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

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Merck & Co., Inc.

(Name of Registrant as Specified In Its Charter)

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1

Notice of Annual Meeting
of Shareholders

To Merck Shareholders:

You are invited to the Annual Meeting of Shareholders of Merck & Co., Inc. on

Tuesday, May 24, 2022, at 9:00 a.m.
(Eastern Time) via Webcast at

www.virtualshareholdermeeting.com/MRK2022.

The purposes of the meeting are to:

•  Elect the 14 Director nominees named in the proxy statement;

•  Consider and act upon a proposal to approve, by non-binding advisory vote, the compensation of our Named Executive Officers;

•  Consider and act upon a proposal to ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2022;

•  Consider and act upon a shareholder proposal regarding an independent board chairman, if properly presented at the meeting;

•  Consider and act upon a shareholder proposal regarding access to COVID-19 products, if properly presented at the meeting;

•  Consider and act upon a shareholder proposal regarding lobbying expenditure disclosure, if properly presented at the meeting; and

•  Transact such other business as may properly come before the meeting.

By order of the Board of Directors,

Kelly E. W. Grez

Corporate Secretary

We have adopted a virtual format for the 2022 Annual Meeting of Shareholders to provide a safe, consistent and convenient experience to all shareholders regardless of location. Vote Right Away—Advance voting methods and deadlines We encourage all shareholders of record to read this proxy statement with care and vote right away using any of the following methods, even if they intend to attend the Annual Meeting. In all cases, have your proxy card or voting instruction form in hand and follow the instructions.
	BY INTERNET*	www.proxyvote.com
	BY PHONE*	In the U.S. or Canada dial toll-free 1-800-690-6903
	BY QR CODE	Scan this QR code to vote with your mobile device (may require free app)
	BY MAIL**	Cast your ballot, sign your proxy card and send in our prepaid envelope
Only shareholders listed on the Company’s records at the close of business on March 25, 2022 are entitled to vote. Merck began distributing its Notice of Internet Availability of Proxy Materials, proxy statement, the 2021 Annual Report on Form 10-K and proxy card/voting instruction form, as applicable, to shareholders and to employee benefit and stock purchase plan participants on April 4, 2022. IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON May 24, 2022: The Notice of Annual Meeting of Shareholders, proxy statement and the 2021 Annual Report on Form 10-K are available free of charge at www.proxyvote.com. The principal executive offices of the Company are located at 2000 Galloping Hill Road, K1-4157, Kenilworth, New Jersey 07033 U.S.A.***

* The telephone and internet voting facilities will close at 11:59 p.m. Eastern Time on May 23, 2022.

** You will need the 16-digit control number included on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials.

If your shares are held in a stock brokerage account or by a bank or other nominee, your ability to vote by telephone or over the internet depends on your broker’s voting process. Please follow the directions provided to you by your broker, bank or nominee.

*** Effective May 1, 2022, the Company’s headquarters will be relocated to Rahway, N.J. and the principal executive offices of the Company will be located at 126 East Lincoln Avenue, Rahway, N.J. 07065 U.S.A.

Merck & Co., Inc. 2022 Proxy Statement

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Dear Merck Shareholders,

It is our pleasure to invite you to the 2022 Annual Meeting of Shareholders of Merck & Co., Inc. (“Merck,” known as “MSD” outside the United States and Canada).

The foregoing Notice of Annual Meeting of Shareholders and accompanying proxy statement will serve as your guide to the business to be conducted and provide details regarding the meeting.

For more than 130 years, Merck has used the power of leading-edge science to deliver products that save and improve lives. We remain committed to this purpose as we continue to positively impact global health today and for generations to come. As the COVID-19 pandemic continued throughout 2021, we prioritized protecting the safety of our employees and their families, sustaining the supply of our medicines and vaccines, and supporting patients in our clinical trials. Our inspiration, innovation and ingenuity enabled us to play a leading role in bringing forward important medicines and vaccines to address many of the world’s most challenging diseases, including our investigational antiviral drug molnupiravir, adding to the short list of important medicines that are part of the global effort in the fight against COVID-19.

Throughout last year, we continued to transform our business, driving greater focus on our innovative portfolio and increasing our operational efficiency. The successful spin-off of Organon is just one notable example. Today, as a result of our strategic and dynamic actions, our company is more focused, more efficient and faster-growing. Guided by our business and capital allocation strategy, we continued to invest in the discovery, development, production and commercialization of medicines and vaccines. This strengthened the short- and long-term sustainability of our business, and accelerated and augmented our pipeline and portfolio.

From a commercial standpoint, our teams executed at the highest levels, achieving strong growth across our key performance drivers, including KEYTRUDA – an established and foundational asset in our portfolio – as well as in vaccines with GARDASIL and GARDASIL 9, and in Animal Health. Overall, it has been a year of significant achievement for Merck in the face of an extraordinarily challenging environment.

We advanced our oncology portfolio and made substantial progress in executing our strategy to become the leading oncology company by 2025. We were pleased to receive FDA approvals in several women’s cancers, as well as renal cell carcinoma (adjuvant and advanced) and melanoma (adjuvant) for KEYTRUDA. We are excited that Merck has more than 90 potential approvals in oncology on the horizon. In 2022, our work in women’s and earlier stage therapies continues with additional focus on advancing prostate and colorectal cancer treatments.

We built on our rich legacy in infectious diseases research with the development of molnupiravir, an investigational oral antiviral for the treatment of COVID-19 that we believe is a key tool in the treatment options available for health care professionals and patients battling the pandemic. We invested at risk to ramp up supply while we were still in early clinical trials, as we recognized the need for broad and timely global access of this important medicine upon authorization.

We are proud that upon receiving Emergency Use Authorization from the FDA in late December 2021, we successfully delivered initial molnupiravir shipments to the U.S. government and to other countries where molnupiravir has been authorized for use, including the UK and Japan. This is a testament to Merck’s agility and ability to establish critical partnerships with governments, public health agencies, key global stakeholders, and across various links in the international supply chain. Our ground-breaking access strategy has been a priority from the start and has accelerated the timely distribution of molnupiravir to patients in need globally.

Merck & Co., Inc. 2022 Proxy Statement

3

In line with our access strategy, we allocated up to 3 million courses of molnupiravir to UNICEF throughout the first half of 2022 for distribution in more than 100 low- and middle-income countries. This was in addition to our agreements with the Medicines Patent Pool and other generic manufacturers to make molnupiravir available following local regulatory authorizations or approvals.

Our Animal Health business continues to expand with growth across species and geographies. Growth in companion animal product sales were led by the BRAVECTO parasiticide line and our line of companion vaccines, while livestock animal product sales showed higher demand globally in the poultry, ruminant and swine sectors. The Animal Health business remains very well positioned to grow faster than the overall market well into the future.

We are confident in the strength and durability of Merck’s business model for this decade and beyond, and we are laser-focused on executing to achieve our goals for long-term growth and sustainability. We have important growth drivers with our durable products that include GARDASIL and GARDASIL 9, which we believe can double sales by 2030. In addition to our HPV vaccines, our vaccines portfolio and pipeline are growing, including with VAXNEUVANCE, which is under priority review by the FDA to expand its use to infants and children for the prevention of invasive pneumococcal disease.

We further strengthened our late-stage pipeline through our acquisition of Acceleron Pharma, bringing in sotatercept which addresses pulmonary arterial hypertension, as well as other compounds designed to address areas of serious unmet need in cardiovascular disease. These new additions complement our growing internal cardiometabolic pipeline of new drugs. In addition to Acceleron, we also completed the acquisition of Pandion Therapeutics, which enabled us to bring in an early-stage asset, leverage our immunology learnings from our immuno-oncology research and begin to extend our focus into autoimmune diseases. Business development will remain an imperative strategic priority that helps bolster and augment our pipeline, drives stronger performance, and enhances our long-term potential. We will continue to aggressively pursue compelling external science to supplement our internal pipeline, leveraging a science-driven and portfolio-informed approach.

We have also worked to further integrate our Environmental, Social and Governance (ESG) initiatives into the core of Merck’s culture and business. We remain committed to operating responsibly to help ensure a safe, healthy, and sustainable environment. Our focus in this space helps advance our company’s efforts and is integral to saving and improving lives. We worked hard throughout 2021 to achieve the ESG goals that we’ve set which challenge Merck to drive change by: expanding health access and equity; continuing to cultivate a diverse, inclusive and engaging environment for our employees; setting ambitious yet impactful sustainability goals; and fostering ethics and values across the organization to drive a culture empowered to Speak Up and maintain compliance.

Merck will continue improving patient outcomes and contributing to a healthier world, while also delivering value for our shareholders and all stakeholders. We are proud of our legacy and passionate about our future, as we work with speed, urgency, and agility to bring forward innovations that address unmet needs. For over a century, Merck has been propelled by bold ideas and innovation that advance human health. We know the world needs more of what Merck can deliver now – this is what inspires us to continue helping and healing patients around the world as we move forward.

Thank you for your confidence and support of our Company. We hope you will participate in the Annual Meeting by attending virtually or by voting, as promptly as possible, through other acceptable means as described in this proxy statement. Your participation is important, so please exercise your right to vote.

Kenneth C. Frazier Executive Chairman Robert M. Davis Chief Executive Officer and President

Merck & Co., Inc. 2022 Proxy Statement

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A Message from Merck’s Independent Lead Director

Dear Merck Shareholders,

For more than 130 years, Merck has remained dedicated to its mission of saving and improving lives. This dedication is evident in Merck’s commitment to providing timely access globally, following applicable authorizations and approvals, to molnupiravir, the Company’s investigational oral antiviral COVID-19 medicine. Merck has pursued a comprehensive supply and access approach to fulfilling this commitment, including investing at risk to produce millions of courses of therapy and granting a voluntary license to the Medicines Patent Pool to make generic molnupiravir available in more than 100 low- and middle-income countries following local regulatory authorizations or approvals – the first such license to the Medicines Patent Pool for a COVID-19 medical technology.

My fellow Directors and I are committed to Merck’s mission as well in our work overseeing the Company’s affairs and fulfilling our responsibilities. The process of planning and executing a smooth CEO transition, in particular, is one of the Board’s most important responsibilities. Our planning resulted last year in a successful CEO transition with Robert M. Davis, then-CFO, succeeding Kenneth C. Frazier as the Company’s President, effective April 1, 2021, and Chief Executive Officer, effective July 1, 2021. Mr. Davis also became a Board member effective July 1, 2021. The Board believes Mr. Davis is the right person to lead Merck into the future and continue its long history of focusing on science and innovation as the driver of long-term sustainable value creation for patients and shareholders. In September 2021, I was honored to be selected by my fellow independent Directors to assume the role of Lead Director. We also announced other important leadership transitions in 2021, electing Dean Y. Li to succeed Roger M. Perlmutter as Executive Vice President and President, Merck Research Laboratories, and Caroline Litchfield to succeed Mr. Davis as Chief Financial Officer. Most recently, with the Board’s support, the Company announced a new leadership structure for its Human Health business, consisting of (i) Human Health Global Marketing led by Arpa Garay, (ii) Human Health U.S. led by Jannie Oosthuizen, and (iii) Human Health International led by Deepak Khanna on an interim basis. This structure will enable the Company to build on its momentum, develop its internal talent and expand its high performing senior leadership team.

In addition to management succession planning, the independent members of the Board regularly review the Board’s leadership structure and will do so again in 2022. Our Board believes that our shareholders and our Company are best served by allowing the Board to exercise its judgment regarding the most appropriate leadership structure at a given time. As part of the Company’s CEO transition, and considering the facts and circumstances at the time, the Board determined that Merck’s shareholders were best served by a leadership structure consisting of (i) Mr. Frazier, our former CEO, serving as Executive Chairman for a transition period, (ii) Mr. Davis serving as CEO and President, and (iii) an independent director appointed by the Board’s independent members serving as Lead Director, and each role has clearly delineated responsibilities. For example, as Executive Chairman, Mr. Frazier focuses on Board operations and governance matters, as CEO, Mr. Davis manages the general supervision, direction and strategy of the business and affairs of the Company subject to the Board’s overall oversight, and, as independent Lead Director, I work closely with both our Executive Chairman and our CEO to set board agendas, approve board materials and ensure that Merck achieves the highest level of corporate governance.

Both as a full Board and through our four standing committees composed of independent directors only, we are dedicated to the effective oversight of the Company’s business and the key risks the Company faces. We believe in the business value of having diverse perspectives in the boardroom. We are deliberate in ensuring we have the right mix of perspectives, skills and expertise to address the Company’s current and anticipated needs as opportunities and challenges facing the Company evolve. Our Directors draw on their unique experiences to provide guidance on corporate strategy and monitor its implementation in areas such as research and development, capital allocation, operating results, human capital management and global manufacturing. The Board also provides oversight for the Company’s ESG strategy and performance as a whole and through our committees based on their specific areas of competency. This year, we are delighted to nominate as a new Director, Douglas M. Baker, Jr., Executive Chairman of Ecolab, Inc., a provider of water and hygiene services and technologies for the food, hospitality, industrial, and energy markets. Mr. Baker brings extensive expertise in corporate governance and general and organizational management, and we look forward to him joining the Board.

We appreciate your investment in Merck and your support for the Board. We remain committed to serving you and the patients around the world that depend on Merck’s life-saving work.

Thomas H. Glocer Independent Lead Director

Merck & Co., Inc. 2022 Proxy Statement

5

Contents

Proxy Summary	6
Corporate Governance	11
Governance Highlights	11
Board Leadership Structure	12
Lead Director	13
Board Meetings and Committees	14
Board’s Role in Strategic Planning	17
Risk Oversight	18
Cybersecurity and Privacy	19
ESG Matters	20
A Strategic Approach to ESG	20
Criteria for Board Membership and Director Nomination Process	21
Management Succession Planning	23
Board Succession Planning	23
Annual Board Evaluation	24
Shareholder Engagement and Feedback	24
Shareholder Communications with the Board	26
Political Contributions and Lobbying Expenditure Oversight and Disclosure	27
Governance and Transparency Around Drug Pricing	27
Independence of Directors	27
Related Person Transactions	28
Compensation Consultants	29
Stock Ownership Information	30
Stock Ownership of Directors and Officers	30
Delinquent Section 16(a) Reports	30
Stock Ownership of Certain Beneficial Owners	31
Proposal 1. Election of Directors	32
2022 Nominees for Director	33
Director Compensation	40
2021 Director Compensation	41
Proposal 2. Non-Binding Advisory Vote to Approve the Compensation of Our Named Executive Officers	42
Compensation Discussion and Analysis	43
Executive Summary	44
Executive Compensation Program Objectives and Strategy	45
Compensation Policies and Practices	46
Peer Groups	47
Detailed Discussion and Analysis	48
The Elements of 2021 Compensation	51
Compensation Risk Assessment	61
Compensation and Management Development Committee Report	61

Summary Compensation Table	62
CEO Pay Ratio	65
Grants of Plan-Based Awards	66
Outstanding Equity Awards	68
Option Exercises and Stock Vested	71
Pension Benefits	72
Nonqualified Deferred Compensation	75
Potential Payments Upon Termination or a Change in Control	76
Proposal 3. Ratification of Appointment of Independent Registered Public Accounting Firm for 2022	82
Audit Committee’s Report	83
Pre-Approval Policy for Services of Independent Registered Public Accounting Firm	83
Fees for Services Provided by the Independent Registered Public Accounting Firm	84
Shareholder Proposals	85
Proposal 4. Shareholder Proposal Regarding an Independent Board Chairman	85
Proposal 5. Shareholder Proposal Regarding Access to COVID-19 Products	87
Proposal 6. Shareholder Proposal Regarding Lobbying Expenditure Disclosure	89
Questions and Answers About the Annual Meeting and Voting	91
Shareholder Proposals and Director Nominations for the 2023 Annual Meeting of Shareholders	95
Forward-Looking Statements	96
Other Matters	96
Appendix A — Non-GAAP Income and Non-GAAP EPS	97
Appendix B — Explanation of Adjustments to Non-GAAP Results for Incentive Plans	99

Merck & Co., Inc. 2022 Proxy Statement

6
	Proxy Summary

This summary highlights information contained elsewhere in this proxy statement and does not contain all of the information that you should consider. You should read the entire proxy statement carefully before voting.

Date and Time Tuesday, May 24, 2022 9:00 a.m. ET	Record Date March 25, 2022
Location Via Webcast at www.virtualshareholdermeeting.com/MRK2022

Voting Matters	Page	Board’s Recommendation
Proposal 1 Election of Directors	32	FOR each Nominee
Proposal 2 Non-binding Advisory Vote to Approve the Compensation of our Named Executive Officers (Say-on-Pay)	42	FOR
Proposal 3 Ratification of Appointment of Independent Registered Public Accounting Firm for 2022	82	FOR
Shareholder Proposals
Proposal 4 Shareholder Proposal Regarding an Independent Board Chairman	85	AGAINST
Proposal 5 Shareholder Proposal Regarding Access to COVID-19 Products	87	AGAINST
Proposal 6 Shareholder Proposal Regarding Lobbying Expenditure Disclosure	89	AGAINST

Business Highlights

  

$12.2B   in R&D expenditures  

Capital Returned & Dividend Increase

  $7.5B   Capital Returned to Shareholders (dividends and share repurchases)  

  

Annualized Total Shareholder Return⁽¹⁾

Year-End 2021
1-Year	3-Year
1.8%	4.9%
5-Year
9.8%
(1)   Relative Total Shareholder Return, a component of our Performance Share Unit program that is described on page 55, is calculated on a different basis.

Merck & Co., Inc. 2022 Proxy Statement

  Proxy Summary     7

2021 NEOs and Compensation Highlights (Page 48)

Below is a list of our 2021 Named Executive Officers, or “NEOs”, and select compensation highlights from 2021. For additional information on our elements of 2021 compensation, please refer to the Compensation Discussion and Analysis (“CD&A”), beginning on page 43.

