongoing shareholder engagement, and they actively consider shareholder feedback as they evaluate and adjust our executive compensation program.
2019 Executive Compensation Program Overview
In late 2018 and into early 2019, the CMDC designed and approved an executive compensation program that was largely in line with our 2018 executive compensation program. The Committee continues to believe this structure aligns with our ongoing commitment to emphasize variable, or “at risk,” compensation for our Named Executive Officers. Certain modifications, highlighted below, describe updates to the 2019 executive compensation program for the company generally. Updates noted with the dotted lines are those made in consideration of the Celgene Transaction. Of note, Operating Margin going forward remains an important measure of the success of the integration, as it serves as a proxy for long-term synergy capture. More details on this program are discussed later in this Proxy Statement.
2019 Compensation Plan: Changes Reflect Integration Planning and Execution

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2020 Executive Compensation Program Overview
Developing an integrated executive compensation program is a top priority for the Committee. Our engagement with shareholders has provided input into the design of our post-Transaction compensation program for our Named Executive Officers. With that feedback in mind, the Committee designed an interim compensation program. The 2020 design includes core financial, operational and integration metrics as well as a pipeline metric that represents the Committee’s ongoing commitment to creating a balanced approach to metrics, encouraging thoughtful, enterprise focus and long-term decision-making.
In 2020, all of our Named Executive Officers will have the same incentive award designs, and all employees at the Vice President level and above will have Key Integration metrics, including human capital management and synergy realization factors, in the annual incentive plan.
In addition to our financial metrics and Key Integration metrics, our pipeline metric continues to play a critical role in our annual incentive plan. Solidifying the direct line of sight into tangible pipeline objectives aligns our executives’ interests with our shareholders’ outcomes, including those shareholders holding CVRs. In particular, the 2020 pipeline goal will take into account the specific milestones associated with the CVR, namely, FDA approval in specified indications of ozanimod (by December 31, 2020), liso-cel (JCAR017) (by December 31, 2020) and ide-cel (bb2121) (by March 31, 2021).
Certain modifications, highlighted below with the dotted lines, describe updates to the 2020 executive compensation program that have been made in consideration of the Celgene Transaction and to encourage and reward our executives’ ongoing commitment to continue to successfully integrate the Celgene business and execute on our core strategy.
2020 Compensation Plan: Design Supports Successful Integration

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Executive Compensation Philosophy and Principles
At Bristol Myers Squibb, the cornerstone of our compensation philosophy and program structure is aligning pay to the achievement of both our short-term and long-term goals, engagement of our employees, the achievement of our Mission and the delivery of value to our shareholders.
Each year, when evaluating company and senior management performance and making its compensation decisions, the Committee considers our compensation philosophy and program structure, which underscores competitive compensation and pay for performance, with the goal of striking the appropriate balance among (i) directly aligning executives’ compensation with the fulfillment of our Mission and the delivery of shareholder value; (ii) making a substantial portion of our executives’ compensation variable and at risk based on operational, financial, strategic and share price performance; and (iii) attracting, retaining and engaging executives who are capable of leading our business in a highly competitive, complex, and dynamic business environment.
After reviewing our financial and operational performance, our share price performance, and the individual performance of our executives, the Committee determined that the compensation of our executives under the program design continues to be appropriate.
In 2019, the Committee reviewed how all the elements of our compensation program design worked together, noting the balance between short-term and long-term compensation and performance, top-line and bottom-line results, absolute and relative factors, and internal and market-based performance metrics. In evaluating 2019 performance, the Committee determined that the compensation of our executives appropriately reflects:

• our financial and operational results;
• the execution and advancement of the company’s long-term strategy in 2019;
• the Committee’s holistic assessment of the individual performance of our executives; and
• the Closing of the Celgene Transaction and the execution and planning of integration.

