DEF 14A 1 a2017proxy.htm DEF 14A Document



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.     )
________________________________________
Filed by the Registrant  ý                             Filed by a Party other than the Registrant  ¨
Check the appropriate box:
 
 
 
¨
 
Preliminary Proxy Statement
 
 
¨
 
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
 
 
ý
 
Definitive Proxy Statement
 
 
¨
 
Definitive Additional Materials
 
 
¨
 
Soliciting Material under Rule 14a-12
THERMO FISHER SCIENTIFIC INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
ý
No fee required.
¨
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
 
(1)
 
Title of each class of securities to which transaction applies:
 
 
(2)
 
Aggregate number of securities to which transaction applies:
 
 
(3)
 
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
 
(4)
 
Proposed maximum aggregate value of transaction:
 
 
(5)
 
Total fee paid:
 
¨
Fee paid previously with preliminary materials.
¨
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
(1)
 
Amount Previously Paid:
 
 
(2)
 
Form, Schedule or Registration Statement No.:
 
 
(3)
 
Filing Party:
 
 
(4)
 
Date Filed:
 






blackwhitelogo.jpg
168 Third Avenue
Waltham, MA 02451
April 4, 2017
Dear Stockholder:
You are cordially invited to attend the 2017 Annual Meeting of Stockholders of Thermo Fisher Scientific Inc., which will be held on Wednesday, May 17, 2017, at 1:00 p.m. (Eastern time) at the Mandarin Oriental New York, 80 Columbus Circle at 60th Street, New York, New York.
The notice of meeting and proxy statement accompanying this letter describe the specific business to be acted upon at the meeting. The Company’s 2016 Annual Report to Stockholders also accompanies this letter.
It is important that your shares of the Company’s common stock be represented and voted at the meeting regardless of the number of shares you may hold. Whether or not you plan to attend the meeting in person, you can ensure your shares of the Company’s common stock are voted at the meeting by submitting your instructions by telephone, the Internet, or in writing by returning the Company’s proxy card (if one has been provided to you). Please review the instructions in the enclosed proxy statement and proxy card regarding each of these voting options.
We are pleased this year to again take advantage of the Securities and Exchange Commission rule allowing companies to furnish proxy materials to their stockholders over the Internet. We believe that this e-proxy process expedites stockholders’ receipt of proxy materials, while lowering the costs and reducing the environmental impact of our annual meeting. Stockholders receiving e-proxy materials have been sent a notice containing instructions on how to access the proxy statement and annual report over the Internet and how to vote.
Thank you for your continued support of the Company.
 
Yours very truly,

 
sig_marc.jpg
 
MARC N. CASPER
President and Chief Executive Officer






blackwhitelogo.jpg
168 Third Avenue
Waltham, MA 02451
NOTICE OF 2017 ANNUAL MEETING OF STOCKHOLDERS
To be held on May 17, 2017
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Stockholders to be Held on May 17, 2017.
The Proxy Statement and 2016 Annual Report are available at www.proxyvote.com.
April 4, 2017
To the Holders of the Common Stock of
THERMO FISHER SCIENTIFIC INC.
Notice is hereby given that the 2017 Annual Meeting of Stockholders of Thermo Fisher Scientific Inc. (“Thermo Fisher” or the “Company”) will be held on Wednesday, May 17, 2017, at 1:00 p.m. (Eastern time) at the Mandarin Oriental New York, 80 Columbus Circle at 60th Street, New York, New York.
The purpose of the meeting is to consider and take action upon the following matters:
1.
Election of twelve directors for a one-year term expiring in 2018.
2.
Approval of an advisory vote on executive compensation.
3.
To hold an advisory vote on the frequency of future executive compensation advisory votes.
4.
Ratification of the Audit Committee’s selection of PricewaterhouseCoopers LLP as the Company’s independent auditors for 2017.
5.
Such other business as may properly be brought before the meeting and any adjournment thereof.
Stockholders of record at the close of business on March 27, 2017, are the only stockholders entitled to notice of and to vote at the 2017 Annual Meeting of Stockholders.
This notice, the proxy statement and the proxy card enclosed herewith are sent to you by order of the Board of Directors of the Company.
 
By Order of the Board of Directors,
 
sig_ssb.jpg
 
SHARON S. BRIANSKY
Vice President and Secretary
IMPORTANT
Whether or not you intend to attend the meeting in person, please ensure that your shares of the Company’s common stock are present and voted at the meeting by submitting your instructions by telephone, the Internet, or in writing by completing, signing, dating and returning the enclosed proxy card to our tabulation agent in the enclosed, self-addressed envelope, which requires no postage if mailed in the United States.
Directions to the Annual Meeting are available by calling Investor Relations at (781) 622-1111.






Table of Contents
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
Purpose of Annual Meeting
Voting Securities and Record Date
Quorum
Manner of Voting
Voting of Proxies
Vote Required for Approval
PROPOSAL 1: ELECTION OF DIRECTORS
Nominees and Incumbent Directors
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
General
Director Nomination Process
Director Independence
Board of Directors Meetings and Committees
Our Board’s Role in Risk Oversight
Executive Sessions
Communications from Stockholders and Other Interested Parties
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Compensation Committee Report
Summary Compensation Table
Grants of Plan-Based Awards for 2016
Outstanding Equity Awards at 2016 Fiscal Year-End
Option Exercises and Stock Vested During 2016
Pension Benefits
Nonqualified Deferred Compensation for 2016
Agreements with Named Executive Officers; Potential Payments Upon Termination or Change in Control
DIRECTOR COMPENSATION
Cash Compensation
Deferred Compensation Plan for Directors
Fisher Retirement Plan for Non-Employee Directors
Stock-Based Compensation
Matching Charitable Donation Program
Summary Director Compensation Table
Stock Ownership Policy for Directors
SECURITY OWNERSHIP
Security Ownership of Certain Beneficial Owners and Management
Section 16(a) Beneficial Ownership Reporting Compliance
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
Review, Approval or Ratification of Transactions with Related Persons
Transactions with Related Persons
EQUITY COMPENSATION PLAN INFORMATION
REPORT OF THE AUDIT COMMITTEE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Independent Auditor Fees
Audit Committee’s Pre-Approval Policies and Procedures
PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION
PROPOSAL 3: ADVISORY VOTE ON THE FREQUENCY OF FUTURE EXECUTIVE COMPENSATION ADVISORY VOTES
PROPOSAL 4: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
OTHER ACTION
STOCKHOLDER PROPOSALS
SOLICITATION STATEMENT
HOUSEHOLDING OF ANNUAL MEETING MATERIALS





blackwhitelogo.jpg
168 Third Avenue
Waltham, MA 02451
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
May 17, 2017
This proxy statement is furnished in connection with the solicitation of proxies by Thermo Fisher Scientific Inc. (“Thermo Fisher” or the “Company”) on behalf of the Board of Directors of the Company (the “Board”) for use at the 2017 Annual Meeting of Stockholders to be held on Wednesday, May 17, 2017, at 1:00 p.m. (Eastern time) at the Mandarin Oriental New York, 80 Columbus Circle at 60th Street, New York, New York, and any adjournments thereof. The mailing address of the principal executive office of the Company is 168 Third Avenue, Waltham, Massachusetts 02451. This proxy statement and enclosed proxy card are being first furnished to stockholders of the Company on or about April 4, 2017.
Purpose of Annual Meeting
At the 2017 Annual Meeting of Stockholders, stockholders entitled to vote at the meeting will consider and act upon the matters outlined in the notice of meeting accompanying this proxy statement, including the election of twelve directors for a one-year term expiring in 2018, an advisory vote on executive compensation, an advisory vote on the frequency of future executive compensation advisory votes, and the ratification of the selection of PricewaterhouseCoopers LLP as the Company’s independent auditors for 2017.
Voting Securities and Record Date
Only stockholders of record at the close of business on March 27, 2017, the record date for the meeting, are entitled to vote at the meeting or any adjournments thereof. At the close of business on March 27, 2017, the outstanding voting securities of the Company consisted of 391,215,184 shares of the Company’s common stock, par value $1.00 per share (“Common Stock”). Each share of Common Stock outstanding at the close of business on the record date is entitled to one vote on each matter that is voted.
Quorum
The presence at the meeting, in person or by proxy, of a majority of the outstanding shares of Common Stock entitled to vote at the meeting will constitute a quorum for the transaction of business at the meeting. Votes of stockholders of record present at the meeting in person or by proxy, abstentions, and “broker non-votes” (as defined below) are counted as present or represented at the meeting for the purpose of determining whether a quorum exists. A “broker non-vote” occurs when a broker or representative does not vote on a particular matter because it either does not have discretionary voting authority on that matter or it does not exercise its discretionary voting authority on that matter.
Manner of Voting
Stockholders of Record
Shares entitled to be voted at the meeting can only be voted if the stockholder of record of such shares is present at the meeting, returns a signed proxy card, or authorizes proxies to vote his or her shares by telephone or over the Internet. Shares represented by valid proxy will be voted in accordance with your instructions. If you choose to vote your shares by telephone or over the Internet, which you may do until 11:59 p.m. Eastern time on Tuesday, May 16, 2017, you should follow the instructions provided on the proxy card. In voting by telephone or over the Internet, you will be allowed to confirm that your instructions have been properly recorded.
A stockholder of record who votes his or her shares by telephone or Internet, or who returns a proxy card, may revoke the proxy at any time before the stockholder’s shares are voted at the meeting by entering new votes by telephone or over the Internet by 11:59 p.m. Eastern time on May 16, 2017, by written notice to the Secretary of the Company received prior to the meeting, by executing and returning a later dated proxy card prior to the meeting, or by voting by ballot at the meeting.





Page 2

Participants in the Thermo Fisher Scientific 401(k) Retirement Plan
If you hold your shares through the Thermo Fisher Scientific 401(k) Retirement Plan (the “401(k) Plan”), your proxy represents the number of shares in your 401(k) Plan account as of the record date. For those shares in your 401(k) Plan account, your proxy will serve as voting instructions for the trustee of the 401(k) Plan. You may submit your voting instructions by returning a signed and dated proxy card to the Company’s tabulation agent in the enclosed, self-addressed envelope for its receipt by 11:59 p.m. Eastern time on Friday, May 12, 2017, or by telephone or over the Internet by 11:59 p.m. Eastern time on Sunday, May 14, 2017, in accordance with the instructions provided on the proxy card.
You may revoke your instructions by executing and returning a later dated proxy card to the Company’s tabulation agent for its receipt by 11:59 p.m. Eastern time on May 12, 2017, or by entering new instructions by telephone or over the Internet by 11:59 p.m. Eastern time on May 14, 2017.
Beneficial Stockholders
If you hold your shares through a broker, bank or other representative (“broker or representative”), you can only vote your shares in the manner prescribed by the broker or representative. Detailed instructions from your broker or representative will generally be included with your proxy material. These instructions may also include information on whether your shares can be voted by telephone or over the Internet or the manner in which you may revoke your votes. If you choose to vote your shares by telephone or over the Internet, you should follow the instructions provided by the broker or representative.
Voting of Proxies
Shares represented by proxy will be voted in accordance with your specific choices. If you sign and return your proxy card or vote by telephone or over the Internet without indicating specific choices, your shares will be voted FOR the nominees for director, FOR the Company’s executive compensation, for every ONE YEAR on the frequency of future executive compensation advisory votes, and FOR the ratification of the selection of independent auditors for 2017. Should any other matter be properly presented at the meeting, the persons named in the proxy card will vote on such matter in accordance with their judgment.
If you sign and return your proxy card marked “abstain” with respect to any of the proposals scheduled to be voted on at the meeting, or choose the same option when voting by telephone or over the Internet, your shares will not be voted affirmatively or negatively on those proposals and will not be counted as votes cast with regard to those proposals.
If you hold your shares as a beneficial owner rather than a stockholder of record, your broker or representative will vote the shares that it holds for you in accordance with your instructions (if timely received) or, in the absence of such instructions, your broker or representative may vote on proposals for which it has discretionary voting authority. The only proposal on which your broker or representative has discretionary voting authority is the proposal to ratify the selection of independent auditors for 2017. If you do not instruct your broker or representative regarding how you would like your shares to be voted with respect to the other proposals scheduled to be voted on at the meeting, your broker or representative will not be able to vote on your behalf with respect to those proposals.
If you hold your shares through the 401(k) Plan, the trustee will vote the shares in your 401(k) Plan account in accordance with your instructions (if timely received) or, in the absence of such instructions, your shares will not be voted.
Vote Required for Approval
Election of Directors
Under the Company’s bylaws, in an uncontested election, a nominee for director will be required to obtain a majority of the votes cast in person or by proxy at the annual meeting in order to be elected, such that the number of votes cast “for” a director must exceed the number of votes cast “against” that director. Abstentions and broker non-votes will not have an effect on the determination of whether a nominee for director has been elected.
Other Matters
Under the Company’s bylaws, the affirmative vote of the holders of a majority of the shares present or represented and entitled to vote at the annual meeting and voting affirmatively or negatively on the matter will be





