AbbVie 2014 Annual Report Download - page 144

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13NOV201221352027
Stockholder Engagement
2014 Say on Pay Results
At our 2014 Annual Meeting, our say on pay proposal received support from 96% of stockholders. The board
and compensation committee are encouraged by the substantial level of stockholder support received for our executive
compensation program. Nevertheless, the company intends to engage proactively with stockholders to ensure that we
continue to understand stockholder feedback and to enable us to take that feedback into consideration for our
compensation decisions. To that end, in early 2015, AbbVie approached and engaged stockholders holding approximately
35% of the company’s outstanding shares. In these discussions, the aggregate feedback was generally supportive of the
compensation program, consistent with the level of stockholder support for our say on pay proposals in the last two
years, and was not prescriptive about our compensation plan design. Going forward, we intend to continue to engage
our stockholders in meaningful discussions about our compensation programs and other key matters of interest to them.
Compensation Program Governance Summary
In addition to strong alignment of pay with the performance of the company and our NEOs, we maintain and
are committed to good governance practices, including the following:
⻬Majority of NEO compensation tied to long-term performance
⻬Short- and long-term incentive programs closely align pay with performance
⻬Robust stock ownership guidelines of 6x salary for CEO, 3x for NEOs, and 4x annual fees for non-employee
directors
⻬NEOs must hold and not sell equity until the minimum stock ownership requirement is satisfied.
⻬Double-trigger requirements for equity acceleration and other benefits in the event of a change in control
⻬No tax gross-ups in executive compensation program
⻬No duplication of performance metrics in short- and long-term incentives
⻬No repricing of stock options without express stockholder approval
⻬No employment contracts
⻬No guaranteed short-term incentives or equity awards, and short-term incentives are capped at 200% of target
⻬Anti-hedging and anti-pledging policies
⻬Independent compensation consultant that performs no other work for the company
⻬Committee has broad discretion to claw back incentive awards in the unlikely event of a restatement of earnings
⻬Proactive stockholder engagement process
II. Executive Compensation Process
Commitment to Performance-Based Awards
The vast majority of NEO pay is performance-based. Specific goals and targets are the foundation of our pay-for-
performance process, and this section describes how they apply to each pay component. Though quantitative metrics
such as financial and operational results are a central part of our performance assessment, some goals such as
leadership and progress against strategic and long-term objectives are difficult to measure using numeric or formulaic
criteria. As such, the compensation committee also conducts a qualitative assessment of individual performance to
ensure the overall assessment of performance and pay decisions are aligned with the company’s true performance over
a period of time. A discussion of the decision-making criteria for each pay component follows.
24 2015 Proxy Statement
EXECUTIVE COMPENSATION