We believe that the execution of our strategy will continue to create sustainable long-term value for shareholders.
Our Executive Compensation Philosophy Focuses on Two Core Elements:
Competitive
Compensation
• We operate in a highly complex and competitive business environment that requires that we attract, retain and engage executives capable of leading our business.
• By providing compensation that is competitive with our peer companies, we reduce the risk that our competitors can successfully recruit our executives. We are also able to maintain the highest ongoing levels of engagement of these talented executives to facilitate and sustain high performance.
Pay for
Performance
• We structure our compensation program to closely align the interests of our executives with those of our shareholders.
• We believe that an executive’s compensation should be directly tied to helping us achieve our mission and deliver value to our shareholders. Therefore, a substantial portion of our executives’ compensation is variable and at risk based on operational, financial, strategic and share price performance.
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Based on this philosophy, our compensation program is designed with the following principles in mind:

to pay our employees equitably based on the work they do, the capabilities and experience they possess, and the performance and behaviors they demonstrate (including, in 2019, passion, innovation, speed and accountability);

to promote a non-discriminatory and inclusive work environment that enables us to benefit from and to use as a competitive advantage the diversity of thought that comes with a diverse and inclusive workforce;

to motivate our executives and all our employees to deliver high performance with the highest integrity; and

to implement best practices in compensation governance, including risk management and promotion of effective corporate policies.
Benchmarking Analysis and Compensation Peer Groups
Benchmarking Approach
In general, our executive compensation program seeks to provide total direct compensation at the median of our primary peer group (as defined below) when targeted levels of performance are achieved. In any given year, however, we may target total direct compensation for a particular executive above or below the median of our primary peer group due to multiple factors. These factors include competencies, qualifications, experience, responsibilities, contribution, individual performance, role criticality and/or potential as well as attracting and retaining talent within the highly competitive biopharmaceutical industry marketplace. We define total direct compensation as base salary plus target annual incentive award plus the grant date fair value of annual long-term equity incentive awards.
Paying at competitive levels when targeted levels of performance are achieved allows us to attract and retain the talent we need to continue driving performance, while enabling us to maintain a competitive cost base with respect to compensation expense.
Benchmarking Process
The Committee’s independent compensation consultant, Compensation Advisory Partners, LLC (“CAP”) annually conducts and shares with the Committee a review of the compensation for our Named Executive Officers, including compensation information compiled from publicly filed disclosures of our primary and extended peer groups. Pay levels of our peers, among other factors, are used as a reference point when determining individual pay decisions (i.e., base salary levels, the size of salary adjustments, if any, target annual incentive levels and long-term equity incentive award size).
2019 Peer Groups
We regularly monitor the composition of our peer groups and make changes when appropriate. Prior to the Celgene Transaction, the Committee, with the help of CAP, reviewed our peer groups for 2019 and determined that all of the peer companies continued to be appropriate and that we would not make any changes to the peer groups. In connection with the Celgene Transaction, the Committee reviewed the peer groups again and determined that the only change that would be made post-Closing was removing Celgene from the peer groups. With the exception of removing Celgene from our peer groups following Closing, our peer groups in 2019 remained unchanged and consisted of the following companies:
Primary Peer Group
Extended Peer Group(1)
AbbVie Inc.
Gilead Sciences Inc.
AstraZeneca PLC
Amgen Inc.
Johnson & Johnson
GlaxoSmithKline PLC
Biogen Inc.
Merck & Co.
Roche Holding AG
Celgene Corporation
Pfizer, Inc.
Novartis AG
Eli Lilly and Company
Sanofi
1)
Our extended peer group includes the primary peer group plus these five companies based outside the U.S. Following the Closing, Celgene was removed from the list of peer companies.
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rimary Peer Group: The Committee believes the companies included in our 2019 primary peer group are appropriate given the unique nature of the biopharmaceutical industry. These companies represent our primary competitors for executive talent and operate in a similarly complex regulatory and research-driven environment.
In determining our primary peer group, we believe emphasis should be placed on whether a company competes directly with us for the specialized talent necessary to further drive our success in creating the leading global biopharmaceutical company. We also consider company size in determining our peer group. The companies in our primary peer group all had annual revenues of at least $10 billion.
Extended Peer Group:  We also review an extended peer group, which comprises the nine companies in our primary peer group (eight following the removal of Celgene) plus five companies based outside the U.S. This extended peer group serves as an additional reference point for compensation practices, including by providing an understanding of the competitive pay environment as it relates to the global nature of both our business and the competition for talent.
2019 Compensation Program – Legacy BMS Named Executive Officers
2019 Target Compensation Benchmarks
Target compensation for Dr. Caforio was at approximately the median of Chief Executive Officers within our primary peer group. The Committee believes Dr. Caforio’s compensation package positions him appropriately among his peers when taking multiple factors into consideration. On average, our other Named Executive Officers were also at approximately the median of our primary peer group, with some variation by position.
The following charts provide an overview of the 2019 executive compensation components for the CEO and other legacy BMS NEOs, as originally granted, and highlights the percentage of target compensation that is variable and at risk.