Page 3

required for: approval of the advisory vote on executive compensation (Proposal 2); approval of one of the three frequency options under the advisory vote on the frequency of future executive compensation advisory votes (Proposal 3); and approval of the ratification of the selection of the independent registered public accounting firm (Proposal 4). Shares which abstain from voting on these proposals and broker non-votes will not be counted as votes in favor of, or with respect to, such proposals and will also not be counted as votes cast. Accordingly, abstentions and broker non-votes will have no effect on the outcome of these proposals.With respect to Proposal 3, if none of the three frequency options receives the vote of the holders of a majority of the votes cast, we will consider the frequency option (one year, two years or three years) receiving the highest number of votes cast by stockholders to be the frequency that has been recommended by stockholders. However, as described in more detail in Proposal 3, because this proposal is non-binding, the Board of Directors may decide that it is in the best interest of our stockholders and the Company to hold future executive compensation advisory votes more or less frequently. Proposal 2 is also a non-binding proposal.
- PROPOSAL 1 -
ELECTION OF DIRECTORS
The number of directors constituting the full Board is fixed at twelve. The terms for Marc N. Casper, Nelson J. Chai, C. Martin Harris, Tyler Jacks, Judy C. Lewent, Thomas J. Lynch, Jim P. Manzi, William G. Parrett, Lars R. Sørensen, Scott M. Sperling, Elaine S. Ullian and Dion J. Weisler expire at the 2017 Annual Meeting of Stockholders. The Nominating and Corporate Governance Committee of the Board has recommended to the Board, and the Board has nominated, Mses. Lewent and Ullian, Drs. Harris and Jacks, and Messrs. Casper, Chai, Lynch, Manzi, Parrett, Sørensen, Sperling and Weisler for a one-year term expiring at the 2018 Annual Meeting of Stockholders. Proxies may not be voted for a greater number of persons than the twelve nominees named. In all cases, directors hold office until their successors have been elected and qualified, or until their earlier resignation, death or removal.
Nominees and Incumbent Directors
Set forth below are the names of the persons nominated as directors, their ages, their offices in the Company, if any, their principal occupations or employment for the past five years, the length of their tenure as directors and the names of other public companies in which they currently hold directorships or have held directorships during the past five years. We have also presented information below regarding each director’s specific experience, qualifications, attributes and skills that led our Board to the conclusion that he or she should serve as a director. Information regarding their beneficial ownership of Common Stock is reported under the heading “SECURITY OWNERSHIP.”
casper.jpg
 
Marc N. Casper
 
Mr. Casper, age 49, has been a director of the Company since October 2009. He joined the Company in November 2001 and has been its President and Chief Executive Officer since October 2009. He served as the Company’s Chief Operating Officer from May 2008 to October 2009 and was Executive Vice President from November 2006 to October 2009. Prior to being named Executive Vice President, he was Senior Vice President from December 2003 to November 2006. Prior to joining the Company, Mr. Casper served as president, chief executive officer and a director of Kendro Laboratory Products. Mr. Casper is also a director of U.S. Bancorp. Within the last five years, Mr. Casper was a director of Zimmer Holdings, Inc. We believe that Mr. Casper is well suited to serve on our Board due to his position as Chief Executive Officer of the Company as well as his 20 years in the life sciences/healthcare equipment industry.





Page 4

chai.jpg
 
Nelson J. Chai
 
Mr. Chai, age 51, has been a director of the Company since December 2010. In January 2017, he was appointed President and Chief Executive Officer of The Warranty Group, which delivers warranty solutions and related benefits to some of the world’s leading manufacturers, distributors, and retailers, as well as specialty insurance products and services for financial institutions. He previously was President of CIT Group Inc., a bank holding company, from August 2011 to December 2015. He joined CIT Group in June 2010 as Executive Vice President, Chief Administrative Officer and head of strategy. Prior to CIT Group, he was President, Asia-Pacific for Bank of America Corporation beginning in December 2008, and Executive Vice President and Chief Financial Officer of Merrill Lynch & Co., a financial services firm, from December 2007 to December 2008. We believe that Mr. Chai is well suited to serve on our Board due to his many years of experience in finance and accounting.
harris.jpg
 
C. Martin Harris
 
Dr. Harris, age 60, has been a director of the Company since March 2012. In December 2016, he was appointed Associate Vice President of the Health Enterprise and Chief Business Officer at the Dell Medical School at The University of Texas at Austin. Dr. Harris previously served since 2009 as the Chief Strategy Officer of The Cleveland Clinic Foundation, a multi-specialty academic medical center, and from June 1996 to December 2016, he had been the Chief Information Officer and Chairman of the Information Technology Division of and a Staff Physician for The Cleveland Clinic Hospital and The Cleveland Clinic Foundation Department of General Internal Medicine. Dr. Harris is also a director of Invacare Corporation, HealthStream Inc. and Colgate-Palmolive Company. We believe that Dr. Harris is well suited to serve on our Board due to his experience in the healthcare industry as a physician and leader of healthcare organizations and also his expertise in the use of information technology in the healthcare industry.
jacks.jpg
 
Tyler Jacks
 
Dr. Jacks, age 56, has been a director of the Company since May 2009. He is the David H. Koch Professor of Biology at the Massachusetts Institute of Technology (MIT) and director of the David H. Koch Institute for Integrative Cancer Research. He joined the MIT faculty in 1992 and was director of its Center for Cancer Research from 2001 to 2008. Since 2002, Dr. Jacks has been an investigator with the Howard Hughes Medical Institute. Dr. Jacks is also a director of Amgen Inc. We believe that Dr. Jacks is well suited to serve on our Board due to his experience as a cancer researcher and member of multiple scientific advisory boards in biotechnology companies, pharmaceutical companies and academic institutions.
lewent.jpg
 
Judy C. Lewent
 
Ms. Lewent, age 68, has been a director of the Company since May 2008. She was Chief Financial Officer of Merck & Co., Inc., a global pharmaceutical company, from 1990 until her retirement in 2007. She was also Executive Vice President of Merck from February 2001 through her retirement and had additional responsibilities as President, Human Health Asia from January 2003 until July 2005, when she assumed strategic planning responsibilities for Merck. Ms. Lewent is also a director of Motorola Solutions, Inc. and GlaxoSmithKline plc. We believe that Ms. Lewent is well suited to serve on our Board due to her many years of global experience in finance and the pharmaceutical industry.





Page 5

lynch.jpg
 
Thomas J. Lynch
 
Mr. Lynch, age 62, has been a director of the Company since May 2009. In March 2017, he was appointed Executive Chairman of the Board of Directors of TE Connectivity Ltd. (formerly Tyco Electronics Ltd.), a global provider of engineered electronic components, network solutions, undersea telecommunication systems and specialty products. He previously was Chairman and Chief Executive Officer of TE Connectivity Ltd. He joined Tyco International in 2004 as President of Tyco Engineered Products and Services and was appointed Chief Executive Officer in January 2006, when Tyco Electronics was formed and later became an independent, separately traded entity and was appointed Chairman in January 2013. Mr. Lynch is also a director of Cummins Inc. We believe that Mr. Lynch is well suited to serve on our Board due to his experience as Chief Executive Officer of a comparably-sized global company.
manzi.jpg
 
Jim P. Manzi
 
Mr. Manzi, age 65, has been a director of the Company since May 2000 and Chairman of the Board since May 2007. He was also Chairman of the Board from January 2004 to November 2006. He has been the Chairman of Stonegate Capital, a firm he formed to manage private equity investment activities in technology startup ventures, primarily related to the Internet, since 1995. From 1984 until 1995, he served as the Chairman, President and Chief Executive Officer of Lotus Development Corporation, a software manufacturer that was acquired by IBM Corporation in 1995. We believe that Mr. Manzi is well suited to serve on our Board due to his senior management experience leading Lotus and overall business acumen.
parrett.jpg
 
William G. Parrett
 
Mr. Parrett, age 71, has been a director of the Company since June 2008. Until his retirement in November 2007, he served as Chief Executive Officer of Deloitte Touche Tohmatsu, a global accounting firm. Mr. Parrett joined Deloitte in 1967, and served in a series of roles of increasing responsibility. Mr. Parrett serves as a director of the Blackstone Group LP, Eastman Kodak Company and UBS AG, and is chairman of their Audit Committees. He also serves as a director of Conduent Inc. and, within the last five years, Mr. Parrett was a director of iGate Corporation. We believe that Mr. Parrett is well suited to serve on our Board due to his experience as Chief Executive Officer of Deloitte Touche Tohmatsu, which demonstrates his leadership capability and extensive knowledge of complex financial and operational issues.
sorensen.jpg
 
Lars R. Sørensen
 
Mr. Sørensen, age 62, has been a director of the Company since May 2016 and previously served as a director of the Company from July 2011 to July 2015. He was President and Chief Executive Officer of Novo Nordisk A/S, a global healthcare company with a leading position in diabetes care from November 2000 to January 2017. He held various senior management roles at Novo Nordisk after he joined the company in 1982. Mr. Sørensen also currently serves as a member of the supervisory board of Bertelsmann AG, a worldwide media company based in Germany, and Carlsberg A/S, an international brewing company. Within the last five years, he was a director of Dong Energy A/S and Danmarks Nationalbank. We believe that Mr. Sørensen is well suited to serve on our Board due to his experience as a Chief Executive Officer of a global healthcare company.





Page 6

sperling.jpg
 
Scott M. Sperling
 
Mr. Sperling, age 59, has been a director of the Company since November 2006. Prior to the merger of Thermo Electron Corporation and Fisher Scientific International Inc., he was a director of Fisher Scientific from January 1998 to November 2006. He has been employed by Thomas H. Lee Partners, L.P., a leveraged buyout firm, and its predecessor, Thomas H. Lee Company, since 1994. Mr. Sperling currently serves as Co-President of Thomas H. Lee Partners, L.P. Mr. Sperling is also a director of iHeartMedia, Inc. and The Madison Square Garden Company. We believe that Mr. Sperling is well suited to serve on our Board due to his experience in acquisitions and finance.
ullian.jpg
 
Elaine S. Ullian
 
Ms. Ullian, age 69, has been a director of the Company since July 2001. She was the President and Chief Executive Officer of Boston Medical Center, a 550-bed academic medical center affiliated with Boston University, from July 1996 to her retirement in January 2010. Ms. Ullian is also a director of Vertex Pharmaceuticals, Inc. and Hologic Inc. We believe that Ms. Ullian is well suited to serve on our Board due to her experience as Chief Executive Officer of Boston Medical Center, a healthcare provider similar to many of the Company’s customers.
weisler.jpg
 
Dion J. Weisler
 
Mr. Weisler, age 49, has been a director of the Company since March 2017. He has been President and Chief Executive Officer of HP Inc., a business that includes personal computers, mobility devices, technical workstations, printers, graphics solutions, managed-print services and internet services, since November 2015, following the separation of Hewlett-Packard Company ("Hewlett-Packard") into two independent companies. He joined Hewlett-Packard in January 2012 as Senior Vice President, Printing and Personal Systems and was appointed Executive Vice President, Printing and Personal Systems in June 2013. Mr. Weisler is also a director of HP Inc. We believe that Mr. Weisler is well suited to serve on our Board due to his senior management experience at a global company.
The Board of Directors recommends a vote “FOR” the nominees for director. Proxies solicited by the Board of Directors will be voted FOR the nominees unless stockholders specify to the contrary on their proxy.






Page 7

CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
General
The Board has adopted governance principles and guidelines of the Company (“Corporate Governance Guidelines”) to assist the Board in exercising its duties and to best serve the interests of the Company and its stockholders. In addition, the Company has adopted a code of business conduct and ethics (“Code of Business Conduct and Ethics”) that encompasses the requirements of the rules and regulations of the Securities and Exchange Commission (“SEC”) for a “code of ethics” applicable to principal executive officers, principal financial officers, principal accounting officers or controllers, or persons performing similar functions. The Code of Business Conduct and Ethics applies to all of the Company’s officers, directors and employees. The Company intends to satisfy SEC and New York Stock Exchange (“NYSE”) disclosure requirements regarding amendments to, or waivers of, the Code of Business Conduct and Ethics by posting such information on the Company’s website. We may also use our website to make certain disclosures required by the rules of the NYSE, including the following:
the identity of the presiding director at meetings of non-management or independent directors;
the method for interested parties to communicate directly with the presiding director or with non-management or independent directors as a group;
the identity of any member of the issuer’s audit committee who also serves on the audit committees of more than three public companies and a determination by the Board that such simultaneous service will not impair the ability of such member to effectively serve on the Company’s audit committee; and
contributions by the Company to a tax exempt organization in which any non-management or independent director serves as an executive officer if, within the preceding three years, contributions in any single fiscal year exceeded the greater of $1 million or 2% of such tax exempt organization’s consolidated gross revenues.
We have long believed that good corporate governance is important to ensure that the Company is managed for the long-term benefit of our stockholders. We periodically review our corporate governance policies and practices and compare them to those suggested by various authorities in corporate governance and the practices of other public companies. As a result, we have adopted policies and procedures that we believe are in the best interests of the Company and our stockholders. In particular, we have adopted the following policies and procedures:
Proxy access. In 2017, we adopted proxy access, which permits a stockholder, or a group of up to 20 stockholders, owning 3% or more of Thermo Fisher’s outstanding common stock continuously for at least three years, to nominate and include in our proxy materials qualifying director nominees constituting up to the greater of (i) 20% of the Board or (ii) two directors.

