UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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NOTICE OF ANNUAL GENERAL MEETING

Friday, December 6, 2019

8:00 a.m. local time

Shelbourne Hotel, 27 St. Stephen’s Green, Dublin, Ireland

MEETING AGENDA

Proposals 1, 2, 3, 4 and 6 above are ordinary resolutions requiring a simple majority of the votes cast at the meeting to be approved. Proposal 5 is a special resolution requiring at least 75% of the votes cast at the meeting to be approved. All proposals are more fully described in this proxy statement. There is no requirement under Irish law that Medtronic’s Irish Statutory Financial Statements for the fiscal year ended April 26, 2019, or the directors’ and auditor’s reports thereon be approved by the shareholders, and no such approval will be sought at the Annual General Meeting.

RECORD DATE

Shareholders of record at the close of business on October 10, 2019, are entitled to vote at the meeting.

ONLINE PROXY DELIVERY AND VOTING

As permitted by the Securities and Exchange Commission, we are making this proxy statement, the Company’s annual report to shareholders, and our Irish statutory financial statements available to our shareholders electronically via the Internet. We believe electronic delivery expedites your receipt of materials, reduces the environmental impact of our Annual General Meeting and reduces costs significantly. The Notice Regarding Internet Availability of Proxy Materials (the “Notice”) contains instructions on how you can access the proxy materials and how to vote online. If you received the Notice by mail, you will not receive a printed copy of the proxy materials unless you request one in accordance with the instructions provided in the Notice. The Notice will be mailed to shareholders on or about October 24, 2019 and will provide instructions on how you may access and review the proxy materials on the Internet and how to vote.

ADMISSION TO THE ANNUAL GENERAL MEETING

If you wish to attend the Annual General Meeting, you must be a shareholder on the record date and either request an admission ticket in advance by visiting www.proxyvote.com and following the instructions provided (you will need the control number included on your proxy card, voter instruction form or Notice), or bring proof of ownership of ordinary shares to the meeting. Tickets will be issued to registered and beneficial owners and to one guest accompanying each registered or beneficial owner.

August 16, 2019

By order of the Board of Directors,

Bradley E. Lerman

Senior Vice President, General Counsel and Company Secretary

Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting of Shareholders to be held on December 6, 2019: This proxy statement, the Company’s 2019 Annual Report to Shareholders and our Irish Statutory Financial Statements for the year ended April 26, 2019, are available at www.proxyvote.com.

TABLE OF CONTENTS

PROXY SUMMARY

This summary highlights information described in more detail elsewhere in this proxy statement. It does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.

2019 Annual General Meeting of Shareholders

	Date and Time:	Friday, December 6, 2019 at 8:00 a.m. (Local Time)
	Place:	Shelbourne Hotel 27 St. Stephen’s Green Dublin, Ireland
	Commence Mail Date:	October 24, 2019
	Record Date:	October 10, 2019

Advance Voting Methods and Deadlines

Questions and Answers About Attending our Annual General Meeting and Voting

We encourage you to review the questions and answers about our Annual General Meeting and voting beginning on page 72 to learn more about the rules and procedures surrounding the proxy and Annual General Meeting process, as well as the business to be conducted at our Annual General Meeting. If you plan to attend the Annual General Meeting in person, we direct your attention to the information following “Admission to the Meeting” on page 73.

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Voting Matters and Board Recommendations

Director Nominees

You are being asked to vote, by separate resolutions, on the election of the following eleven Directors. Each Director nominee is elected annually by a majority of votes cast. Detailed information about each Director’s background, skill sets and areas of expertise can be found beginning on page 13.

Corporate Governance Highlights

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2019 Board Composition

2019 Board Skills

Shareholder Outreach on Governance

We recognize the value of shareholder engagement and take a proactive approach to shareholder outreach on governance matters. Every year, we reach out to our 20 largest institutional investors, owning over 40% of our outstanding shares, to seek input on governance, executive compensation, strategic issues and to address their questions and concerns. We bring feedback from our shareholders to our Board; such feedback is instrumental to the Board’s decision-making process.

ENGAGEMENT CYCLE

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Performance Highlights

Medtronic is the global leader in medical technology - alleviating pain, restoring health, and extending life for millions of people around the world. Fiscal year 2019 was a strong year for Medtronic. The company executed on its broad, sustainable growth strategy, driving therapy innovation and global market penetration. Medtronic also delivered on its commitments, with record revenue and solid operating margin expansion and earnings per share growth, all of which resulted in a very strong improvement in free cash flow. The company deployed its capital in line with its stated priorities, balancing the return of cash to our shareholders with disciplined reinvestment in its businesses.

During fiscal year 2019, Medtronic delivered record revenue of $30.6 billion, growing in the mid-single digits⁽¹⁾ for the seventh consecutive year, with these results driven by growth across its business groups and geographic regions. The company made progress on its robust pipeline, resulting in several product launches through the year, and advanced several major product lines that are on track to launch over the course of fiscal year 2020. In the emerging markets, Medtronic expanded access to its therapies around the world, resulting in double-digit revenue growth⁽¹⁾.

Medtronic executed on its Enterprise Excellence programs, leveraging its size and scale to drive improved effectiveness and efficiency across the company. This resulted in non-GAAP operating margin improvement, which coupled with Medtronic’s solid revenue growth, contributed to high-single digit non-GAAP diluted earnings per share growth⁽¹⁾. In addition, Medtronic made significant progress in improving its free cash flow generation, with fiscal year 2019 free cash flow of $5.9 billion growing 62%. Importantly, this represented a conversion of non-GAAP earnings to free cash flow of 83%, above the conversion target set by management in June 2018, one to two years ahead of schedule.

Medtronic strategically deployed its capital, investing in future growth platforms with a focus on returns, while at the same time increasing its return to shareholders. In fiscal year 2019, Medtronic returned $4.6 billion to its shareholders in the form of dividends and net share repurchases, meeting its commitment of returning a minimum of 50 percent of its free cash flow to its shareholders.

The company continues to create distinct competitive advantages and capitalize on the long-term trends in healthcare: namely, the desire to improve clinical outcomes; the growing demand for expanded access to care; and the optimization of cost and efficiency within healthcare systems. These trends, along with an aging population in most countries, produce secular growth tailwinds that Medtronic believes represent sustainable, long-term opportunities for the company. In addition, the company expects the investments it has made in its pipeline to begin paying off, with major upcoming product launches that are expected to accelerate revenue growth.

Most importantly, in its fiscal year 2019, Medtronic served 75 million patients - more patients, in more places around the world, than in any year in its history. More than two patients are benefitting from Medtronic therapies and services every second. This is a direct result of the dedication and passion of over 90,000 employees, collaborating with the company’s partners in healthcare, to fulfill the Medtronic Mission.

A few of the company’s more notable fiscal year 2019 performance highlights include the following:

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Executive Compensation Philosophy

Our compensation programs align the interests of all our executives, including NEOs, with those of our shareholders. Our programs are market-competitive to ensure we attract, retain and engage highly talented executives with compensation packages established pursuant to the following principles:

Executive Compensation Program Design

CHIEF EXECUTIVE OFFICER TARGET TOTAL DIRECT COMPENSATION COMPONENTS		AVERAGE OTHER NAMED EXECUTIVE OFFICER TARGET TOTAL DIRECT COMPENSATION COMPONENTS

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Sustainability and Citizenship Highlights

Medtronic’s approach to environmental, social and governance (“ESG”) is grounded in our Mission which articulates the Company’s purpose and acknowledges our responsibility to contribute to human welfare; deliver the highest-quality products, therapies and services to patients; make a fair profit; recognize the personal worth of employees; and maintain good citizenship as a company.

Recognizing the significant impact that ESG has on our ability to achieve sustainable growth, the Nominating and Governance Committee of the Company’s Board of Directors has responsibility to review the Company’s ESG performance, including the impacts of our operations on society and the environment.

An executive-level Sustainability Steering Committee, chaired by our Chief Financial Officer, oversees the Company’s sustainability strategy, which is focused primarily on performance related to the following priority issues:

SUSTAINABILITY STRATEGY

Our Sustainability Program Office monitors activities related to our material issues, as well as emerging risks, and escalates them to the Sustainability Steering Committee as appropriate. The program office also tracks long-term internal targets related to each priority issue.

In recent years, Medtronic has launched a Global Human Rights program, a Responsible Supply Management program and Product Stewardship program to embed management of these issues and ensure compliance with emerging regulations and customer expectations.