This target mix supports the core elements of our executive compensation philosophy by emphasizing long-term, stock-based incentives while providing competitive annual cash components, thus aligning our executive compensation program with our business strategy.

The following sections discuss the primary components of our executive compensation program and provide detail on how specific pay decisions were made for each NEO in 2019.
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Components of Our 2019 Compensation Program
Core components of our 2019 executive compensation program for legacy BMS NEOs:
Base Salary
Annual Incentive Award
Long-Term Equity Incentives, comprising:
  – Performance Share Units
  – Market Share Units
Base Salary
Base salaries are used to help us attract talent in a highly competitive labor market. The salaries of our executives are primarily based on the specialized qualifications, experience and criticality of the individual executive and/or his or her role and the pay levels of comparable positions within our primary peer group. Salary increases for our executives are determined based on both the performance of an individual and the size of our annual salary increase budget in a given year, which is based in part on an assessment of market movement related to salary budgets for our peer companies and broader general industry trends. Therefore, we typically set our annual salary increase budgets based on the median of such forecasts. There may be adjustments to salary from time to time to recognize, among other things, when an executive assumes significant increases in responsibility and/or is promoted, and to reflect competitive pay based on market data for individual executive roles.
In 2019, in accordance with our company-wide merit review process, employees, including the Named Executive Officers, were eligible for a merit increase provided that their performance fully met or exceeded expectations on both Results and Behaviors (as defined below). Employees who are determined to be below the fully performing level typically receive either a reduced merit increase or no salary increase depending on the extent to which they are below the fully performing level. In addition, the position of total compensation relative to market is also considered in determining whether to provide a salary increase to each employee. Effective April 1, 2019, Mr. Bancroft, Dr. Boerner, Ms. Leung and Dr. Lynch received an increase of 3%. Dr. Caforio did not receive an increase because the Committee determined that his base salary relative to market was appropriately aligned.
In addition, in connection with the Celgene Transaction, the Committee reviewed the compensation for all of our legacy BMS NEOs. This was done in an attempt to ensure that we continue to pay competitively in light of the increased complexity of, and changes to, our business, including the incorporation of the Hematology franchise and the new reporting structure of our R&D function into Research and Early Development and Global Drug Development. As a result of this review, the Committee made no additional changes to our CEO’s base salary. Dr. Boerner received an increase of 7.6%, effective as of June 1, 2019, and Ms. Leung received an increase of 3.2%, effective as of the Closing. The compensation packages for the legacy Celgene NEOs, including their new base salary levels following the Closing, are discussed on page 55 under “2019 Compensation Program – Legacy Celgene Named Executive Officers.”
Annual Incentive Plan
Our annual incentive plan is designed to reward performance that supports our business strategy of creating the leading biopharmaceutical company and our Mission to help patients prevail over serious diseases. The annual plan aligns with our business strategy and Mission by sharpening management’s focus on key financial and pipeline goals, as well as by rewarding individual performance (both Results and Behaviors), consistent with our pay-for-performance philosophy.
Each NEO’s target annual incentive is expressed as a percentage of base salary, which is set at a level to ensure competitive total direct compensation. Annual incentive awards for each NEO are determined by evaluating both company performance (as measured by the Company Performance Factor) and individual performance (as measured by the Individual Performance Factor (“IPF”)). The maximum incentive opportunity for each NEO is 200% of target.
The Company Performance Factor can range from 0% to 152%, based on financial achievements and pipeline results, and the IPF can range from 0% to 165%, based on individual performance (both Results and Behaviors), subject to a 200% of target maximum payout. For 2019, the IPF was also based on transaction-related factors, such as deal execution, integration planning activities, human capital management, and synergy identification and planning. The graphic below illustrates the calculation used to determine annual incentive plan awards.
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Annual Incentive Award Calculation for Named Executive Officers
Target annual bonus