Declassified Board of Directors. Our bylaws provide that all of our directors will stand for election to one-year terms.
Majority Voting for Election of Directors. Our bylaws provide for a majority voting standard in uncontested director elections, so a nominee is elected to the Board if the votes “for” that director exceed the votes “against” (with abstentions and broker non-votes not counted as for or against the election). If a nominee does not receive more “for” votes than “against” votes, the director must offer his or her resignation, which the Board would then determine whether to accept and publicly disclose that determination.
No Hedging or Pledging Policy. We prohibit all hedging and pledging transactions involving Company securities by our directors and officers.
Separation of Chief Executive Officer and Chairman Roles. We separate the roles of Chief Executive Officer and Chairman of the Board in recognition of the differences between the two roles. The CEO is responsible for setting the strategic direction for the Company and the day-to-day leadership and performance of the Company, while the Chairman of the Board provides guidance to the CEO and sets the agenda for Board meetings and presides over meetings of the Board.





Page 8

You can access the current charters for our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, our Corporate Governance Guidelines and our Code of Business Conduct and Ethics at www.thermofisher.com or by writing to:
Investor Relations Department
Thermo Fisher Scientific Inc.
168 Third Avenue
Waltham, MA 02451
Phone: 781-622-1111
Email: investorrelations@thermofisher.com
Director Nomination Process
The Nominating and Corporate Governance Committee considers recommendations for director nominees suggested by its members, other directors, management and other interested parties. It will consider stockholder recommendations for director nominees that are sent to the Nominating and Corporate Governance Committee to the attention of the Company’s Secretary at the principal executive office of the Company.
Stockholder Nominations - Advance Notice Bylaw
In addition, the Company’s bylaws include an advance notice provision that requires stockholders desiring to bring proposals before an annual meeting (which proposals are not to be included in the Company’s proxy statement and thus are submitted outside the processes of (1) Rule 14a-8 under the Exchange Act and (2) our "proxy access" bylaw described below) to do so in accordance with the terms of such advance notice provision. The advance notice provision requires that, among other things, stockholders give timely written notice to the Secretary of the Company regarding their proposals. To be timely, notices must be delivered to the Secretary at the principal executive office of the Company not less than 60, nor more than 75, days prior to the first anniversary of the date on which the Company mailed its proxy materials for the preceding year’s annual meeting of stockholders. Accordingly, a stockholder who intends to present a proposal at the 2018 Annual Meeting of Stockholders without inclusion of the proposal in the Company’s proxy materials must provide written notice of such proposal to the Secretary no earlier than January 19, 2018, and no later than February 3, 2018. Proposals received at any other time will not be voted on at the meeting. If a stockholder makes a timely notification, the proxies that management solicits for the meeting may still exercise discretionary voting authority with respect to the stockholder’s proposal under circumstances consistent with the proxy rules of the SEC.
Proxy Access Nominations
Pursuant to the proxy access bylaw adopted by the Board in early 2017, a stockholder, or a group of up to 20 stockholders, continuously owning for three years at least three percent of our outstanding common shares may nominate and include in our proxy materials up to the greater of two directors or 20 percent of the number of directors currently serving, if the stockholder(s) and nominee(s) satisfy the bylaw requirements. For eligible stockholders to include in our proxy materials nominees for the 2018 Annual Meeting, proxy access nomination notices must be received by the Company no earlier than December 19, 2017, and no later than January 18, 2018. The notice must contain the information required by the Company's bylaws.
Role of the Nominating and Corporate Governance Committee
The process for evaluating prospective nominees for director, including candidates recommended by stockholders, includes meetings from time to time to evaluate biographical information and background material relating to prospective nominees, interviews of selected candidates by members of the Nominating and Corporate Governance Committee and other members of the Board, and application of the Company’s general criteria for director nominees set forth in the Company’s Corporate Governance Guidelines. These criteria include the prospective nominee’s integrity, business acumen, age, experience, commitment, and diligence. Our Corporate Governance Guidelines specify that the value of diversity on the Board should be considered by the Nominating and Corporate Governance Committee in the director identification and nomination process. The Nominating and Corporate Governance Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. The Committee believes that the backgrounds and qualifications of the directors considered as a group should provide a significant breadth of experience, knowledge and abilities to assist the Board in fulfilling its responsibilities. The Nominating and Corporate Governance Committee also considers such other relevant factors as it deems appropriate, including the current composition of the Board, the





Page 9

balance of management and independent directors, and, with respect to members of the Audit Committee, financial expertise.
After completing its evaluation, the Nominating and Corporate Governance Committee makes a recommendation to the full Board as to the persons who should be nominated by the Board, and the Board determines the nominees after considering the recommendation and report of the Nominating and Corporate Governance Committee.
The Nominating and Corporate Governance Committee has from time to time engaged a search firm to facilitate the identification, screening and evaluation of qualified, independent candidates for director to serve on the Board. Dr. Harris and Messrs. Chai and Lynch, who joined the Board in 2012, 2010 and 2009, respectively, were recommended to the Board by Egon Zehnder International. Mr. Weisler, who joined the Board in March 2017, was recommended to the board by Heidrick & Struggles.
Director Independence
The Company’s Corporate Governance Guidelines require a majority of our Board to be “independent” within the meaning of the NYSE listing requirements including, in the judgment of the Board, the requirement that such directors have no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). The Board has adopted the following standards to assist it in determining whether a director has a material relationship with the Company, which can be found in the Company’s Corporate Governance Guidelines, on the Company’s website at www.thermofisher.com. Under these standards, a director will not be considered to have a material relationship with the Company if he or she is not:
•         A director who is (or was within the last three years) an employee, or whose immediate family member is (or was within the last three years) an executive officer, of the Company;
•         A director who is a current employee or greater than 10% equity owner, or whose immediate family member is a current executive officer or greater than 10% equity owner, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues;
•         A director who has received, or whose immediate family member has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service);
•         (A) A director who is, or whose immediate family member is, a current partner of a firm that is the Company’s internal or external auditor; (B) a director who is a current employee of a firm that is the Company’s internal or external auditor; (C) a director whose immediate family member is a current employee of a firm that is the Company’s internal or external auditor and personally works on the Company’s audit; or (D) a director who was, or whose immediate family member was, within the last three years (but is no longer) a partner or employee of a firm that is the Company’s internal or external auditor and personally worked on the Company’s audit within that time;
•         A director who is (or was within the last three years), or whose immediate family member is (or was within the last three years), an executive officer of another company where any of the Company’s current executive officers at the same time serve or served on the other company’s compensation committee;
•         A director who is (or was within the last three years) an executive officer or greater than 10% equity owner of another company that is indebted to the Company, or to which the Company is indebted, in an amount that exceeds one percent (1%) of the total consolidated assets of the other company; and
•         A director who is a current executive officer of a tax exempt organization that, within the last three years, received discretionary contributions from the Company in an amount that, in any single fiscal year, exceeded the greater of $1 million or 2% of such tax exempt organization’s consolidated gross revenues. (Any automatic matching by the Company of employee charitable contributions will not be included in the amount of the Company’s contributions for this purpose.)





Page 10

Ownership of a significant amount of the Company’s stock, by itself, does not constitute a material relationship. For relationships or amounts not covered by these standards, the determination of whether a material relationship exists shall be made by the other members of the Board who are independent (as defined above).
The Board has determined that each of Mses. Lewent and Ullian, Messrs. Chai, Lynch, Manzi, Parrett, Sørensen, Sperling and Weisler, and Dr. Harris is “independent” in accordance with the Company’s Corporate Governance Guidelines and Section 303A.02 of the listing standards of the NYSE. Each of Mses. Lewent and Ullian, Messrs. Chai, Lynch, Manzi, Parrett, Sørensen, Sperling and Weisler, and Dr. Harris has no relationship with the Company, other than any relationship that is categorically not material under the guidelines shown above and other than compensation for services as a director as disclosed in this proxy statement under “DIRECTOR COMPENSATION."
In determining the independence of the Company’s directors, the Board considered that in 2016 the Company sold products, in the ordinary course of business, to: (i) the Massachusetts Institute of Technology (“MIT”), where Dr. Jacks is a professor and the director of the David H. Koch Institute for Integrative Cancer Research, and the Howard Hughes Medical Institute (“HHMI”), where Dr. Jacks is an employee and investigator; (ii) TE Connectivity, where Mr. Lynch is Executive Chairman; (iii) the University of Texas, where Dr. Harris is an executive; and (iv) HP Inc., the information technology company formed following the separation of Hewlett-Packard into two independent companies ("HP"), where Mr. Weisler is CEO.
With respect to MIT, TE Connectivity, the University of Texas and HP the amount of the sales to each entity in 2016 were less than 2% of the 2016 revenues of such other entity and less than 0.3% of Thermo Fisher’s 2016 revenues. With respect to HHMI, the Company’s 2016 sales to the organization represented approximately 4% of HHMI’s 2016 consolidated gross revenues, and accordingly Dr.  Jacks is not deemed independent under the Company’s Corporate Governance Guidelines.
Board of Directors Meetings and Committees
The Board met 10 times during 2016. During 2016, each of our directors attended at least 75% of the total number of meetings of the Board and the committees of which such director was a member. The Board has a standing Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, as well as Strategy and Finance, and Science and Technology Committees. The Company encourages, but does not require, the members of its Board to attend the annual meeting of stockholders. Last year, 10 of our directors attended the 2016 Annual Meeting of Stockholders.
Audit Committee
The Audit Committee is responsible for assisting the Board in its oversight of the integrity of the Company’s financial statements, the Company’s compliance with legal and regulatory requirements, the independent auditor’s qualifications and independence, and the performance of the Company’s internal audit function and independent auditors. Certain responsibilities of our Audit Committee and its activities during fiscal 2016 are described with more specificity in the Report of the Audit Committee in this proxy statement under the heading “REPORT OF THE AUDIT COMMITTEE.”
The current members of our Audit Committee are Messrs. Parrett (Chairman), Chai, Lynch and Weisler. The Board has determined that each of the members of the Audit Committee is “independent” within the meaning of SEC rules and regulations, the listing standards of the NYSE, and the Company’s Corporate Governance Guidelines, and that each is “financially literate” as is required by the listing standards of the NYSE. The Board has also determined that each of Messrs. Parrett and Chai qualifies as an “audit committee financial expert” within the meaning of SEC rules and regulations, and that they each have accounting and related financial management expertise as is required by the listing standards of the NYSE. The Board has determined that Mr. Parrett’s membership on four audit committees does not impair his ability to effectively serve on the Company’s Audit Committee. The Audit Committee met 14 times during 2016.
Compensation Committee
The Compensation Committee is responsible for reviewing and approving compensation matters with respect to the Company’s chief executive officer and its other officers, reviewing and recommending to the Board management succession plans, and administering equity-based plans. Certain responsibilities of our Compensation Committee and its activities during 2016 are described in this proxy statement under the heading “Compensation Discussion and





Page 11

Analysis.” The Compensation Committee also periodically reviews our director compensation, and makes recommendations on this topic to the Board as it deems appropriate, as described under the heading “DIRECTOR COMPENSATION.”
The current members of our Compensation Committee are Messrs. Lynch (Chairman) and Parrett and Ms. Ullian. The Board has determined that each of the members of the Compensation Committee is “independent” within the meaning of the listing standards of the NYSE and the Company’s Corporate Governance Guidelines. The Compensation Committee met seven times during 2016.
Role of Consultant
The Compensation Committee has sole authority to retain and terminate a compensation consultant to assist in the evaluation of CEO or senior executive compensation. Since October 2007, the Committee has retained Pearl Meyer & Partners (“Pearl Meyer”) as its independent compensation consultant. Pearl Meyer does not provide any other services to the Company and the Compensation Committee has determined, based on its assessment of the relevant factors set forth in the applicable SEC rules, that Pearl Meyer’s work for the Compensation Committee does not raise any conflict of interest.
The consultant compiles information regarding the components and mix (short-term/long-term; fixed/variable; cash/equity) of the executive compensation programs of the Company and its peer group (see page 17 of this proxy statement for further detail regarding the peer group), analyzes the relative performance of the Company and the peer group with respect to the financial metrics used in the programs, and provides advice to the Compensation Committee regarding the Company’s programs. The consultant also provides information regarding emerging trends and best practices in executive compensation.
The consultant retained by the Compensation Committee reports to the Compensation Committee Chair and has direct access to Committee members. The consultant periodically meets with members of the Committee either in person or by telephone.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is responsible for identifying persons qualified to serve as members of the Board, recommending to the Board persons to be nominated by the Board for election as directors at the annual meeting of stockholders and persons to be elected by the Board to fill any vacancies, and recommending to the Board the directors to be appointed to each of its committees. In addition, the Nominating and Corporate Governance Committee is responsible for developing and recommending to the Board a set of corporate governance guidelines applicable to the Company (as well as reviewing and reassessing the adequacy of such guidelines as it deems appropriate from time to time) and overseeing the annual self-evaluation of the Board.
The current members of our Nominating and Corporate Governance Committee are Messrs. Sørensen (Chairman), Chai and Sperling, and Dr. Harris. The Board has determined that each of the members of the Nominating and Corporate Governance Committee is “independent” within the meaning of the listing standards of the NYSE and the Company’s Corporate Governance Guidelines. The Nominating and Corporate Governance Committee met five times during 2016.
Our Board’s Role in Risk Oversight
Our Board oversees our risk management processes directly and through its committees. Our management is responsible for risk management on a day-to-day basis. The role of our Board and its committees is to oversee the risk management activities of management. Risk assessment reports are periodically provided by management to the Board. The Audit Committee assists the board in fulfilling its oversight responsibilities with respect to risk management in the areas of financial reporting, internal controls and compliance with legal and regulatory requirements, and, in accordance with NYSE requirements, discusses policies with respect to risk assessment and risk management, including guidelines and policies to govern the process by which the Company’s exposure to risk is handled. The Compensation Committee assists the Board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs. The Nominating and Corporate Governance Committee assists the Board in fulfilling its oversight responsibilities with respect to the management of risks associated with board organization, membership and structure, succession planning for our directors, and corporate governance.