Medtronic releases an Integrated Performance Report annually, which follows the Global Reporting Initiative and Sustainability Accounting Standards Board Reporting Frameworks. This report outlines our management approach and performance related to our five priority issues and 8 other issues identified as vital to our success:

The statement above provides information on Medtronic’s activities related to the four overarching areas outlined in the Task-force for Climate-related Financial Disclosure (TCFD) framework: Governance, Strategy, Risk Management, and Metrics/Targets.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements may be identified by words like “anticipate,” “expect,” “project,” “believe,” “plan,” “may,” “estimate,” “intend” and other similar words. Forward-looking statements in this proxy statement include, but are not limited to, statements regarding individual and Company performance objectives and targets, statements relating to the benefits of Medtronic’s acquisitions, product launches and business strategies, and Medtronic’s intent to return capital to shareholders through dividends and share repurchases. These and other forward looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. Factors that may cause actual results to differ materially from those contemplated by the statements in this proxy statement can be found in Medtronic’s periodic reports on file with the U.S. Securities and Exchange Commission. The forward-looking statements speak only as of the date of this proxy statement and undue reliance should not be placed on these statements. We disclaim any intention or obligation to publicly update or revise any forward-looking statements. This cautionary statement is applicable to all forward-looking statements contained in this document.

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PROPOSAL 1 – ELECTION OF DIRECTORS

Directors and Nominees

Our Board of Directors currently has eleven members, all of whom serve until the 2019 Annual General Meeting. All nominees are currently Medtronic directors who were elected by shareholders at the 2018 Annual General Meeting, other than Andrea J. Goldsmith, Ph.D.. On March 11, 2019, Dr. Goldsmith was appointed by our Board of Directors as an independent director upon the recommendation of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee engaged a third-party search firm to identify qualified candidates, including Dr. Goldsmith, and each Board member had an opportunity to meet with Dr. Goldsmith prior to her appointment to confirm that her appointment would further the Board’s commitment to seek out candidates with diverse backgrounds, skills and experiences. In order to be elected as a director, each nominee must be appointed by an ordinary resolution and each must receive the affirmative vote of a majority of the votes cast by the holders of ordinary shares represented at the Annual General Meeting in person or by proxy. If a nominee becomes unable or declines to serve, the individuals acting as proxies will have the authority to vote for any substitute who may be nominated in accordance with Medtronic’s Articles of Association. We have no reason to believe this will occur.

The Nominating and Corporate Governance Committee considers candidates for Board membership, including those suggested by shareholders, applying the same criteria to all candidates. Any shareholder who wishes to recommend a prospective nominee for the Board for consideration by the Nominating and Corporate Governance Committee must notify the Company Secretary in writing at Medtronic’s registered office at 20 on Hatch, Lower Hatch Street, Dublin 2, D02 XH02, Ireland. Any such recommendations should provide whatever supporting material the shareholder considers appropriate, but should at a minimum include such background and biographical material as will enable the Nominating and Corporate Governance Committee to make an initial determination as to whether the nominee satisfies the criteria for directors set out in the Governance Principles.

If the Nominating and Corporate Governance Committee identifies a need to replace a current member of the Board, to fill a vacancy on the Board, or to expand the size of the Board, it considers candidates from a variety of sources, including third-party search firms that assist with identifying, evaluating and conducting due diligence on potential director candidates. The process followed to identify and evaluate candidates includes meetings to review biographical information and background material relating to candidates, and interviews of selected candidates by members of the Board. Recommendations of candidates for inclusion in the Board slate of director nominees are based upon the criteria set forth in the Governance Principles. These criteria include business experience and skills, judgment, honesty and integrity, the ability to commit sufficient time and attention to Board activities and the absence of potential conflicts with Medtronic’s interests. While the Nominating and Corporate Governance Committee does not have a formal diversity policy for Board membership, we seek directors who represent a mix of backgrounds and experiences that will enhance the quality of the Board’s deliberations and decisions. When evaluating candidates for Board membership, the Nominating and Corporate Governance Committee considers, among other factors, diversity with respect to viewpoint, skills, experience, and community involvement, and input from other members of the Board.

After completing the evaluation process, the Nominating and Corporate Governance Committee makes a recommendation to the full Board as to individuals who should be nominated by the Board. The Board determines the nominees after considering the recommendations and report of the Nominating and Corporate Governance Committee and such other nominees and evaluations as it deems appropriate.

Shareholders who intend to appear at the Annual General Meeting to nominate a candidate for election by the shareholders at the meeting (in cases where the Board does not intend to nominate the candidate or where the Nominating and Corporate Governance Committee was not requested to consider the candidacy) must comply with the procedures in Medtronic’s Articles of Association, which are described under “Other Information — Shareholder Proposals and Director Nominations” on page 74 of this proxy statement.

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Nominees for director for one-year terms ending in 2020:

RICHARD H. ANDERSON   President and Chief Executive Officer Amtrak

Director since 2002 Age 64

Mr. Anderson has been President and Chief Executive Officer of Amtrak, an intercity passenger rail service provider, since July 2017. From 2007 until May 2016, Mr. Anderson served as Chief Executive Officer and a director of Delta Air Lines, Inc., a commercial airline. Upon retiring as Chief Executive Officer of Delta Air Lines, Inc., he became the Executive Chairman of the board of directors of Delta Air Lines, Inc. until October 2016. He was Executive Vice President of UnitedHealth Group Incorporated, a diversified health care company, from 2004 until 2006. Mr. Anderson was Chief Executive Officer of Northwest Airlines Corporation from 2001 to 2004. Mr. Anderson is a former director of Delta Air Lines, Inc.

Committees: Audit, Compensation, Finance and Financial Risk, and Nominating and Corporate Governance

Other Public Company Directorships: None

Director Qualifications: Mr. Anderson’s qualifications to serve on our Board include his more than 25 years of business, operational, financial and executive management experience. He has also served on the board of directors of another public company. Mr. Anderson’s extensive experience, including within the health care industry and for Fortune 500 companies, allows him to contribute valuable strategic management and risk assessment insight to Medtronic. Additionally, Mr. Anderson qualifies as an “audit committee financial expert” as defined by SEC rules.

CRAIG ARNOLD   Chairman and Chief Executive Officer Eaton Corporation

Director since 2015 Age 59

Mr. Arnold has been Chairman and Chief Executive Officer of Eaton Corporation, a power management company, since June 2016. From September 2015 to May 2016, Mr. Arnold served as President and Chief Operating Officer of Eaton Corporation. Prior to that, Mr. Arnold served as the Vice Chairman and Chief Operating Officer, Industrial Sector, of Eaton Corporation. From 2000 to 2008 he served as Senior Vice President of Eaton Corporation and Group Executive of the Fluid Power Group of Eaton. Prior to joining Eaton, Mr. Arnold was employed in a series of progressively more responsible positions at General Electric Company from 1983 to 2000. Mr. Arnold was appointed to the Board of Directors of Eaton Corporation in 2015. Mr. Arnold is a former director of Covidien plc.

Committees: Compensation (Chair), Finance and Financial Risk, and Technology and Value Creation

Other Public Company Directorships: Eaton Corporation

Director Qualifications: With his years of managerial experience, both at Eaton and at General Electric, Mr. Arnold brings to the Board of Directors demonstrated management ability at senior levels. His position as Chief Executive Officer of the Eaton Industrial Sector gives Mr. Arnold critical insights into the operational requirements of a large, multinational company. In addition, in previously serving on the Audit Committee of another public company, Mr. Arnold gained valuable experience dealing with accounting principles and financial reporting rules and regulations, evaluating financial results, and generally overseeing the financial reporting process of a large corporation.

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SCOTT C. DONNELLY   Chairman, President and Chief Executive Officer Textron, Inc.

Director since 2013 Age 57

Mr. Donnelly is Chairman, President and Chief Executive Officer of Textron, Inc., a producer of aircraft, defense and industrial products. Mr. Donnelly joined Textron in June 2008 as Executive Vice President and Chief Operating Officer and was promoted to President and Chief Operating Officer in January 2009. He was appointed to the Board of Directors in October 2009, and became Chief Executive Officer of Textron in December 2009 and Chairman of the Board in September 2010. Previously, Mr. Donnelly was the President and CEO of General Electric Company’s aviation business unit, GE Aviation, a leading maker of commercial and military jet engines and components as well as integrated digital, electric power and mechanical systems for aircraft. Prior to July 2005, Mr. Donnelly held various other management positions since joining General Electric in 1989.

Committees: Compensation, Nominating and Corporate Governance (Chair), and Technology and Value Creation

Other Public Company Directorships: Textron, Inc.

Director Qualifications: Mr. Donnelly’s qualifications to serve on our Board include more than two decades of business experience in innovation, manufacturing, sales and marketing, and business processes. Mr. Donnelly also serves on the board of directors of another public company. His extensive executive decision-making experience and corporate governance work make Mr. Donnelly a valuable director.

ANDREA J. GOLDSMITH, PH. D.   Professor Stanford University, Stephen Harris, School of Engineering & Department of Electrical Engineering

Director since 2019 Age 54

Dr. Goldsmith has served as the Stephen Harris professor in the School of Engineering at Stanford University since 2012 and has served as a professor, associate professor or assistant professor at Stanford University since January 1999. Dr. Goldsmith also founded and served as Chief Technology Officer of Plume WiFi (formerly, Accerlera, Inc.) from August 2010 to August 2014 and Quantenna Communications, Inc. (formerly, mySource Communications, Inc.) from 2005 to 2009. In addition, Dr. Goldsmith currently serves on the Technical Advisory Boards of Sequans Communications and Cohere Technologies. Dr. Goldsmith is a frequent lecturer and writer regarding wireless technologies.