		Annual Base Salary$	Target Annual Incentive%	Target Long-Term Incentive$	Target TDC   Increase%(1)
	2021 NEOs
	Robert M. Davis Chief Executive Officer, President and Former Chief Financial Officer	$1,500,000	150%	$10,750,000(2)	+131%
		.........................................................................................................................................................
	Kenneth C. Frazier Executive Chairman and Former Chief Executive Officer	1,250,000	100	10,750,000	-34
		.........................................................................................................................................................
	Caroline Litchfield Executive Vice President and Chief Financial Officer	900,000	100	2,200,000	—(3)
		.........................................................................................................................................................
	Frank Clyburn Former Executive Vice President and President, Human Health(4)	1,000,000	100	4,300,000	—(3)
		.........................................................................................................................................................
	Richard R. DeLuca, Jr. Executive Vice President and President, Merck Animal Health	800,000	100	2,700,000	—(3)
		.........................................................................................................................................................
	Dean Li, M.D., Ph.D. Executive Vice President and President, Merck Research Laboratories	950,000	100	3,000,000	—(3)

(1) Target Total Direct Compensation (“TDC”) is defined as the sum of annual base salary, target annual cash incentive and target long-term incentive. This column reflects the increase in Target TDC from 2020 to 2021 for those who were NEOs in 2020.

(2) In 2021, Mr. Davis’ actual LTI award was $9,200,000, which reflects 3 months at the 2021 CFO rate and 9 months at the CEO rate, when Mr. Davis became President.

(3) Ms. Litchfield, Mr. Clyburn, Mr. DeLuca and Dr. Li were not NEOs in 2020.

(4) Mr. Clyburn resigned from his position as Executive Vice President and President, Human Health, effective February 1, 2022.

Variable Compensation is Critical to Achieve Our Objectives (Page 45)

Merck’s compensation programs are designed to align the interests of our executives with the interests of our shareholders, among other objectives. For this reason, a significant portion of our NEOs’ pay is variable and at-risk, subject to Company performance as measured against financial, operating and strategic objectives, as well as Relative Total Shareholder Return or R-TSR (as defined in Appendix B). The Company’s variable incentives demonstrate a strong linkage between pay and performance.

Annual Cash Incentive

The Company Scorecard (described in more detail on page 53) focuses on our most critical business drivers — the Company’s target revenue (“Revenue”), non-GAAP pre-tax income (“Pre-Tax Income”) and the Company’s research and development goals for the incentive program (“Pipeline”) — and is used to determine the payout of our annual incentive for all eligible employees, including our NEOs under the Executive Incentive Plan. Our Scorecard performance during 2021 resulted in above-target achievement of 148%.

Merck & Co., Inc. 2022 Proxy Statement

8     Proxy Summary  

Long-Term Incentive (“LTI”)

The long-term incentive program, consisting of a mix of PSUs and stock options, provides our NEOs with the opportunity to own Merck stock, directly linking a substantial portion of their compensation to the returns realized by our shareholders.

The 2019 PSU program (described in more detail on page 57) paid out at 140% based on achievement of cumulative two-year OCF, cumulative two-year EPS and three-year R-TSR metrics during the performance period, weighted at 25%, 25% and 50%, respectively. As previously disclosed, cumulative two-year OCF and EPS metrics were used due to the complexities associated with disentangling our Organon business from a multi-year financial plan. Organon was successfully spun off in June 2021.

Say-On-Pay Advisory Vote (Page 46)

In 2021, shareholders continued their support for our executive compensation programs with approximately 91% of the votes cast voting in favor of approving the say-on-pay proposal. Consistent with the Company’s strong interest in shareholder engagement and our pay-for-performance approach, the Compensation and Management Development Committee continues to evaluate our executive compensation program to ensure alignment between the respective interests of our executives and shareholders. The C&MD Committee did not make significant changes to our executive compensation program in 2021 as a direct result of the most recent say-on-pay vote.

We ask that our shareholders approve, on an advisory basis, the compensation of our NEOs as further described in Proposal 2 on page 42.

For additional information, please refer to the CD&A beginning on page 43 of this proxy statement.

Shareholder Engagement and Feedback (Page 24)

Merck communicates regularly with shareholders to better understand their perspectives and has established a shareholder engagement program that is both proactive and cross-functional. In addition, our Lead Director, who is also Chair of our Governance Committee, participates in substantive engagements with some of the Company’s largest shareholders. In 2021, discussions with shareholders covered a wide range of topics of interest to shareholders, including the Company’s response to the COVID-19 pandemic and related matters, the Board’s composition and leadership, management and director succession, Environmental, Social and Governance (“ESG”) reporting, executive compensation programs, human capital management and other governance matters. These discussions provided valuable insights into shareholder views, and we heard from many shareholders that they greatly appreciated the opportunity to engage with our Company.

We will continue to engage with shareholders on a regular basis to better understand and consider their views on our executive compensation programs, ESG and corporate governance practices.

Board Composition and Refreshment

At least annually, the Governance Committee considers the size, structure and needs of the Board. The Governance Committee reviews possible candidates for the Board and recommends Director nominees to the Board for approval.

In selecting Director nominees, the Board considers its composition, including its diversity, and the skills, areas of expertise and experience then-represented on the Board. The Board also considers the Company’s current and future global business strategies, opportunities and challenges. Such considerations have resulted in the election of five new Board members over the last three years and the nomination of a new director in this proxy statement. For more information, see “Criteria for Board Membership and Director Nomination Process” beginning on page 21.

Considering the factors noted above, the Board is nominating an additional independent Director to stand for election by shareholders at the 2022 Annual Meeting of Shareholders, Mr. Douglas M. Baker, Jr., Executive Chairman of Ecolab Inc., a provider of water and hygiene services and technologies for the food, hospitality, industrial, and energy markets.

Merck & Co., Inc. 2022 Proxy Statement

  Proxy Summary     9

Nominees for Director (Page 33)

The following provides summary information about each Director nominee. Each Director stands for election annually. Detailed information about each individual’s background, skillsets and areas of expertise can be found beginning on page 33.

							Current Committee Memberships
							Audit	C&MD	Governance	Research
	Director Nominee	Age		Director          Since		Title
	Douglas M. Baker, Jr.*		63		—	Executive Chairman and Former Chief Executive Officer, Ecolab Inc.
	Mary Ellen Coe		55		2019	President, Google Customer Solutions, Google Inc.
	Pamela J. Craig		65		2015	Former Chief Financial Officer, Accenture plc
	Robert M. Davis Management		55		2021	Chief Executive Officer and President, Merck & Co., Inc.
	Kenneth C. Frazier Management		67		2011	Executive Chairman, Merck & Co., Inc.
	Thomas H. Glocer Lead Director		62		2007	Former Chief Executive Officer, Thomson Reuters Corporation
	Risa J. Lavizzo-Mourey, M.D.		67		2020	Penn Integrates Knowledge Professor of Health Equity and Health Policy, University of Pennsylvania
	Stephen L. Mayo, Ph.D.		60		2021	Bren Professor of Biology and Chemistry, California Institute of Technology
	Paul B. Rothman, M.D.		64		2015	Dean of Medical Faculty and Vice President for Medicine, The Johns Hopkins University, and CEO, Johns Hopkins Medicine
	Patricia F. Russo		69		1995	Chairman, Hewlett Packard Enterprise Company; Former Chief Executive Officer and Director, Alcatel-Lucent
	Christine E. Seidman, M.D.		69		2020	Thomas W. Smith Professor of Medicine and Genetics, Harvard Medical School, and Director, Cardiovascular Genetics Center, Brigham and Women’s Hospital
	Inge G. Thulin		68		2018	Former Chairman of the Board, President and Chief Executive Officer, 3M Company
	Kathy J. Warden		50		2020	Chairman, Chief Executive Officer and President, Northrop Grumman Corporation
	Peter C. Wendell		71		2003	Managing Director, Sierra Ventures
	Number of Meetings in 2021						9	5	6	5

*Mr. Douglas M. Baker, Jr. is a first-time Director nominee for election at the 2022 Annual Meeting of Shareholders. If elected, Mr. Baker would serve as a member of the Compensation and Management Development Committee and the Governance Committee. Effective May 5, 2022, Mr. Baker will retire as Executive Chairman of Ecolab, Inc.

  ^{Committee Chair}

Merck & Co., Inc. 2022 Proxy Statement

10     Proxy Summary  

Our 2022 Director Nominees Snapshot

Our Director nominees possess broad expertise, skills, experience and perspectives that will facilitate the strong oversight and strategic direction required to govern the Company’s business and strengthen and support senior management. As illustrated by the following charts, our slate of Director nominees consists of individuals with expertise in fields that align with the Company’s business and long-term strategy, includes a mixture of tenure that allows for both new perspectives and continuity and reflects the Board’s commitment to diverse perspectives.

Board Skills and Qualifications (of 14 Director Nominees)	No. of Nominees
CEO Leadership	9
Financial	7
Scientific	4
Health Care Industry	4
Global Strategy & Operations	9
Marketing or Public Relations	3
Digital/Technology	7
Public Company Governance	5
Public Policy & Regulation	3
Talent Management	9
Capital Markets Experience	3

Merck & Co., Inc. 2022 Proxy Statement

	11
Corporate Governance

The Board has the legal responsibility for overseeing the affairs of the Company and for the overall performance of the Company. The Board’s primary mission is to represent and protect the interests of our shareholders. To that end, the Board selects and oversees the senior management team, which is charged with conducting Merck’s daily business.

The Board has adopted corporate governance principles (the “Policies of the Board”) that, together with our Restated Certificate of Incorporation, By-Laws and Board committee charters, form the governance framework for the Board and its committees. The Policies of the Board cover a wide range of subjects, including the philosophy and functions of the Board, the composition of the Board, the independent Lead Director’s responsibilities, categorical independence standards, Director qualifications, assessment of the Board, committee responsibilities, Director transition and retirement, service on other boards, Director compensation, stock ownership guidelines, chairmanship of meetings, Director orientation and continuing education, incumbent Director resignation and related person transactions. From time to time, the Board revises the Policies of the Board and Board committee charters in response to changing regulatory requirements, evolving best practices and the perspectives of our shareholders and other constituents.

Most recently, in March 2022, the Board amended: (1) the Policies of the Board and the Charter of the Governance Committee to more expressly reflect (a) the Board’s oversight of ESG matters and (b) the Governance Committee’s assistance in this regard; and (2) the Charter of the Audit Committee to clarify the Audit Committee’s responsibility for reviewing the Company’s cybersecurity risk management program.

Governance Materials

The following items relating to corporate governance at Merck are available on our website at www.merck.com/company-overview/leadership/board-of-
directors:

• Restated Certificate of Incorporation

• By-Laws

• Policies of the Board — a statement of Merck’s corporate governance guidelines

• Merck Board Committee Charters

• Merck Code of Conduct — Our Values and Standards

Governance Highlights

We believe good corporate governance is essential to achieving long-term shareholder value. We are committed to governance policies and practices that serve the interests of our Company and its many stakeholders. For this reason, we devote considerable time and resources to making sure that our policies reflect our values and business goals, we have an effective corporate governance structure, and we operate in an open, honest and transparent way. In addition, we evaluate our practices against prevailing best practices as well as emerging and evolving topics identified in a variety of ways, including through shareholder engagement and corporate governance organizations.

Merck & Co., Inc. 2022 Proxy Statement

12     Corporate Governance    Board Leadership Structure  

We highlight some significant aspects of our corporate governance practices below.

Independence   •  We have a strong independent Lead Director.   •  Our independent Directors convene regular executive sessions.   •  All four of our standing Board committees (Audit, Compensation and Management Development, Governance and Research) are comprised solely of independent Directors.   •  Twelve of our fourteen Director nominees are independent.   Accountability   •  Every Director stands for re-election every year.   •  Directors are elected by majority vote.   •  An incumbent director who does not receive a majority vote must tender his/her resignation, and the Governance Committee must promptly make a recommendation as to the tendered resignation. The Board must act on the Governance Committee’s recommendation within 90 days after certification of the vote and publicly disclose its decision and rationale.   Best practices   •  Our Board of Directors as a whole, and each individual
Board committee, conducts a self-evaluation every year.   •  The Board actively engages in CEO succession planning.   •  The Board is diverse in terms of gender, ethnicity,
experience and skills.   •  Our Board policies include an express Diversity Policy.   Transparency   •  We have strong control over our political spending and disclose corporate political activity and contributions in the U.S., Canada and Australia.   •  We disclose aspects of our public policy engagement, including our key lobbying/advocacy issues. Board oversight   •  The full Board and each individual Board committee is responsible for overseeing risk.   •  The full Board oversees corporate strategy.   Alignment with shareholder interests   •  Our officers and directors are prohibited from engaging in hedging, pledging or short sale transactions involving Company stock. •  Executives and Directors must hold prescribed meaningful amounts of Company stock. •  We have a robust shareholder engagement program. •  We have a proxy access provision in our By-Laws under which shareholders who own 3% of our stock for at least three years may nominate up to 20% of the members of our Board. •  Holders of 15% of our shares may call a special meeting. •  We do not have a shareholder rights plan (also known as a poison pill). •  We do not have any supermajority voting provisions.   Compensation practices   •  We have conducted an annual say-on-pay advisory vote since 2011. •  All incentive compensation paid to executives is subject to a clawback policy. •  Our incentive compensation awards are designed to align pay with performance. •  Our Compensation and Management Development Committee uses an independent compensation consultant.   Operating Responsibly   •  We have a longstanding commitment to operating responsibly. •  All of our employees must adhere to a robust Code of Conduct.

Board Leadership Structure

The Board is highly empowered and engaged, and the independent Directors evaluate our Board leadership structure at least annually. The Board believes that the Company and our shareholders are best served by allowing the Board to exercise its judgment regarding the most appropriate leadership structure for the Company and the Board at a given time. The Board’s discretion should not be unduly constrained in advance because the most appropriate leadership structure at any given time will depend on a variety of factors, including the leadership, skills and experience of each of the CEO, the independent Lead Director and the other members of the Board, as well as the needs of the business and other factors.

Currently, the Board is led by Kenneth C. Frazier, who serves as the Executive Chairman of the Board, and by Thomas H. Glocer, an independent Director, who serves as the Board’s Lead Director.

Merck & Co., Inc. 2022 Proxy Statement

  Corporate Governance   Lead Director     13

The current structure is the result of the Board’s CEO succession planning and regular evaluation of the Company’s leadership structure. In February 2021, the Board unanimously elected Robert M. Davis to succeed Mr. Frazier as CEO and also to become a member of the Board, effective July 1, 2021. The Board also determined that Mr. Frazier will continue to serve as Executive Chairman for a transition period to be determined by the Board. Mr. Glocer was elected independent Lead Director by the independent members of the Board in September 2021 following the resignation of Les Brun due to his decision to become chairman and chief executive officer of Ariel Alternatives, LLC, a subsidiary of Ariel Investments, LLC, a private equity initiative being created to help scale minority-owned businesses to serve as tier 1 suppliers to Fortune 500 companies. Having an independent Lead Director vested with key duties and responsibilities and four independent Board committees chaired by independent Directors promotes strong independent oversight of the Executive Chairman, the CEO and the rest of our management team.

As Executive Chairman, Mr. Frazier presides over meetings of the Board and shareholders and focuses on Board operations and governance matters. He serves as the liaison between the Board and management, working closely with the independent Lead Director and our CEO. Mr. Davis is in charge of the general supervision, direction and control of the business and affairs of the Company subject to the Board’s overall oversight. The Board meets in executive session without Mr. Frazier and Mr. Davis at each regular Board meeting. During these executive sessions led by the independent Lead Director, the Directors discuss topics such as the Board’s leadership structure, succession planning for the CEO and key management positions, and points of follow-up with management on strategic issues.

Lead Director

Merck’s independent Lead Director is appointed by the independent members of the Board of Directors to a three-year term. The position of Lead Director has a clear mandate and significant authority and responsibilities set forth in the Policies of the Board, including:

Board Meetings and Executive Sessions	•  The authority to call meetings of the independent members of the Board. •  Presiding at all meetings of the Board at which the Executive Chairman is not present, including executive sessions of the independent members of the Board.
Communicating with Management	•  Serving as the principal liaison on Board-wide issues between the independent members of the Board, the Executive Chairman and the CEO.
Agendas	•  Approving meeting agendas and information sent to the Board, including supporting material for meetings.
Meeting Schedules	•  Approving meeting schedules to ensure there is sufficient time for discussion of all agenda items.
Communicating with Shareholders and Stakeholders	•  Being available for consultation and direct communication with major shareholders, as appropriate. •  Serving as a liaison between the Board and shareholders on investor matters.
Board Performance Evaluation	•  Leading the annual performance evaluation of the Board.
Chairman and CEO Performance Evaluations	•  Leading the annual performance evaluation of the Executive Chairman and the CEO.
CEO Succession	•  Leading the CEO succession planning process.

As further described below, the Board’s four standing committees, each of which is composed solely of independent Directors, also play an active role in the Board’s leadership structure. The independent chairs of each of these committees provide strong leadership to guide the important work of the Board. They work with the Company’s senior executives to ensure the committees are discussing key strategic risks and opportunities of the Company. The Board believes the Company and its shareholders are well-served by the current leadership structure for all the foregoing reasons.

Merck & Co., Inc. 2022 Proxy Statement

14     Corporate Governance    Board Meetings and Committees    

Board Meetings and Committees   In 2021, the Board of Directors met seven times. Under the Policies of the Board, Directors are expected to attend regular Board meetings, applicable Board committee meetings and annual shareholder meetings.   The independent Directors of the Board met in 12 executive sessions in 2021. The Lead Director of the Board presided over the executive sessions. All 13 Directors nominated for election at the 2021 Annual Meeting of Shareholders attended the meeting.     All Directors attended at least 75% of the meetings of the Board and of the committees on which they served in 2021.