Page 12

Executive Sessions
In accordance with the listing standards of the NYSE and the Company’s Corporate Governance Guidelines, independent directors meet at least twice a year in an executive session without management and at such other times as may be requested by any independent director. Jim P. Manzi, as the Chairman of the Board, presides at the meetings of the Company’s independent directors held in executive session without management.
Communications from Stockholders and Other Interested Parties
The Board has established a process for stockholders and other interested parties to send communications to the Board or any individual director or groups of directors, including the Chairman of the Board and the independent directors. Stockholders and other interested parties who desire to send communications to the Board or any individual director or groups of directors should write to the Board or such individual director or group of directors care of the Company’s Corporate Secretary, Thermo Fisher Scientific Inc., 168 Third Avenue, Waltham, Massachusetts 02451. The Corporate Secretary will relay all such communications to the Board, or individual director or group of directors, as the case may be.

EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The Compensation Committee oversees our compensation program for executive officers. In this role, the Compensation Committee reviews and approves annually all compensation decisions relating to our named executive officers. Our named executive officers for the year ended December 31, 2016 are Marc N. Casper, President and Chief Executive Officer, Stephen Williamson, Senior Vice President and Chief Financial Officer, Mark P. Stevenson, Executive Vice President, Peter M. Wilver, Executive Vice President and Chief Administrative Officer (who retired from the Company on March 31, 2017) and Thomas W. Loewald, Senior Vice President and Chief Commercial Officer.
Executive Summary of Key Elements of Officer Compensation for 2016
 

Pay for Performance

 
 
Our executive compensation program ties a substantial portion of each executive’s overall compensation to the achievement of key strategic, financial and operational goals and uses a portfolio of equity awards to help align the interests of our executives with those of our stockholders. Key financial metrics include organic revenue growth, adjusted operating income margin, and adjusted earnings per share. Each of these metrics directly drove payouts to our named executive officers in incentive programs used in 2016.
 
Consistent with this approach, the compensation of our named executive officers for 2016 featured:
•        cash payouts under our annual cash incentive bonus program that ranged between 155% and 200% of target, reflective of the strong operating performance of the Company, as well as strong individual performance, and
•        equity grants for our named executive officers that consisted of a mixture of stock options, performance-based restricted stock units and time-based restricted stock units.
These equity grants in 2016 complemented a portfolio of previously granted equity awards, including performance-based restricted stock units granted in 2014 and 2015 to all named executive officers which incorporated the Company’s performance on organic revenue growth and adjusted EPS growth metrics. Our executive compensation program also incorporates a number of other key features that are designed to align the interests of our named executive officers with that of our stockholders, including:
•        a compensation package more heavily weighted toward long-term equity-based incentive compensation than salary and annual cash incentives in order to emphasize the focus on the Company’s long-term performance,





Page 13

•        stock ownership guidelines, in order to encourage officers to focus on the Company’s long-term performance and discourage unreasonable risk-taking,
•        annual incentive awards that are subject to recoupment (or “clawback”) in the event of an accounting restatement due to material noncompliance of the Company with any financial reporting requirements under the U.S. federal securities laws that is required to be prepared at any time during the three-year period following payment of the award,
•        a policy not to include tax gross-ups in compensation arrangements,
•        double-trigger provisions in all of our executives’ change in control agreements, and
•        limited perquisites, none of which are subject to a tax gross-up.
A comparison of the major elements of pay in 2016 for our named executive officers in the aggregate relative to the mix of pay in the market study prepared by Pearl Meyer (the “Pearl Meyer Study”) in late 2015, as more fully described below, follows. At the time of the Pearl Meyer Study, the Company’s named executive officers were Messrs. Casper, Williamson, Stevenson, Wilver and Loewald and Alan J. Malus (who has since retired from the Company).
Mix of 2016 Pay By Component
a2017proxy_chart-06805.jpg a2017proxy_chart-07947.jpg
At our 2016 Annual Meeting, our stockholders overwhelmingly approved our say-on-pay vote, with a 97% favorable advisory vote. The Committee believes that the support received from our stockholders at the 2016 Annual Meeting served to validate the overall philosophy and design of the Company’s executive compensation program. In making compensation decisions after the 2016 Annual Meeting, the Committee has remained consistent with this overall philosophy and design.

Objectives and Philosophy of Our Executive Compensation Program
The primary objectives of our executive compensation program are to:
•      attract and retain the best possible executive talent,
•      promote the achievement of key strategic and financial performance measures by linking annual cash incentives to the achievement of corporate performance goals,
•      motivate the Company’s officers to create long-term value for the Company’s stockholders and achieve other business objectives of the Company, and
•      require stock ownership by the Company’s officers in order to align their financial interests with the long-term interests of the Company’s stockholders.

To achieve these objectives, the Compensation Committee evaluates our officers’ compensation program with the goal of setting compensation at levels the Committee believes are competitive with those of other peer





Page 14

companies that compete with us for executive talent. In addition, our executive compensation program ties a substantial portion of each executive’s overall cash compensation to key strategic, financial and operational goals such as organic revenue growth, adjusted operating margin expansion, and new product introductions and we provide a portion of our executive compensation in the form of stock options, performance-based restricted stock unit grants, and/or time-based restricted stock unit grants. The Committee believes frequent reviews of the compensation levels of our named executive officers help us retain our executives and ensures their interests remain aligned with those of our stockholders by allowing them to participate in both the shorter term success of the Company as reflected in organic revenue growth and growth in adjusted earnings per share from one year to the next, as well as the longer term success of the Company as reflected in stock price appreciation. Our compensation package is highly performance-based, with the largest portion consistently denominated in equity.

Strategic Pay Positioning
Overall positioning of pay for named executive officers as a group is targeted to be within 10% of the sum of the median for the CEO and the 60th percentile for the other named executive officers for total compensation (total direct compensation, change in pension value and nonqualified deferred compensation earnings, and all other compensation) and within 10% of the sum of the median for the CEO and the 65th percentile for the other named executive officers for total direct compensation.
Generally, the goal is to achieve this through positioning of each major element of pay independently. Base salaries, for example, as the only fixed component of pay, are targeted to fall within 10% of median competitive levels, in the aggregate. Annual incentives are targeted to provide the opportunity for a 65th percentile payment, in the aggregate, for the achievement of preset internal goals, as well as an opportunity for top quartile actual payouts for strong performance, and actual payouts below median levels for performance below the preset goals.
The objective of our long term incentive program is to develop strong executive retention through opportunities tied to appreciation of the Company’s stock price over time. Superior returns to stockholders will result in significant opportunities to increase the value of executives’ overall equity holdings, while returns that fall short will significantly diminish that overall value. As such, opportunities are targeted to approximate the 75th percentile, in the aggregate.
Individual decisions may result in positioning outside of these specified ranges, particularly where the measured market reflects little differentiation between the 25th, median and 75th percentiles. Individual components may also be highly differentiated based on key requirements of a specific role, success in past roles within or outside the Company or, within our pay for performance culture, demonstrated success in an executive officer’s current role. Position tenure also plays an important role in the positioning of individual pay levels.

Consistent with the aforementioned pay-for-performance influence, the Compensation Committee reviews each component of pay individually and collectively, to ensure that the compensation programs work in a unified manner to motivate and retain key executive talent.
The Compensation Committee uses market surveys and analyses prepared by outside consulting firms to stay informed of developments in the design of compensation packages generally and to benchmark our officer compensation program against those of companies with whom we compete for executive talent to ensure our compensation program is in line with current marketplace standards.
The Compensation Committee initially targets compensation for our executive officers as a group, in the aggregate, and then considers the allocation among each officer individually. The principal reference for external comparison is to proxy-named executive officers of industrial and healthcare companies comparable to the Company in terms of annual revenues and market capitalization.
The chart below compares the components of our compensation package to the targeted strategic pay positioning as described above, for each component of pay as computed by Pearl Meyer.





Page 15

2016 Pay by Component as a Percentage of Targeted Positioning
a2016paybycomponentchart.jpg
For 2016, aggregate base salaries for the named executive officers as a group were 100% of median competitive levels, as measured by Pearl Meyer. The aggregate target bonus opportunity was 100% of the 65th percentile competitive opportunity. Aggregate long-term incentives were 89% of the 75th percentile competitive level. Combining these components provided an aggregate target total direct compensation opportunity of 101% of the combined competitive positions (i.e., within 10% of the sum of the median for the CEO and the 65th percentile for the other named executive officers). Combining the target total direct compensation with retirement income and perquisites provided aggregate total compensation of 91% of the targeted level as a group (i.e., within 10% of the sum of the median for the CEO and the 60th percentile for the other named executive officers).
Typically, during the first calendar quarter of each year, the chief executive officer makes a recommendation to the Compensation Committee with respect to annual salary increases and bonuses, and annual equity awards, if any, for executive officers other than himself, which is then reviewed by the Compensation Committee. The Compensation Committee annually reviews the individual performance evaluations for the executive officers, and, usually in late February, determines their compensation changes and awards after receiving input from other independent directors of the Board. As part of this process, the Compensation Committee also reviews, with respect to named executive officers, the current value of prior equity grants, the balances in deferred compensation accounts, and the amount of compensation the executive officer would receive if he left the Company under a variety of circumstances.





Page 16

Components of Our Executive Compensation Program
The primary elements of our executive compensation program are:
 
Element
Form
Primary Purpose
Performance Criteria
 
Base salary
 
Cash
 
Provide competitive, fixed compensation to attract and retain the best possible executive talent
 
Achievement of Company and individual goals
 
Annual cash
incentive
bonuses
 
Cash
 
Align executive compensation with our corporate strategies and business objectives; promote the achievement of key strategic and financial performance measures by linking annual cash incentives to the achievement of corporate performance goals
 
Organic revenue growth, adjusted operating income as a percentage of revenue, adjusted earnings per share, and non-financial measures (see page 18)
 
Long-term
incentive awards
 
Stock options
 
Align executive compensation with our corporate strategies and business objectives; motivate the Company’s officers to create long-term value for the Company’s stockholders and achieve other business objectives of the Company; encourage stock ownership by the Company’s officers in order to align their financial interests with the long-term interests of the Company’s stockholders
 
N/A, but appreciation in common stock price yields greater value
 
 
Time-based restricted stock unit awards
 
 
 
 
Performance-based restricted stock unit awards
 
 
Organic revenue growth and adjusted earnings per share (see page 22)
 
 
 
 
 
Retirement plans
 
Eligibility to participate in, and receive Company contributions to, our 401(k) plan (available to all U.S. employees) and, for most executives, a supplemental deferred compensation plan
 
Provide competitive retirement benefits to attract and retain skilled management
 
N/A
 
Perquisites
 
Eligibility to receive supplemental long-term disability and life insurance, access to emergency medical service; in the case of the CEO, limited use of Company aircraft for non-business purposes
 
Provide a competitive compensation package
 
N/A
 
Severance and
Change in
Control Benefits
 
Eligibility to receive cash and other severance benefits in connection with termination under certain scenarios (see page 24)
 
Provide competitive benefits to attract and retain the best possible executive talent and facilitate the executive’s evaluating potential business combinations
 
N/A
Each year, the Compensation Committee, after reviewing information provided by compensation consultants, determines what it believes in its business judgment to be the appropriate mix of various compensation components.