Committees: Finance and Financial Risk, Quality, and Technology and Value Creation

Other Public Company Directorships: Crown Castle International Corp.

Director Qualifications: Dr. Goldsmith’s qualifications to serve on our Board include her nationally recognized status in science and engineering, as a member of the National Academy of Engineering and the American Academy of Arts and Sciences and as a Fellow of the Institute of Electrical and Electronics Engineers. Dr. Goldsmith also serves on the board of directors of another public company. Dr. Goldsmith’s academic research focuses on the design, analysis, and fundamental performance limits of wireless systems and networks, as well as in the application of communication theory and signal processing to neuroscience, and her insights and perspectives on the intersection between fundamental science and technology developments and commercial innovation make her a valuable member of our Board.

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RANDALL J. HOGAN, III   Chairman nVent Electric plc

Director since 2015 Age 63

Mr. Hogan has been the Chairman of nVent Electric plc, a manufacturing company for electrical connection and protection products, since May 2018. From January 2001 until May 2018, Mr. Hogan served as Chief Executive Officer of Pentair plc, an industrial manufacturing company and was appointed Chairman in May 2002. From December 1999 to December 2000, he was President and Chief Operating Officer of Pentair, from March 1998 to December 1999 he was Executive Vice President and President of Pentair’s Electrical and Electronic Enclosures Group. Prior to joining Pentair, he was President of the Carrier Transicold Division of United Technologies Corporation. Before that, he was with the Pratt & Whitney division of United Technologies, General Electric Company and McKinsey & Company. Mr. Hogan is the past Chair of the board of the Federal Reserve Bank of Minneapolis. Mr. Hogan is a former director of Covidien plc. and Pentair plc.

Committees: Audit (Chair), Compensation, and Nominating and Corporate Governance

Other Public Company Directorships: nVent Electric plc

Director Qualifications: Serving as Chairman of nVent Electric plc and having served in the roles of Chairman, Chief Executive Officer, President and Chief Operating Officer of Pentair, Mr. Hogan offers a wealth of management experience and business acumen. Running a public company gave Mr. Hogan front-line exposure to many of the issues facing public companies, particularly on the operational, financial and corporate governance fronts. Mr. Hogan’s service on the Board of Directors and Governance Committee of Unisys as well as on the Board of the Federal Reserve Bank of Minneapolis and service as former Chair of the Audit Committee of Covidien plc further augments his range of knowledge, providing experience on which he can draw while serving as a member of our Board and Audit Committee. Additionally, Mr. Hogan qualifies as an “audit committee financial expert” as defined by SEC rules.

OMAR ISHRAK   Chairman and Chief Executive Officer Medtronic plc

Director since 2011 Age 63

Mr. Ishrak has been Chairman and Chief Executive Officer of Medtronic since 2011. Prior to joining Medtronic, Mr. Ishrak served as President and Chief Executive Officer of GE Healthcare Systems, a comprehensive provider of medical imaging and diagnostic technology, from 2009 to 2011. Before that, Mr. Ishrak was President and Chief Executive Officer of GE Healthcare Clinical Systems from 2005 to 2008 and President and Chief Executive Officer of GE Healthcare Ultrasound and BMD from 1995 to 2004.

Other Public Company Directorships: Intel Corporation

Director Qualifications: Mr. Ishrak’s qualifications to serve on our Board include his more than 30 years in the health care industry and more than 35 years of technology development and business management experience. Mr. Ishrak’s strong technical expertise and deep understanding of our customers, as well as his long history of success as a global executive in the medical technology industry, make him a valuable and qualified director with critical technical, leadership and strategic skills.

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MICHAEL O. LEAVITT   Founder and Chairman Leavitt Partners

Director since 2011 Age 68

Governor Leavitt has been founder and Chairman of Leavitt Partners, a family of healthcare companies focused on value based healthcare policy, since 2009. Prior to that he was the United States Secretary of Health and Human Services from 2005 to 2009; Administrator of the Environmental Protection Agency from 2003 to 2005; and Governor of Utah from 1993 to 2003. Governor Leavitt is a former director of Health Equity, Inc.

Committees: Finance and Financial Risk, Quality, and Technology and Value Creation (Chair)

Other Public Company Directorships: American Express Company

Director Qualifications: Governor Leavitt’s qualifications to serve on our Board include his extensive management and leadership experience, including serving as the Governor of Utah, a large state with a diverse body of constituents, appointments to positions with the U.S. government, where he oversaw and advised on issues of national concern; and overseeing Leavitt Partners, LLC’s work advising and investing in health care. Governor Leavitt’s decades of leadership experience with valuable knowledge of the governmental regulatory environment and corporate governance makes him a valuable member of our Board.

JAMES T. LENEHAN   Financial Consultant and Retired Vice Chairman and President of Johnson & Johnson

Director since 2007 Age 70

Mr. Lenehan served as President of Johnson & Johnson, an international pharmaceutical company, from 2002 until 2004, when he retired after 28 years of service to Johnson & Johnson. During those 28 years, Mr. Lenehan also served as Vice Chairman of Johnson & Johnson from 2000 until 2004; Worldwide Chairman of Johnson & Johnson’s Medical Devices and Diagnostics Group from 1999 until he became Vice Chairman of the Board; and Worldwide Chairman, Consumer Pharmaceuticals & Professional Group. Mr. Lenehan has been a financial consultant since 2004, including serving as Senior Advisor of Cerberus Operations and Advisory Company, LLC, a private investment firm. Mr. Lenehan is a former director of Talecris Biotherapeutics Holding Corp.

Committees: Audit, Quality, and Technology and Value Creation

Other Public Company Directorships: None

Director Qualifications: Mr. Lenehan’s qualifications to serve on our Board include over 32 years of business, operational and management experience in medical device, pharmaceutical, biotherapeutics and related industries. He also serves on the board of directors of private companies. His management ability at senior levels and financial experience make his input valuable to Medtronic. Additionally, Mr. Lenehan qualifies as an “audit committee financial expert” as defined by SEC rules.

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ELIZABETH G. NABEL, M.D.   President of Brigham Health Professor of Medicine, Harvard Medical School

Director since 2014 Age 67

Dr. Nabel has been President of Brigham Health, hospitals and physician organizations operating inpatient and outpatient facilities, clinics, primary care health centers, and diagnostic and treatment technologies, research laboratories, and postgraduate medical and scientific education and training programs, as well as Harvard Medical School’s second largest teaching affiliate. Dr. Nabel has also been a Professor of Medicine at Harvard Medical School since 2010. Prior to that, Dr. Nabel held a variety of roles, including Director, at the National Heart, Lung and Blood Institute at the National Institutes of Health, a federal agency funding research, training, and education programs to promote the prevention and treatment of heart, lung, and blood diseases, from 1999 to 2009. Dr. Nabel is an elected member of the National Academy of Medicine of the National Academy of Sciences.

Committees: Audit, Quality (Chair), and Technology and Value Creation

Other Public Company Directorships: Moderna, Inc.

Director Qualifications: Dr. Nabel’s qualifications to serve on the Board include extensive experience in the health care field, including senior positions with a number of research universities and organizations. Dr. Nabel has a deep understanding of medical sciences and innovations, as well as physicians and other health care providers who are central to the use and development of our products. Additionally, Dr. Nabel qualifies as an “audit committee financial expert” as defined by SEC rules.

DENISE M. O’LEARY   Private Venture Capital Investor

Director since 2000 Age 61

Ms. O’Leary has been a private venture capital investor in a variety of early stage companies since 1996. She was a member of the Stanford University Board of Trustees from 1996 through 2006, where she chaired the Committee of the Medical Center. Ms. O’Leary is a former director of US Airways Group, Inc. and Calpine Corporation.

Committees: Finance and Financial Risk (Chair), Nominating and Corporate Governance, and Quality

Other Public Company Directorships: American Airlines Group, Inc.

Director Qualifications: Ms. O’Leary’s qualifications to serve on our Board include her extensive experience with companies at a variety of stages and her success as an investor. She also serves on the boards of directors of other public companies. Her financial expertise, experience in the oversight of risk management, and thorough knowledge and understanding of capital markets provide valuable insight with regard to corporate governance and financial matters.

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KENDALL J. POWELL   Retired Chairman and Chief Executive Officer General Mills, Inc.

Director since 2007 Age 65

Mr. Powell was Chairman of General Mills, Inc., an international producer, marketer and distributor of cereals, snacks and processed foods, from 2008 until December 2017 and was Chief Executive Officer of General Mills, Inc. from 2007 until June 2017. He was President and Chief Operating Officer of General Mills, Inc. from 2006 to 2007, and became a director of General Mills, Inc. in 2006. He was Executive Vice President and Chief Operating Officer, U.S. Retail from 2005 to 2006; and Executive Vice President of General Mills, Inc. from 2004 to 2005. From 1999 to 2004, Mr. Powell was Chief Executive Officer of Cereal Partners Worldwide, a joint venture of General Mills, Inc. and the Nestle Corporation. Mr. Powell joined General Mills, Inc. in 1979. Mr. Powell is a former director of General Mills, Inc.