(As percentage of NEO base salary)
X
Company Performance Factor


(Based on achievement of financial and pipeline metrics)
X
Individual Performance Factor
(Based on achievement of pre-defined objectives that align with strategic goals and consider actions taken towards successful integration planning and execution)
=
Annual Bonus
The target annual incentive for each legacy BMS NEO is expressed as a percentage of the executive’s base salary. If mid-year salary adjustments are made, the target annual incentive award will include the pro-rated impact of the adjustments.
Performance Metrics Underlying the Company Performance Factor
Our 2019 annual incentive plan design has the following corporate-wide measures, which apply to all legacy BMS employees eligible to participate in the plan, including our legacy BMS Named Executive Officers:
2019 Metric and Weighting
What It Is
Why It’s Important
Earnings Per Share (EPS)
(50%)
Non-GAAP Diluted EPS
(Net Income divided by outstanding shares of common stock, as adjusted to reflect the Celgene Transaction)
A critical measure of annual profitability aligning our employees’ interests with those of our shareholders
Total Revenues
(25%)
Total Revenues, Net of Foreign Exchange
(Total revenues minus reserves for returns, discounts, rebates and other adjustments)
A measure of topline growth that creates a foundation of long-term sustainable growth and competitive superiority
Pipeline
(25%)
• Near-Term Value
(Submissions and approvals)
• Long-Term Growth Potential
Increases BMS-wide focus on delivery of our late-stage pipeline and continued development of a robust pipeline through both internal efforts and business development
Our pipeline metric highlights the importance of pipeline delivery to the near-term and long-term success of the company. This metric measures the sustainability and output of our R&D pipeline portfolio and is comprised of goals in two categories, Near-Term Value and Long-Term Growth Potential with a Qualitative Overlay on the entire metric:
Metric
What It Is
Why It’s Important
Near-Term Value
(50%)
Regulatory submissions and approvals for new medicines and new indications and formulations of key marketed products in the U.S., EU, China and Japan
Recognizes delivery of the late-stage pipeline, which drives near-term value
Long-Term Growth Potential (50%)
• Development Candidates
• First in Human
• Registrational Study Starts
Recognizes the progression and successes of the R&D pipeline at various stages of development, including internally and externally sourced compounds
Qualitative Overlay
Reflects management’s, the Science & Technology Committee’s (“S&T Committee”) and CMDC’s holistic evaluation of our pipeline performance, including such considerations as the performance of high value assets and the integration of acquired assets, among other factors. In particular, this considers actions taken toward successful integration planning and execution.
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Adjustments Made to Legacy BMS NEO Annual Incentive Program due to the Celgene Transaction
Upon the Closing of the Celgene Transaction, the Committee made adjustments to the 2019 annual incentive plan to ensure appropriate treatment for all legacy BMS employees, including our NEOs. Those adjustments included:
Adjustment
Details
Rationale
Limit Earnings Per Share (EPS) measurement to the quarter immediately preceding the Closing (or Q3)
• “Lock in” EPS actual performance through three quarters (the most recent publicly available earnings measurement prior to Close)
• Payout based on actual EPS achievement through three quarters compared to goal through three quarters
• Ensure the appropriate reward for BMS employees, including NEOs, based on EPS generated organically
• Prevent windfall payouts due to combined company EPS, which was likely to be higher than legacy BMS
Include Celgene Transaction- related factors in qualitative IPF evaluation
• Evaluate certain factors, such as deal execution, integration planning activities, human capital management, and synergy identification and planning as part of IPF
• Retain IPF payout parameters; IPF may range from 0-165%, and maximum bonus capped at 200% of target
• Immediately begin to tie executive compensation to integration planning success and focus
• Reward executives for integration success through qualitative mechanism in 2019 due to short post-Closing period; move to embedded metric in 2020
The Committee believes that it is appropriate to continue to evaluate the revenue and pipeline measures in the Company Performance Factor for 2019 by measuring the performance of the legacy BMS business through the close of the relevant performance period (calendar year), as there were fewer than six weeks remaining in the fiscal year for the business to operate post Closing. Maintaining this structure was important to help ensure that management and the broader employee base who participate in the annual incentive plan, stayed focused on execution of critical business priorities. Accordingly, the revenue goal remained unchanged after the Closing, but revenues contributing to the achievement of legacy BMS executive Company Performance Factor achievement only includes revenues attributed to the legacy BMS business, and excludes any revenue contributed by the former Celgene business.