The Board of Directors has four standing committees, each of which is made up solely of independent Directors: Audit Committee; Compensation and Management Development (C&MD) Committee; Governance Committee; and Research Committee. In addition, the Board from time to time establishes special purpose committees. All of our standing committees are governed by Board-approved charters, which are available on our website at www.merck.com/company-overview/leadership/board-of-directors/. The committees evaluate their performance and review their charters annually. Additional information about the committees is provided below. As non-independent directors, Mr. Frazier and Mr. Davis are not members of any Board committee, but may participate in meetings at the request of the committees.

Audit Committee      

	Pamela J. Craig Chair	Overview                                                                                                              The Audit Committee oversees our accounting and financial reporting processes, internal controls and audits and consults with management, the internal auditors, and the independent auditors on, among other items, matters related to the annual audit, the published financial statements and the accounting principles applied. The Audit Committee has established policies and procedures for the pre-approval of all services provided by the independent auditors (as described on page 83 of this proxy statement) and for the approval of the annual internal audit plan as executed by the internal audit organization. The Audit Committee’s Report is included on page 83 of this proxy statement.   The Primary Functions of this Committee are to:                                             •   Appoint, evaluate and retain our independent auditors; •   Maintain direct responsibility for the compensation, termination and oversight of our independent auditors and evaluate the independent auditors’ qualifications, performance and independence; •   Oversee the Company’s compliance with legal & regulatory requirements, including monitoring compliance with the Foreign Corrupt Practices Act and the Company’s policies on ethical business practices and reporting on these items to the Board; •   Establish procedures for the receipt, retention and treatment, on a confidential basis, of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; •   Oversee the Enterprise Risk Management process; •   Regularly meet with the Chief Information Officer regarding the Company’s information technology and have primary responsibility for overseeing the Company’s cybersecurity risk management program; and •   Review any significant issues concerning litigation and contingencies with management, counsel, and the independent public accountants.
Other Members Mary Ellen Coe Stephen L. Mayo, Ph.D. Paul B. Rothman, M.D. Christine E. Seidman, M.D. Kathy J. Warden
Number of Meetings in 2021: 9
Financial Experts on Audit Committee The Board has determined that each of Ms. Craig and Ms. Warden is an “audit committee financial expert” as defined by the SEC and has accounting or related financial management expertise as required by NYSE Corporate Governance Listing Standards.

Merck & Co., Inc. 2022 Proxy Statement

  Corporate Governance   Board Meetings and Committees     15

Compensation and Management Development Committee      

	Patricia F. Russo     Chair	Overview                                                                                                              The C&MD Committee annually reviews and approves corporate goals and objectives relevant to the TDC opportunity for the Executive Chairman, the CEO and certain other officers; evaluates their performance against these goals and objectives; and, based on this evaluation, sets their target TDC and determines payouts under our variable compensation plans. The details of the processes and procedures involved are described in the Compensation Discussion and Analysis section of this proxy statement beginning on page 43. The independent members of the full Board ultimately make the final decisions regarding the Executive Chairman and the CEO’s TDC. In 2021, the name of the C&MD Committee was changed from the Compensation and Benefits Committee to better reflect the role it plays in assisting the Board in its oversight of the Company’s broader human capital matters. The C&MD Committee Report is included on page 61 of this proxy statement.   The Primary Functions of this Committee are to:                                             •   Establish and maintain a competitive portfolio of fair and equitable compensation and benefits policies, practices and programs designed to attract, engage and retain a workforce that helps the Company achieve immediate and long-term success; •   Discharge the Board’s responsibilities for compensating our officers; •   Oversee/monitor –  The competence and qualifications of our executive officers, –  Officer succession, –  The soundness of the organizational structure, –  The Company’s programs, policies and practices related to its management of human capital resources including talent management, culture, diversity, equity and inclusion, and provide input on the same, and –  Other related matters necessary to ensure the effective management of the business; and •   Review the Compensation Discussion and Analysis for inclusion in our proxy statement.
Other Members Thomas H. Glocer Risa J. Lavizzo-Mourey, M.D. Inge G. Thulin Peter C. Wendell
Number of Meetings in 2021: 5
Compensation and Management Development Committee Interlocks and Insider Participation There were no C&MD Committee interlocks or insider (employee) participation during 2021.

Governance Committee      

	Thomas H. Glocer Chair | Lead Director	Overview                                                                                                              The Governance Committee oversees the Company’s corporate governance, including the practices, policies and procedures of the Board and its committees. Further, the Governance Committee annually reviews the size, structure and needs of the Board and Board committees, reviews possible candidates for the Board and recommends Director nominees to the Board for approval. The details of the review process and assessment of candidates are described under “Criteria for Board Membership and Director Nomination Process” beginning on page 21 of this proxy statement.   The Primary Functions of this Committee are to:                                           •   Coordinate an annual evaluation of Board performance, and review Board compensation, related person transactions and D&O indemnity and fiduciary liability insurance coverage for the Company’s officers and non-employee Directors; •   Oversee the Board’s Incumbent Director Resignation Policy; •   Review the Company’s: Good Manufacturing Practice compliance, including with respect to internal and external manufacturing as well as internal and external audits; worker safety practices; and privacy policies and practices; •   Review social, political and economic trends that affect our business; review the positions and strategies we pursue to influence public policy; and •   Assist the Board in its oversight of the Company’s ESG matters and strategy related thereto, including: (i) reviewing public policy positions, strategy regarding political engagement, and corporate responsibility initiatives with significant financial and/or reputational impact, as appropriate, and monitoring and evaluating the Company’s corporate responsibility programs and activities, including the support of charitable, political and educational organizations and political candidates and causes, (ii) reviewing the Company’s environmental sustainability practices, its supply chain manufacturing strategy and governance, as well as its third-party sourcing programs, and (iii) ensuring that applicable ESG matters are subject to review by Board committees with relevant areas of competency.
Other Members Pamela J. Craig Patricia F. Russo Inge G. Thulin Kathy J. Warden1
Number of Meetings in 2021: 6

⁽¹⁾ Ms. Warden was appointed to the Governance Committee as of March 22, 2022. She previously served on the Research Committee.

Merck & Co., Inc. 2022 Proxy Statement

16     Corporate Governance    Board Meetings and Committees  

Research Committee      

	Paul B. Rothman, M.D. Chair	Overview                                                                                                              The Research Committee oversees the overall strategy, direction and effectiveness of the Company’s operations for the research and development of pharmaceutical products and vaccines. As part of this oversight, the Research Committee focuses on a variety of areas, including drug and vaccine discovery, licensing and development strategies, decision-making procedures and outcomes, as well as processes and procedures for identifying, evaluating and capitalizing on cutting edge scientific developments and advancements and enabling technologies.   The Primary Functions of this Committee are to:                                             •   Identify areas and activities that are critical to the success of our product and vaccine discovery, development and licensing efforts and evaluate the effectiveness of our strategies and operations in those areas; •   Keep the Board apprised of this evaluation process and findings and make appropriate recommendations to the President of Merck Research Laboratories and to the Board on modifications of strategies and operations; and •   Assist the Board in its oversight responsibilities to ensure compliance with the highest standards of scientific integrity in the conduct of Merck research and development.
Other Members Mary Ellen Coe Risa J. Lavizzo-Mourey, M.D.1 Stephen L. Mayo, Ph.D. Christine E. Seidman, M.D. Peter C. Wendell
Number of Meetings in 2021: 5

⁽¹⁾ Dr. Lavizzo-Mourey was appointed to the Research Committee as of March 22, 2022. She previously served on the Governance Committee.

Merck & Co., Inc. 2022 Proxy Statement

  Corporate Governance   Board’s Role in Strategic Planning     17

Board’s Role in Strategic Planning

The Board — acting both as a whole and through its four standing committees — is fully engaged and involved in the Company’s strategic planning process. All of our Directors have an obligation to keep informed about the Company’s business and strategies, so they can provide guidance to management in formulating and developing plans and knowledgeably exercise their decision-making authority on matters of importance to the Company.

The Board’s oversight and guidance are inextricably linked to the development and review of the Company’s strategic plan. By exercising sound and independent business judgment on the strategic issues that are important to the Company’s business, the Board facilitates Merck’s long-term success.

Our Strategic Planning Cycle

Merck & Co., Inc. 2022 Proxy Statement

18     Corporate Governance    Risk Oversight  

Risk Oversight

Overseeing risk is an important component of the Board’s engagement on strategic planning. The Board’s approach to overseeing risk management leverages the Board’s leadership structure and ensures the Board oversees risk through both a Company-wide approach and specific areas of competency. A summary of this risk oversight approach follows:

Board of Directors Oversees risk through Company-wide Enterprise Risk Management (“ERM”) process and functioning of Board Committees.	Audit Committee Responsibility for reviewing ERM process to ensure it is robust and functioning effectively. Primary responsibility for overseeing the Company’s risk management program related to its cybersecurity. Oversees risk relating to finance, business integrity and Sarbanes-Oxley reporting through its interactions with the Chief Financial Officer, Chief Ethics and Compliance Officer, Controller and the head of internal audit.
	Compensation & Management Development Committee Evaluates relationships between risk and rewards as it relates to our executive compensation program. When setting incentive plan targets each year, the C&MD Committee is aware of the risk associated with drug pricing, among other things, and ensures our plans do not incentivize risky behavior in order to meet targets. Oversees the Company’s programs, policies and practices related to its management of human capital resources.
Management Identification, assessment and management of risk through Company-wide ERM process.
	Governance Committee Oversees the Company’s corporate governance, including the practices, policies and procedures of the Board and its committees, considers the size, structure and needs of the Board, reviews possible candidates for the Board, and recommends Director nominees to the Board for approval. Plays a role in compliance oversight, including in the areas of manufacturing quality, privacy, and worker safety. Assists the Board in its oversights of ESG matters and strategy.
	Research Committee Oversees overall strategy, direction and effectiveness of the Company’s research and development operations.

The ERM process allows for full Board oversight of the most significant risks facing the Company and was established to ensure a complete Company-wide approach to evaluating risk over six distinct but overlapping risk areas:

Responsibility and Reputation	Risks that may impact the well-being of the Company, its employees, customers, patients, communities or reputation
Strategy	Macro risks that may impact our ability to achieve long-term business objectives
Operations	Risks in operations and cybersecurity that may impact our ability to achieve business objectives
Compliance	Risks related to compliance with laws, regulations and Company values, ethics and policies
Reporting	Risks to maintaining accurate financial statements and timely, complete financial disclosures
Safety	Risks to employee, patient or community health and safety

Merck & Co., Inc. 2022 Proxy Statement

  Corporate Governance   Risk Oversight     19

Our ERM process seeks to identify emerging risks and address them appropriately to limit negative consequences to the Company or the data it maintains. Its goal is to provide an ongoing review, implemented across the Company and aligned to Company values and ethics, to identify and assess risk and to monitor risk and agreed-upon mitigating action. Furthermore, if a risk transforms into an incident, the ERM process ensures that effective response and business continuity plans are in place. If the ERM process identifies a material risk, it will be elevated through the CEO and the Executive Team to the full Board for consideration. Through the ERM process, each Board committee oversees specific areas of risk relevant to the committee through direct interactions with the CEO, members of the Company’s Executive Team and the heads of business divisions, compliance and corporate functions. A committee may address risks directly with management or, where appropriate, may elevate a risk for consideration by the full Board or another Board committee. The Board committees also oversee risk based on their specific areas of competency. Additional detail with respect to certain key areas of oversight are provided below.

Cybersecurity and Privacy

As our Company becomes more dependent on technology and data, the need for a robust cybersecurity, privacy, and technology risk management program is increasingly critical. We have developed and implemented a comprehensive program designed to protect the confidentiality of sensitive information, ensure the integrity of critical data and automated processes, and safeguard the availability of our information technology capabilities.

Cybersecurity has been an area of management attention for over two decades and we have aligned our cybersecurity program to the National Institute of Standards and Technology (NIST) Cybersecurity Framework and the Payment Card Industry Data Security Standard (PCI-DSS). We have implemented appropriate policies, processes, and technology to reduce the likelihood or impact of a breach and have cyber insurance. We have an employee awareness program to regularly educate our workforce on the cybersecurity risks they face and how they can operate safely. We regularly assess our cybersecurity capabilities using third party security firms including an annual assessment of our adherence to the PCI-DSS standard.

We have also developed and continually evolve our Global Privacy Program to promote organizational accountability for privacy, data governance, and data protection across our business and with our collaborative partners and suppliers. The program helps us uphold our commitment to data security and privacy, including maintaining 100% compliance to regulatory requirements for active incident monitoring, risk/harm analysis, and on-time notification of data breaches. Our commitment applies not only to our Company’s information, but also to the information entrusted to us by others. We were the first company in the world to obtain regulatory certification in the European Union for Binding Corporate Rules based in part on our existing Asia Pacific Economic Cooperation Cross Border Privacy Rules certification.

We are aware that we must continuously evolve our controls to address new threats, adhere to changing laws and standards, and reduce the risk associated with the introduction of new, innovative technology.

While everyone at the Company plays a part in information security, cybersecurity, and data privacy, oversight responsibility is shared by the Board, its committees, and management.

Responsible Party	Oversight Area for Cybersecurity and Privacy Matters
Board	Participates in periodic reviews and discussions dedicated to the Company’s risks related to the protection of our data and systems including cybersecurity and privacy.
Audit Committee	Primarily responsible for overseeing the Company’s risk management program related to cybersecurity. The Audit Committee provides feedback on the Company’s framework for assessing, prioritizing and mitigating cybersecurity risk and receives periodic updates based on this framework, including from third-party and internal audit assessments.
Governance Committee	Responsible for oversight in the area of privacy and receives periodic updates regarding the Company’s Global Privacy Program.
Management	Responsible for implementing and managing the Company’s framework for assessing, prioritizing and mitigating cybersecurity risk. Manages the Company’s Global Privacy Program. Responds to incidents and issues in a timely manner. Provides periodic updates to the Board and or its committees, as applicable.

Merck & Co., Inc. 2022 Proxy Statement

20     Corporate Governance    A Strategic Approach to ESG  

Environmental, Social and Governance (“ESG”) Matters

The work to address our environmental footprint and social impact begins with the Board, which as a whole and through its committees, has responsibility for overseeing the Company’s ESG matters. In general:

Responsible Party	Oversight Area for ESG Issues
Board	Provides oversight with respect to the Company’s ESG matters and strategy related thereto.
Governance Committee	Monitors and assists the Board in its oversight of the Company’s ESG matters, including ensuring that applicable ESG matters are subject to review by Board committees with relevant areas of competency, by monitoring and evaluating corporate responsibility programs and activities, reviewing strategy regarding political engagement and reviewing environmental sustainability practices.
Compensation & Management Development Committee	Assists the Board with its oversight of human capital management, including the Company’s policies and practices related to talent management, culture, diversity, equity and inclusion. This includes maintaining fair hiring and promotion practices and a commitment to sustain pay equity for Merck employees of all genders, races and ethnicities.
Audit Committee	Monitors compliance with the Company’s policies on ethical business practices.
Research Committee	Monitors compliance with the highest standards of scientific integrity in the conduct of the Company’s research and development.
Management	Management is responsible for reviewing, refining, and implementing long-term ESG strategy, including through its Public Policy & Responsibility Council comprising diverse cross-functional members, and for updating the Board and its committees, as applicable, on ESG matters.

A Strategic Approach to ESG

Our ESG strategy applies our global resources and investments to the priority areas that matter most to society and to our business:

• Access to Health

• Employees

• Environmental Sustainability

• Ethics & Values

Addressing these focus areas enables us to better reach those in need with our medicines and vaccines; to help to build robust, durable health systems worldwide; to develop a diverse, inclusive and healthy global workforce; to demonstrate our environmental stewardship in our operations and in our supply chain; to enhance our relationships with key stakeholders; and to continue to contribute toward the UN Sustainable Development Goals (“SDGs”). This commitment to a high level of ESG performance helps to drive sustainable value for our business and for society.

Advancing Health Equity is Key to our Access Strategy

As a research-intensive biopharmaceutical company, our role is to discover and develop innovative medicines and vaccines that address unmet medical needs and some of the world’s greatest health threats. As part of this pursuit, we have a responsibility to an increasingly diverse set of patients, including addressing the systemic issues that have long impacted underrepresented groups.

Our global approach to Access to Health is one of our four ESG focus areas. Our strategy is driven by our Access to Health Guiding Principles, which span the areas of discovery and invention, availability, affordability, and strengthening systems and addressing inequity. In addressing access, we are focused on improving people’s health, contributing to social and economic development and helping to achieve the United Nations’ Sustainable Development Goal for Good Health and Well-Being (SDG 3) through our health equity efforts.

Merck & Co., Inc. 2022 Proxy Statement

  Corporate Governance   Criteria for Board Membership and Director Nomination Process     21

Pursuing health equity, the idea that everyone has a fair and just opportunity to be as healthy as possible, is key to our access strategy. Addressing preventable differences in the burden of disease and health outcomes with people who are underserved can make a meaningful, measurable and lasting impact in patients’ lives.

In December 2021, we further underscored our legacy of catalyzing solutions that improve health equity by announcing an additional $150 million commitment through Merck for Mothers. This program promotes safe, high-quality, and respectful maternal care in underserved communities, and we aim to reach 25 million women through these initiatives and services by 2025. Merck for Mothers will continue to focus efforts on countries where the need is great, including India, Nigeria, Kenya and the U.S., bringing on new collaborators and strategic investments that further scale the impact of the current 100+ programs across 50+ global sites.