Committees: Compensation, Finance and Financial Risk, and Nominating and Corporate Governance

Other Public Company Directorships: None

Director Qualifications: Mr. Powell’s qualifications to serve on our Board include more than three decades of business, operational and management experience. Mr. Powell also served on the board of directors of another public company. His extensive marketing and executive decision-making experience and corporate governance work make Mr. Powell a valuable director.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE DIRECTOR NOMINEES.

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CORPORATE GOVERNANCE

Our Corporate Governance Principles

The Board of Directors has adopted Principles of Corporate Governance (the “Governance Principles”), last amended August 2017. The Governance Principles describe Medtronic’s corporate governance practices and policies, and provide a framework for the governance of Medtronic. Among other things, the Governance Principles include the provisions below.

Our Governance Principles, the charters of our Audit, Compensation, Finance and Financial Risk, Nominating and Corporate Governance, Quality, and Technology and Value Creation Committees and our codes of conduct are published on our website at www.medtronic.com/us-en/about/corporate-governance.html. These materials are available in print to any shareholder upon request. From time to time, the Board reviews and updates these documents as it deems necessary and appropriate to keep abreast of governance regulations.

Lead Independent Director and Chairman; Executive Sessions

Mr. Ishrak, our Chief Executive Officer, also serves as Chairman of the Board. The Board believes it is appropriate for Mr. Ishrak to serve as Chairman of the Board due to his extensive knowledge of, and experience in, the global health care industry generally and in the medical device industry specifically. This knowledge and experience is critical in identifying strategic priorities and providing unified leadership in the execution of strategy. We believe that Mr. Ishrak’s experience and knowledge as the CEO and Chairman is an asset to Medtronic and promotes efficient board functioning, with independent board leadership provided by our “Lead Independent Director”.

Under Medtronic’s Principles of Corporate Governance, the independent directors annually elect a Lead Independent Director to ensure periodic refreshment of Board leadership roles. Our current Lead Independent Director is Scott C. Donnelly who replaced Richard H. Anderson on July 1, 2017.

As Lead Independent Director, Mr. Donnelly’s duties include:

In keeping with Medtronic’s commitment to corporate governance best practices, Mr. Donnelly also takes the lead in both the Board’s ongoing, thoughtful evaluation of Medtronic’s governance structure and constructive shareholder engagement on emerging governance issues. Medtronic’s accountability to its shareholders is clearly indicated by its openness to their engagement, including through its proxy access policy and strong Lead Independent Director. In this role, Mr. Donnelly ensures that he is available, if appropriately requested by shareholders, for consultation and direct communication.

Four regular meetings of our Board were held in fiscal year 2019. At each Board meeting, our independent directors meet in executive session with no Company management present, as did each of our committees.

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Board Role in Risk Oversight

Our Board of Directors, in exercising its overall responsibility to oversee the management of our business, considers risks when reviewing the Company’s strategic plan, financial results, merger and acquisition-related activities, legal and regulatory matters and its public filings with the Securities and Exchange Commission. The Board is also deeply engaged in the Company’s Enterprise Risk Management (“ERM”) program and has received briefings on the outcomes of the ERM program and the steps the Company is taking to mitigate risks that program has identified. The Board’s oversight of risk management includes full and open communications with management to review the adequacy and functionality of the risk management processes used by management. In addition, the Board of Directors uses its committees to assist in its risk oversight responsibility as follows:

Compensation Risk Assessment

We conducted a risk assessment of our compensation policies and practices during fiscal year 2019 and concluded that such policies and practices do not create risks that are reasonably likely to have a material adverse effect on our Company. The framework for the assessment was developed using materials from the Compensation Committee’s independent consultant, Frederic W. Cook & Co., Inc. (FW Cook). We evaluated our compensation plans and practices against the established framework and noted the following:

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Committees of the Board and Meetings

Our standing Board committees consist solely of independent directors, as defined in the New York Stock Exchange (“NYSE”) Corporate Governance Standards. The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (the “Exchange Act”). Each director attended 75% or more of the total Board and Board committee meetings on which the director served in fiscal year 2019. In addition, it has been the longstanding practice of Medtronic for all directors to attend the Annual General Meeting of Shareholders. All directors serving at that time attended the last Annual General Meeting.

The following table summarizes (i) the membership of the Board as of the end of fiscal year 2019, (ii) the members of each of the Board’s standing committees as of the end of fiscal year 2019 (other than for Dr. Goldsmith, who was appointed to the committees noted effective June 21, 2019), and (iii) the number of times each standing committee met during fiscal year 2019.

AS OF APRIL 26, 2019

Board

Audit

Compensation

Finance and Financial Risk

Nominating and Corporate Governance

Quality

Technology and Value Creation

Richard H. Anderson

Craig Arnold

Scott C. Donnelly

Andrea J. Goldsmith, Ph.D.

Randall J. Hogan, III

Omar Ishrak

Michael O. Leavitt

James T. Lenehan

Elizabeth G. Nabel, M.D.

Denise M. O’Leary

Kendall J. Powell

Number of fiscal year 2019 meetings

5

12

5

5

4

4

4

	Member
	Chair

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The principal functions of our six standing committees — the Audit Committee, the Compensation Committee, the Finance and Financial Risk Committee, the Nominating and Corporate Governance Committee, the Quality Committee, and the Technology and Value Creation Committee — are described below.

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Audit Committee Pre-Approval Policies

Rules adopted by the SEC require public company audit committees to pre-approve audit and non-audit services provided by a company’s independent registered public accounting firm. Our Audit Committee has adopted detailed pre-approval policies and procedures pursuant to which audit, audit-related, tax and other permissible non-audit services are pre-approved by category of service. The fees are budgeted, and actual fees versus the budget are monitored throughout the year. During the year, circumstances may arise when it becomes necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, we obtain the approval of the Audit Committee before engaging the independent registered public accounting firm. The policies require the Audit Committee to be informed of each service, and do not permit any delegation of the Audit Committee’s responsibilities to management. The Audit Committee may delegate pre-approval authority to one or more of its members, but such member(s) must report any pre-approval decisions to the Audit Committee at its next scheduled meeting.

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Director Independence

Under the NYSE Corporate Governance Standards, to be considered independent, the Board must affirmatively determine that the director has no material relationship with Medtronic, other than as a director. The Board of Directors has determined that the following directors (all of our non-management directors) are independent under the NYSE Corporate Governance Standards: Messrs. Anderson, Arnold, Donnelly, Hogan, Lenehan and Powell, Drs. Goldsmith and Nabel, Gov. Leavitt and Ms. O’Leary. In making this determination, the Board considered any current or proposed relationships that could interfere with a director’s ability to exercise independent judgment, including those identified by Medtronic’s Standards for Director Independence, which correspond to the NYSE standards on independence. These standards identify certain types of relationships that are categorically immaterial and do not, by themselves, preclude the directors from being independent. The types of relationships and the directors who have had such relationships include:

All of the relationships of the types listed above were entered into, and payments were made or received, by Medtronic in the ordinary course of business and on competitive terms, and no director participated in negotiations regarding, nor approved, any such purchases or sales. Aggregate payments to, transactions with, or discretionary charitable contributions to each of the relevant organizations did not exceed the greater of $1,000,000 or 2% of that organization’s consolidated gross revenues for any of that organization’s last three fiscal years. The Board reviewed the transactions with each of these organizations and determined that the directors had no role with respect to the Company’s decision to make any of the purchases or sales or to engage in the relationship, and that the nature and amount of payments involved in the transactions would not influence the relevant director’s objectivity in the boardroom or have a meaningful impact on such director’s ability to satisfy fiduciary obligations on behalf of Medtronic’s shareholders.

In the course of fulfilling its duties, the Board of Directors also considered situations in which the director had a further removed relationship with the relevant third party, such as being a director or trustee (rather than an employee or executive officer), of an organization that engages in a business relationship with Medtronic or receives discretionary charitable contributions from Medtronic or its affiliates. The Board determined that no such further removed relationships impact the independence of its directors.

Related Party Transactions and Other Matters

The Board of Directors of Medtronic has adopted written related party transaction policies and procedures. The policies require that all “interested transactions” (as defined below) between Medtronic or any of its subsidiaries and a “related party” (as defined below) are subject to approval or ratification by the Nominating and Corporate Governance Committee. In determining whether to approve or ratify such transactions, the Nominating and Corporate Governance Committee will consider, among other factors it deems appropriate, whether the interested transaction is on the same terms as are generally available to an unaffiliated third-party under the same or similar circumstances, the extent of the related person’s interest in the transaction, and any other information regarding the interested transaction or the related party that would be material to investors in light of the circumstances. An interested transaction may be approved only if it is determined in good faith that, under all of the circumstances, the interested transaction is in the best interests of Medtronic and its shareholders. In addition, the Nominating and Corporate Governance Committee has reviewed certain categories of interested transactions and deemed them to be pre-approved or ratified. Also, the Board of Directors has delegated to the chair of the Nominating and Corporate Governance Committee (or another member if the chair is interested in the transaction) the authority to pre-approve or ratify any interested transaction in which the aggregate amount is not expected to exceed $1 million. Finally, the policies provide that no director shall participate in any discussion or vote regarding an interested transaction for which he or she is a related party, except that the director shall provide all relevant information concerning the interested transaction to the Nominating and Corporate Governance Committee.

