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13NOV201221352027
Committee Process for Setting Total Compensation
Each February, the committee, with the assistance of its independent compensation consultant and AbbVie’s
management team, determines target pay levels for NEOs. The process starts with a consideration of peer compensation
levels and the mix of compensation for comparable executives at peer companies (particularly health care peers), which
are listed below in the section captioned ‘‘Peer Group Benchmarking.’’ After this benchmark review, the committee
establishes NEO compensation relative to the peer median (as derived primarily from the health care peer group
approved by the committee) based on several factors, including company performance and stockholder value creation, as
well as how a particular NEO’s responsibilities and individual performance helped drive those results. Awards are further
differentiated based on each NEO’s contributions to long-term strategic performance.
With respect to long-term incentive awards, the committee considers the extent to which the peer-group NEOs’
pay mix consists of long-term incentives and adjusts based on two primary factors. First, the committee considers the
company’s short- and long-term returns to stockholders and relative performance against financial and/or operating
measures that drive stockholder returns, as well as performance against measurable strategic objectives. Second, the
committee considers each NEO’s performance and relative contribution to the company’s long-term success.
Peer Group Benchmarking
To provide the appropriate context for executive pay decisions for 2014, the committee, in consultation with its
independent compensation consultant, assessed the compensation practices and pay levels of two designated peer
groups. In addition to competing for executive talent, the peer companies also operate complex business operations with
significant global reach. The peer groups used for establishing compensation for 2014 were as follows:
Amgen, Inc. 3M Company
Bristol-Myers Squibb Company Bristol-Myers Squibb Company
Eli Lilly and Company Caterpillar Inc.
GlaxoSmithKline plc The Coca-Cola Company
Johnson & Johnson Colgate-Palmolive Company
Merck & Company, Inc. General Dynamics Corporation
Novartis AG General Mills, Inc.
Pfizer Inc. H.J. Heinz Company
Kellogg Company
Kimberly-Clark
McDonald’s Corporation
Merck & Company, Inc.
PepsiCo Inc.
The Procter & Gamble Company
Members of the Health Care Peer Group are AbbVie’s primary competitors for executive talent and are
companies the committee believes chiefly represent our competitive market.
Generally, members of the High-Performing Peer Group have a five-year average return on equity (ROE) of at
least 18% and are similar to AbbVie in size, performance and/or scope of global operations. The committee believes this
ROE metric over a five-year period is a rigorous threshold that correlates well with long-term stockholder value creation.
The committee periodically reviews the company’s peer groups to ensure the companies continue to be
appropriate peers for compensation benchmarking purposes. In 2014, the committee approved the addition of Gilead
Sciences to the Health Care Peer Group. General Dynamics, H.J. Heinz, Merck, and The Procter & Gamble Company were
removed from the High-Performing Peer Group. These updated peer groups will be used to determine compensation in
2015.
2015 Proxy Statement 25
Health Care Peer Group High-Performing Peer Group
EXECUTIVE COMPENSATION