Page 17

The Committee believes that the Company’s executive compensation program supports the executive compensation objectives described above without encouraging management to take unreasonable risk with respect to Thermo Fisher’s business. The Committee believes that the program’s use of long-term, equity-based compensation, including the use of options and restricted stock unit awards, and our stock ownership guidelines, all encourage officers to take a long-term view of Thermo Fisher’s performance and discourage unreasonable risk-taking. The Committee has reviewed the Company’s key compensation policies and practices and concluded that any risks arising from our policies and programs are not reasonably likely to have a material adverse effect on the Company.
Compensation Consultant
In late 2015, the Committee directly engaged Pearl Meyer to assist the Committee in its review and evaluation of the compensation for the executive officers. Pearl Meyer provides no services to the Company other than to the Compensation Committee, and is therefore entirely independent of the management of the Company. In making decisions on 2016 salary changes, the setting of 2016 target annual cash incentive bonuses as a percentage of salary, and equity award decisions in February 2016, the Committee considered the Pearl Meyer Study, which included data from a peer group of publicly-traded companies, and survey data reflecting industry- and size-appropriate comparators.
Peer Group
The Committee reviewed the companies included in the prior year’s peer group with respect to revenue, market capitalization and enterprise value, each as compared to the Company’s, and determined that adjustments for 2016 were unnecessary.
Pearl Meyer used the peer group set forth below in connection with analyzing 2016 executive compensation:
3M Company
 
Honeywell International Inc.
Abbott Laboratories
 
Illinois Tool Works Inc.
AbbVie Inc.
 
Ingersoll-Rand Plc
Amgen Inc.
 
L-3 Communications Holdings, Inc.
Baxter International Inc.
 
Medtronic, Inc.
Bristol-Myers Squibb Company
 
Monsanto Company
Danaher Corporation
 
Parker-Hannifin Corporation
Eaton Corporation plc
 
PPG Industries, Inc.
EMC Corporation (which was subsequently
 
Stryker Corporation
acquired by Dell Technologies Inc.)
 
Texas Instruments Incorporated
Emerson Electric Co.
 
Textron Inc.
Gilead Sciences Inc.
 
 
Base Salary
Base salary is used to recognize the experience, skills, knowledge and responsibilities required of all our employees, including our executive officers. Generally, we believe that executive officer base salaries should be, in the aggregate, near (e.g., within 10%) the median of the range of salaries for executives in similar positions at comparable companies determined in a manner consistent with the Pearl Meyer Study, but with variations as dictated by individual circumstances. Base salaries are generally reviewed annually by our Compensation Committee in February and changes are effective in late March/early April of that year. In making base salary decisions, the Committee takes into account a variety of factors, including the level of the individual’s responsibility, the length of time the individual has been in that position, the ability to replace the individual, demonstrated success in role, and the current base salary of the individual. In late February 2016, the Compensation Committee considered the market data contained in the Pearl Meyer Study and increased the salaries of our executive officers for 2016 (effective late March 2016) in accordance with our standard annual compensation review. The 2016 base salaries for the named executive officers were set consistent with our philosophy of keeping salaries within 10% of these measured market medians, in the aggregate. Increases vary principally to reflect tenure in current position and competitive pay levels, to recognize strong individual performance and to assist the Company to retain these executives. Mr. Wilver did not receive an increase, as he had previously announced his retirement from the Company as Chief Financial Officer effective March 31, 2016. Subsequently, Mr. Wilver accepted the position of





Page 18

Executive Vice President and Chief Administrative Officer of the Company effective August 1, 2015, at a lower base salary level. Base salaries for the other named executive officers were increased as reflected in the table below.
Name
Prior Base Salary
Base Salary as of
Increase
March 28, 2016
Marc N. Casper
 
$
1,350,000

 
 
$
1,425,000

 
 
5.6
%
 
Stephen Williamson
 
$
575,000

 
 
$
603,750

 
 
5.0
%
 
Mark P. Stevenson
 
$
818,500

 
 
$
860,000

 
 
5.1
%
 
Peter M. Wilver
 
$
675,000

 
 
$
550,000

 
 

 
Thomas W. Loewald
 
$
600,000

 
 
$
613,200

 
 
2.2
%
 

Annual Cash Incentive Award
Annual cash incentive awards for the Company’s executive officers for 2016 were granted under the Company’s 2013 Annual Incentive Award Plan (the “162(m) Plan”), which was approved by the stockholders of the Company at its 2013 Annual Meeting of Stockholders. The 162(m) Plan was adopted to preserve the tax deductibility of the annual bonus that may be earned by executive officers of the Company. The actual amounts paid are subject to the application by the Compensation Committee of negative discretion under the 162(m) Plan, as described below.
Under the 162(m) Plan, in the first quarter of each calendar year the Compensation Committee selects a performance goal for the year. For 2016, the Committee selected the financial measure of earnings before interest, taxes and amortization, excluding the impact of (i) extraordinary items and any other unusual or non-recurring items, (ii) discontinued operations, (iii) gains or losses on the dispositions of discontinued operations, (iv) the cumulative effects of changes in accounting principles, (v) the writedown of any asset, (vi) charges for restructuring and rationalization programs, (vii) other non-cash charges or items, (viii) gains or losses related to financing activities, (ix) the effect of acquisitions, or (x) gains or losses as a result of foreign currency conversions or fluctuations in foreign currency exchange rates, and certain other unusual or nonrecurring items (“adjusted operating income”). The Committee selected this financial measure, as opposed to an income measure computed under generally accepted accounting principles (GAAP), because this measure is consistent with how management measures and forecasts the Company’s performance, especially when comparing such results to previous periods or forecasts. The maximum award payable in any year under the 162(m) Plan to an executive officer is $5,000,000. Each executive officer was awarded a percentage of adjusted operating income for the year, subject to the right of the Committee to lower, but not raise, the actual bonuses paid. In February 2017, the Compensation Committee elected to lower the 2016 bonuses payable under the 162(m) Plan to the amounts computed in accordance with the process described below for the Company’s annual incentive program for the year based on the Compensation Committee’s determinations as to the level of achievement of the supplemental performance measures under the Company’s annual incentive program for 2016.
Typically, in the first quarter of each calendar year, the Compensation Committee also establishes a target incentive cash award amount under the Company’s annual incentive program for each officer of the Company, including executive officers. This amount, which is a percentage of base salary, is determined by the Compensation Committee based on a variety of factors, including the level of the individual’s responsibility, the length of time the individual has been in that position, the ability to replace the individual, demonstrated success in role, and the current target incentive cash award of the individual. The amount actually awarded to an officer, which can range from 0 to 200% of target, varies primarily based on performance of the Company as a whole with respect to financial and non-financial measures, but is subject to adjustment based on the Committee’s subjective evaluation of an officer’s contributions to those results. In addition, for executives managing specific businesses within the Company, the performance of the individual business is also considered. The Committee generally sets the goals such that the target payout (100% of target bonus) represents attractive financial performance within our industry and can be reasonably expected to be achieved; and payouts above 150% of this target require outstanding performance.
For 2016, the annual incentive program established by the Compensation Committee was based on 70% financial performance and 30% non-financial performance. The financial measures established by the Compensation Committee were (i) growth in “organic revenue” (reported revenue adjusted for the impact of acquisitions and divestitures and for foreign currency changes) (40%), (ii) adjusted operating income as a percentage of revenue (15%), and (iii) adjusted earnings per share (15%). The Committee selected these financial measures, as opposed to





Page 19

financial measures computed under generally accepted accounting principles (GAAP), because these measures are consistent with how management measures and forecasts the Company’s performance, especially when comparing such results to previous periods or forecasts. For the three financial measures, the Company’s actual performance was measured relative to the Company’s internal operating goals for 2016. The weighting of the financial measures and performance targets for 2016 were:
 
 
Organic Revenue Growth (40%)
 
Adjusted Operating Income as a
Percentage of Revenue (15%)
 
Adjusted Earnings Per
Share (15%)
 
 
 
 
 
 
 
Threshold
(0% payout on each
measure)
 
2.00%
 
Varies with organic revenue growth1
 
$7.60
 
 
 
 
 
 
 
Incremental
Performance
Adjustment
 
-25% for each 0.50% organic revenue growth below baseline
 
+25% for each 0.50% organic revenue growth above baseline up to 150% of target and for each 0.25% organic revenue growth above 150% of target
 
Assumes 35% adjusted operating income pull through2 on organic revenue growth above or below baseline for organic revenue growth results of up to 1.00% above baseline organic revenue growth and 30% pull through2 on organic revenue growth over 1.00% above baseline
 
-25% for each $0.06 below baseline
 
+25% for each $0.06 above baseline
 
 
 
 
 
 
 
Baseline (100% payout factor)
 
4.00%
 
23.05% of revenue (at the baseline target organic revenue growth of 4.00%)
 
$7.84
 
 
 
 
 
 
 
Maximum (200% payout factor)
 
5.50%
 
Varies with organic revenue growth1
 
$8.08
 
 
 
 
 
 
 
Actual Results
 
4.25%
 
23.10% of revenue
 
$8.27
 
 
 
 
 
 
 
Payout Factor
 
112.6%
 
108.5%
 
200.0%
1 
Because the payout factors linked the variation in organic revenue growth to margin expansion, the “threshold” and “maximum” (whether expressed as dollars or as a percentage) varied directly with actual organic revenue growth achievement; no single “threshold or “maximum” performance level can be attributed to adjusted operating income as a percentage of revenue. The adjusted operating income as a percentage of revenue payout factor cannot go below zero or above 200%.
2 
The payout factors recognized incremental costs required to achieve accelerated organic revenue growth, and reflected the greater difficulty in achieving margin expansion on lower organic revenue; as such, the “pull through” (incremental adjusted operating margin as a percentage of revenue) varied at different levels of organic revenue growth achievement.
The calculated payout on the financial goals was 130.4%. The remaining 30% of the annual cash incentive award was based on company-wide, non-financial measures relating to the achievement of customer allegiance goals, positioning the Company for accelerated revenue growth and margin expansion, the continuation of building a diverse workforce and employer of choice initiatives, and the achievement of merger and acquisition-related goals.





Page 20

The results for the non-financial goals were as follows:
Non-Financial Measure
 
Achievement
 
 
 
Customer Allegiance
 
We achieved a new high on our customer allegiance score in 2016 (measured by a formula relating to how many of our customers would recommend us to another potential customer); we successfully integrated websites and increased our e-business capabilities across the portfolio
 
 
 
Positioning the Company for Accelerated Revenue Growth
 
We had a strong cadence of new product launches and we delivered very strong growth in China, India and Korea
 
 
 
Positioning the Company for Margin Expansion
 
We successfully launched a financial shared services center and further integrated our Life Sciences Solutions and Laboratory Products infrastructure
 
 
 
Building a Diverse Workforce/ Employer of Choice
 
We received very positive feedback from our employees in our annual employee survey highlighting our diverse and inclusive culture, and improved leadership diversity
 
 
 
Mergers and Acquisitions
 
We exceeded our synergy targets for the Company's 2014 acquisition of Life Technologies Corporation (the "Life Technologies Acquisition"); closed the Affymetrix and FEI acquisitions and began integrating
The Committee judged these goals in the context of the overall goal to deliver on the Company’s commitments to all stakeholders and advance the Company’s position as the world leader in serving science. Taking all of these factors into account, the Committee concluded that actual achievement against the non-financial measures was at a payout of 150%.
For 2016, the executives also participated in a one-time supplemental plan which provided them the opportunity to achieve up to an additional 20% of target bonus by attaining certain thresholds of adjusted operating income, with no payout if adjusted operating income was below $4.038 billion and a 20% payout for income over $4.079 billion. This plan was adopted to provide executives an opportunity to offset the reduced bonus payments from the prior year due to the significant negative foreign exchange environment at that time. Actual adjusted operating income of $4.222 billion yielded a 20% payout under the supplemental plan.
The process described above resulted in a preliminary overall achievement calculation of 136.2% of target bonus (without taking into account the 20% supplemental payment) for executives, including the named executive officers, in the aggregate. The Committee elected this year to grant Messrs. Casper, Williamson, Stevenson and Loewald 135% of target (rounded down from 136.2% for administrative convenience). Accordingly, Messrs. Casper, Williamson, Stevenson and Loewald, as corporate officers, received bonuses of 155% of target (including the payout under the supplemental plan). Mr. Wilver received a bonus of 200% of target (including the payout under the supplemental plan) based on his individual contributions.
In setting target bonuses for 2016, the Committee considered the Pearl Meyer Study and concluded it was appropriate to change the target bonuses for certain of the named executive officers as follows:
Name
2015 Target Bonus as a Percentage of Salary
2016 Target Bonus as a Percentage of Salary
Marc N. Casper
185%
190%
Stephen Williamson
75%
80%
Mark P. Stevenson
105%
105%
Peter M. Wilver
90%
75%
Thomas W. Loewald
85%
85%
Following these adjustments, the 2016 target bonus awards for our named executive officers ranged from 42% below to 31% above the targeted 65th percentile opportunity, but approximated 100% of the targeted 65th percentile opportunity in the aggregate, as defined in the Pearl Meyer Study.