Under the policies, an “interested transaction” is defined as any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or any guarantee of indebtedness) in which:

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An “interested transaction” includes a material amendment or modification to an existing interested transaction.

A “related party” is defined as any:

During fiscal year 2019, Sarah Powell, a daughter of director Kendall J. Powell, was employed by Medtronic as a Global Senior Product Manager. The aggregate value of the compensation paid to Ms. Powell during fiscal year 2019 was approximately $170,594, which included salary, bonus and equity compensation. In addition, Ms. Powell received the standard benefits provided to other non-executive Medtronic employees for her services during fiscal year 2019. Ms. Powell is not an executive officer of, and does not have a key strategic role within, Medtronic.

Complaint Procedure; Communications with Directors

The Sarbanes-Oxley Act of 2002 requires companies to maintain procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls or auditing matters and to allow for the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters. We currently have such procedures in place. Our 24-hour, toll-free confidential compliance line is available for the submission of concerns regarding accounting, internal controls or auditing matters.

Our Lead Independent Director may be contacted via e-mail at leaddirector@medtronic.com. Shareholders may also communicate with our independent directors via e-mail at independentdirectors@medtronic.com. Communications received from shareholders may be forwarded directly to Board members as part of the materials sent before the next regularly scheduled Board meeting, although the Board has authorized management, in its discretion, to forward communications on a more expedited basis if circumstances warrant or to exclude a communication if it is illegal, unduly hostile or threatening or otherwise inappropriate. Advertisements, solicitations for periodical or other subscriptions and other similar communications generally will not be forwarded to the directors.

Our Codes of Conduct

All Medtronic employees, including our Chief Executive Officer and other senior executives, are required to comply with our Code of Conduct to help ensure that our business is conducted in accordance with the highest standards of ethical behavior. Our Code of Conduct covers all areas of professional conduct, including customer relationships, conflicts of interest, insider trading, intellectual property and confidential information, as well as requiring strict adherence to all laws and regulations applicable to our business. Employees are required to bring any violations and suspected violations of the Code of Conduct to the attention of Medtronic through management or our legal counsel or by using Medtronic’s confidential compliance line. In addition, our Code of Ethics for Senior Financial Officers provides specific policies applicable to our Chief Executive Officer, Chief Financial Officer, Treasurer and Controller and to other senior financial officers designated from time to time by our Chief Executive Officer.

These policies relate to internal controls, the public disclosures of Medtronic, violations of the securities or other laws, rules or regulations, and conflicts of interest. The members of the Board of Directors are subject to a Code of Business Conduct and Ethics relating to director responsibilities, conflicts of interest, strict adherence to applicable laws and regulations, and promotion of ethical behavior.

Our codes of conduct are published on our website, at www.medtronic.com under the About Medtronic — Corporate Governance section, and are available in print to any shareholder who requests them. We intend to disclose future amendments to, or waivers for directors and executive officers of, our codes of conduct on our website promptly following the date of such amendment or waiver.

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Director Compensation

The Nominating and Corporate Governance Committee conducts a biennial review of our non-employee director compensation program and makes recommendations for adjustments, as appropriate, to the Board. In connection with the review conducted in fiscal year 2019, the Nominating and Corporate Governance Committee’s outside consultant on director compensation, Willis Towers Watson, assessed the compensation paid to our non-employee directors against non-employee director compensation trends and data from our 27-company peer group, which includes both Irish and non-Irish companies. After consultation with Willis Towers Watson, the Nominating and Corporate Governance Committee found the compensation program to be appropriate and no changes were made to the program in fiscal year 2019.

The principal features of the compensation received by our non-employee directors for fiscal year 2019 are described below.

Non-employee Directors are eligible for the following compensation:

The Director Compensation table reflects all compensation awarded to, earned by, or paid to the Company’s non-employee directors during fiscal year 2019. No additional compensation was provided to Mr. Ishrak for his service as a director on the Board.

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Fees Earned or Paid in Cash

The fees earned or paid in the cash column represent the amount of the annual retainer and annual cash stipend for Board and committee service.

The annual cash retainer, annual cash stipend and special committee fees are paid in two installments — in the middle and at the end of a fiscal year. The annual cash retainer and annual cash stipend are reduced by 25% if a non-employee director does not attend at least 75% of the total meetings of the Board and Board committees on which such director served during the relevant year. The table on page 21 of this proxy statement under the section entitled “Committees of the Board and Meetings” shows the committees on which the individual directors serve.

Stock Awards

Directors are annually granted restricted stock units on the first day of the fiscal year in an amount equal to $175,000 divided by the fair market value of a Medtronic ordinary share on the date of grant. Grants are made on a pro rata basis for participants who are directors for less than the entire preceding fiscal year and are reduced by 25% for any directors who failed to attend at least 75% of the applicable meetings during such fiscal year. The restricted stock units vest on the one-year anniversary of the grant date.

Dividends paid on Medtronic ordinary shares are credited to a director’s stock unit account in the form of additional units.

Prior to the Covidien acquisition in January 2015, directors were granted deferred stock units rather than restricted stock units. The balance in a director’s stock unit account will be distributed to the director in the form of Medtronic ordinary shares upon resignation or retirement from the Board in a single distribution or, at the director’s option, in five equal annual distributions.

Stock Holdings

Non-employee directors held the following restricted stock units, stock options, and deferred stock units as of April 26, 2019:

To align directors’ interests more closely with those of shareholders, the Nominating and Corporate Governance Committee approved the Medtronic plc Stock Ownership and Retention Guidelines pursuant to which non-employee directors are expected to own stock of Medtronic in an amount equal to five times the annual Board retainer. Until the ownership guideline is met, the directors must retain 75% of after-tax Medtronic shares received through settlement of equity compensation awards. Once the guideline is met, the directors must retain 75% of after-tax shares for one year following grant of equity compensation awards. For stock options, net after-tax profit shares are those shares remaining after payment of the option’s exercise price and income taxes. For share issuances, net gain shares are those remaining after payment of income taxes. Shares retained may be sold on the later of one year after grant or when the ownership guidelines are met. In the case of retirement or termination, shares may be sold after the shorter of the remaining retention period or one year following retirement or termination, as applicable. As of August 1, 2019, all directors were in compliance with the stock ownership and retention policy; however, due to their more recent appointments, Dr. Nabel and Dr. Goldsmith are expected to make progress towards the required ownership guidelines over time.

Deferrals

Prior to the Covidien acquisition in January 2015, directors were able to defer all or a portion of their cash compensation through participation in the Medtronic Capital Accumulation Plan Deferral Program. This was a nonqualified plan designed to allow participants to defer a portion of their pre-tax compensation, and to earn returns or incur losses on those deferred amounts based upon allocation of their balances to one or more investment alternatives, which were the same investment alternatives that Medtronic offers its employees through its 401(k) Plan. Director contributions in the deferred compensation program were discontinued effective as of the close of the Covidien acquisition in January 2015.

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SHARE OWNERSHIP INFORMATION

Significant Shareholders

The following table shows information as of August 1, 2019, concerning each person who is known by us to beneficially own more than 5% of our ordinary shares.

Beneficial Ownership of Management

The following table shows information as of August 1, 2019, concerning beneficial ownership of Medtronic’s ordinary shares by Medtronic’s directors, named executive officers identified in the Summary Compensation Table under “Executive Compensation,” and all directors and executive officers as a group.

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Delinquent Section 16(a) Report

Based upon a review of reports and written representations furnished to it, Medtronic believes that during fiscal year 2019, no director, officer, or other person subject to Section 16(a) of the Exchange Act (“Section 16”) with respect to Medtronic failed to file on a timely basis any report required by Section 16.

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) describes the compensation programs and decisions made by the Compensation Committee in regard to the compensation of the following named executive officers (“NEOs”) for fiscal year 2019:

Executive Summary

Executive Compensation Philosophy

Our compensation programs align the interests of all our executives, including NEOs, with those of our shareholders. Our programs are market-competitive to ensure we attract, retain and engage highly talented executives with compensation packages established pursuant to the following principles:

Background and Context for Fiscal Year 2019

Fiscal Year 2019 NEO Compensation

The Compensation Committee made the following compensation decisions effective for the start of fiscal year 2019 based on company and individual performance during fiscal year 2018. These decisions set base salary as well as the targeted values for annual and long-term incentive plans that commence for fiscal year 2019:

The LTIP increases for Ms. Parkhill and Mr. Martha are designed to bring their target values to their market median over a period of time following their appointment.

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Fiscal Year 2019 Financial Performance Highlights

During fiscal year 2019, Medtronic delivered strong results as the company executed on its sustainable growth strategy, driving therapy innovation and global market penetration, while delivering enterprise synergies to expand margins. All of this resulted in a significant improvement in free cash flow.