We also pursue strategies to provide direct access to our products to those who need them. A recent example are the non-exclusive voluntary licensing agreements we have entered into with the Medicines Patent Pool and established generic manufacturers. We aim to accelerate and facilitate affordable global access to molnupiravir—our investigational oral antiviral COVID-19 medicine—in more than 100 low- and middle-income countries following approvals or emergency authorization by local regulatory agencies.

When market-based solutions are inadequate or unavailable, we also pursue programs to provide direct access to our medicines and vaccines, including product donations and patient assistance programs. This includes our longstanding support of the Mectizan^® Donation Program (“MDP”). The MDP provides our Company’s product Mectizan—as much as needed, for as long as needed—with the goal to help eliminate river blindness and lymphatic filariasis and provide equitable solutions in remote communities where health services are limited.

Through these initiatives, we continue to challenge ourselves to innovate, make ambitious commitments, and form collaborative partnerships to advance health equity.

$1 Billion Bond Issued to Support ESG Strategy

In December 2021, we announced a $1 billion sustainability bond to support eligible projects and partnerships, including:

• Access to essential health care services (affordability and addressing barriers to health, infectious disease R&D)

• Socioeconomic advancement and empowerment (employee/supplier diversity and inclusion, health literacy)

• Renewable energy generation

• Energy efficiency

• Green buildings

• Sustainable water and wastewater management

• Pollution prevention and control

For more information on this bond, please see our Company’s Investor Relations page at www.merck.com/investor-relations/.

Criteria for Board Membership and Director Nomination Process

The Governance Committee is responsible for screening and nominating director candidates to be considered for election by the Board. As part of this process, the Governance Committee considers the composition of the Board at the time, including the depth of experience, balance of professional skills, expertise and diversity of perspectives represented by its members at the time. The Governance Committee evaluates prospective nominees identified on its own initiative as well as candidates recommended by other Board members, management, shareholders or search consultants. In 2021, the Governance Committee retained a search firm to identify possible candidates who meet the Board’s qualifications, to interview and screen such candidates (including conducting reference checks) and to assist in scheduling candidate interviews with Board members.

Merck & Co., Inc. 2022 Proxy Statement

22     Corporate Governance    Criteria for Board Membership and Director Nomination Process  

To be considered for membership on the Board, a candidate must meet the following minimum criteria:

• be of proven integrity with a record of substantial achievement in an area of relevance to the Company;

• have demonstrated ability and sound judgment that usually will be based on broad experience;

• be able and willing to devote the required amount of time to the Company’s affairs, including attendance at Board meetings, Board committee meetings and annual shareholder meetings;

• possess a judicious and critical temperament that will enable objective appraisal of management’s plans and programs; and

• be committed to building sound, long-term Company growth.

Individual Experience, Qualifications, Attributes and Skills

In its regular discussions regarding Board composition — and especially in conjunction with the annual Board and committee evaluations — the Governance Committee works with the Board to determine the appropriate mix of professional experience, expertise, educational background and other qualifications that are particularly desirable in light of our current and future business strategies. The Governance Committee uses this input in its planning and Director search process. In addition to the five broad criteria listed above, the following chart highlights the background, experience and skills the Board considers for future candidates. These attributes are amply represented by our current Director nominees.

Director Nominee Skills	of 14 Nominees
CEO Leadership Experience serving as a chief executive officer at a publicly traded or private organization	9
Financial Experience or expertise in financial accounting and reporting processes or the financial management of a major organization	7
Scientific Scientific expertise related to the health care industry and the Company’s long-term commitment to research and development strategies	4
Health Care Industry Experience with complex issues within the health care industry	4
Global Strategy & Operations Leadership experience overseeing and/or driving strategic direction and growth of an organization globally	9
Marketing or Public Relations Experience in digital marketing, advertising, social media and consumer insight functions, including product development and brand building	3
Digital/Technology Experience or expertise in information technology (including cybersecurity and data privacy) or the use of digital media or technology to facilitate business objectives	7
Public Company Governance Experience as a board member of another publicly-traded company	5
Public Policy & Regulation Experience with public policy and regulation in the healthcare industry or other highly-regulated industries	3
Talent Management Experience in executive recruiting, succession planning and talent management, including retaining key talent and driving employee engagement	9
Capital Markets Experience Experience in corporate lending or borrowing, capital market transactions, significant mergers or acquisitions, private equity or investment banking	3

Diversity

As a Company, Merck knows that diversity and inclusion are fundamental to the Company’s success and core to future innovation. As a Board, diversity is an important factor considered when identifying prospective nominees for our Board, and the Policies of the Board include a formal diversity policy. The policy reflects the Board’s longstanding commitment to

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  Corporate Governance   Management Succession Planning     23

ensuring that Directors represent diverse perspectives and areas of expertise important to fostering the Company’s business success. The policy provides that the Board does not discriminate against potential Directors on the basis of gender, race, age, sexual orientation or ethnic and national background and that having a board composed of diverse individuals is an important contributor to the Board’s overall effectiveness.

Shareholder Recommendations of Director Candidates

The Governance Committee will consider recommendations for Director candidates made by shareholders and will evaluate those individuals using the same criteria applied to other candidates. Shareholder recommendations must be sent to the Office of the Secretary, Merck & Co., Inc., 2000 Galloping Hill Road, K1-4157, Kenilworth, New Jersey 07033 U.S.A., and must include detailed background information regarding the recommended candidate that demonstrates how that candidate meets the Board membership criteria.

Candidates are evaluated initially based on materials submitted by them or on their behalf. If a proposed or recommended candidate continues to be of interest to the Governance Committee, we obtain additional information through inquiries to various sources and, if warranted, interviews.

Management Succession Planning

Succession planning and talent development are important at all levels within the Company. The Board regularly reviews short- and long-term succession plans for the CEO and other executive officers. In assessing possible CEO candidates, the independent Directors identify the skills, experience and attributes they believe are required for an effective CEO in light of the Company’s global business strategies, opportunities and challenges. More broadly, the Board engages with the Company’s leadership team on matters of talent and culture, including around the development of the Company’s talent pipeline and advancing diversity and inclusion efforts across the enterprise. The Board’s succession planning activities are strategic, long-term and supported by the Board’s committees and external consultants, as needed, and Directors have substantial opportunities to engage with possible succession candidates. Most recently, this succession planning process resulted in a new leadership structure for the Company’s Human Health business to enable the Company to develop our internal talent and expand our high performing senior leadership team following the departure of Frank Clyburn, former Executive Vice President and President, Human Health. Effective February 28, 2022, Arpa Garay leads Human Health Global Marketing, Jannie Oosthuizen leads Human Health U.S., and a third role will lead Human Health International. The Board provided guidance regarding the new leadership structure. The Board also approved the appointments of Ms. Garay and Mr. Oosthuizen and will be responsible for approving the appointment of the third role.

Board Succession Planning

The Board also considers its own composition and succession plans. In Director succession planning, the Governance Committee and the Board consider, among other things, the needs of the Board and the Company in light of the overall composition of the Board, with a view toward achieving a balance of the skills, experience and attributes that are essential to the Board’s oversight role. In particular, the Board is deliberate in ensuring the Board has the right mix of diverse perspectives, skills and expertise to address the Company’s current and anticipated needs as opportunities and challenges facing the Company evolve. Such considerations have resulted in the election of five new Board members over the last three years and the nomination in this proxy statement of a new Director. In addition, in November of 2021, the Board amended the Policies of the Board to provide that Directors may not be nominated for re-election to the Board after they reach the age of 75. The Board believes that, in addition to its ongoing review of the overall composition of the Board, this policy promotes regular refreshment of the Board and is considered as part of overall succession planning.

Merck & Co., Inc. 2022 Proxy Statement

24     Corporate Governance    Annual Board Evaluation  

Annual Board Evaluation

The Board conducts an evaluation of its performance and effectiveness, as well as that of its four standing committees, on an annual basis. The purpose of the evaluation is to track progress in certain areas targeted for improvement, identify ways to enhance the overall effectiveness of the Board and its committees and provide opportunities to discuss other important topics, such as Board composition, succession plans and priority agenda topics. The independent Lead Director leads the evaluation process. The Governance Committee may also from time to time engage an independent third party to manage the process. In 2021, the evaluation was conducted in 3 phases.

Board Evaluation Process
Step 1	Step 2	Step 3
First, each Director completed a written questionnaire developed by the Governance Committee to provide feedback on the effectiveness of the Board, the Board’s leadership structure, the committees and the level and quality of the Directors’ individual contributions, as well as any areas that the Director believes warrant heightened focus in the year ahead.	Second, the independent Lead Director, Thomas H. Glocer, conducted an interview with each Board member to gather additional suggestions for improving Board effectiveness and to solicit additional feedback on Board operations, composition and priority agenda topics.	Finally, the collective feedback of the Board members was compiled and presented to the full Board. During discussion led by independent Lead Director, Thomas H. Glocer, Directors considered areas of strength and opportunities to enhance the operations of the Board.

The Board evaluation process resulted in a number of recommendations, including

recommendations regarding priority agenda topics for the Board to address in 2022.

Shareholder Engagement and Feedback

Merck regularly communicates with shareholders to better understand their perspectives and has established a shareholder engagement program that is proactive and cross-functional. Throughout the year, members of Investor Relations, the Office of the Secretary, Human Resources and the ESG Strategy and Engagement Team, as well as other subject-matter experts within the Company, engage with our shareholders to remain well-informed regarding their perspectives on current issues and to address any questions or concerns. These teams serve as liaisons between shareholders, members of senior management and the Board.

In addition, we conduct an extensive shareholder outreach program twice a year focused on governance, executive compensation and ESG matters. We believe it is most productive to discuss these matters well in advance of the Annual Meeting to enable management and the Board to gather information about investor perspectives and make educated and deliberate decisions that are balanced and appropriate for Merck’s diverse shareholder base and in the Company’s best interests. Given our large shareholder base, we concentrate our outreach efforts on our largest 30 shareholders, which represented approximately 40% of our ownership as of December 31, 2021, based on filings made by our shareholders with the SEC on or before March 1, 2022.

During 2021, we held discussions with a number of our shareholders in the spring before the Annual Meeting and once again in late fall. Our Lead Director, who is also Chair of the Governance Committee, participated in substantive engagements with some of the Company’s shareholders. We also regularly seek to take advantage of other engagement opportunities and events.

Merck & Co., Inc. 2022 Proxy Statement

  Corporate Governance   Shareholder Engagement and Feedback     25

Topics Discussed with Shareholders during 2021
•  COVID-19 priorities •  Company strategy •  Board leadership, composition and refreshment •  Management succession •  Board and management diversity •  Human capital management •  ESG reporting	•  Global access to Merck products •  Commitment to racial and ethnic diversity •  Risk oversight •  Cybersecurity •  Executive compensation programs •  Policy and pricing environment •  Shareholder proposals	•  Lobbying expenditures •  Climate initiatives •  Merck Animal Health •  Director tenure •  Merck culture •  Reputation •  Director onboarding •  Board evaluation process

Some key themes emerged as part of our various engagements as set forth below.

What We Heard	What We Did
Shareholders are increasingly interested in hearing more about ESG strategy and oversight.	•  The Company hosted a virtual Investor Event in February 2022 in which our senior management team discussed the Company’s long-term ESG strategies. •  This proxy statement includes on page 20 a description of the Board’s oversight of ESG matters. •  The Governance Committee reviewed the Policies of the Board and the charters of each Board committee to ensure the committees’ oversight of applicable ESG matters was appropriately identified. Following that review, the Governance Committee recommended, and the Board approved, amendments to the Policies of the Board and the Governance Committee charter, which are available on our website at www.merck.com/company-overview/leadership/board-of-directors/.
Shareholders are interested to know more about the Company’s global access strategy for COVID-19 therapeutics.	•  Merck has been transparent about our commitment to providing timely global access to molnupiravir, the investigational oral antiviral COVID-19 medicine being developed in collaboration with Ridgeback Biotherapeutics, as well as our comprehensive supply approach to fulfilling that commitment. Information regarding our approach is available on our website at www.merck.com/research-and-products/covid-19/.

Proxy Access

After engaging with a number of our largest shareholders, our Board proactively amended our By-Laws in 2015 to give shareholders a right to proxy access for Director nominations. Our By-Laws allow a shareholder (or a group of no more than twenty shareholders) who has maintained continuous qualifying ownership of at least 3% of the Company’s outstanding common stock for at least three years to include Director nominees constituting up to 20% of the Board in the Company’s proxy materials for an annual meeting of shareholders. Our By-Laws, which prescribe additional requirements for proxy access, are available on our website at www.merck.com/company-overview/leadership/board-of-directors/.

Merck & Co., Inc. 2022 Proxy Statement

26     Corporate Governance    Shareholder Communications with the Board  

Shareholder Communications with the Board

The Board of Directors welcomes input from shareholders and other interested parties and has established a process to receive these communications. Shareholders and interested parties may communicate directly with the Board, the independent Lead Director, the non-management or independent Directors as a group or other members of the Board by emailing office.secretary@merck.com, or by writing to the following address:

Board of Directors

Merck & Co., Inc.

2000 Galloping Hill Road, K1-4157

Kenilworth, NJ 07033 U.S.A.

In order to manage efficiently the volume of correspondence received, communications will be reviewed by the Office of the Secretary for the purpose of determining whether the contents are appropriate for submission to the entire Board, the Chairman, the independent Lead Director or the Chair of a particular committee. The Office of the Secretary will not transmit:

• communications that advocate that the Company engage in illegal activity;

• communications that, under community standards, contain offensive or abusive content;

• communications that have no relevance to the role of the Board or to the business of the Company;

• resumes or other job-related inquiries; and

• mass mailings, solicitations and advertisements.

Comments or questions regarding the nomination of Directors and other corporate governance matters will be referred to the Chair of the Governance Committee. Comments or questions regarding executive compensation will be referred to the Chair of the C&MD Committee.

In addition, the Audit Committee has established procedures for the receipt, retention and treatment, on a confidential basis, of complaints regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters. These procedures are described in the Merck Code of Conduct — Our Values and Standards.

The Merck Code of Conduct is available on our website at www.merck.com/company-overview/culture-and-values/code-of-conduct/values-and-standards/ .

Merck & Co., Inc. 2022 Proxy Statement

  Corporate Governance   Political Contributions and Lobbying Expenditure Oversight and Disclosure     27

Political Contributions and Lobbying Expenditure Oversight and Disclosure

Merck is committed to participating constructively and responsibly in the political process and to providing clarifying analysis and information regarding the issues that affect our business and patient care. The Company advocates for public policies that foster research into innovative medicines and improve access to medicines, vaccines and health care. Our participation in the political process is guided by the following principles: improving patient access to healthcare, including access to medicines and vaccines, improving access to animal health products, and encouraging innovation. The Company’s public policy positions are determined by senior management with oversight by the Governance Committee. Our political contributions are made in accordance with all applicable laws and Company policies and procedures and are overseen by senior management. The Governance Committee monitors all such contributions, and the full Board receives a bi-annual report.

In addition, the Company publicly discloses and regularly updates information regarding its public policy positions and advocacy expenditures on our website at www.merck.com/company-overview/responsibility/transparency-disclosures/. This information includes the Company’s contributions, categorized by state, candidate and amount, for our corporate political and political action committee contributions in the U.S., Canada and Australia. These disclosures include information for the past 5 years. In addition, this information includes a list of U.S. industry and trade groups in which we are members where our dues are greater than $25,000 and the portion of our dues that these groups use for advocacy and/or political activities.

Governance and Transparency around Drug Pricing

In order to provide information about the Company’s pricing practices, the Company annually posts on its website its Pricing Transparency Report for the United States. The report provides the Company’s average annual list price, net price increases and average discounts across the Company’s U.S. portfolio dating back to 2010. In 2021, the Company’s gross U.S. sales were reduced by 43.5% as a result of rebates, discounts and returns. Our process around pricing our products includes regular 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.

Independence of Directors

The Policies of the Board require that a substantial majority of our Directors be independent. In making independence determinations, the Board observes all relevant criteria established by the U.S. Securities and Exchange Commission (the “SEC”) and the New York Stock Exchange (the “NYSE”), as well as categorical independence standards set forth in the Policies of the Board. The Board considers all relevant facts and circumstances in making an independence determination.

To be considered independent, an outside director must meet the bright line independence tests established by the NYSE, and the Board must affirmatively determine that the director has no direct or indirect material relationship with the Company.

The Board also rigorously considers all relevant heightened independence requirements for members of the Audit Committee and the C&MD Committee. The Governance Committee reviews the Board’s approach to determining director independence periodically and recommends changes, as appropriate, for consideration and approval by the full Board.

Independence Determinations

In accordance with the NYSE Corporate Governance Listing Standards and the categorical standards reflected in the Policies of the Board, the Board reviewed relationships between the Company and each Director. As a result of that review, the Board has determined that, with the exception of Robert M. Davis, our CEO and President, and Kenneth C. Frazier, our Executive Chairman, each Director has only immaterial relationships with the Company, and accordingly, each is independent under these standards. The Board also has determined that each member of the Audit Committee, the C&MD Committee

Merck & Co., Inc. 2022 Proxy Statement

28     Corporate Governance    Related Person Transactions  

and the Governance Committee is independent within the meaning of the NYSE Corporate Governance Listing Standards and the rules of the SEC.

In making these determinations, the Board considered relationships that exist between the Company and other organizations where Directors serve, as well as the fact that in the ordinary course of business, transactions may occur between such organizations and the Company or one of our subsidiaries. The Board also evaluated whether there were any other facts or circumstances that might impair a Director’s independence.

Drs. Lavizzo-Mourey, Rothman and Seidman are employed at medical or academic institutions with which the Company engages in purchase and/or sale transactions in the ordinary course of business. Ms. Coe is employed by Google Inc., and, in 2020, the Company engaged in a purchase transaction with Google Inc. in the ordinary course of business. In addition, Mr. Thulin was employed by 3M Company until June 1, 2019, and the Company engages in routine business transactions with 3M Company. The Board reviewed transactions with each of these entities and determined that the applicable individual Director had no role with respect to the Company’s decision to make any of the purchases or sales, and the aggregate amounts in each case were less than 2% of the consolidated gross revenues of the other organization and the Company.