Similarly, the pipeline metric remained focused solely on the performance of the legacy BMS business pipeline.
Financial and Pipeline Metric Target Setting Considerations
At the beginning of each year, the Committee undertakes an incentive target setting process to establish targets that it believes will motivate our executives appropriately to deliver the high performance that drives shareholder value creation in both the short- and long-term.
Financial and strategic performance targets are:
Predefined;
Stretch goals that are aligned with earnings guidance;
Tied to the key financial objectives of the company; and
Aligned with industry benchmarks on speed of commercial launch and expected market adoption.
Pipeline performance targets are:
Set in collaboration with the S&T Committee;
Aligned with the company’s strategic plan and key value drivers;
Aligned with industry benchmarks on typical clinical study duration and regulatory approval timelines;
Separated into two performance categories, “Near-Term Value” and “Long-Term Growth Potential”, subject to a qualitative overlay; and
Reflective of annual milestones that link short-term outcomes to long-term strategic R&D priorities (milestones for higher-value assets are emphasized in goal setting to provide a framework that assesses not only quantity, but also quality and impact of milestones).
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The S&T Committee also identifies those highest-value assets and the integration of acquired assets, among other factors, the importance of which will inform the application of a qualitative overlay.
In establishing targets and goals each year, the Committee considers budget, operational priorities, long-term strategic plans, historical performance, product pipeline and external factors, including external expectations, competitive developments, and the regulatory environment, among other things. Threshold, target, and maximum performance goals are evaluated independently and are set to provide appropriate awards across a wide but reasonable set of performance outcomes.
The Committee set incentive targets in the first quarter of 2019 in consideration of anticipated performance, in line with guidance provided to the market in early 2019 and in line with commercial and pipeline expectations. Later in the year, we met or exceeded financial and operational goals in certain key areas, including growth of both revenues and non-GAAP earnings, positive regulatory and development milestones, important business development activities, and disciplined expense management, resulting in a revision of guidance to the market for the year.
Annual Incentive Plan Program Outcome Calculations
The payouts for the 2019 annual incentive plan were based on the combination of an executive’s target bonus amount, the Company Performance Factor, and the Individual Performance Factor for each executive.
Company performance results for the year led to a Company Performance Factor of 116.29% for 2019.
The calculation was based on the following performance against goals:
Performance Measure
Target
Actual
% of
Target
Resulting Payout
Percentage
Non-GAAP Diluted Earnings Per Share(1)(2)(3)
$3.16
$3.42
108.3%
125.95%
Total Revenues, Net of Foreign Exchange ($=MM)(1)(2)
$24,009
$24,413
101.7%
113.25%
Pipeline Score
3
3
100.0%
100.00%
Total
104.6%
116.29%
1)
Consistent with the company’s past practice, non-GAAP diluted earnings per share (for the nine months ended September 30, 2019) and total revenues (full year), net of foreign exchange, were each adjusted ($0.03) and $102 million, respectively, due to unanticipated favorable budget variance for Sprycel performance in Europe due to changes in timing of the generic competition. The Committee determined that it was appropriate to exclude the impact of this unanticipated favorable budget variance because this event favorably impacted performance in an amount that was not determinable when the target was set in the first quarter of 2019.
2)
Consistent with the company’s past practice, non-GAAP diluted earnings per share (for the nine months ended September 30, 2019) and total revenues (full year), net of foreign exchange, were each adjusted ($0.02) and $145 million, respectively, due to unanticipated favorable budget variance due to changes in timing of the UPSA business divestiture. The Committee determined that it was appropriate to exclude the impact of this unanticipated favorable budget variance because this event favorably impacted performance in an amount that was not determinable when the target was set in the first quarter of 2019.