For the company’s annual incentive plan, performance was as follows: (i) revenue growth was in the mid-single digit range on a comparable, constant currency basis, (ii) non-GAAP diluted earnings per share (“EPS”) growth was in the high-double digit range on a comparable basis, and (iii) after adjusting for certain delayed restructuring and tax payments, free cash flow would have been $5.7 billion. As illustrated below, the company’s performance was above target in revenue growth and significantly above target in free cash flow, with non-GAAP EPS falling below target. As a result, payout for the annual incentive plan was above target and paid out at 107%.

For the company’s long-term performance plan, performance was as follows: (i) revenue growth was in the mid-single digit range on a comparable, constant currency basis, and (ii) return on invested capital was in the low-double digits. As illustrated below, the company exceeded its revenue growth target, but fell below its return on invested capital target. As a result, payout for the long-term performance plan was below target and paid out at 79%.

In addition, award payouts for the annual incentive plan and the three-year long-term performance plan were at 107% and 79% of target award opportunities, respectively, as summarized below.

ACTUAL PERFORMANCE AS A PERCENT OF PLAN PERFORMANCE &
ACTUAL AWARD PAYOUT AS A PERCENT OF TARGET AWARD PAYOUT

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Compensation of our Chief Executive Officer

The compensation of our CEO is positioned within the median range of our Compensation Comparison Group and is based on the same design elements and performance standards that are applicable to the other NEOs. For fiscal year 2019 the Compensation Committee determined to increase the CEO’s base salary by 3%, maintain his target annual incentive opportunity at 175% of base salary, and maintain his long-term incentive opportunity at $13.5 million which was equally allocated to stock options, restricted stock units, and long-term performance plan awards.

The following chart presents a comparison of our CEO’s “realizable compensation” relative to company performance for the last three completed fiscal years. Realizable compensation represents the sum of actual base salaries paid, actual bonuses earned,the Black-Scholes value of stock options, fair market value of restricted stock and projected value of long-term performance awards as of April 26, 2019. Company profitability consists of cumulative earnings before interest and taxes (EBIT), and EBIT return on revenue, EBIT return on assets, EBIT return on equity and EBIT return on capital. Company growth consists of three-year net revenue, operating cash flow, net income and diluted EPS cumulative compound annual growth rates. Total shareholder return consists of three-year stock price appreciation and dividend reinvestments. All financial performance amounts for Medtronic and the comparison companies are based on GAAP as reported amounts as of the last completed fiscal year-end. The analysis indicates that realizable compensation is reasonably aligned with company profitability and total shareholder return, conservative relative to growth and further indicates that realizable compensation is 5 percent lower than total direct compensation as granted over that same 3-year period.

3-YEAR MEDTRONIC CEO TOTAL DIRECT COMPENSATION
AS GRANTED VERSUS REALIZABLE COMPENSATION

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Target total direct compensation represents base salary + target annual incentive + target long-term incentive

NEO Pay Versus Performance

The Compensation Committee annually evaluates how the amount of annual cash compensation aligns with the Company’s performance when ranked against the comparison companies. For purposes of this analysis, annual cash compensation is evaluated based on company size, profitability, and growth and annual cash compensation represents the actual base salaries and annual bonuses paid for each fiscal year. As illustrated below, the Compensation Committee has aligned total annual compensation for the NEOs with the Company’s relative size and performance over the last five fiscal years.

MEDTRONIC PERFORMANCE VERSUS TOTAL ANNUAL COMPENSATION

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Consideration of “Say-on-Pay” Voting Results

For fiscal year 2018, the Medtronic advisory vote on “say-on-pay” garnered shareholder support of 94%. The Compensation Committee reviewed shareholder and other stakeholder feedback along with the results of the shareholder “say-on-pay” vote in making compensation decisions during fiscal year 2019. The Medtronic advisory vote is held on an annual basis.

At our 2018 annual meeting, shareholders again showed strong support for our executive compensation programs with 96% of the votes cast approving our executive compensation.

Efforts to gather stakeholder feedback included periodic outreach to our largest shareholders. Based on this feedback and the 96% say-on-pay approval by shareholders in 2018, the Committee concluded that shareholders support our compensation policies and practices. Therefore, the Compensation Committee continued to apply the same principles in determining fiscal year 2019 compensation actions.

Relative Total Shareholder Return

The Compensation Committee decided to add a Relative Total Shareholder Return metric to the LTIP in fiscal year 2019 (see page 44 for more detail). This decision was, in part, based on suggestions from shareholders.

Corporate Governance

The Compensation Committee has incorporated the following market-leading governance features into our programs:

Summary of Key Compensation Practices
		Double-trigger change of control vesting of compensation and benefits, including equity
		Comprehensive clawback policy that applies to annual incentive, long-term incentives and equity compensation
		Rigorous stock ownership requirements and holding periods on portions of after-tax shares until guidelines are met
		Targets for performance metrics aligned to financial goals communicated to shareholders
		Multiple performance metrics under our short- and long-term performance-based plans discourage short-term risk-taking at the expense of long-term results
What We Do		Forfeiture policy providing forfeiture of equity awards when a NEO terminates employment for any reason other than retirement, disability, death, or termination under specific circumstances related to a change of control
		Responsible use of shares under our long-term incentive program
		Align pay and shareholder performance
		Engagement of an independent compensation consultant
		Limited perquisites
		No defined benefit supplemental executive retirement plans or special healthcare coverage for NEOs
		No “single-trigger” vesting of equity awards in event of a change of control
		No dividends or dividend equivalents on unearned equity compensation
What We Do Not Do		No excessive severance benefits
		No hedging and pledging of Company stock permitted for executives
		No “golden parachute” excise tax gross-ups
		No backdating or repricing of stock option awards
		No multi-year compensation guarantees

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Participants in Executive Compensation Design and Decision-Making Process

Role of Compensation Committee

The Compensation Committee establishes our compensation philosophy, program design and administration rules, and is the decision-making body on all compensation matters related to our NEOs. The Committee solicits input from an independent outside compensation consultant and relies on the consultant’s advice. For more information on the Compensation Committee, its members and its duties as identified in its charter, please refer to the section entitled “Committees of the Board and Meetings — Compensation Committee” beginning on page 23 of this proxy statement.

Independent Compensation Consultant

The Compensation Committee has engaged FW Cook, an independent outside compensation consulting firm (the “Independent Consultant”), to advise the Compensation Committee on all matters related to executive officer compensation. Specifically, the Independent Consultant conducts an annual competitive market analysis of total compensation for NEOs, provides relevant market data, updates the Compensation Committee on compensation trends and regulatory developments, and counsels the Committee on program designs and specific compensation decisions related to our CEO and other executives. This is the only work completed by the Independent Consultant for Medtronic and the services of that firm are at the discretion and direction of the Compensation Committee.

In April 2019, the Compensation Committee decided to change compensation consultants for FY20 and engaged Semler Brossy as the independent external consultant (the “Independent Consultant”) to advise the Committee on all matters related to executive compensation. Semler Brossy completed transition activities through the end of fiscal year 2019 and fully transitioned into the role in July 2019.

In June 2013, the Compensation Committee adopted enhanced independence standards for outside consultants that mirror the NYSE listing standards. This policy established an assessment framework to confirm and report on a consultant’s independence. The policy also requires a consultant to confirm its independent status according to the Compensation Committee’s standards. The Compensation Committee reviews and confirms the independence of its outside consultants on an annual basis.

In light of the NYSE listing standards, the Compensation Committee has considered the independence of FW Cook. In connection with this process, the Compensation Committee has reviewed, among other items, a letter from FW Cook addressing its independence and the members of the consulting team serving the Committee, including the following factors: (i) other services provided to us by FW Cook, (ii) fees paid by us as a percentage of FW Cook’s total revenue, (iii) policies or procedures of FW Cook that are designed to prevent conflicts of interest, (iv) any business or personal relationships between the senior advisor of the consulting team and a member of the Compensation Committee, (v) any Company stock owned by the senior advisor or any member of that individual’s immediate family, and (vi) any business or personal relationships between our executive officers and the senior advisor. The Compensation Committee discussed these considerations and concluded that the work performed by FW Cook and its senior advisor involved in the engagement did not raise any conflict of interest.

Role of Chief Executive Officer in Compensation Decisions

In making compensation decisions for executive officers reporting to the CEO, the Compensation Committee solicits the views of our CEO and the Independent Consultant. The Compensation Committee conducts executive sessions without the CEO present. The CEO does not make recommendations to the Compensation Committee about his own compensation.