Related Person Transactions

Related Person Transaction Policy

The Board has adopted a written Related Person Transaction Policy (the “Policy”) that is incorporated into the Policies of the Board and administered by the Governance Committee. The Policy governs the review and approval of any transactions involving amounts exceeding $120,000 to which the Company or a subsidiary is a party and in which a “related person” has a direct or indirect material interest. A “related person” is any Director, Director nominee, executive officer or holder of more than 5% of any outstanding class of the Company’s voting securities, as well as immediate family members or certain affiliated entities of any of the foregoing persons.

Pursuant to the Policy, management determines whether a transaction requires review by the Governance Committee, in which case the transaction, along with all material information, will be disclosed to the Governance Committee for review, approval, ratification or termination. In the event a related person transaction is approved by the Governance Committee, such transaction will be subject to ongoing monitoring to ensure that the transaction remains fair and reasonable to the Company. For additional information, the full Policy is available on the Company’s website at www.merck.com/company-overview/leadership/board-of-directors/ in the Policies of the Board.

Certain Related Person Transactions

Each Director and executive officer of Merck annually, and each Director nominee before such nominee’s nomination, completes and submits to the Company a Director & Officer (“D&O”) Questionnaire. The D&O Questionnaire requests, among other things, information regarding whether any Director, Director nominee, executive officer or their immediate family members had an interest in any transaction or proposed transaction with Merck or its subsidiaries or has a relationship with a company that has entered or proposes to enter into such a transaction.

After review of the D&O Questionnaires by the Office of the Secretary, the responses are collected, summarized and distributed to responsible areas within the Company to identify any potential transactions. All relevant relationships and any transactions, along with payables and receivables, are compiled for each person and affiliation. Management submits a report of the affiliations, relationships, transactions and appropriate supplemental information to the Governance Committee for its review. Based on this information for 2021, the Governance Committee has determined that no transactions require disclosure under Item 404(a) of SEC Regulation S-K.

Merck & Co., Inc. 2022 Proxy Statement

  Corporate Governance   Compensation Consultants     29

Compensation Consultants

Role of Compensation Consultants

The C&MD Committee retains the services of a compensation consultant to serve as an objective third-party advisor on the reasonableness of compensation levels and on the appropriateness of the compensation program structure in supporting our business strategy and human resource objectives. Since 2008, the C&MD Committee has retained FW Cook as its compensation consultant. In addition, the Governance Committee periodically retains FW Cook to assist with a review of the Directors’ compensation program.

Independence of Compensation Consultant

The C&MD Committee annually reviews the services provided by FW Cook and has concluded that FW Cook is independent in providing executive compensation consulting services. The C&MD Committee conducted a specific review of its relationship with FW Cook in 2021, and, consistent with the guidance provided under the Dodd-Frank Act and by the SEC and the NYSE, determined that FW Cook’s work for the C&MD Committee did not raise any conflicts of interest. In making this determination, the C&MD Committee reviewed information provided by FW Cook on the following factors:

• the provision of other services to Merck by FW Cook;

• the fees received from Merck by FW Cook as a percentage of the total revenue of FW Cook;

• the policies and procedures of FW Cook that are designed to prevent conflicts of interest;

• any business or personal relationship between any member of FW Cook’s consulting team advising the C&MD Committee or any other employee of FW Cook and a member of the C&MD Committee;

• any business or personal relationship between any member of FW Cook’s consulting team advising the C&MD Committee or any other employee at FW Cook and an executive officer of Merck; and

• any stock of Merck owned by any member of FW Cook’s consulting team advising the C&MD Committee or any other employee at FW Cook or their immediate family members.

In particular, the C&MD Committee noted that (i) FW Cook provided no other services to Merck; and (ii) FW Cook’s work is performed directly on behalf of the Board working in cooperation with management, to assist both the C&MD Committee and the Governance Committee with executing their respective responsibilities.

Services Performed During 2021

During 2021, FW Cook supported the C&MD Committee by:

• reviewing our competitive market data with respect to the Executive Chairman’s, CEO’s and other senior executives’ compensation;

• providing guidance and analysis on executive compensation plan design, market trends, regulatory developments and best practices;

• assisting with design and setting of performance goals in the variable incentive plans;

• assisting with compensation planning for the CEO transition which occurred in July 2021;

• assisting in determining the Executive Chairman’s and CEO’s target TDC and payouts under the Executive Incentive Plan;

• assisting with the preparation of public filings related to executive compensation, including the Compensation Discussion and Analysis, CEO pay ratio and the accompanying tables and footnotes;

• assisting with a review of Merck’s primary peer group; and

• assisting with the expansion and consolidation of Merck’s clawback policy.

Since 2010, management has retained Pay Governance LLC to provide consulting services on an as-needed basis. Although Pay Governance did not provide any services during 2021, they will perform their biennial risk assessment of our compensation programs in November 2022.

Merck & Co., Inc. 2022 Proxy Statement

30

Stock Ownership Information

Stock Ownership of Directors and Officers

The table below reflects the number of shares of Merck common stock beneficially owned by (a) each of our Directors; (b) each of our executive officers named in the Summary Compensation table; and (c) all Directors and executive officers as a group. As of February 28, 2022, 2,527,811,512 shares of Merck common stock were issued and outstanding. Unless otherwise noted, the information is stated as of February 28, 2022, and the beneficial owners exercise sole voting and/or investment power over their shares. In addition, unless otherwise indicated, the address for each person named below is c/o Merck & Co., Inc., 2000 Galloping Hill Road, Kenilworth, New Jersey 07033.

	Company Common Stock
Name of Beneficial Owner	Shares Beneficially Owned(1)		Right to Acquire Beneficial Ownership Under Options/Stock Units Exercisable/Distributable Within 60 Days(2)		Percent of Class		Phantom Stock Units(3)
Kenneth C. Frazier		710,665		3,668,920		*		—
Robert M. Davis		247,593		430,029		*		—
Mary Ellen Coe		10		—		*		12,949
Pamela J. Craig		1,715		—		*		20,624
Thomas H. Glocer		5,100		—		*		80,578
Risa J. Lavizzo-Mourey		1,000		—		*		5,486
Stephen L. Mayo		100		—		*		2,911
Paul B. Rothman		100		—		*		20,625
Patricia F. Russo		13,148		—		*		44,787
Christine E. Seidman		100		—		*		7,164
Inge G. Thulin		100		—		*		14,043
Kathy Warden		500		—		*		5,610
Peter C. Wendell		1,000		—		*		111,095
Frank Clyburn(4)		98,875		263,812		*		2,241
Richard R. DeLuca, Jr.		135,063		370,888		*		—
Dean Li		15,462		49,723		*		—
Caroline Litchfield		26,556		147,787		*		—
All Directors and Executive Officers as a Group (28 individuals)		1,591,687		5,769,706		*		342,916

 * Less than 1% of the Company’s outstanding shares of common stock.

(1) Includes equivalent shares of common stock held by the Trustee of the Merck U.S. Savings Plan, for the accounts of individuals as follows: Mr. Frazier — 4,382 shares, Mr. Clyburn — 1,780 shares, Mr. DeLuca — 1,166 shares, and all Directors and executive officers as a group — 8,803 shares.

(2) This column reflects the number of shares that could be acquired within 60 days of February 28, 2022, through the exercise of outstanding stock options.

(3) Represents phantom shares denominated in Merck common stock under the Plan for Deferred Payment of Directors’ Compensation or the Merck Deferral Program.

(4) Mr. Clyburn was promoted from Executive Vice President and Chief Commercial Officer to Executive Vice President and President, Human Health, effective April 1, 2021. He resigned from his position, effective February 1, 2022.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act, as amended, requires our executive officers, directors, and beneficial owners of more than 10% of our common stock to file stock ownership reports and reports of changes in ownership with the SEC. Based on a review of those reports and written representations from the reporting persons, to our knowledge, all such reports for 2021

Merck & Co., Inc. 2022 Proxy Statement

  Stock Ownership Information   Stock Ownership of Certain Beneficial Owners     31

were filed on a timely basis, except: (1) one Form 4 by Richard R. DeLuca, Jr. reporting a special one-time Restricted Stock Unit retention grant due on May 6, 2021, but filed on November 4, 2021, (2) one Form 4 by Frank Clyburn also reporting a special one-time Restricted Stock Unit retention grant due on May 6, 2021, but filed on November 4, 2021, and (3) one Form 4 by David M. Williams reporting the vesting of Restricted Stock Units due on February 12, 2021, but filed on February 11, 2022.

Stock Ownership of Certain Beneficial Owners

The table below reflects the number of shares beneficially owned by persons or entities known to us to own more than 5% of the outstanding shares of Merck common stock as of December 31, 2021. As of December 31, 2021, 2,527,604,629 shares of Merck common stock were issued and outstanding.

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership		Percent of Class
The Vanguard Group 100 Vanguard Blvd., Malvern, PA 19355		211,202,531(1)		8.36%
BlackRock, Inc. 55 East 52nd Street, New York, NY 10055		198,224,264(2)		7.80%

(1) As reported on Amendment No. 7 to Schedule 13G (the “Vanguard filing”) filed with the SEC on February 9, 2022. According to the Vanguard filing, of the 211,202,531 shares of Merck common stock beneficially owned by The Vanguard Group (“Vanguard”) as of December 31, 2021, Vanguard has the shared power to vote or direct the vote with respect to 4,007,839 shares, sole power to dispose or to direct the disposition of 200,790,380 shares, and shared power to dispose or to direct the disposition of 10,412,151 shares.

(2) As reported on Amendment No. 12 to Schedule 13G (the “BlackRock filing”) filed with the SEC on February 1, 2022. According to the BlackRock filing, of the 198,224,264 shares of Merck common stock beneficially owned by BlackRock, Inc. (“BlackRock”) as of December 31, 2021, BlackRock has the sole power to vote or direct the vote with respect to 171,958,371 shares and sole power to dispose or to direct the disposition of 198,224,264 shares.

Merck & Co., Inc. 2022 Proxy Statement

32
	Proposal 1 Election of Directors

The Board has recommended 14 nominees for election as Directors at the 2022 Annual Meeting of Shareholders: Mr. Douglas M. Baker, Jr., Ms. Mary Ellen Coe, Ms. Pamela J. Craig, Mr. Robert M. Davis, Mr. Kenneth C. Frazier, Mr. Thomas H. Glocer, Dr. Risa J. Lavizzo-Mourey, Dr. Stephen L. Mayo, Dr. Paul B. Rothman, Ms. Patricia F. Russo, Dr. Christine E. Seidman, Mr. Inge G. Thulin, Ms. Kathy J. Warden and Mr. Peter C. Wendell. All nominees, other than Mr. Davis, our Chief Executive Officer, and Mr. Frazier, our Executive Chairman, satisfy the NYSE independence requirements.

In connection with the Board’s CEO succession planning, in February 2021, the Board elected Mr. Davis, effective July 1, 2021, to succeed Mr. Frazier as CEO and become a member of the Board and stand for election by shareholders at the 2022 Annual Meeting of Shareholders. Mr. Baker is being nominated to stand for election by shareholders at the meeting. All other nominees currently serve on the Board and were elected by the shareholders at the 2021 Annual Meeting. Mr. Baker was first identified as a possible Director candidate by a third-party search firm. Mr. Baker was recommended to the Board by the Governance Committee and met with various members of the Board leading up to his nomination.

All Director nominees named in this proxy statement meet the Board’s criteria for membership and were recommended by the Governance Committee, and approved by the Board, for election by shareholders at the 2022 Annual Meeting. All of them hold, or have held, senior leadership positions in large, complex organizations, including multi-national corporations, medical or academic institutions, or charitable organizations. In these positions, our Director nominees have demonstrated their leadership, intellect and analytical skills and gained deep experience in core disciplines significant to their oversight responsibilities at Merck. Their varied roles and experiences reflect a diversity of perspectives, skills and expertise to address the Company’s current and anticipated needs as the Company’s opportunities and challenges evolve. If elected, each nominee will serve until the 2023 Annual Meeting of Shareholders or until a successor has been duly elected and qualified, subject to their earlier resignation, death or removal.

Any Director nominee who does not receive a majority of the votes cast with respect to his or her election will not be re-elected as a Director of the Company. However, under the New Jersey Business Corporation Act, incumbent Directors who are not re-elected in an uncontested election because of a failure to receive a majority of the votes cast in favor of their re-election will be “held over” and continue as Directors of the Company until they resign, or their successors are elected at the next election of directors. Our Incumbent Director Resignation Policy, included in the Policies of the Board, provides that an incumbent Director who is not re-elected must promptly submit a resignation. The Governance Committee will evaluate whether to accept such resignation and make a recommendation to the full Board. The Board must act on the recommendation no later than 90 days following certification of the shareholder vote and publicly disclose its decision and rationale.

If any Director nominee becomes unavailable for election (which we do not expect), votes will be cast for such substitute Director nominee or nominees as may be designated by the Board, unless the Board reduces its size.

There are no family relationships among Merck’s executive officers and Directors.

We provide below biographical information for each Director nominee, including key experience, qualifications and skills such Director nominee contributes to the Board in light of our current needs and business priorities.

FOR

The Board of Directors recommends that the shareholders vote FOR the election of each of the Director Nominees.

Merck & Co., Inc. 2022 Proxy Statement

  Proposal 1   Election of Directors     33

Douglas M. Baker, Jr. Independent
Age: 63
Director Nominee
Committees:(1)
Compensation and Management Development	Governance

Experience

Mr. Baker has wide-ranging expertise in corporate governance and general and organizational management, including a deep understanding of global marketing, sales and operations of public companies. Currently, Mr. Baker is Executive Chairman of Ecolab Inc., a provider of water and hygiene services and technologies for the food, hospitality, industrial and energy markets. He previously served as Chairman of the Board & Chief Executive Officer of Ecolab. Mr. Baker is also a member of the Board of Target Corporation and served as their Lead Independent Director from 2015 to 2021. This directorship as well as his previous directorship at U.S. Bancorp provide him with deep experience on governance issues facing large public companies.

Career Highlights

Ecolab Inc.

•  Executive Chairman (2021-present)⁽²⁾

•  Chairman and Chief Executive Officer (2006-2020)

•  Chief Executive Officer (2004-2006)

Other Public Directorships

Current

•  Ecolab Inc. (Since 2006)⁽²⁾

•  Target Corporation (Since 2013)

Former

•  U.S. Bancorp (2008-2018)

(1) If elected, Mr. Baker will serve on these committees.

(2) Mr. Baker will retire as Executive Chairman of Ecolab Inc., effective May 5, 2022.

Mary Ellen Coe Independent
Age: 55
Director Since: 2019
Committees:
Audit	Research

Experience

Ms. Coe has a deep understanding of the digital and technology landscape, as well as global strategy and operations, due to her experience as a senior leader at Google Inc. She also has extensive marketing and sales expertise from her leadership position at McKinsey and other global marketing consulting firms.

Career Highlights

Google Inc.

•  President, Google Customer Solutions (2017-present)

•  Vice President, Go-to-Market Operations and Strategy (2012-2017)

Other Public Directorships

Current

•  None

Former

•  Whole Foods Market, Inc. (2016-2017)

Merck & Co., Inc. 2022 Proxy Statement

34     Proposal 1    Election of Directors  

Pamela J. Craig Independent
Age: 65
Director Since: 2015
Committees:
Audit (Chair)	Governance

Experience

Ms. Craig has extensive finance, management, operational, technology and international business expertise, including her history of accomplishment and executive ability as Chief Financial Officer of Accenture plc. In addition, her directorships at other public companies, including her service as a member of the Audit and Science/Technology/Sustainability Committees of 3M Company, as a member of the Audit and Corporate Responsibility and Sustainability Committees of Corning Incorporated, and as chair of the Technology Committee and a member of the Compensation Committee of Progressive Insurance, provide her with valuable experience on governance issues facing public companies.

Career Highlights

Accenture plc, global management consulting, technology services and outsourcing company

•  Chief Financial Officer (2006-2013)

•  Senior Vice President, Finance (2004-2006)

•  Group Director, Business Operations and Services (2003-2004)

•  Managing Partner, Global Business Operations (2001-2003)

Other Public Directorships

Current

•  Progressive Insurance (since 2018)

•  3M Company Inc. (since 2019)

•  Corning Incorporated (since 2021)

Former

•  Akamai Technologies, Inc. (2011-2019)

•  Wal-Mart Stores, Inc. (2013-2017)

Robert M. Davis

Management

Age: 55

Director Since: 2021

Experience

Mr. Davis, Merck’s Chief Executive Officer and President, has extensive management, financial, and operational expertise. During his tenure at Merck, Mr. Davis served as President, with responsibility for Merck’s operating divisions, Human Health, Animal Health, Manufacturing and Merck Research Laboratories. He also served as Merck’s Chief Financial Officer and Executive Vice President, Global Services, with broad responsibilities, including with respect to finance, risk management, real estate operations, corporate strategy, business development, information technology and procurement. In addition, Mr. Davis’ service on the board of directors of Duke Energy, including his roles as Chair of the Finance & Risk Management Committee and member of the Corporate Governance Committee, has provided him with valuable experience on governance issues facing public companies. Prior to joining Merck in 2014, Mr. Davis held leadership roles at Baxter International, Inc., including as Corporate Vice President and President of Medical Products and Corporate Vice President and Chief Financial Officer.

Career Highlights

Merck & Co., Inc.

•  Chief Executive Officer and President (2021-present)

•  Chief Financial Officer and Executive Vice President, Global Services (2016-2021)

•  Chief Financial Officer and Executive Vice President (2014-2016)

Baxter International, Inc.