3)
Non-GAAP diluted earnings per share target reflects the first three fiscal quarters because this metric was measured as of the quarter immediately preceding the Closing (or Q3).
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For the pipeline metric, the S&T Committee reviews performance in the near-term value and long-term growth potential categories and holistically assesses the quality of the results to determine a performance score using a scale of one to five, with three being target. For 2019, we met our target goal range for near-term value, but did not meet the target goal range for long-term growth potential. We advanced a number of important programs and achieved several high value milestones. The S&T Committee considered the specific milestones that were achieved and those that were not achieved and determined, based on a holistic review of not only the quantity of the milestones achieved, but the impact and import of those milestones, to recommend a pipeline score of 3.0, which the Committee approved. The following results were among the inputs considered in determining that pipeline score.
Near-Term Value
• 27 regulatory submissions and approvals (target range of 23-34).
• Opdivo combination with Yervoy approved for first-line kidney cancer in the EU; Empliciti approved in combination with Pomalyst for second-line multiple myeloma in the EU and Japan.
Long-Term Growth Potential
• Met goal in one of three categories, with 19 pipeline projects meeting transition milestones (target range for transition milestones was 22-34).
• Achieved high-value development candidate CCR8 (for treatment of different forms of cancer, including breast, colon and lung).
• Initiated a Phase 1 clinical trial for STING agonist (for treatment of different forms of cancer); initiated registrational studies for Opdivo in first-line liver cancer and high-risk breast cancer; achieved significant progress in the TYK2 inhibitor registrational program (targeting moderate-to-severe psoriasis).
Individual Performance Factor
Our executive compensation program is designed to reward executives for financial, operational, strategic, share price and individual performance while demonstrating high integrity and ethical standards. We believe this structure appropriately incentivizes our executives to focus on our long-term business strategy, to achieve our Mission to help patients prevail over serious diseases, and to attain sustained long-term value creation for our shareholders.
2019 BMS Behaviors
 ✔ Passion
 ✔ Innovation
 ✔ Speed
 ✔ Accountability
When determining individual award levels, the Committee considers (i) individual performance against strategic, financial and operational objectives that support our long-term business strategy and shareholder value creation (“Results”) and (ii) an executive’s demonstration of the behaviors defined in the BMS Behaviors (“Behaviors”) identified in the box to the left.
The Role of Risk Assessment in Our Incentive Program
Also embedded in the determination of individual award levels is the ongoing assessment of enterprise risk, including reputational risk stemming from the dynamic external environment. In particular, we evaluate how each of our executives demonstrate our BMS Behaviors in the execution of their day-to-day decisions. This evaluation is one input into the determination of payouts under both the annual incentive and long-term equity incentive programs. Therefore, given the direct link between Behaviors that impact payout and our executive compensation program’s emphasis on sustainable long-term value, we attempt to minimize and appropriately reduce the possibility that our executive officers will make excessively or inappropriately risky decisions that could maximize short-term results at the expense of sustainable long-term value creation for our shareholders.
2019 Individual Performance Assessment
When determining the individual component of the annual incentive awards, the Committee considered each executive’s contributions to our company’s strategic achievements and financial and operational performance, including factors related to the Celgene Transaction, as well as his or her demonstration of our BMS Behaviors. The Committee evaluated our NEOs’ performance against clear and pre-defined objectives established at the beginning of the year and tied to the company’s key strategic objectives.
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For the CEO, the Committee evaluated the following in determining his IPF:
2019 CEO Performance Evaluation
Strategic Objective
Evaluation
Drive enterprise performance: Achieve budgeted financial targets established at the beginning of the year, including revenues, non-GAAP EPS and operating margin, achieve predefined customer service metrics and ensure supply chain reliability.