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Executive Compensation Program Design

The design of our executive compensation program is illustrated below:

	Component	Performance Period (yrs.)	Basic Design	Purpose
	Base Salary	1	■ Calibrated with the Comparison Group market median range	■ Compensates for carrying out basic duties of the job ■ Recognizes individual experiences, skills, and sustained performance
	Benefits	1	■ Health, retirement, and other life events ■ Market-competitive benefits	■ Same benefits available to Medtronic employees ■ Non-qualified deferred compensation plan available to all executives
	Perquisites	1	■ Allowance covering expenses such as financial and tax planning, memberships, etc. ■ No tax gross-up	■ Provide a modest allowance to be used in lieu of Company-provided perquisites
	Annual Incentive Plan	1	■ Uses revenue growth, non-GAAP diluted EPS growth, free cash flow, and quality compliance performance measures ■ Actual payout for performance below threshold is zero. Payout for performance between threshold and maximum is 50-200% for revenue growth and non- GAAP diluted EPS growth and between 50%-150% for free cash flow	■ Rewards the accomplishment of annual operating plan based on Company performance and it is driven by performance for our shareholders
	Restricted Stock Units	3	■ Granted annually ■ Vest 100% on the 3rd anniversary of grant date ■ Vesting is dependent on achieving a three-year non- GAAP diluted EPS growth threshold	■ Promotes long-term stock ownership in Medtronic ■ Provides retention ■ Includes a long-term performance-based threshold that must be achieved for award vesting
	Stock Options	4	■ Granted annually ■ Vest 25% per year starting on the 1st anniversary of grant date	■ Aligns pay with performance by linking value to stock price appreciation and shareholder value creation
	Long-Term Performance Plan	3	■ Granted annually ■ Actual pay for performance below threshold is zero; payout for performance between threshold and maximum is 50%-200% ■ Uses cumulative revenue growth, return on invested capital, & relative TSR performance measures over a three-year performance period ■ Payable in cash if performance criteria satisfied	■ Aligns a portion of cash compensation to longer-term strategic financial goals not influenced by variability in the stock market ■ Beginning with the FY19-FY21 plan, total shareholder return relative to our Comparison Group was added as an equally weighted performance measure for 1/3 of the LTPP

The mix of total direct compensation for our NEOs is weighted 84% to 91% at risk with 68% to 74% allocated to long-term incentives, as illustrated below:

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How We Establish Executive Compensation Levels

The Compensation Committee considers relevant market pay practices when establishing executive compensation levels and evaluating compensation programs, including base salary and annual and long-term incentives. To facilitate our ability to benchmark competitive compensation levels and practices, the Compensation Committee established a Comparison Group. The Compensation Committee selected the companies that constitute the Comparison Group after discussing various recommendations from the Independent Consultant. The Comparison Group is selected using Compensation Committee-approved criteria designed to identify companies that reflect our size (measured by revenue, market capitalization, and other size measures), our complexity, and our global footprint and to ensure we include companies that represent our Medical Device and Life Sciences industry.

The Compensation Committee uses data from the Comparison Group to establish a competitive market median range within which individual pay can be positioned to reflect each NEO’s experience and performance. Consistent with our pay-for-performance philosophy, we establish an award range for short-term and long-term incentives that generates above-market pay for above-market performance and below-market pay for below-market performance. In addition to the competitive market information, the Compensation Committee also reviews information about performance, potential, expertise, and experience for each NEO.

The following table summarizes the selection criteria used by the Compensation Committee to select the Compensation Comparison Group.

During fiscal year 2018, the Independent Consultant recommended two changes to the Comparison Group: (1) the removal of Du Pont from the Comparison Group because they were acquired by The Dow Chemical Company in September 2017 and are no longer a relevant comparison company; and (2) the addition of Danaher because it was reclassified from an industrial conglomerate to a health care company in fiscal year 2018 following the spin-off of Fortive. The Compensation Committee approved these changes in fiscal year 2018. Summarized below is a comparison of the Company to the Comparison Group in various measures of financial and market size at the middle of fiscal year 2019:

COMPARISON GROUP SIZE COMPARISONS

-- All financial and market data are taken from Standard & Poor’s Capital IQ

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Fiscal Year 2019 Compensation Decisions

Fiscal Year 2019 Annual Base Salaries for Named Executive Officers

One of the principles of our compensation philosophy as outlined on page 32 is to maintain base salary within a +/- 15% range around the median base salary paid by our Comparison Group. The range allows for pay decisions to consider individual factors such as performance, potential, expertise, and experience. At the beginning of each fiscal year, the Independent Consultant presents to the Compensation Committee an analysis that identifies the median base salary ranges for the CEO and each NEO based on their respective, or substantially similar, positions in the Compensation Comparison Group. Using this market data the Compensation Committee approves base pay increases for NEOs and recommends to the Board of Directors base pay increases for the CEO considering individual factors such as performance for the previous fiscal year (fiscal year 2018), potential, expertise, and experience.

The table below shows the fiscal year 2019 base salary increases for the CEO and each NEO.

Fiscal Year 2019 Annual Incentive Target Pay

Using the same analytical approach described for the annual base salary, the Independent Consultant identifies a +/- 15% range around the median for annual incentive target pay for the CEO and each NEO, which is set as a percentage of annual base salary. No changes were made to fiscal year 2019 annual incentive target pay. The table below shows fiscal year 2019 CEO and NEO annual incentive target pay as a percentage of base salary.

Fiscal Year 2019 Long-Term Incentive Plan (LTIP) Target Pay

Using the same analytical approach described for the annual base salary and annual target incentive, the Independent Consultant identifies a +/- 20% range around the median for long-term incentive plan target pay for the CEO and each NEO, which is set as target value. For fiscal year 2019, long-term incentive plan target pay for Ms. Parkhill and Mr. Martha were updated coincident with individual performance-based progression towards the competitive market median. LTIP target pay for Mr. Coyle was updated as shown below. The table below shows fiscal year 2019 CEO and NEO long-term incentive targets.

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Fiscal Year 2019 Annual Medtronic Incentive Plan (“MIP”) Design

Annual incentive compensation supports the Compensation Committee’s pay-for-performance philosophy and aligns individual goals with Company goals as set forth in the Company’s annual operating plan. Under the MIP, executives are eligible for cash awards based on the Company’s attainment of performance measures established by the Compensation Committee and the Board of Directors as part of the annual and strategic planning process. Consistent with past practice, the Compensation Committee structured the 2019 annual incentive plan as follows:

In establishing the annual incentive plan design, the Compensation Committee, in consultation with its Independent Consultant and management, considered shareholder feedback, competitive comparisons and the Company’s strategic imperatives. When reviewing and approving the fiscal year 2019 plan design, the Compensation Committee considered the 94% support expressed by shareholders for the fiscal year 2018 say-on-pay proposal and continued to use performance measures aligned with the Company’s Board-approved annual operating plan and that represent the best financial measures of annual executive performance expectations. Accordingly, the key design elements of the fiscal year 2019 annual incentive plan, which are substantially the same as our fiscal year 2018 plan, are as follows:

Change in Cash Flow Metric

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Fiscal Year 2019 Annual MIP Performance Measures

At the beginning of the fiscal year, the Committee approved the target performance goal and performance range for each of the three equally weighted performance measures. The targets are from the Company’s Board-approved annual operating plan and the performance range is derived from the median performance range structure used by our Compensation Comparison Group.

The following provides details about the performance measures, targets, and performance range.

For purposes of the annual incentive calculation, “diluted EPS” refers to non-GAAP diluted EPS. A reconciliation of the GAAP to non-GAAP diluted EPS is included in Appendix A to this proxy statement. Revenue Growth represents fiscal year 2019 revenue in comparison to fiscal year 2018 revenue. Free Cash Flow is defined as cash provided by operating activities, less additions to property, plant and equipment as shown on the Statement of Cash Flows, further adjusted for management’s discretionary adjustments as allowed under Medtronic’s Annual Incentive Plan. The Quality Compliance Modifier Performance Threshold uses a score card based on Food and Drug Administration (“FDA”) inspections, non-material FDA warning letters, and material FDA warning letters.

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Fiscal Year 2019 MIP Calculation Methodology

In calculating the annual incentive plan results, if the minimum performance for a measure is met, then a performance multiplier for each performance measure is determined and the overall performance score is calculated. For Revenue Growth and Diluted Earnings Per Share, the performance multiplier would be 0 if performance is below the minimum, 0.5x if performance is at threshold, 1x if performance is at target and 2x if performance is at or above the maximum performance level. For Free Cash Flow the performance multiplier would be 0 if performance is below the minimum, 0.5x if performance is at threshold, 1x if performance is at target and 1.5x if performance is at or above the maximum performance level. The performance multiplier for each performance measure is multiplied by the weighted percentage to obtain a performance score for that measure. The performance scores for each measure are added together for an overall performance score, taking into account the Quality Compliance Modifier. That overall performance score is multiplied by the individual target award and eligible earnings to arrive at the actual payment amount, as illustrated below:

MEDTRONIC INCENTIVE PLAN PERFORMANCE EQUALS:

Fiscal Year 2019 Long-Term Incentive Plan (LTIP) Design

Using the same analytical approach described for annual base salary and short-term incentives, the Independent Consultant identifies a +/- 20% median range for long-term incentive target pay for the CEO and each NEO. Target LTIP is expressed as a fixed dollar value from which the underlying shares subject to the LTIP award are determined based on the market price at the close of business on the grant date.

The target is split equally among three LTIP components: stock options; restricted stock units; and a three-year cash incentive plan called the Long-Term Performance Plan (“LTPP”). For example, the hypothetical target LTIP of $2,400,000 would be granted as $800,000 stock options aggregate grant date Black-Scholes value, $800,000 restricted stock units, and $800,000 under the LTPP.