•  Corporate Vice President and President, Medical Products (2010-2014)

•  Corporate Vice President and Chief Financial Officer (2006-2010)

•  Corporate Vice President and Treasurer (2004-2006)

Other Public Directorships

Current

•  Duke Energy (since 2018)

Former

•  C.R. Bard (2015-2017)

Merck & Co., Inc. 2022 Proxy Statement

  Proposal 1   Election of Directors     35

Kenneth C. Frazier

Management

Age: 67

Director Since: 2011

Experience

Mr. Frazier has broad managerial and operational expertise and deep institutional knowledge, as well as a track record of achievement, integrity and sound judgment demonstrated prior to, and during, his long tenure with Merck. In addition, his role as the Chair of the Board Affairs Committee of Exxon Mobil Corporation has provided him with important experience on governance issues facing public companies.

Career Highlights

Merck & Co., Inc.

•  Executive Chairman (2011-present)

•  Chief Executive Officer (2011-2021

•  President (2010-2021)

•  Executive Vice President and President, Global Human Health (2007-2010)

•  Executive Vice President and General Counsel (2006-2007)

•  Senior Vice President and General Counsel (1999-2006)

Other Public Directorships

Current

•  Exxon Mobil Corporation (since 2009)

Former

•  None

Thomas H. Glocer Independent Lead Director
Age: 62
Director Since: 2007
Committees:
Compensation and Management Development	Governance (Chair)

Experience

Mr. Glocer has extensive management, operational, technology and international business expertise, including his history of accomplishment and executive ability as CEO and a Director of Thomson Reuters Corporation. In addition, his directorships at other public companies, including his service as Lead Director and as a member of the Operations and Technology Committee at Morgan Stanley, provide him with valuable experience on governance issues facing public companies.

Career Highlights

Angelic Ventures LP, a family office investing in early-stage technology and data companies

•  Founder and Managing Partner (2012-present)

Thomson Reuters Corporation, multi-national media and information firm

•  Chief Executive Officer (2008-2011)

•  Chief Executive Officer, Reuters Group PLC (2001-2008)

Other Public Directorships

Current

•  Morgan Stanley (since 2013)

•  Publicis Groupe (since 2016)

Former

•  None

Merck & Co., Inc. 2022 Proxy Statement

36     Proposal 1    Election of Directors  

Risa J. Lavizzo-Mourey, M.D. Independent
Age: 67
Director Since: 2020
Committees:
Compensation and Management Development	Research

Experience

Dr. Lavizzo-Mourey has extensive health policy experience, serving as Robert Wood Johnson Foundation Professor Emerita of Health Equity and Health Policy and formerly as President and Chief Executive Officer of Robert Wood Johnson Foundation, the nation’s largest healthcare-focused philanthropic organization. Her role at Robert Wood Johnson Foundation provided her with deep management, strategic, human capital and talent development expertise. In addition, her directorships at other public companies, including her service as Chair of the Governance Committee at GE and her previous service as Chair of the Compensation and Management Development Committee at Hess Corporation, provide her with extensive experience on corporate governance matters. Dr. Lavizzo-Mourey was elected to the National Academy of Medicine, American Academy of Arts and Sciences and The American Philosophical Society.

Career Highlights

University of Pennsylvania

•  Penn Integrates Knowledge Professor of Health Equity and Health Policy
(2018-2021)

Robert Wood Johnson Foundation

•  President Emerita (2017-present)

•  President and Chief Executive Officer (2003-2017)

•  Senior Vice President and Director (2001-2002)

Other Public Directorships

Current

•  General Electric Company (since 2017)

•  Intel Corporation (since 2018)

•  Better Therapeutics (since 2021)

Former

•  Hess Corporation (2004-2020)

Stephen L. Mayo, Ph.D. Independent
Age: 60
Director Since: 2021
Committees:
Audit	Research

Experience

Dr. Mayo has extensive scientific experience relevant to the biopharmaceutical industry, including being the Bren Professor of Biology and Chemistry, Merkin Institute Professor and former Chair of the Division of Biology and Biological Engineering at the California Institute of Technology (“Caltech”) and co-founder of Xencor, a public antibody engineering company. In addition, in his role as the former Vice Provost at Caltech, Dr. Mayo oversaw Caltech’s technology licensing program. Elected to the National Academy of Sciences in 2004 for his pioneering contributions in the field of protein design, Dr. Mayo has also served as a presidential appointee on the National Science Foundation’s National Science Board and as an elected board member for the American Association for the Advancement of Science. Dr. Mayo also serves as a member of the board of directors of Sarepta Therapeutics, Inc.

Career Highlights

California Institute of Technology

•  Merkin Institute Professor (2021-present)

•  Bren Professor of Biology and Chemistry (2007–present)

•  Chair, Division of Biology and Biological Engineering (2010–2020)

•  Vice Provost for Research (2007–2010)

Howard Hughes Medical Institute,

non-profit medical research organization

•  Investigator (1994–2007)

Other Public Directorships

Current

•  Sarepta Therapeutics (since 2021)

Former

•  None

Merck & Co., Inc. 2022 Proxy Statement

  Proposal 1   Election of Directors     37

Paul B. Rothman, M.D. Independent
Age: 64
Director Since: 2015
Committees:
Audit	Research (Chair)

Experience

Dr. Rothman has extensive expertise in patient care, science and medicine relevant to the pharmaceutical industry, including through his positions as the CEO of Johns Hopkins Medicine and the Dean of Medical Faculty and Vice President for Medicine, The Johns Hopkins University, and his past experience as Dean and Head of Internal Medicine at Carver College of Medicine at the University of Iowa. In addition, his vast operational and management experience of a large-scale medical organization provide him with a deep understanding of the complexities of the U.S. healthcare delivery system and policy environment.

Career Highlights

Johns Hopkins University

•  Dean of the Medical Faculty and Vice President for Medicine (2012-present)

Johns Hopkins Medicine

•  Chief Executive Officer (2012-present)

Carver College of Medicine at the University of Iowa

•  Dean (2008-2012)

•  Head of Internal Medicine (2004-2008)

Other Public Directorships

Current

•  None

Former

•  None

Patricia F. Russo Independent
Age: 69
Director Since: 1995(1)
Committees:
Compensation and Management Development (Chair)	Governance

Experience

Ms. Russo has extensive management, operational, international business and financial expertise, as well as a broad understanding of the technology industry, which includes her career achievements during her tenure as CEO and Director of Alcatel-Lucent and Lucent Technologies Inc. In addition, her directorships at other public companies, including her roles as the Non-executive Chairman of Hewlett Packard Enterprise Company and the Independent Lead Director and Chair of the Governance and Corporate Responsibility Committee of General Motors, provide her with deep experience on governance issues facing large public companies.

Career Highlights

Hewlett Packard Enterprise Company, technology company

•  Non-executive Chairman (2015-present)

Alcatel-Lucent, global telecommunications equipment company

•  Chief Executive Officer and Director (2006-2008)

•  Chairman, Lucent Technologies Inc. (2003-2006)

•  President and Chief Executive Officer, Lucent Technologies Inc. (2002-2006)

Other Public Directorships

Current

•  General Motors Company (since 2009). Independent Lead Director (2010-2014; 2021-present)

•  Hewlett Packard Enterprise Company (since 2015), Non-executive Chairman (2015)

•  KKR Management Inc. (the managing partner of KKR & Co., L.P.) (since 2011)

Former

•  Arconic, Inc. (2016-2018) formerly Alcoa, Inc. (2008-2016)

(1) Ms. Russo was on the Board of Directors of Schering-Plough Corporation from 1995 until 2009 when the Company became Merck & Co., Inc.

Merck & Co., Inc. 2022 Proxy Statement

38     Proposal 1    Election of Directors  

Christine E. Seidman, M.D. Independent
Age: 69
Director Since: 2020
Committees:
Audit	Research

Experience

Dr. Seidman has extensive scientific experience relevant to the biopharmaceutical industry, including being the Thomas W. Smith Professor of Medicine and Genetics at Harvard Medical School and the director of the Cardiovascular Genetics Center. In addition, her role leading the Seidman Laboratory, a research laboratory that focuses on integrating clinical medicine and molecular technologies to define disease-causing gene mutations and genetic variations that increase disease risk, provides Dr. Seidman with managerial experience relevant to scientific research. The recipient of many honors, Dr. Seidman was elected to the American Society for Clinical Investigation, the National Academy of Sciences, American Academy of Arts and Sciences and the National Academy of Medicine.

Awards

•  The Ray C. Fish Award for Scientific Achievement (2020)

•  American Heart Association Medal for Genomic and Precision Medicine (2019)

•  Vanderbilt Prize in Biomedical Sciences (2019)

Career Highlights

Harvard Medical School/Brigham and Women’s Hospital (Harvard University)

•  Thomas W. Smith Professor of Medicine and Genetics (2005-present)

•  Professor of Genetics and Medicine (1998-2005)

•  Professor of Medicine (1997-1998)

Howard Hughes Medical Institute, non-profit medical research organization

•  Investigator (1994-present)

Brigham and Women’s Hospital

•  Director, Cardiovascular Genetics Center (1992-present)

•  Attending Physician, Cardiovascular Division (1987-present)

Other Public Directorships

Current

•  None

Former

•  None

Inge G. Thulin Independent
Age: 68
Director Since: 2018
Committees:
Compensation and Management Development	Governance

Experience

Mr. Thulin has extensive management, operational, technology and international business expertise, as demonstrated by a track record of success leading 3M Company. Mr. Thulin possesses broad industry experience drawn from 3M’s diverse businesses, commitment to research and strong life sciences division. He also brings valuable insight into driving innovation, based on his experience with new product development and manufacturing. In addition, his previous directorships at other public companies provide him with deep experience on governance issues facing large public companies.

Career Highlights

3M Company, global technology company

•  Executive Chairman (2018-2019)

•  Chairman, President and Chief Executive Officer (2012-2018)

•  President and Chief Executive Officer (2012)

•  Executive Vice President and Chief Operating Officer (2011-2012)

•  Executive Vice President, International Operations (2004-2011)

Other Public Directorships

Current

•  None

Former

•  3M Company (2012-2019)

•  Chevron Corporation (2015-2019)

Merck & Co., Inc. 2022 Proxy Statement

  Proposal 1   Election of Directors     39

Kathy J. Warden Independent
Age: 50
Director Since: 2020
Committees:
Audit	Governance

Experience

Ms. Warden has broad experience in operational leadership at Northrop Grumman Corporation, an innovative company using science, technology and engineering to create and deliver products and services. Ms. Warden has extensive expertise in strategy, performance and business development in government and commercial markets, as well as cybersecurity expertise. Prior to joining Northrop Grumman, Ms. Warden held leadership roles at General Dynamics and General Electric. In addition, Ms. Warden is a member of the Board of Visitors of James Madison University and a former chair of the board of the Richmond Federal Reserve Bank.

Career Highlights

Northrop Grumman Corporation, global security company

•  Chairman, Chief Executive Officer and President (2019-present)

•  President and Chief Operating Officer (2018)

•  Corporate Vice President and President, Mission System Sector (2016-2017)

•  Corporate Vice President and President, Information Systems Sector (2013-2015)

•  Vice President, Cyber Intelligence Division (2011-2012)

Other Public Directorships

Current

•  Northrop Grumman Corporation
(since 2018)

Former

•  None

Peter C. Wendell Independent
Age: 71
Director Since: 2003
Committees:
Compensation and Management Development	Research

Experience

Mr. Wendell has extensive management, financial and venture capital expertise as demonstrated by his position as a Managing Director of Sierra Ventures, his service as a board member and Senior Advisor at WestBridge Capital, his status as a Lecturer in strategic management at the Stanford University Graduate School of Business for over 20 years, and his former Chairmanship of the Princeton University endowment.

Career Highlights

Sierra Ventures, technology-oriented venture capital firm

•  Managing Director (1982-present)

Stanford University

•  Faculty, Stanford University Graduate School of Business (1991-present)

Other Public Directorships

Current

•  None

Former

•  None

Merck & Co., Inc. 2022 Proxy Statement

40

Director Compensation

Our non-employee Directors receive cash compensation, as well as cash-settled equity compensation in the form of deferred stock units, for their Board service. During 2021, non-employee Directors were compensated for their Board service as shown in the chart below.

2021 Schedule of Director Fees

Compensation Element(1)	Director Compensation Program
Annual Retainer	$ 120,000
Annual Mandatory Deferral	$ 200,000 credit to Director’s Merck common stock account under the Plan for Deferred Payment of Directors’ Compensation
Committee Chair Retainer	$ 30,000 for the Audit Committee(2)
	$ 20,000 for the Governance Committee(3)
	$ 20,000 for the Compensation and Management Development Committee
	$ 20,000 for the Research Committee
Audit Committee Member Retainer	$ 10,000(2)
Lead Director Retainer	$ 40,000(3)

(1) All compensation is annual. Retainers are paid in quarterly installments and may be voluntarily deferred at the Director’s election.

(2) The Audit Committee Chair retainer includes the Audit Committee Member retainer fee in the amount of $10,000.

(3) The Lead Director is the Chair of the Governance Committee as prescribed by the Governance Committee charter. As a result of the combined responsibility, the Lead Director retainer totals $60,000 in the aggregate.

Directors’ Deferral Plan

Annual Retainer

Under the Merck & Co., Inc. Plan for Deferred Payment of Directors’ Compensation (“Directors’ Deferral Plan”), each Director may elect to defer all or a portion of cash compensation from retainers. Any amount so deferred is, at the Director’s election, valued as if invested in investment measures offered under the Merck U.S. Savings Plan, including our common stock, and is payable in cash installments or as a lump sum generally no sooner than one year after service as a Director ceases.

Annual Mandatory Deferral

In addition to the annual retainer, upon election (or re-election) at the Annual Meeting of Shareholders, each Director receives a credit, which for 2021, was valued at $200,000 in the form of phantom shares denominated in Merck common stock to the Director’s account under the Directors’ Deferral Plan. Directors who join the Board after the Annual Meeting of Shareholders are credited with a pro-rata portion. All distributions from the Directors’ deferred account are payable in cash installments or as a lump sum and are generally made no sooner than one year after service as a Director ceases.

Expenses and Matching Gift Program

We reimburse all Directors for travel and other necessary business expenses incurred in the performance of their

services for us. We also extend coverage to Directors under our travel accident and directors’ and officers’ indemnity insurance policies. Directors are also eligible to participate in the Merck Foundation Matching Gift Program. The maximum gift total for an active Director participating in the matching gift program is $30,000 in any calendar year.

Director Stock Ownership Guidelines

Upon joining the Board, each Director must own at least one share of Merck common stock. Directors must attain a target Merck common stock ownership level having a value equal to five times the annual cash retainer within five years of joining the Board, or as soon thereafter as practicable. Deferred stock units held in the Merck common stock account under the Directors’ Deferral Plan are counted toward the target goal. Any Director may request that the Governance Committee consider whether the target ownership level is appropriate in view of such Director’s personal circumstances.

As of December 31, 2021, all Directors serving at least three years have either met or exceeded these stock ownership requirements. Dr. Seidman and Ms. Warden joined the Board effective March 16, 2020, Dr. Lavizzo-Mourey joined the Board effective May 26, 2020 and Dr. Mayo joined the Board effective March 15, 2021. Each of these Directors is making progress toward meeting the stock ownership guidelines.

Merck & Co., Inc. 2022 Proxy Statement

  Director Compensation   2021 Director Compensation     41

2021 Director Compensation

The table below summarizes the annual compensation for our non-employee Directors for the fiscal year ended December 31, 2021.

Mr. Davis and Mr. Frazier are the only Directors who are officers and employees of the Company, and they do not receive any additional compensation for their Board service.

	Director Compensation for Fiscal Year Ended December 31, 2021
Name	Fees Earned or Paid in Cash ($)		All Other Compensation ($)(3)			Total ($)
Leslie A. Brun(1)		$120,815		$200,000		$	320,815
Thomas R. Cech, Ph.D.(1)		62,500		30,751			93,251
Mary Ellen Coe		130,000		200,000			330,000
Pamela J. Craig		150,000		225,000			375,000
Thomas H. Glocer		150,000		200,000			350,000
Risa J. Lavizzo-Mourey, M.D.		120,000		204,500			324,500
Stephen L. Mayo, Ph.D.(2)		103,441		209,140	(4)		312,581
Paul B. Rothman, M.D.		141,667		230,000			371,667
Patricia F. Russo		125,000		200,000			325,000
Christine E. Seidman, M.D.		130,000		225,000			355,000
Inge G. Thulin		120,000		200,000			320,000
Kathy J. Warden		130,000		200,000			330,000
Peter C. Wendell		120,000		230,000			350,000

(1) Mr. Brun retired from the Board effective August 19, 2021. Dr. Cech retired from the Board effective as of the 2021 Annual Meeting of Shareholders.

(2) Dr. Mayo was elected to the Board effective March 15, 2021.

(3) Represents credits in the form of cash-settled deferred stock units (phantom shares) of Merck common stock to the Directors’ Deferral Plan. Dr. Cech did not receive a credit to the Directors’ Deferral Plan because he retired from the Board at the 2021 Annual Meeting of Shareholders.

Figures also include charitable contributions made by the Merck Foundation under its matching gift program on behalf of the following Directors:

Director Name	Matched Charitable Contribution ($)
Cech*	$	30,751
Craig		25,000
Lavizzo-Mourey		4,500
Rothman		30,000
Seidman		25,000
Wendell		30,000

*$900 of Dr. Cech’s $30,751 matched charitable contribution was requested in 2020, but not paid until 2021.

(4) During 2021, Dr. Mayo received a prorated portion of the 2020 credit under the Directors’ Deferral Plan when he joined the Board on March 15, 2021, as well as the full 2021 portion.