Continue to improve the operating model, including executing on-time completion of 2019 deliverables against company transformation plan, strengthening pipeline governance and execution, and ensure readiness for integration of Celgene.

Demonstrate ethics, integrity and quality in everything we do, including setting a firm “tone at the top” on a culture of respect, business integrity, quality, compliance and uncompromising ethics.
• Met or exceeded targets for revenues (excluding Celgene), operating margin (through September 30, 2019) and non-GAAP EPS (through September 30, 2019), as a result of strong commercial execution.
• Exceeded all customer service metrics and supply chain reliability target.
• Achieved transformation savings goal in 2019 and implemented strengthened portfolio governance process without compromising timelines.
• Significant integration planning and execution progress achieved in 2019, including, but not limited to, pre-closing announcement of the organizational design and top three levels of leadership, as well as general managers and key leadership team appointments for international markets, business continuity, synergy capture and employee engagement.
• Launched internal campaign focused on integrity, included integrity and uncompromising ethics in key messages at town halls, and continued mandatory global compliance trainings.
Maximize the value of the marketed portfolio and develop the next generation of medicines for long-term growth: Achieve budgeted revenue targets for core marketed products, advance key product regulatory approvals, regulatory submissions, registrational study starts, and other key pipeline milestones.
• Met or exceeded revenue targets for Eliquis, Orencia, Sprycel and Yervoy and grew net sales of prioritized brands compared to 2018.
• Met or exceeded most U.S. new patient share objectives for Opdivo, including in first-line kidney cancer, first-line melanoma, adjuvant melanoma, second-line head and neck cancer, second-line hepatocellular carcinoma, and third-line small-cell lung cancer, among other indications.
• Additional indications approved for Opdivo, including first-line kidney cancer in the EU and achieved positive clinical trial results from Checkmate 227 Part 1 and Checkmate 9LA.
• Overall pipeline performance and key milestones are described in more detail on page 46.
Evolve our culture and execute our People Strategy: Continue to cultivate great managers and leaders, drive global diversity and inclusion, and build talent.
• Continued comprehensive approach to deepen engagement of global leadership team and cultivate great managers.
• Improved manager capability index on employee engagement survey.
• Progress made on diversity and inclusion with representation of women globally and underrepresented ethnic groups in the U.S.; identified opportunities to increase diversity and inclusion with 2020 aspirational goals.
• Significant progress made on building a new culture for the combined company based on shared values and a strong patient focus, which will further enable the long-term value of the transaction to be realized.
• Successfully managed succession for certain key roles and continued robust management development and succession planning for critical positions.
Individual Performance Modifier Based on CMDC Evaluation: 135%
In addition, the Committee noted the following with respect to each of our other NEOs:
For Mr. Bancroft, the Committee considered: (i) his significant leadership in the achievement of the Company’s strong financial results; (ii) his proactive leadership in all aspects of the Celgene Transaction and integration planning, including shareholder and employee engagement, financing arrangements, divesting the Otezla business for $13.4 billion with minimal delay to the overall timeline, financial planning, synergy capture, and minimizing risks of business disruption
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following the Closing; (iii) his continued leadership through the Closing in driving the evolution of our operating model while ensuring a balanced approach to capital allocation, enabling the Company to increase the dividend for the 11th year in row and maintaining a strong balance sheet and strong investment grade credit ratings with financial flexibility; (iv) his critical support of other significant business development activities, including the divestitures of the UPSA business, the completion of the de-risking of the U.S. Pension Plan and a manufacturing plant in Anagni, Italy; and (v) the successful transition of his CFO responsibilities to David V. Elkins upon the Closing. After 35 years of service with our Company, Mr. Bancroft is retired effective March 16, 2020.
For Mr. Elkins, the Committee considered: (i) his leadership in the achievement of very strong financial performance at Celgene through the Closing; (ii) his critical role in executing the Celgene transaction and planning for integration with a focus on synergy capture and minimizing business disruption; (iii) his critical role in divesting the Otezla business for $13.4 billion; and (iv) his leadership in building the new Finance organization, retaining critical talent, and maintaining appropriate business and financial controls.
For Ms. Leung, the Committee considered: (i) her critical role in providing strategic and tactical advice to our Board and senior management in all aspects of the Celgene Transaction, including attaining shareholder approval of the Transaction, successfully negotiating and executing the Otezla divestiture and consent agreement with the U.S. Federal Trade Commission, and providing legal advice generally with respect to securities and financing, corporate governance and executive compensation matters; (ii) her leadership in protecting and defending our intellectual property position and proactive management of significant legal issues; (iii) her role in supporting other significant transactions, including innovative partnerships and the divestitures of the UPSA business and manufacturing plant in Anagni, Italy; and (iv) her contributions and performance as a trusted and respected senior leader who provides valuable strategic advice and whose impact spans across all teams and functions.
For Dr. Boerner, the Committee considered: (i) his leadership of the Commercialization organization and focus on strong commercial execution, resulting in a 10% increase in revenues attributed to the legacy BMS products (with no increase in U.S. average net selling prices for legacy BMS products); (ii) his critical role engaging with shareholders and employees in connection with the Celgene transaction; (iii) his critical role in integration planning, including organizational design, synergy capture, and talent management, including the pre-Closing appointment of general managers and key leadership team appointments for international markets among other things; and (iv) his active, visible commitment to ethics and integrity and driving a culture of compliance across all markets.
For Dr. Vessey, the Committee considered (i) the significant milestones and developments achieved by the legacy Celgene pipeline assets through the Closing; (ii) his critical role in integration planning, including relating to organizational design, the combined pipeline portfolio, synergy capture and talent management, among other things; (iii) his leadership of Research & Early Development and successful stabilization of the broader Research and Development organization; and (iv) his successful development and management of external partnerships and other key research relationships.
2019 Annual Incentive Award Payments
The actual annual incentive awards paid to our legacy BMS Named Executive Officers are shown in the table below and can also be found in the Summary Compensation Table under the Non-Equity Incentive Plan Compensation column:
Executive
Target Incentive
Award
Applying Company
Performance Factor(1)
Actual
Payout(2)
Giovanni Caforio, M.D.
$2,475,000