Page 21

The target bonus awards and actual bonus awards for 2016 for the named executive officers were as follows:
Name
Target Bonus as a
Percentage of Salary
Target Bonus Award
Actual Bonus Award
Marc N. Casper
190%
 
$
2,707,500

 
$
4,196,625

Stephen Williamson
80%
 
$
483,000

 
$
748,650

Mark P. Stevenson
105%
 
$
903,000

 
$
1,399,650

Peter M. Wilver
75%
 
$
412,500

 
$
825,000

Thomas W. Loewald
85%
 
$
521,220

 
$
807,891

Stock Option and Restricted Stock Unit Awards
Our equity award program is the primary vehicle for offering long-term incentives to our executives. We believe that equity grants provide our executives with a strong link to our long-term performance, create an ownership culture and help to align the interests of our executives with that of our stockholders. In addition, the vesting feature of our equity grants should further our goal of executive retention because this feature provides an incentive to our executives to remain in our employ during the vesting period. In determining the size of equity grants to our executives, our Compensation Committee considers the peer group information contained in the Pearl Meyer Study, Company and business unit performance, the individual performance of the executives, and prevailing market trends. The Committee also considers the recommendations of the chief executive officer with respect to awards to our executives other than the chief executive officer, and input from other independent directors of the Board with respect to awards to our chief executive officer. The Committee then decides how much of these values should be delivered by each of the long-term incentive vehicles utilized by the Company, such as stock options, performance-based restricted stock units or time-based restricted stock units.
We typically make an initial equity award to newly hired executives and to newly promoted executives to reflect their new responsibilities, and annual equity grants in late February as part of our overall compensation program. Our equity awards have typically taken the form of stock options and restricted stock unit grants. Because time-based restricted stock units have a built-in value at the time the grants are made, we generally grant significantly fewer restricted stock units than the number of stock options we would grant for a similar purpose. All equity grants to our officers are approved by the Compensation Committee. Equity grants for newly hired or promoted non-officer employees are determined and approved by the Employee Equity Committee, which currently consists of Mr. Casper, and cannot exceed 25,000 shares per employee without Compensation Committee approval. The timing of the Compensation Committee meeting in late February is such that the meeting occurs after we have publicly released earnings for the just-completed year. While our cash incentive program is designed to reward executives for meeting near-term (generally annual) financial and operational goals, our equity program is designed to focus on long-term performance and alignment of executive officer compensation with the long-term interests of our stockholders.
Typically, the stock options we grant to our named executive officers vest in equal annual installments over the first four years of a seven-year option term, performance-based restricted stock units vest in equal annual installments over three years (assuming the performance standard has been met), and time-based restricted stock unit awards vest in four tranches over three and one-half years at the end of 6, 18, 30 and 42 months. Vesting normally ceases upon termination of employment, except for acceleration upon qualifying retirements, death, disability, and in the case of certain terminations for Mr. Casper (see “Agreements with Named Executive Officers; Potential Payments Upon Termination or Change in Control” on page 34). Stock option exercise rights normally cease for officers other than Mr. Casper shortly after termination, except in the cases of death, disability and qualifying retirement. Prior to the exercise of an option, the holder has no rights as a stockholder with respect to the shares subject to such option, including voting rights and the right to receive dividends or dividend equivalents. Prior to the distribution of shares after vesting of restricted stock units (which represent a right in the future to receive shares), the holder has no right to transfer or vote the underlying shares. Generally, holders of restricted stock units have the right to accrue dividends (in the form of dividend equivalents) but do not receive them unless and until vesting and delivery of the underlying shares occur.
Our practice is to set the exercise price of stock options to equal the closing price of our Common Stock on the New York Stock Exchange on the date the grant is approved by the Compensation Committee or the Employee Equity Committee.





Page 22

2016 Annual Grant
On February 24, 2016, in connection with the normal compensation cycle, the Committee granted stock options, time-based restricted stock units and performance-based restricted stock units to the named executive officers. In setting grant levels for 2016, the Committee considered the Pearl Meyer Study. The Committee adjusted these amounts towards the 75th percentile to reflect its interest in focusing on long-term performance and the development of strong executive retention through opportunities tied to appreciation of the Company’s stock price over time, as well as its judgment on matters of internal fairness. In determining the mix of long-term incentives for 2016, the Committee considered the retentive and incentive value of the current and prior grants to Messrs. Casper, Williamson, Stevenson, Wilver and Loewald, and the overall weighting toward equity-based incentive compensation relative to salary and annual cash incentives, which places greater emphasis on the Company’s long-term performance. The adjusted amounts were then converted to numbers of stock options and restricted stock units. Approximately 30% of the calculated award value was delivered through stock options, 35% through time-based restricted stock units and 35% through performance-based restricted stock units (measured at the target level). The Committee adopted these allocations consistent with the strategy of providing executives with a balanced portfolio of equity vehicles.
a2017proxy_chart-10879.jpg
The value of equity grants as of the grant date in February 2015 and February 2016 are reflected in the table below.
 
Stock Options
Time-Based Restricted
Stock Units
Performance-Based
Restricted Stock Units
(at target)
Name
2015
2016
2015
2016
2015
2016
Marc N. Casper
$
3,482,400

$
3,579,114

$
4,014,019

$
4,048,824

$
4,014,019

$
4,048,824

Stephen Williamson
$
574,596

$
630,047

$
629,136

$
700,758

$
629,136

$
700,758

Mark P. Stevenson
$
1,276,880

$
1,331,341

$
1,454,877

$
1,492,355

$
1,454,877

$
1,492,355

Peter M. Wilver
$

$
630,047

$
524,280

$
700,758

$
524,280

$
700,758

Thomas W Loewald
$
809,658

$
773,938

$
904,383

$
882,436

$
904,383

$
882,436

The February 2016 stock options to Messrs. Casper, Williamson, Stevenson, Wilver and Loewald (a) vest in equal annual installments over the four-year period commencing on the first anniversary of the date of grant (i.e., the first 1/4 of the stock option grant would vest on the first anniversary of the date of grant) so long as the executive officer is employed by the Company on each such date (subject to certain exceptions), (b) have an exercise price equal to the closing price of the Company’s Common Stock on the New York Stock Exchange on the date of grant, and (c) have a term of 7 years from such date.
The February 2016 time-based restricted stock units granted to Messrs. Casper, Williamson, Stevenson, Wilver and Loewald vest as follows: 15%, 25%, 30% and 30% vesting on the dates 6, 18, 30 and 42 months from the date of grant, respectively, so long as the executive officer is employed by the Company on each such date (subject to certain exceptions).





Page 23

In connection with the February 2016 performance-based restricted stock unit program, the Compensation Committee adopted as performance goals the measures organic revenue growth and adjusted earnings per share. The Committee selected these financial measures, as opposed to measures computed under GAAP, because these measures are consistent with how management measures and forecasts the Company’s performance, especially when comparing such results to previous periods or forecasts, and because the Company believes both metrics are important to many of the Company’s stockholders. For each of the performance goals, the Company’s actual performance is measured relative to the Company’s internal operating plan for 2016. The vesting of the performance-based restricted stock units granted to Messrs. Casper, Williamson, Stevenson, Wilver and Loewald in February 2016 is as follows: 1/3 on the date the Compensation Committee certifies that the performance goals related to the Company’s organic revenue growth and adjusted earnings per share have been achieved (the “Performance Certification Date”), 1/3 on the one-year anniversary of the Performance Certification Date, and 1/3 on the two-year anniversary of the Performance Certification Date (subject to certain exceptions). The weighting of the financial measures and performance targets for 2016 were:
 
Organic Revenue Growth (50%)1
Adjusted Earnings Per Share (50%)1
Threshold
(0% payout on each measure)
2.50%
$7.60
Baseline
(50% payout on each measure)
4.00%
$7.84
Maximum
(75% payout on each measure)
5.00%
$8.02
Actual Results
4.25%
$8.27
Payout Factor
125%
1 
There are a variety of payout scenarios for financial results between the threshold and maximum levels.
Payouts under the program are step-wise, based on standalone organic revenue growth in equal proportion to adjusted earnings per share, with no graduated payout at intermediate points. The plan was designed to provide some level of opportunity, but full downside risk. One-third of the total number of units earned vested on February 28, 2017, and the same number of restricted units will vest on both the first anniversary and the second anniversary of this vesting date so long as the executive officer is employed by the Company on each such date (subject to certain exceptions). Dividends paid by the Company accrue in the form of dividend equivalents on unvested restricted stock units (in the case of performance-based units, only after the performance conditions are met), and will be paid out if and when the underlying shares vest and are delivered.
Stock Ownership Policy
The Compensation Committee has established a stock ownership policy that the chief executive officer hold shares of Common Stock equal in value to at least four times his or her annual base salary and that each other executive officer hold shares of Common Stock equal in value to at least two times his or her annual base salary. For purposes of this policy, time-based restricted stock units are counted towards the target. All of our named executive officers are currently in compliance with this policy.
Benefits and Other Compensation
We maintain broad-based benefits that are provided to all employees, including health and dental insurance, life and disability insurance and a 401(k) plan. Executives are eligible to participate in all of our employee benefit plans, in each case on the same basis as other employees. The 401(k) plan is a tax-qualified retirement savings plan pursuant to which all U.S.-based employees, including officers, are able to contribute a percentage of their annual salary up to the limit prescribed by the Internal Revenue Service (the “IRS”) to the 401(k) plan on a before-tax basis. The Company matches contributions made by employees to the 401(k) plan, dollar for dollar, up to the first 6% of compensation deferred by the employee to the plan. Employees were capped at contributing 6% of $265,000 for 2016 in accordance with the IRS annual compensation limit. All contributions to the 401(k) plan as well as any matching contributions are fully-vested upon contribution, except that matching contributions to new employees joining the Company after January 1, 2014 vest after two years of employment.





Page 24

The named executive officers, in addition to certain other U.S.-based eligible executives, are also entitled to participate in the Company’s Deferred Compensation Plan. Pursuant to the Deferred Compensation Plan, an eligible employee can defer receipt of his or her annual base salary and/or bonus until he or she ceases to serve as an employee of the Company or until a future date prior to his or her termination of employment with the Company. The Deferred Compensation Plan is discussed in further detail under the heading “Nonqualified Deferred Compensation for 2016” on page 32. Amounts deferred under this plan are treated as if they were invested in selected mutual funds and other investment vehicles administered by a third party investment manager. The Company matches 100% of the first 6% of pay that is deferred into the Deferred Compensation Plan over the IRS annual compensation limit for 401(k) purposes.
The Company provides officers with perquisites and other personal benefits that the Company and the Compensation Committee believe are reasonable and consistent with its overall compensation program to better enable the Company to attract and retain superior employees for key positions. Each named executive officer has access to supplemental long-term disability and life insurance, and emergency medical service through Massachusetts General Hospital’s global hospital network. Additionally, the Company provides a $3 million term life insurance policy to Mr. Casper.
The Company owns a corporate plane to allow our executive officers and other corporate and business leaders to travel safely and efficiently for business purposes, enabling our employees to be more productive by providing a secure environment to conduct confidential business and avoid the scheduling constraints associated with commercial air travel. The Compensation Committee has adopted a corporate aircraft usage policy to allow Mr. Casper to use the corporate plane for limited non-business purposes, up to an annual incremental cost to the Company of $150,000. The value of Mr. Casper’s non-business use of the plane will be treated as taxable income to him in accordance with IRS regulations and will not be grossed up.
Attributed costs of the personal benefits described above for the named executive officers for 2016 are described in the “Summary Compensation Table” on page 25. None of these perquisites are subject to a tax gross-up.
Severance and Change in Control Benefits
Pursuant to our equity plans and agreements we have entered into with our executives, in the event of the termination of their employment under certain circumstances, they are entitled to specified benefits. We have provided more detailed information about these benefits, along with estimates of their value under various circumstances, under the caption “Agreements with Named Executive Officers; Potential Payments Upon Termination or Change in Control” on page 34. We believe providing these benefits helps us compete for executive talent and that our severance and change in control benefits are generally in line with severance packages offered to comparable executives at other companies.
We have executive change in control retention agreements with our executives that provide cash and other severance benefits if there is a change in control of the Company and their employment is terminated by the Company without “cause” or by the individual for “good reason,” in each case within 18 months thereafter. We also have an executive severance policy that provides severance benefits to our executives (other than Mr. Casper) in the event their employment is terminated by the Company without “cause” in the absence of a change in control. Mr. Casper’s severance arrangements are provided in a separate agreement between him and the Company. The change in control retention agreements and executive severance arrangements are described in greater detail under the caption “Agreements with Named Executive Officers; Potential Payments Upon Termination or Change in Control” on page 34. None of the Company’s change in control retention agreements with named executive officers provide for a tax-gross up.
Tax and Accounting Considerations
Deductibility of Executive Compensation
The Compensation Committee considers the potential effect of Section 162(m) of the Internal Revenue Code of 1986 as amended (the “Code”), in designing its compensation program, but reserves the right to use its independent judgment to approve nondeductible compensation, while taking into account the financial effects such action may have on the Company. Section 162(m) limits the tax deduction available to public companies for annual compensation that is paid to the Company’s chief executive officer and three other most highly paid executive officers (other than the chief financial officer) in excess of $1,000,000, unless the compensation qualifies as “performance-based” or is otherwise exempt from Section 162(m). Stock options, performance-based restricted





Page 25

stock unit awards and annual incentive cash bonuses for the executive officers are intended to qualify for the deduction.
Accounting Considerations
Accounting considerations also play an important role in the design of our executive compensation programs and policies. ASC 718 requires us to expense the cost of stock-based compensation awards. We consider the relative impact in terms of accounting cost in addition to other factors such as stockholder dilution, retentive impact, and motivational impact when selecting long-term equity incentive instruments.
Compensation Committee Report
The Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.
 
