AbbVie 2013 Annual Report Download - page 140

This Compensation Discussion and Analysis (‘‘CD&A’’) describes the pay philosophy established
for the company’s named executive officers, the design of our compensation programs, the process used
to examine performance in the context of executive pay decisions, and the performance goals and
results for each named executive officer:
Name Title
Richard A. Gonzalez .... Chairman of the Board and Chief Executive Officer
Laura J. Schumacher .... Executive Vice President, Business Development, External Affairs and
General Counsel
William J. Chase ........ Executive Vice President, Chief Financial Officer
Carlos Alban .......... Executive Vice President, Commercial Operations
Timothy J. Richmond .... Senior Vice President, Human Resources
Although we describe our programs in the context of the named executive officers, it is important
to note that our programs generally have broad eligibility and therefore in most cases apply to
employee populations outside the named executive officer group as well.
Compensation Philosophy and Components of Pay
AbbVie has established a compensation philosophy that aligns named executive officers’ interests
with both short- and long-term profitable growth and stockholder returns, and is designed to attract
and retain named executive officers whose talent and contributions sustain this growth. The intent of
this philosophy is to directly support achievement of the company’s primary business strategies and
goals, while also aligning named executive officers’ performance and rewards with stockholders’
interests. Consequently, the Committee believes the vast majority of named executive officer
compensation at AbbVie should be, and by definition is, performance-based. AbbVie and the
Committee will continue to consider and develop AbbVie’s compensation structure, design, practices
and procedures to effectively meet the company’s business needs and goals.
Four primary pay components make up AbbVie’s executive pay program: base pay, short-term
incentives, long-term incentives and benefits. Each component serves complementary, but different and
specific, purposes.
Base Pay
Setting appropriate levels of base pay ensures AbbVie can attract and retain a leadership team that
will continue to meet our commitments to customers and patients and sustain profitable growth for our
stockholders. Adjustments to base pay may be made from time to time by the Committee to reflect
factors such as performance, level of responsibility and market data for similar positions at comparable
peer companies. Talented executives have choices of where they work, and our base pay rates therefore
need to be competitive in the context of total compensation.
Short-Term Incentives
AbbVie’s short-term incentive structure is intended to align named executive officers’ interests
directly with AbbVie’s annual operating strategies, financial goals and leadership behaviors. It provides
a direct link between named executive officers’ short-term incentives and the company’s annual
performance results through both measurable financial and operational performance and subjective
assessments of strategic progress and leadership behaviors. Some goals, strategies and leadership
behaviors may apply to all named executive officers and, as such, may be corporate priorities that are
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