AbbVie 2013 Annual Report Download - page 148

officers do not receive tax gross-ups on their grantor trusts. The manner in which the grantor trust will
be distributed to a named executive officer upon retirement from the company generally follows the
manner elected by the named executive officer under the AbbVie Pension Plan. If a named executive
officer (or the named executive officer’s spouse, depending upon the pension distribution method
elected by the named executive officer under the AbbVie Pension Plan) lives beyond the actuarial life
expectancy age used to determine the Supplemental Pension Plan benefit, and therefore exhausts the
trust balance, the Supplemental Pension Plan benefit will be paid to the named executive officer (or his
or her spouse) by AbbVie.
Deferred Compensation
Named executive officers of the company, like all U.S. employees, are eligible to defer a portion of
their annual base salary to the AbbVie Savings Plan, the company’s qualified savings plan, up to the
IRS contribution limits. Named executive officers are also eligible to defer up to 18 percent of their
base salary, less contributions to the AbbVie Savings Plan, to a non-qualified deferred compensation
plan. Up to 100 percent of annual bonus awards earned by the named executive officers are also
eligible for deferral to the non-qualified deferred compensation plan. Named executive officers may
defer these amounts to unfunded book accounts or choose to have the amounts paid in cash on a
current basis and deposited into individually established grantor trusts, net of tax withholdings. These
amounts are credited annually with earnings. Named executive officers do not receive tax gross-ups on
their grantor trusts. Named executive officers elect the manner in which the assets held in their grantor
trusts will be distributed to them upon retirement or other separation from the company. These
arrangements are described in greater detail in this proxy statement beginning with the section
captioned ‘‘Summary Compensation Table.’’
Change in Control Arrangements
AbbVie’s named executive officers have change in control agreements, the purpose of which is to
aid in retention and recruitment, encourage continued attention and dedication to assigned duties
during periods involving a possible change in control of the company, and to protect the earned
benefits of the named executive officers against adverse changes resulting from a change in control.
The level of payments provided under the agreements is established to be consistent with market
practices as confirmed by data provided to the Committee by its independent compensation consultant.
These arrangements are described in greater detail in the section of this proxy statement captioned
‘‘Potential Payments upon Termination or Change in Control.’’
Financial Planning
Named executive officers are eligible for up to $10,000 of annual costs associated with estate
planning advice, tax preparation and general financial planning fees. If a named executive officer
chooses to utilize this benefit, fees for services received up to the annual allocation amount are paid by
the company and are treated as imputed income to the named executive officer, who then is
responsible for payment of all taxes due on the fees paid by the company.
Company-Provided Transportation
Named executive officers are eligible for transportation perquisites that are designed to improve
the effectiveness and efficiency of their work, including the use of a company-leased vehicle and access
to company-provided air travel. In some cases, these benefits may be used for personal use, which
would then be considered part of the named executive officer’s total compensation and treated as
taxable income under applicable tax laws.
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