THE COMPENSATION COMMITTEE
Thomas J. Lynch (Chairman)
William G. Parrett
Elaine S. Ullian
Summary Compensation Table
The following table summarizes compensation for services to the Company earned during the last three fiscal years by the Company’s chief executive officer, chief financial officer, and the three other most highly compensated executive officers of the Company during 2016. The executive officers listed below are collectively referred to in this proxy statement as the “named executive officers.”
Name and
Principal Position
Year
Salary
($)(1)
Stock
Awards
($)(2)
Option
Awards
($)(3)
Non-Equity
Incentive Plan
Compensation
($)(4)
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(5)
All Other
Compensation
($)(6)
Total
($)
Marc N. Casper
President and Chief
Executive Officer
2016
$
1,407,471

$
8,097,648

$
3,579,114

$
4,196,625

 
 
$

 
$
519,803

$
17,800,661

2015
$
1,339,692

$
8,028,038

$
3,482,400

$
2,997,000

 
 
$

 
$
459,949

$
16,307,079

2014
$
1,254,808

$
8,277,048

$
4,021,270

$
3,353,850

 
 
$

 
$
539,981

$
17,446,957

Stephen Williamson(7)
Senior Vice President and Chief Financial Officer
2016
$
597,031

$
1,401,516

$
630,047

$
748,650

 
 
$

 
$
93,132

$
3,470,376

2015
$
540,251

$
1,258,272

$
574,596

$
517,500

 
 
$

 
$
72,755

$
2,963,374

 
 
 
 
 
 
 
 
 
 


Mark P. Stevenson(8)
Executive Vice
President
2016
$
850,301

$
2,984,710

$
1,331,341

$
1,399,650

 
 
$
263,500

 
$
162,127

$
6,991,629

2015
$
817,237

$
2,909,754

$
1,276,880

$
1,578,300

(9)
 
$

 
$
133,481

$
6,715,652

2014
$
723,077

$
2,703,090

$
3,058,000

$
5,074,000

(10)
 
$
236,735

 
$
167,865

$
11,962,767

Peter M. Wilver(11)
Executive Vice President and Chief Administrative Officer
2016
$
550,000

$
1,401,516

$
630,047

$
825,000

 
 
$

 
$
96,343

$
3,502,906

2015
$
677,596

$
1,522,878

$
457,446

$
729,000

 
 
$

 
$
103,556

$
3,490,476

2014
$
673,962

$
1,690,208

$
825,660

$
880,875

 
 
$

 
$
122,428

$
4,193,133

Thomas W. Loewald
Senior Vice President and Chief Commercial Officer
2016
$
610,115

$
1,764,872

$
773,938

$
807,891

 
 
$

 
$
104,993

$
4,061,809

2015
$
596,347

$
1,808,766

$
809,658

$
612,000

 
 
$

 
$
92,566

$
3,919,337

2014
$
568,125

$
1,690,208

$
825,660

$
708,688

 
 
$

 
$
99,276

$
3,891,957

(1)
Reflects salary earned for the year, though a portion of such salary may have been paid early in the subsequent year.
(2)
These amounts represent the aggregate grant date fair value of restricted stock unit awards made during 2016, 2015 and 2014, respectively, calculated in accordance with the Company’s financial reporting practices. For information on the valuation assumptions with respect to these awards, refer to note 5 of the Thermo Fisher financial statements in the Form 10-K for the year ended December 31, 2016, as filed with the SEC. For performance-based restricted stock unit awards made to Messrs. Casper, Williamson, Stevenson, Wilver and





Page 26

Loewald in February 2016, these amounts reflect the grant date fair value of such awards at the time of grant based upon the probable outcome (earning 100% of target) at the time of grant. The value of the performance-based restricted stock unit awards at the grant date in February 2016 assuming that the highest level of performance conditions was achieved was $6,073,236, $1,051,137, $2,238,533, $1,051,137 and $1,323,654 for Messrs. Casper, Williamson, Stevenson, Wilver and Loewald, respectively. The amounts reflected in this column do not represent the actual amounts paid to or realized by the named executive officer for these awards during fiscal years 2016, 2015 or 2014.
(3)
These amounts represent the aggregate grant date fair value of stock option awards made during 2016, 2015 and 2014, respectively, calculated in accordance with the Company’s financial reporting practices. For information on the valuation assumptions with respect to these awards, refer to note 5 of the Thermo Fisher financial statements in the Form 10-K for the year ended December 31, 2016, as filed with the SEC. These amounts do not represent the actual amounts paid to or realized by the named executive officer for these awards during fiscal years 2016, 2015 or 2014.
(4)
Reflects compensation earned for the year but paid early in the subsequent year.
(5)
These amounts represent the actuarial increase (if any) in the present value of Mr. Stevenson's benefits under the Applera Corporation Supplemental Executive Retirement Plan (the “SERP”) during the year. Mr. Stevenson’s SERP balance decreased by $55,141 in 2015. As the SERP was a plan maintained by Life Technologies prior to the Life Technologies Acquisition, and was frozen prior to the acquisition, only Mr. Stevenson (a former employee of Life Technologies) participates in the SERP.
(6)
Under SEC rules and regulations, if the total value of all perquisites and personal benefits is $10,000 or more for any named executive officer, then each perquisite or personal benefit, regardless of its amount, must be identified by type. If perquisites and personal benefits are required to be reported for a named executive officer, then each perquisite or personal benefit that exceeds the greater of $25,000 or 10% of the total amount of perquisites and personal benefits for that officer must be quantified and disclosed in a footnote. The amounts presented in this column include (a) matching contributions made on behalf of the named executive officers by the Company pursuant to the Company’s 401(k) Plan, (b) premiums paid by the Company with respect to long-term disability insurance for the benefit of the named executive officers, (c) premiums paid by the Company with respect to supplemental group term life insurance, (d) access to emergency medical service through Massachusetts General Hospital’s global hospital network, (e) matching contributions made on behalf of the named executive officers by the Company pursuant to the Company’s Non-Qualified Deferred Compensation Plan, (f) dividends accrued in the form of dividend equivalents on restricted stock units and (g) with respect to Mr. Casper, premiums paid by the Company for a term life insurance policy for the benefit of Mr. Casper as well as the incremental cost to the Company of Mr. Casper’s non-business use of Company aircraft. As described on page 24, Mr. Casper is permitted to use the aircraft for non-business purposes. The incremental cost to the Company during 2016 for non-business use represents the direct variable costs incurred due to usage of the Company aircraft including fuel, crew trip expense, crew meals, catering, landing fees, hangar/parking costs and other miscellaneous expenses. Since the aircraft is used primarily for business travel, the Company does not include in the calculation fixed costs which remain constant, such as pilots’ salaries, the acquisition costs of the aircraft, and the cost of maintenance not related to Mr. Casper’s personal trips. Mr. Casper’s annual allowance for personal use of the Company aircraft is limited to $150,000 in incremental cost to the Company.
For 2016, the dollar value of the principal components of these perquisites and personal benefits was (1) $15,900 for each of Messrs. Casper, Williamson, Stevenson, Wilver and Loewald, for matching 401(k) contributions, (2) $2,513, $2,843, $4,037, $3,378 and $4,261 for Messrs. Casper, Williamson, Stevenson, Wilver and Loewald, respectively, for long-term disability insurance premiums, (3) $320,186, $64,780, $119,009, $66,889 and $69,152 for Messrs. Casper, Williamson, Stevenson, Wilver and Loewald, respectively, for matching deferred compensation plan contributions, (4) $68,669, $9,110, $22,634, $10,085 and $15,172 for Messrs. Casper, Williamson, Stevenson, Wilver, and Loewald, respectively, for dividends accrued in the form of dividend equivalents on restricted stock units, and (5) for Mr. Casper, $11,875 for a term life insurance policy and $100,569 of incremental cost to the Company for use of the Company’s aircraft for personal travel.
(7)
Mr. Williamson became an executive officer of the Company on August 1, 2015.
(8)
Mr. Stevenson became an executive officer of the Company on February 3, 2014, the date of the closing of the Life Technologies Acquisition.





Page 27

(9)
Includes a $504,000 bonus awarded to Mr. Stevenson in February 2016 for his efforts with respect to the integration of Life Technologies during 2015.
(10)
Includes a $3.1 million retention bonus paid to Mr. Stevenson in February 2014 upon the closing of the Life Technologies Acquisition and a $756,000 bonus awarded to him in February 2015 for his efforts with respect to the integration of Life Technologies in 2014.
(11)
Mr. Wilver served as Senior Vice President and Chief Financial Officer of the Company until August 1, 2015, when he became Executive Vice President and Chief Administrative Officer of the Company. Mr. Wilver retired from the Company on March 31, 2017.
Grants of Plan-Based Awards for 2016*
Name
Grant Date
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
Estimated Future Payouts Under Equity Incentive Plan Awards
All Other Stock Awards:
Number of  Shares of Stock or Units
All Other Option Awards:
Number of Securities Underlying Options
Exercise or Base Price of Option Awards
($/Sh)
Grant Date Fair Value of Stock and Option Awards
($)(2)
Threshold
($)
Target
($)(1)
Maximum
($)
Threshold
Target
Maximum
Marc N. Casper
2/24/2016
$
2,707,500

$
5,415,000

 
 
 
 
 
 
 
 
 
 
 
 
2/24/2016
 
 
 
(3)
31,200

(3)
46,800

(3)
 
 
 
 
 
$
4,048,824

2/24/2016
 
 
 
 
 
 
 
 
 
31,200

(4)
 
 
 
$
4,048,824

2/24/2016
 
 
 
 
 
 
 
 
 
 
 
128,100

(5)
$
129.77

$
3,579,114

Stephen Williamson
2/24/2016
$
483,000

$
966,000

 
 
 
 
 
 
 
 
 
 
 
 
2/24/2016
 
 
 
(3)
5,400

(3)
8,100

(3)
 
 
 
 
 
$
700,758

2/24/2016
 
 
 
 
 
 
 
 
 
5,400

(4)
 
 
 
$
700,758

2/24/2016
 
 
 
 
 
 
 
 
 
 
 
22,550

(5)
$
129.77

$
630,047

Mark P. Stevenson
2/24/2016
$
903,000

$
1,806,000

 
 
 
 
 
 
 
 
 
 
 
 
2/24/2016
 
 
 
(3)
11,500

(3)
17,250

(3)
 
 
 
 
 
$
1,492,355

2/24/2016
 
 
 
 
 
 
 
 
 
11,500

(4)
 
 
 
$
1,492,355

2/24/2016
 
 
 
 
 
 
 
 
 
 
 
47,650

(5)
$
129.77

$
1,331,341

Peter M. Wilver
2/24/2016
$
412,500

$
825,000

 
 
 
 
 
 
 
 
 
 
 
 
2/24/2016
 
 
 
(3)
5,400

(3)
8,100

(3)
 
 
 
 
 
$
700,758

2/24/2016
 
 
 
 
 
 
 
 
 
5,400

(4)
 
 
 
$
700,758

2/24/2016
 
 
 
 
 
 
 
 
 
 
 
22,550

(5)
$
129.77

$
630,047

Thomas W. Loewald
2/24/2016
$
521,220

$
1,042,440

 
 
 
 
 
 
 
 
 
 
 
 
2/24/2016
 
 
 
(3)
6,800

(3)
10,200

(3)
 
 
 
 
 
$
882,436

2/24/2016
 
 
 
 
 
 
 
 
 
6,800

(4)
 
 
 
$
882,436

2/24/2016
 
 
 
 
 
 
 
 
 
 
 
27,700

(5)
$
129.77

$
773,938

*
All equity awards made during 2016 were granted under the Company’s 2013 Stock Incentive Plan.
(1)
Target awards are based on a percentage of the named executive officer’s salary.
(2)
These amounts represent the aggregate grant date fair value of stock option and restricted stock unit awards made during 2016, calculated in accordance with the Company’s financial reporting practices. For information on the valuation assumptions with respect to these awards, refer to note 5 of the Thermo Fisher financial statements in the Form 10-K for the year ended December 31, 2016, as filed with the SEC. The amounts reflected in this column do not represent the actual amounts paid to or realized by the named executive officer for these awards during fiscal year 2016.
(3)
Represents the threshold, target and maximum number of achievable shares pursuant to a performance-based restricted stock unit award. In connection with the awards of performance-based restricted stock units, the Compensation Committee adopted as performance goals growth in organic revenue and adjusted earnings per share. If 2016 organic revenue growth was at least 2.50%, and/or 2016 adjusted earnings per share was at least $7.60, then the executives would be entitled to a number of units ranging from 25% to 150% of the target number of units granted. Organic revenue growth for 2016 of 4.25% and adjusted earnings per share for 2016 of $8.27 led to an actual payout of 125% of the target number of units for each executive. One-third of the total number of units earned vested on February 28, 2017, and the same number of restricted units will vest on both