Changes to Non-Employee Director Compensation Program effective 2022

The Governance Committee reviews the Company’s non-employee Director compensation program on a biennial basis. In 2021, the Governance Committee conducted such a review in consultation with FW Cook, the C&MD Committee’s independent compensation consultant.

The review included FW Cook’s analysis of both compensation levels and program design compared to Merck’s peer groups that are used for executive compensation competitive benchmarking—a U.S. pharmaceutical peer group and a supplemental peer group comprised of the Dow Jones Industrial Average companies, excluding financial services companies (as described on page 47). Based on this review and the recommendation of FW Cook, the Governance Committee submitted its findings to the full Board in November 2021 and recommended that the full Board approve changes to the non-employee Director compensation program to address anticipated market trends and increased rates prior to the Governance Committee’s biennial Director compensation program review in 2023. Based on the results of FW Cook’s analysis and the Governance Committee’s recommendation, the Board approved the following changes to the non-employee Director compensation program effective January 1, 2022:

∎ Increased annual mandatory deferral credit from $200,000 to $220,000.

The above increase represents a 6% increase in total non-employee Director compensation. The Governance Committee will continue to conduct, on a biennial basis, a competitive assessment of our non-employee Director compensation program with the goal of maintaining it at or near the median of our external peer groups.

Merck & Co., Inc. 2022 Proxy Statement

42
	Proposal 2 Non-Binding Advisory Vote to Approve the Compensation of Our Named Executive Officers

We are pleased to provide our shareholders the opportunity to vote on a non-binding, advisory resolution to approve the compensation of our Named Executive Officers as disclosed in this proxy statement, including the Compensation Discussion and Analysis, compensation tables and the narrative discussion accompanying the tables, beginning on page 43. As described in the CD&A, our executive compensation programs are principally designed to reward executives based on the achievement of Company and individual performance objectives which, as a whole, are intended to drive sustainable long-term value creation for shareholders and reflect and maintain our position as an industry leader in the development of innovative medicines. The compensation of our NEOs is also designed to enable us to attract, engage and retain talented, high-performing and experienced executives in a competitive market.

In order to align executive pay with operational performance and the creation of long-term shareholder value, a significant portion of compensation paid to our NEOs is allocated to annual cash incentives and long-term equity incentives, which are both directly linked to Company and/or stock price performance. For 2021, approximately 90% and 83%, respectively, of the CEO’s and other NEOs’ annual target total direct compensation was variable based on our operating performance and/or our stock price.

In addition, management and the C&MD Committee continually review the compensation programs for the NEOs to ensure they achieve the desired goals of reinforcing alignment of officer incentives with the interests of shareholders and linking compensation to performance as measured by operational results. As a result, we have adopted the policies and practices described on page 46 to further align pay with operational performance and increases in long-term shareholder value while minimizing incentives that could lead to excessive risk-taking.

We are asking shareholders to indicate their support for the NEO compensation as described in this proxy statement. Accordingly, the following resolution will be submitted for approval by shareholders at the 2022 Annual Meeting:

“Resolved, that the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and the narrative discussion described in pages 43-81 of this proxy statement, is hereby APPROVED on an advisory basis.”

The shareholder vote on this resolution will not be binding on management, the C&MD Committee or the Board and will not be construed as overruling any decision by management, the C&MD Committee or the Board. However, the Board and the C&MD Committee value the opinions of our shareholders as expressed through their votes and other communications. In 2021, shareholders continued their support of our executive compensation programs with approximately 91% of the votes cast for approval of a similar proposal. We will continue to give careful consideration to the outcome of the advisory vote on executive compensation and to the opinions of our shareholders when making compensation decisions.

At our 2017 Annual Meeting, our shareholders voted in support of annual advisory votes on future executive compensation proposals. The Board has adopted a practice providing for annual say-on-pay advisory votes. The Board expects that the next say-on-pay vote will occur in 2023.

FOR

The Board of Directors recommends that shareholders vote FOR the resolution to approve, on an advisory basis,

the compensation of our Named Executive Officers.

Merck & Co., Inc. 2022 Proxy Statement

	43
Compensation Discussion and Analysis

This CD&A describes the material elements of compensation for our 2021 Named Executive Officers.

Named Executive Officers

Robert M. Davis

Chief Executive Officer, President

and Former Chief Financial Officer

Kenneth C. Frazier

Executive Chairman and

Former Chief Executive Officer

Caroline Litchfield

Executive Vice President and

Chief Financial Officer

Frank Clyburn

Former Executive Vice President and

President, Human Health

Richard R. DeLuca, Jr.

Executive Vice President and

President, Merck Animal Health

Dean Li, M.D., Ph. D.

Executive Vice President and

President, Merck Research Laboratories

Table of Contents

Executive Summary	44
Executive Compensation Program Objectives and Strategy	45
Our Industry Environment	45
Market Competitive Pay and Pay-for-Performance	45
Variable Compensation is Critical to Achieve Our Objectives	45
Say-on-Pay Advisory Vote	46
Compensation Policies and Practices	46
Peer Groups	47
Merck’s Primary Peer Group	47
Merck’s Supplemental Peer Group	47
Detailed Discussion and Analysis	48
The Elements of 2021 Compensation	51
How Our Compensation Program Works	51
Base Salary	52
Annual Cash Incentive	52
2021 Merck Company Scorecard	53
Named Executive Officer 2021 Annual Incentive Payments	54
Long-Term Equity Incentives	54
Retention Actions	58
Other Employee Benefits	58
2022 Compensation Actions	59
Other Compensation Practices	60
Compensation Risk Assessment	61
Compensation and Management Development Committee Report	61

Merck & Co., Inc. 2022 Proxy Statement

44     Compensation Discussion and Analysis    Executive Summary  

Executive Summary

2021 was a year of significant achievement and meaningful progress for Merck in the face of what has continued to be a challenging environment for individuals, healthcare systems, and economies around the world. We remained committed to protecting the health and safety of our employees, sustaining the supply of our medicines and vaccines, employing our scientific capabilities in the global fight against COVID-19 and progressing our pipeline. We achieved strong operational performance, accelerated our broad pipeline, completed the spin-off of Organon, and completed key strategic business development transactions. Despite challenges from the ongoing pandemic, our teams performed with agility and executed with excellence.

Our efforts and underlying business strength enabled us to deliver 17% sales growth (16% excluding the impact of currency exchange). As a result, we exceeded our Revenue and Pre-Tax Income targets for our 2021 Scorecard. Commercially, we executed extremely well across all our key performance drivers, including KEYTRUDA, GARDASIL / GARDASIL 9, and Animal Health.

KEYTRUDA grew 18% (ex-exchange) to over $17 billion, reflecting continued robust global demand. In the U.S., KEYTRUDA continued to demonstrate durable momentum across all key tumors, and benefited from the recent launches in triple-negative breast cancer (neoadjuvant/adjuvant), renal cell carcinoma (adjuvant and advanced settings), advanced cervical cancer, and advanced endometrial cancer. Outside the U.S., KEYTRUDA growth continued to be driven by non-small cell lung cancer indications and the ongoing launches in head and neck and RCC (adjuvant and advanced settings). In addition, we continued to fortify our position in oncology with several milestones highlighting our strategy of targeting earlier-stage cancers where there is potential for improved outcomes by reducing the risk of recurrence. GARDASIL / GARDASIL 9 grew by 39% (ex-exchange) driving strong growth in our vaccines portfolio. Outside the U.S., robust growth was driven by strong underlying demand across all key geographies, particularly China. GARDASIL / GARDASIL 9 are increasingly being recognized as vaccines that can help prevent certain HPV-related cancers in both females and males. Our Animal Health business crossed the $5.5 billion revenue threshold with 16% growth (ex-exchange) and is well-positioned for continued success.

We also continued to progress on our pipeline, receiving more than 30 approvals and filing more than 20 new drug applications and supplemental biologics license applications in the U.S., European Union, Japan, and China. In particular, we made meaningful advancements across our broader pipeline with approvals for new molecular entities, including VAXNEUVANCE, Verquvo and WELIREG. For molnupiravir, our investigational oral antiviral COVID-19 medicine, we have received authorizations in 10 countries, including an emergency use authorization (“EUA”) in the U.S. and a special approval for emergency use in Japan. We believe molnupiravir will be an important treatment option to combat the ongoing COVID-19 pandemic with clinical trial data showing significantly reduced hospitalization or death in adult patients at high risk of progressing to severe disease. Following the FDA’s EUA in December 2021, our dedicated teams worked diligently to deliver 1.4 million courses of therapy to the U.S., Japan, United Kingdom, and other countries.

We also acted on key strategic business development opportunities to augment our pipeline, including the acquisitions of Pandion Therapeutics, Inc., a clinical-stage biotechnology company developing novel therapeutics designed to address the unmet needs of patients living with autoimmune diseases, and Acceleron Pharma Inc., a biopharmaceutical company focused on harnessing the power of the transforming growth factor (TGF)-beta superfamily of proteins, with a lead candidate, sotatercept, having the potential to provide a novel approach to treating pulmonary arterial hypertension.

Lastly, 2021 marked significant changes within the Merck executive team, including the transition of Kenneth C. Frazier to Executive Chairman and Robert M. Davis to Chief Executive Officer, both effective July 1, 2021. The Board’s succession planning resulted in the election of Dean Y. Li, M.D., Ph.D. to succeed Roger M. Perlmutter, M.D., Ph.D. as Executive Vice President and President, Merck Research Laboratories, effective January 1, 2021, and Caroline Litchfield to succeed Mr. Davis as Chief Financial Officer, effective April 1, 2021.

Scorecard Performance 2021⁽¹⁾

Financial Performance(2)
	Target($B)		Actual($B)		Weighting%			Score%
Revenue		$52.80		$54.87		40	%		173	%
Pre-Tax Income		$19.72		$20.49		40	%		132	%
Non-Financial Performance
Pipeline						20	%		130	%
Overall Payout									148	%

PSU Performance (2019–2021)⁽¹⁾

	Peer Median		Merck		Result		Weighting		Payout
3-Year R-TSR		9.86%		5.90%		80%		50%		40%
	Target($B)		Actual($B)		Result		Weighting		Payout
2-Year Cum. OCF		$28.80		$32.60		200%		25%		50%
2-Year Cum. EPS		$9.64		$10.97		200%		25%		50%
Overall Payout								100%		140%

(1)   Excluding the impact of variances in currency exchange rates versus budget and certain other items, consistent with plan design, as discussed below; rounded.

(2)  For purposes of the 2021 Company Scorecard, our internal Revenue and Pre-Tax Income goals assumed Organon remained part of Merck for all of 2021; as such, Revenue was adjusted to include Organon actual performance prior to spin date and operating plan numbers post spin date, and Pre-Tax income was similarly adjusted.

Merck & Co., Inc. 2022 Proxy Statement

  Compensation Discussion and Analysis   Executive Compensation Program Objectives and Strategy     45

Executive Compensation Program Objectives and Strategy

Our Industry Environment

The pharmaceutical industry is science-focused and requires experimentation to foster innovation. Ultimately, our work has an enormous impact on global health and well-being. Because of the inherent complexity and dynamic science of human and animal health, even with flawless execution, we risk failure. In addition:

• The costs associated with innovation are increasing while relative return is decreasing due to ongoing pricing pressure.

• The number of products available to treat or prevent a particular disease or condition typically increases over time, which can limit the commercial potential of key products.

• It generally takes 10 to 15 years to discover, develop, and bring a new product to market.

Market Competitive Pay and Pay-for-Performance

We strive to balance the need to deliver market-competitive pay within a framework that provides the appropriate mix of fixed and variable, at-risk compensation to attract, retain, and motivate talent and align with our pay-for-performance objectives.

Our executive compensation program is designed to…
	Support our efforts to attract and retain the brightest and most innovative minds in business, research, and academia.
	Align the interests of our executives with the interests of our shareholders to ensure prudent actions that will benefit long-term value.
	Reward our executives based on the achievement of sustained financial and operational performance and demonstrated leadership.
	Support a shared, one-company mindset of performance and accountability to deliver on business objectives.

Variable Compensation is Critical to Achieve Our Objectives

Annual Cash Incentive

The Company Scorecard (described in more detail on page 53) focuses on our most critical business drivers — Revenue, Pre-Tax Income, and Pipeline accomplishments — and is used to determine the payout for our annual incentive for all employees, including our NEOs under the Executive Incentive Plan. Our Scorecard performance for 2021 resulted in above-target achievement of 148%.

Long-Term Incentive

The long-term incentive program, consisting of a mix of PSUs and stock options, provides our NEOs with the opportunity to own Merck stock, directly linking a substantial portion of their compensation to the returns realized by our shareholders.

The 2019 PSU program (described in more detail on page 57) paid out at 140% based on achievement of cumulative two-year OCF, cumulative two-year EPS and three-year R-TSR metrics during the performance period, weighted at 25%, 25% and 50%, respectively. As previously disclosed, cumulative two-year OCF and EPS metrics were used due to the complexities associated with disentangling our Organon business from a multi-year financial plan. Organon was successfully spun off in June 2021.

Merck & Co., Inc. 2022 Proxy Statement

46     Compensation Discussion and Analysis    Compensation Policies and Practices  

Say-on-Pay Advisory Vote

In 2021, shareholders continued their support for our executive compensation
programs with approximately 91% of the votes cast in favor of the say-on-pay
proposal. Consistent with the Company’s strong interest in shareholder
engagement and our pay-for-performance approach, the C&MD Committee
continues to evaluate our executive compensation program to ensure alignment
between the respective interests of our executives and shareholders. The C&MD
Committee did not make significant changes to our executive compensation
program in 2021 as a direct result of the most recent say-on-pay vote.

We ask that our shareholders approve, on an advisory basis, the compensation of
our NEOs as further described in Proposal 2 on page 42.

Compensation Policies and Practices

Our executive compensation and corporate governance programs are designed to closely link pay with operational performance and increases in long-term shareholder value while minimizing incentives that could lead to excessive risk-taking. To help us accomplish these important objectives, we have adopted the following policies and practices over time:

We do…		We do not…
	Utilize a total shareholder return metric in the PSU program to align the payout with long-term stock performance and shareholder experience	Allow Directors and management employees, including officers, to engage in transactions involving short sales, publicly traded options, hedging or pledging of Company stock   Grant time-vested RSUs to NEOs as part of the annual LTI program   Grant stock options with an exercise price less than fair market value   Re-price underwater stock options without shareholder approval   Pay tax gross-ups on any payments made in connection with a change in control event
	Provide dividend equivalents only on earned Restricted Stock Units (“RSUs”) and PSUs
	Monitor LTI program share utilization regularly relative to both industry standards and versus our pharmaceutical and supplemental peer groups
	Conduct competitive benchmarking to ensure executive officer compensation is aligned to market
	Offer limited perquisites that are supported by business interests
	Include caps on annual cash incentive and PSU program payouts
	Retain an independent compensation consultant that reports directly to the C&MD Committee
	Maintain robust stock ownership requirements and share retention policies
	Maintain an incentive recoupment (i.e., clawback) policy, which was expanded in 2021 to include misconduct that affects the Company’s overall goodwill or reputation
	Conduct assessments to identify and mitigate risk in our compensation programs
	Require double-trigger vesting of equity in the event of a change in control (i.e., there must be both a change in control and an involuntary termination)
	Avoid employment agreements

Merck & Co., Inc. 2022 Proxy Statement

  Compensation Discussion and Analysis   Peer Groups     47

Peer Groups

Merck’s Primary Peer Group

Individual executive officer compensation levels and opportunities are compared to a peer group of large multinational pharmaceutical companies approved by the C&MD Committee that participate in a pharmaceutical industry compensation survey conducted by Willis Towers Watson, an independent consulting firm. In setting compensation levels for 2021, the C&MD Committee reviewed the survey results for the following peer companies that Merck competes with to attract talented, high-performing executives. The C&MD Committee occasionally reviews information related to the companies in the primary peer group that are headquartered in the U.S. because practices outside the U.S. can differ geographically.

Primary Peer Group Companies       AbbVie Amgen AstraZeneca Bristol-Myers Squibb Eli Lilly GlaxoSmithKline Johnson & Johnson Novartis Pfizer Roche Holding AG Sanofi   All numbers as of 12/31/2021             

In 2021, the C&MD Committee approved the addition of Gilead Sciences, Inc. to our primary peer group, effective January 1, 2022.

Merck’s Supplemental Peer Group

In addition to the pharmaceutical peer group described above, we also use a supplemental peer group consisting of the companies that comprise the Dow Jones Industrial Average (excluding the financial services companies) as a secondary reference for CEO compensation and for other compensation-related practices (for example, share usage and dilution, change in control policy design, and stock ownership and retention guidelines). Merck is a member of the Dow Jones Industrial Average, and we believe this group provides insight into practices among companies of similar scale and complexity that operate across a variety of industries, providing us with a broader view of market pay, policies, and practices.

Supplemental Peer Group Companies(1)
3M Amgen Apple Boeing Caterpillar Chevron Cisco Coca-Cola Dow Home Depot Honeywell IBM Intel	Johnson & Johnson McDonald’s Microsoft Nike Procter & Gamble salesforce.com UnitedHealth Group Verizon Visa Walgreens Walmart Walt Disney
(1)   Reflects Dow Jones Industrial Average companies (excluding the financial services companies) as of the beginning of 2021. All numbers as of 12/31/2021

Our overarching strategy is to position our executives’ target TDC at the median, on average, with variability by individual executive based on scope and complexity of role, market availability of proven talent, experience, leadership, sustained performance over time, potential for advancement as part of succession planning, and other unique factors that may exist from time to time. This median target compensation philosophy ensures that actual realized compensation varies above or below market levels based on attainment of longer-term goals and changes in shareholder value, and overall costs and share dilution are reasonable and sustainable relative to market practices.

Merck & Co., Inc. 2022 Proxy Statement

48     Compensation Discussion and Analysis    Detailed Discussion and Analysis  

Detailed Discussion and Analysis

Further information regarding our 2021 Named Executive Officers and the material elements of their compensation is described below.

		Compensation Decisions for 2021
	Robert M. Davis Chief Executive Officer, President and Former Chief Financial Officer(1)	•  Increased base salary by $385,392 •  Increased annual incentive target percentage by 45% points(2) •  Increased LTI target by $6,750,000(3) •  Changes resulted in increased target TDC of 131% to reflect promotions that occurred in 2021
	Age: 55
	Tenure*: 8 Years
(1)   Mr. Davis was promoted from Executive Vice President, Global Services and Chief Financial Officer (“CFO”) to President, effective April 1, 2021, and became Chief Executive Officer and a member of the Board, effective July 1, 2021. (2)  Mr. Davis’ 2021 annual incentive target increased from 105% of salary as CFO to 150% as CEO. In 2021, Mr. Davis’ actual annual incentive award was prorated for the portion of the year as CEO, effective July 2021. (3)  Mr. Davis’ 2021 LTI target increased from $4,000,000 as CFO to $10,750,000 as CEO. In 2021, Mr. Davis’ actual LTI award was $9,200,000, which reflects 3 months at the 2021 CFO rate and 9 months at the CEO rate, when Mr. Davis became President.

		Compensation Decisions for 2021
	Kenneth C. Frazier Executive Chairman and Former Chief Executive Officer(1)	•  Decreased base salary by $450,000 •  Decreased annual incentive target percentage by 50% points(2) •  Decreased LTI target by $5,000,000(3) •  Changes resulted in decreased target TDC of 34% to reflect the transition of his role in 2021
	Age: 67
	Tenure*: 30 Years
(1)   Mr. Frazier stepped down as President, effective April 1, 2021, and retired as Chief Executive Officer, effective June 30, 2021. After retiring as CEO, Mr. Frazier has continued as Executive Chairman of Merck for a transition period to be determined by the Board. (2)  Mr. Frazier’s 2021 annual incentive target decreased from 150% of salary as CEO to 100% as Executive Chairman. Mr. Frazier’s actual annual incentive award was prorated for the portion of the year as Executive Chairman, effective July 2021. (3)  Mr. Frazier’s 2021 LTI target decreased from $15,750,000 to $10,750,000, due to his transition from CEO to Executive Chairman. * Length of tenure is rounded.

Merck & Co., Inc. 2022 Proxy Statement

  Compensation Discussion and Analysis    Detailed Discussion and Analysis     49

		Compensation Decisions for 2021
	Caroline Litchfield Executive Vice President and Chief Financial Officer(1)	•  Set base salary at $900,000(2) •  Set annual incentive target at 100%(2) •  Set LTI target at $2,200,000(2)
	Age: 53
	Tenure*: 31 Years
(1)   Ms. Litchfield was promoted from Senior Vice President, Treasurer to Executive Vice President and Chief Financial Officer, effective April 1, 2021. (2)  Reflects compensation as Executive Vice President and Chief Financial Officer.

		Compensation Decisions for 2021
	Frank Clyburn Former Executive Vice President and President, Human Health (1)	•  Set base salary at $1,000,000(2) •  Set annual incentive target at 100%(2) •  Set LTI target at $4,300,000(2) •  Issued a $3,000,000 LTI retention award, subject to vesting conditions(3)
	Age: 57
	Tenure*: 14 Years
(1)   Mr. Clyburn was promoted from Executive Vice President and Chief Commercial Officer to Executive Vice President and President, Human Health, effective April 1, 2021. He resigned from his position, effective February 1, 2022. (2)  Reflects compensation as Executive Vice President and President, Human Health. (3)  In connection with Mr. Davis’ transition to CEO, Mr. Clyburn received a $3,000,000 LTI retention award that would have vested on May 4, 2024, subject to his continued employment. As a result of his departure in February 2022, the full amount of the retention award was forfeited, and Mr. Clyburn was not eligible for severance benefits. * Length of tenure is rounded.

Merck & Co., Inc. 2022 Proxy Statement

50     Compensation Discussion and Analysis    Detailed Discussion and Analysis  

		Compensation Decisions for 2021
	Richard R. DeLuca, Jr. Executive Vice President and President, Merck Animal Health	•  Set base salary at $800,000 •  Set annual incentive target at 100% •  Set LTI target at $2,700,000 •  Issued a $2,000,000 LTI retention award, subject to vesting conditions(1)
	Age: 59
	Tenure*: 10 Years
(1)   In connection with Mr. Davis’ transition to CEO, Mr. DeLuca received a $2,000,000 LTI retention award that will vest on May 4, 2024, subject to his continued employment.

		Compensation Decisions for 2021
	Dean Li, M.D., Ph.D. Executive Vice President and President, Merck Research Laboratories(1)	•  Set base salary at $950,000(2) •  Set annual incentive target at 100%(2) •  Set LTI target at $3,000,000(2)
	Age: 59
	Tenure*: 5 Years
(1)   Dr. Li was promoted from Senior Vice President, Discovery Sciences and Translational Medicine to Executive Vice President and President, Merck Research Laboratories, effective January 1, 2021. (2)  Reflects compensation as Executive Vice President and President, Merck Research Laboratories. * Length of tenure is rounded.

Merck & Co., Inc. 2022 Proxy Statement

  Compensation Discussion and Analysis   The Elements of 2021 Compensation     51

The Elements of 2021 Compensation

How Our Compensation Program Works

What We Reward	How We Link Pay To Performance	How We Pay
•  Top and bottom-line performance that meets or exceeds consensus and management expectations •  Pipeline accomplishments that advance our position as an industry-leading biopharmaceutical company •  Decision-making that yields long-term value creation for shareholders •  Targeted growth strategy, consistently seeking opportunities that complement or supplement our portfolio in Oncology, Vaccines, Hospital and Animal Health	•  Inclusion of key financial and non-financial metrics in our annual cash incentive plan to ensure executives are rewarded for top and bottom-line performance and pipeline advancement which leads to longer-term revenue opportunities •  Long-term incentive comprised of a mix of performance share units and stock options, linking a substantial amount of pay opportunity to long-term company performance and increased shareholder value •  Majority of total target pay opportunity is at-risk and tied to company performance and/or long-term stock value	•  Overall target total pay opportunity, as well as each pay element, is assessed for competitiveness relative to primary and/or supplemental peer groups, which include the largest pharmaceutical peers and Dow Jones Industrial Average companies, excluding financial services •  Competitive positioning is targeted to median of market; actual positioning varies based on a variety of factors, including scope and complexity of role, years of experience, demonstrated performance over time, and other factors

*Rounded based on full year long-term incentive and annual incentive targets.

The C&MD Committee recommends, and the independent members of the Board of Directors approve, the compensation for our CEO and Executive Chairman. The C&MD Committee reviews and approves compensation for all other NEOs each year based on a variety of factors, including scope and complexity of role, experience, sustained leadership, and performance and competitive positioning as compared to our pharmaceutical and supplemental peer groups as described in more detail on page 47.

Additional details regarding the roles and responsibilities of the C&MD Committee are provided on page 15.

Merck & Co., Inc. 2022 Proxy Statement

52     Compensation Discussion and Analysis    The Elements of 2021 Compensation  

Base Salary

The C&MD Committee must balance the need to deliver a competitive level of base salary with ensuring the appropriate mix of fixed to variable compensation for each NEO. The table shows adjustments made to base salaries in 2021 for Mr. Davis and Mr. Frazier who were NEOs in 2020. Adjustments were based on Merck’s U.S. salary increase budget for all employees.	Named Executive Officer	Annual Base Salary Increase %			Market/Promotional Adjustment %			New Base Salary
	Davis(1)		3.0	%		30.7	%	$	1,500,000
	Frazier(2)		NA			-26.5			1,250,000
	Litchfield		—	(3)		—	(3)		900,000
	Clyburn		—	(3)		—	(3)		1,000,000
	DeLuca		—	(3)		—	(3)		800,000
	Li		—	(3)		—	(3)		950,000
	(1)  Annual salary increase, effective March 2021; promotional adjustment effective July 2021. (2) Reduction in base salary effective July 2021. (3) Ms. Litchfield, Mr. Clyburn, Mr. DeLuca and Dr. Li were not NEOs in 2020.

Annual Cash Incentive

The NEOs participate in the Executive Incentive Plan (“EIP”). Award amounts under the EIP are determined based upon achievement of Company performance measures as reflected by the Company Scorecard. The overall EIP award fund cannot exceed 200% of the aggregate total target incentive amount for all participants. The maximum award amount for each NEO for 2021, excluding the impact of the Scorecard, is listed in the Grants of Plan-Based Awards table on page 66.	Named Executive Officer	2020 Target Annual Incentive % of Base Salary			2021 Target Annual Incentive % of Base Salary(1)
	Davis		105	%		150	%
	Frazier		150			100
	Litchfield		—	(2)		100
	Clyburn		—	(2)		100
	DeLuca		—	(2)		100
	Li		—	(2)		100
	(1)  Reflects annual incentive targets as of December 31, 2021. (2) Ms. Litchfield, Mr. Clyburn, Mr. DeLuca and Dr. Li were not NEOs in 2020.

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  Compensation Discussion and Analysis   The Elements of 2021 Compensation     53

2021 Merck Company Scorecard

Our Company Scorecard helps translate our strategic priorities into operational terms that enable tracking and measurement of our progress and performance against annual operating goals and critically important long-term strategic drivers of sustainable value creation tied to our research and development pipeline — each of which is measured in the context of compliance, health, safety, and environmental outcomes. The Company Scorecard may be adjusted based on an evaluation of these outcomes, recognizing the importance they play in driving Merck’s values and a culture of integrity. For 2021, no adjustment was applied. Revenue and Pre-Tax Income are equally weighted at 40% each based on the C&MD Committee’s belief that they are the key financial measures of our success during the year. The Pipeline goals are collectively weighted at 20% and are designed to ensure that we are focused on internal and external early discovery opportunities, late-stage clinical development progression, and regulatory filings and approvals.

The target, threshold and stretch Revenue and Pre-Tax Income goals are set in relation to the Board-approved annual operating plan and the expectations of management. Each year, the Pipeline goals are recommended by the head of Merck Research Laboratories, reviewed by the Research Committee, and approved by the C&MD Committee. Failure to achieve threshold performance on any of the metrics would result in forfeiture of the entire opportunity for that metric. If the combined results of the three metrics do not total at least 50, there would be no payout. The overall results of the Scorecard are calibrated so individuals may receive between 50% and 200% of their target award opportunity established for the annual performance period. Adjustments are applied to Revenue and Pre-Tax Income results using a consistent framework of adjustments to our reported financial results for incentive program purposes approved by the C&MD Committee to accurately reflect the operating performance of our business. For further explanation of these adjustments, please refer to Appendix B on page 99. The Scorecard results are summarized below.

2021 Company Scorecard⁽¹⁾

(1) Excluding the impact of variances in currency exchange rates versus budget and certain other items, consistent with plan design; rounded.

Revenue:

Merck’s revenue for 2021 was $48.70B, reflecting continuing operations. For purposes of the 2021 Company Scorecard, our internal Revenue goals assumed Organon remained part of Merck for all of 2021. As such, for purposes of determining Revenue for the 2021 Company Scorecard, this figure was adjusted to include Organon actual performance prior to spin date and operating plan numbers post spin date. This result of $54.88B was adjusted to $54.87B to exclude the impact of currency exchange rates (versus currency exchange rates budgeted in the annual operating plan) and the impact of business development transactions (consistent with plan design and past practice). We exceeded our internal Revenue target of $52.80B due to strong performance in key pillars including oncology, vaccines, and animal health, as well as the significant contribution of molnupiravir.

Merck & Co., Inc. 2022 Proxy Statement

54     Compensation Discussion and Analysis    The Elements of 2021 Compensation  

Pre-Tax Income:

For purposes of the 2021 Company Scorecard, our internal Pre-Tax Income goals assumed Organon remained part of Merck for all of 2021. As such, Pre-Tax Income from continuing operations was adjusted to include the impact of Organon, similar to the adjustment described above for Revenue. This result of $20.48B was adjusted to $20.49B to exclude the impact of currency exchange rates (versus currency exchange rates budgeted in the annual operating plan) and the effect of certain business development transactions (consistent with plan design and past practice). We exceeded our internal Pre-Tax income target of $19.72B due to the sales strength that was achieved coupled with our continued discipline in expense management.

2021 Annual Incentive Payouts

The table below shows the 2021 annual cash incentives paid to the NEOs. The “Final Award” for each NEO is reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation table.

Named Executive Officer 2021 Annual Incentive Payments

			Target
Named Executive Officer	Annual Base Salary (as of 12/31/21) ($)		Annual Incentive (%)			Annual Incentive ($)		Company Scorecard Result (%)			Final Award ($)
Davis(1)		$1,500,000		150	%		$1,915,274		148	%		$2,834,606
Frazier(2)		1,250,000		100			1,894,658		148			2,804,094
Litchfield(3)		900,000		100			800,137		148			1,184,203
Clyburn(3)		1,000,000		100			975,342		148			1,443,506
DeLuca		800,000		100			800,000		148			1,184,000
Li(4)		950,000		100			946,486		148			1,400,799

(1) Prorated using 105% target from January-June and 150%, effective July 1.

(2) Prorated using 150% target and $1,700,000 in salary from January-June and 100% and $1,250,000 in salary, effective July 1.

(3) Prorated using 100% target, effective April 1.

(4) Prorated using 100% target, effective January 4.

Long-Term Equity Incentives

2021 Equity Award Mix

We use two long-term incentive vehicles to ensure that our LTI program remains balanced, sustainable, and supportive of its objectives over a multi-year period.

	Performance Share Units
	PSUs link realized compensation value to the achievement of critical financial and operational objectives and align executives’ interests with those of our shareholders. The earned award varies based on results versus pre-determined performance goals, as well as long-term returns to shareholders as measured by relative stock price performance and dividend yield.
	Stock Options Stock options align our executives’ interests with the interests of our shareholders because options only have financial value to the recipient if the price of our stock at the time of exercise exceeds the stock price on the date of grant. As a result, we believe stock option grants encourage executives to focus on behaviors and initiatives that support sustained long-term stock price appreciation, which benefits all shareholders.

Merck & Co., Inc. 2022 Proxy Statement

  Compensation Discussion and Analysis   The Elements of 2021 Compensation     55

Current LTI Grant Practices

All grants to executive officers are approved by the C&MD Committee and, in the case of our CEO and Executive Chairman, recommended by the C&MD Committee and approved by the independent members of the Board of Directors. Annual PSU grants (with a 3-year performance period) are generally made on the last business day in March and annual stock option grants are made on the third business day following announcement of our first quarter earnings. We may also selectively grant stock options and RSUs to executive officers on the third business day following the announcement of quarterly earnings generally as part of a new hire sign-on or for retention purposes. These dates were chosen to ensure that grants are made shortly after we have released information about our financial performance to the public. However, the C&MD Committee reserves the right to change the date when grants are made, in view of its responsibility to consider all facts and circumstances to ensure that grants are consistent with our compensation philosophy and objectives.

Stock options are granted at no less than fair market value on a fixed date or date of a particular event, with all required approvals obtained in advance of or on the actual grant date. Fair market value is the closing price of a share of Company stock on the grant date. In certain countries, a higher grant price may be used to satisfy provisions of local applicable law. The re-pricing of stock options is not permitted under the Incentive Stock Plan without prior shareholder approval.

2021 LTI Grant Values

The 2021 annual LTI grant values for the CEO and Executive Chairman as compared to the prior year are shown in the following table. The number of shares associated with each award is set forth in the Grants of Plan-Based Awards table on page 66. The LTI grant value for Mr. Davis was increased by the Board in consideration of his new role as President and Chief Executive Officer. The LTI value for Mr. Frazier was decreased by the Board in consideration of his transition to Executive Chairman. The other NEOs were not named executive officers in 2020.

	Target Grant Value(1)					Increase in Target Grant Value
Named Executive Officer	2020			2021
Davis(2)		$4,000,000			$9,200,000		+$5,200,000
Frazier		15,750,000			10,750,000		-5,000,000
Litchfield		—	(3)		2,200,000		—
Clyburn		—	(3)		4,300,000		—
DeLuca		—	(3)		2,700,000		—
Li		—	(3)		3,000,000		—

(1) Grant values shown above will be different from the values shown in the Summary Compensation and Grants of Plan-Based Awards tables based on the fair value on grant date in accordance with FASB ASC Topic 718 and SEC disclosure rules which consider factors other than share price.

(2) Mr. Davis’ LTI target in 2021 increased from $4,000,000 as CFO to $10,750,000 as CEO. In 2021, Mr. Davis’ actual LTI award was $9,200,000 which reflects 3 months at the 2021 CFO rate and 9 months at the CEO rate, when Mr. Davis became President.

(3) Ms. Litchfield, Mr. Clyburn, Mr. DeLuca and Dr. Li were not NEOs in 2020.

PSU Program

At the beginning of each year, we review the design of our PSU program to ensure that our metrics are focused on the long-term measures that are most applicable to driving value for the Company and its shareholders over a three-year performance period. Payouts under the PSU program are formulaic and, as such, the C&MD Committee does not consider individual performance or use discretion when determining final awards.

Financial targets applicable to the PSUs are established based on our three-year financial plan, which considers a variety of factors including management, Board, and external expectations and aspirations of our long-term performance. R-TSR performance versus our peer group is measured at the end of the three-year period and compares Merck’s average annual TSR to the median TSR of our pharmaceutical peer group. Each percentage point of outperformance or underperformance versus the median modifies the earned award by +/-5 percentage points. In the event of underperformance by more than 10 percentage points, there will not be a payout on the R-TSR portion of the award. In the event of outperformance, the payout

Merck & Co., Inc. 2022 Proxy Statement

56