Page 28

the first anniversary and the second anniversary of this vesting date so long as the executive officer is employed by the Company on each such date (subject to certain exceptions). Dividends on the Common Stock for which the record date is after the performance conditions are met accrue in the form of dividend equivalents on unvested restricted stock units, and will be paid out if and when the underlying shares vest and are delivered.
(4)
Represents a time-based restricted stock unit award which vests over a three-and-a half-year period commencing on the date of grant (15%, 25%, 30% and 30% vesting at 6, 18, 30 and 42 months, respectively, from the date of grant) so long as the executive officer is employed by the Company on each such date (subject to certain exceptions). Dividends on the Common Stock for which the record date is after the grant date accrue in the form of dividend equivalents on unvested restricted stock units, and will be paid out if and when the underlying shares vest and are delivered.
(5)
Options vest in equal annual installments over the four-year period commencing on the first anniversary of the date of grant (i.e., the first 1/4 of the stock option grant would vest on the first anniversary of the date of grant) so long as the executive officer is employed by the Company on each such date (subject to certain exceptions).
Outstanding Equity Awards at 2016 Fiscal Year-End
 
Option Awards
Stock Awards
Name
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(1)
Equity
Incentive
Plan Awards:
Number
of Securities
Underlying
Unexercised
Unearned
Options
(#)
Option
Exercise
Price
($)
Option
Expiration
Date
Number of
Shares or
Units of Stock
That Have Not
Vested (#)(1)
Market Value of Shares or Units of Stock That Have Not Vested ($) @ $141.10*
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested (#)
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) @ $141.10*
Marc N. Casper
350,520


 

$
46.56

11/21/2019


 


 

 
 
100,000


 

$
46.56

11/21/2019


 


 

 
 
111,672

39,041

(2
)

$
73.24

2/26/2020


 


 

 
 
65,750

65,750

(3
)

$
124.28

2/26/2021


 


 

 
 
30,000

90,000

(4
)

$
131.07

2/25/2022


 


 

 
 

128,100

(5
)

$
129.77

2/24/2023


 


 

 
 


 



9,990

(6
)
$
1,409,589


 

 
 


 



15,318

(7
)
$
2,161,370


 

 
 


 



18,376

(8
)
$
2,592,854


 

 
 






25,521

(9
)
$
3,601,013

 
 
 
 
 






26,520

(10
)
$
3,741,972

 
 
 
 
 


 




 

46,800

(11
)
$
6,603,480

(12
)
Stephen Williamson
7,125

2,375

(2
)

$
73.24

2/26/2020


 


 

 
 
4,350

4,350

(3
)

$
124.28

2/26/2021


 


 

 
 
4,950

14,850

(4
)

$
131.07

2/25/2022


 


 

 
 

22,550

(5
)

$
129.77

2/24/2023


 


 

 
 


 



690

(6
)
$
97,359


 

 
 


 



1,059

(7
)
$
149,425


 

 
 


 



2,880

(8
)
$
406,368


 

 
 


 



4,000

(9
)
$
564,400


 

 
 


 



4,590

(10
)
$
647,649


 

 
 


 




 

8,100

(11
)
$
1,142,910

(12
)





Page 29

 
Option Awards
Stock Awards
Name
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(1)
Equity
Incentive
Plan Awards:
Number
of Securities
Underlying
Unexercised
Unearned
Options
(#)
Option
Exercise
Price
($)
Option
Expiration
Date
Number of
Shares or
Units of Stock
That Have Not
Vested (#)(1)
Market Value of Shares or Units of Stock That Have Not Vested ($) @ $141.10*
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested (#)
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) @ $141.10*
Mark P. Stevenson**
50,000

50,000

(3
)

$
124.28

2/26/2021


 


 

 
 
11,000

33,000

(4
)

$
131.07

2/25/2022


 


 

 
 

47,650

(5
)

$
129.77

2/24/2023


 


 

 
 


 



6,526

(6
)
$
920,819


 

 
 


 



6,660

(8
)
$
939,726


 

 
 






9,250

(9
)
$
1,305,175

 
 
 
 
 






9,775

(10
)
$
1,379,253

 
 
 
 
 


 




 

17,250

(11
)
$
2,433,975

(12
)
Peter M. Wilver
25,950

8,650

(2
)

$
73.24

2/26/2020


 


 

 
 
13,500

13,500

(3
)

$
124.28

2/26/2021


 


 

 
 
4,350

13,050

(13
)

$
121.62

9/9/2022


 


 

 
 

22,550

(5
)

$
129.77

2/24/2023


 


 

 
 


 

$


2,040

(6
)
$
287,844


 

 
 


 

$


3,129

(7
)
$
441,502


 

 
 


 

$


3,315

(14
)
$
467,747


 

 
 


 

$


4,590

(10
)
$
647,649


 

 
 


 

$



 

8,100

(11
)
$
1,142,910

(12
)
Thomas W. Loewald

7,675

(2
)

$
73.24

2/26/2020


 


 

 
 
13,500

13,500

(3
)

$
124.28

2/26/2021


 


 

 
 
6,975

20,925

(4
)

$
131.07

2/25/2022


 


 

 
 

27,700

(5
)

$
129.77

2/24/2023


 


 

 
 


 



2,040

(6
)
$
287,844


 

 
 


 



3,129

(7
)
$
441,502


 

 
 


 



4,140

(8
)
$
584,154


 

 
 


 



5,750

(9
)
$
811,325


 

 
 


 



5,780

(10
)
$
815,558


 

 
 


 




 

10,200

(11
)
$
1,439,220

(12
)
*
Reflects the closing price of the Company’s Common Stock on the New York Stock Exchange on December 31, 2016.
**
In addition to the outstanding equity reflected in the chart above, Mr. Stevenson held 7,549 Life Technologies restricted stock units (“RSUs”) that were converted into the right to receive $76.1312 per share in cash from the Company in accordance with their original vesting schedule, pursuant to the Agreement and Plan of Merger by and among Life Technologies, the Company and Polpis Merger Sub Co., dated April 14, 2013 (the “Acquisition Agreement”). The restricted cash will vest in April 2017, so long as Mr. Stevenson is employed by the Company at such time (subject to certain exceptions).
(1)
Unexercisable stock options and unvested units of restricted stock vest as described in the footnotes below and under certain circumstances described under the heading “Agreements with Named Executive Officers; Potential Payments Upon Termination or Change in Control.” Unexercisable stock options and unvested units of restricted stock also vest upon certain other events such as death, disability, or qualifying retirement.
(2)
Represents the balance of a stock option granted on February 26, 2013, which vested on February 26, 2017.





Page 30

(3)
Represents the balance of a stock option granted on February 26, 2014, one-half of which vested on February 26, 2017, and the remainder of which vests on February 26, 2018, so long as the executive officer is employed by the Company on such date (subject to certain exceptions).
(4)
Represents the balance of a stock option granted on February 25, 2015, one-third of which vested on February 25, 2017, and the remainder of which vests in equal installments on February 25, 2018 and February 25, 2019, so long as the executive officer is employed by the Company on each such date (subject to certain exceptions).
(5)
Option vests in equal annual installments on February 24, 2017, February 24, 2018, February 24, 2019 and February 24, 2020, so long as the executive officer is employed by the Company on each such date (subject to certain exceptions).
(6)
Represents the balance of a time-based restricted stock unit award made on February 26, 2014, which vests on August 26, 2017, so long as the executive officer is employed by the Company on such date (subject to certain exceptions).
(7)
Represents the balance of a performance-based restricted stock unit award made on February 26, 2014, which vested on February 26, 2017.
(8)
Represents the balance of a time-based restricted stock unit award made on February 25, 2015, which vests 50% on each of August 25, 2017 and August 25, 2018, so long as the executive officer is employed by the Company on each such date (subject to certain exceptions).
(9)
Represents the balance of a performance-based restricted stock unit award made on February 25, 2015, one-half of which vested on February 25, 2017, and the remainder of which vests on February 25, 2018, so long as the executive officer is employed by the Company on such date (subject to certain exceptions).
(10)
Represents the balance of a time-based restricted stock unit award made on February 24, 2016, which vests 29.4% on August 24, 2017, and 35.3% on each of August 24, 2018 and August 24, 2019, so long as the executive officer is employed by the Company on each such date (subject to certain exceptions).
(11)
Represents the maximum number of achievable shares that may be earned pursuant to a performance-based restricted stock unit award made on February 24, 2016. In connection with the awards of performance-based restricted stock units, the Compensation Committee adopted as performance goals a range of growth in organic revenue and adjusted earnings per share. If 2016 organic revenue growth was at least 2.50%, and/or 2016 adjusted earnings per share was at least $7.60, then the executive would be entitled to a number of units ranging from 25% to 150% of the target number of units granted. Organic revenue growth for 2016 of 4.25% and adjusted earnings per share for 2016 of $8.27 led to an actual payout of 125% of the target number of units for the executive. One-third of the total number of units earned vested on February 28, 2017, and the same number of restricted units will vest on both the first anniversary and the second anniversary of this vesting date so long as the executive is employed by the Company on each such date (subject to certain exceptions).
(12)
Represents the maximum payout of a performance-based restricted stock unit award made on February 24, 2016 at $141.10, the Company’s closing stock price on December 31, 2016.
(13)
Represents the balance of a stock option granted on September 9, 2015, which vests in equal annual installments on September 9, 2017, September 9, 2018 and September 9, 2019, so long as Mr. Wilver is employed by the Company on each such date (subject to certain exceptions).
(14)
Represents the balance of a time-based restricted stock unit award made on September 9, 2015, 29.4% of which vested on March 9, 2017 and 35.3% vests on each of March 9, 2018 and March 9, 2019, so long as Mr. Wilver is employed by the Company on each such date (subject to certain exceptions).





Page 31

Option Exercises and Stock Vested During 2016
The following table reports information regarding stock option exercises and the vesting of stock awards during fiscal year 2016 by the Company’s named executive officers. No stock appreciation rights were exercised or were outstanding during fiscal year 2016.
 
Option Awards
Stock Awards
Name
Number of
Shares
Acquired on
Exercise
(#)
Value
Realized
On
Exercise
($)(1)
Number of
Shares
Acquired on
Vesting
(#)
Value
Realized
On
Vesting
($)(2)
Marc N. Casper
108,797

$
10,322,771

228,130

$
30,386,639

Stephen Williamson
27,700

$
2,525,385

7,592

$
1,073,304

Mark P. Stevenson(3)


15,650

$
2,275,255

Peter M. Wilver
68,200

$
6,643,884

22,518

$
3,102,817

Thomas W. Loewald
26,650

$
2,168,306

16,971

$
2,404,851

(1)
The amounts shown in this column represent the difference between the option exercise price and the market price on the date of exercise.
(2)
The amounts shown in this column represent the number of shares vesting multiplied by the market price on the date of vesting.
(3)
In addition to the amounts reflected in the table, Mr. Stevenson received $1,372,493 in 2016 upon the vesting of 18,028 RSUs granted to him by Life Technologies, which the Company paid in cash in accordance with the Acquisition Agreement. For more information about this transaction, see “Transactions with Related Persons, Promoters and Certain Control Persons — Transactions with Related Persons” below.
Pension Benefits
Prior to the Life Technologies Acquisition, Life Technologies maintained the Applera Corporation Supplemental Executive Retirement Plan (the “SERP”), a U.S. non-tax-qualified pension plan for select executives. The SERP provides a monthly pension payable at age 65 equal to 50% of final five-year average monthly pay, prorated for less than 15 years of service. Benefit accruals under the SERP were frozen as of January 1, 2010.
The table below shows the present value of accumulated benefits payable to each of the named executive officers under the SERP. As the SERP was a plan maintained by Life Technologies prior to the Life Technologies Acquisition, and was frozen prior to the acquisition, only Mr. Stevenson (a former employee of Life Technologies) participates in the SERP.
Name
Plan Name
Number of Years
Credited Service
(#)
Present Value of
Accumulated Benefit
($)
Payments During
Last Fiscal Year
($)
Marc N. Casper

 

Stephen Williamson

 

Mark P. Stevenson
Applera Corporation Supplemental Executive Retirement Plan
5
$2,683,279
(1)

Peter M. Wilver

 

Thomas W. Loewald

 

(1)
Represents the actuarial present value of accumulated benefit as of December 31, 2016 under the SERP, based on assumptions of a 3.99% discount rate and a retirement age of 65.






Page 32

Nonqualified Deferred Compensation for 2016
Name
Executive
Contributions
in Last FY ($)(1)
Registrant
Contributions
in Last FY ($)(2)
Aggregate
Earnings in
Last FY ($)
Aggregate
Withdrawals/
Distributions ($)
Aggregate Balance at
Last FYE ($)
Marc N. Casper
$
248,208

$
248,208

$
323,447

$
(379,526
)
$
3,482,145

(3)
Stephen Williamson
$
50,911

$
50,911

$
24,921

$

$
553,914

(4)
Mark P. Stevenson
$
961,564

$
99,488

$
262,286

$

$
2,966,821

(5)
Peter M. Wilver
$
61,129

$
61,129

$
99,502

$

$
1,420,090

(6)
Thomas W. Loewald
$
57,399

$
57,399

$
40,649

$

$
564,903

(7)
(1)
Represents deferral of a portion of 2016 salary and/or bonus earned for 2015 performance (but paid in 2016).
(2)
Represents a matching Company contribution in the deferred compensation plan with respect to 2016 salary and/or bonus earned for 2015