FY19 LTIP DESIGN

Fiscal Year 2019 Long-Term Incentive Plan Components

Stock Options

Stock options are a performance-based compensation component that tie one-third of the target LTIP value to stock price appreciation and shareholder value creation. Stock options only have value when the market price exceeds the exercise price. All stock option grants have an exercise price that is equal to the market close stock price on the date of grant. Stock options have a ten-year term and vest over four years in equal increments of 25% per year beginning one year after the date of grant.

Restricted Stock Units (RSU)

RSUs represent the second one-third of the target LTIP value and are intended to assist in retaining high performing executives and align executives’ compensation with shareholders through long-term stock ownership. The RSU grants cliff vest (100%) on the third anniversary of the grant date. Unlike the more commonly used time-based RSUs used by our Comparison Group, Medtronic’s RSUs include a three-year minimum performance threshold that must be met before the RSUs vest. For fiscal year 2019 RSU grants, the performance threshold was set as the cumulative diluted EPS over a three-year period based on a compound annual growth rate of 3%.

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Long-Term Performance Plan (LTPP)

Our LTPP is a three-year cash incentive plan that is based on long-term measures of Company performance. Our LTPP design was established following an extensive review completed by the Compensation Committee, Independent Consultant, and management. The review considered shareholder feedback, competitive benchmarking, and the Company’s short-term and long-term strategic imperatives. The LTPP has different measures than our short-term incentive plan as it is tied to longer term financial performance measures that are not influenced by variability in the stock market. The LTPP pays in cash after the end of the three fiscal year performance period. A new LTPP award grant and performance period is established at the beginning of each fiscal year. Because three-year performance periods overlap, performance goals are established at the start of each performance period and, once established, do not change.

Fiscal Year 2019 LTPP Design

Beginning with the FY2019 – FY2021 LTPP performance period, Relative TSR is weighted at one-third along with Revenue Growth and ROIC. This change is in response to suggestions from shareholders about introducing this metric into the Company’s long-term incentive plans.

FY19 LTPP DESIGN

Fiscal Year 2019 Long-Term Performance Plan Performance Measures

At the beginning of the fiscal year, the Committee approved the LTPP performance measures and targets for the fiscal year 2019 - 2021 performance cycle. The targets were established based on Medtronic’s strategic plan and aligned with the goals disclosed to investors. The revenue growth measure, target, and performance range are different from those applicable to the annual incentive plan because the LTPP measures revenue performance on a cumulative basis over a three-year performance period. As in past years, we measure revenue on a cumulative basis because this requires that each year’s growth is counted. We set performance goals for threshold, target and maximum performance based on a targeted growth rate for revenue in each year of the three-year period as shown in the table below.

The following table provides detailed information about each performance measure.

The revenue growth used in LTPP results is defined as the three-year cumulative revenue growth measured at constant currency. ROIC is defined as non-GAAP net income after the removal of the after-tax impact of amortization plus interest expense net of tax, divided by Invested Capital, averaged over the 3-year period. Invested Capital is defined as Total Equity Plus Interest-Bearing Liabilities less Cash and Cash Equivalents for each year. Relative Total Shareholder Return was added for the FY19-FY21 LTPP plan and is defined as the ending share price of a share of common stock, plus the value of reinvested dividends, divided by the beginning share price. Both beginning and ending share prices are measured over a 30-day average. Relative TSR is measured against Medtronic’s Compensation Comparison Group.

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Fiscal Year 2019 Long-Term Performance Plan Calculation Methodology

For each performance measure, the performance multiplier would be 0 if performance is below the minimum, 0.5x if performance is at threshold, 1x if performance is at target, and 2x if performance is at or above the maximum performance level. The performance multiplier for each performance measure is multiplied by the weighted percentage to obtain a performance score for that measure. The performance scores for each measure are added together for an overall performance score. That overall performance score is then multiplied by the applicable NEO’s individual target award to arrive at the actual payment amount.

LONG-TERM PERFORMANCE PLAN PAYOUT EQUALS:

Fiscal Year 2019 Annual and Long-Term Incentive Plan Payouts

Fiscal Year 2019 Annual Incentive Plan Results and Payouts

At the end of the fiscal year, the Committee reviewed performance against the incentive plan targets for fiscal year 2019 and approved the resulting CEO and NEO annual incentive plan payout percentages and payments as shown below.

ANNUAL MIP FINANCIAL RESULTS:

ANNUAL MIP QUALITY COMPLIANCE MODIFIER:

The company works diligently to comply with all quality and regulatory requirements and is routinely monitored by federal regulators. During fiscal year 2019 nine non-material observations were noted across Medtronic’s global operations, below our metric threshold as noted below:

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ANNUAL MIP PAYMENTS:

Fiscal Year 2017 — 2019 Restricted Stock Unit Payout Results

At the end of the fiscal year, the Committee certified the attainment of the threshold 3% cumulative diluted EPS growth performance results for the restricted stock unit performance period that began in fiscal year 2017 and was completed at the end of fiscal year 2019.

The following table shows the results for fiscal year 2017-2019 Restricted Stock Unit Performance Threshold:

Fiscal Year 2017 — 2019 Long-Term Performance Plan Payout Results

At the end of the fiscal year, the Committee certified the results for the LTPP performance period that began in fiscal year 2017 and was completed at the end of fiscal year 2019. Payments of awards for this LTPP performance period were made during the first fiscal quarter of fiscal year 2020 and can be found in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 51.

The following table shows the results for fiscal year 2017 – 2019 LTPP and the resulting total payout percentage:

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LONG-TERM PERFORMANCE PLAN PAYMENTS:

Other Benefits and Perquisites

Medtronic provides broad-based benefit plans to all of its employees, including the same programs for NEOs. All employees participate in the same health care plans, and we do not provide NEOs with any different or additional benefit plans, except for a business allowance of $24,000 for U.S.-based NEOs and $40,000 for the CEO. Our business allowance policy is described in detail below.

United States Tax-Qualified Retirement Plans

Medtronic sponsors a number of United States tax-qualified retirement plans for its employees, including the NEOs. The Company maintains the Medtronic Retirement Plan (“MRP”), which consists of two types of benefits – the Final Average Pay Pension (“FAPP”) benefit and the Personal Pension Account (“PPA”) benefit. Employees hired before May 1, 2005 could elect to receive the FAPP and either the PPA or the Personal Investment Account (“PIA”) feature in the Medtronic Savings and Investment Plan – our 401(k) plan.

Mr. Ishrak is a participant in the PPA. The PPA is a defined benefit pension plan. The company contributes 5% of eligible compensation for each year of participation into the participants account and participants earn interest at a rate equal to the 10-year U.S. treasury bond rate.

Employees hired or rehired on or after May 1, 2005 but prior to January 1, 2016 are not eligible for the FAPP benefit as that particular benefit has been closed to new entrants but may elect either the PPA benefit under the MRP or the PIA feature under the 401(k) plan. Messrs. Coyle, Lerman, and Martha participate in the PIA plan. Under the PIA plan the company contributes 5% of eligible compensation each year.

Employees hired or rehired on or after January 1, 2016 are eligible for the Medtronic Core Contribution (“MCC”) feature in the 401(k) plan. The MCC is a defined contribution plan in which employees receive a contribution equal to 3% of eligible pay at the end of the fiscal year. Ms. Parkhill is a participant in the MCC plan.

Additional details regarding the MRP, PIA, and 401(k) plan are provided on page 59 of this proxy statement.

Supplemental Retirement Plans

The Company offers a Nonqualified Retirement Plan Supplement (“NRPS”) designed to provide all eligible employees, including the NEOs, with benefits that supplement those provided under our tax-qualified plans. The NRPS is designed to restore benefits lost under the PPA, PIA, FAPP or MCC due to covered compensation limits prescribed by the Internal Revenue Code. The NRPS also restores benefits for otherwise eligible compensation deferred into the Medtronic Capital Accumulation Plan Deferral Program (the “Capital Accumulation Plan”). The NRPS provides employees with no greater benefit than they would have received under the qualified plan in which they participate were it not for the covered compensation limits and deferrals into the Capital Accumulation Plan.

Nonqualified Deferred Compensation Plan

The Company provides all employees at the vice president level or above, including our NEOs, and highly-compensated employees with a market-competitive nonqualified deferred compensation plan through the Capital Accumulation Plan. Our plan allows these employees to make voluntary deferrals from their base pay and incentive payments, which are then credited with gains or losses based on the performance of selected investment alternatives. These alternatives are the same as those offered in our tax-qualified 401(k) Plan for all employees. There are no Company contributions to the plan or Company subsidized returns or Company guaranteed returns.

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Business Allowance

Medtronic does not provide any perquisites such as automobiles, club memberships, or financial and tax advisors. Instead, we provide NEOs with a market-competitive business allowance. The NEOs may spend their business allowance at their discretion for expenses such as financial and tax planning, automobiles or club memberships. The business allowance is paid as taxable income, and we do not track how executives use their respective business allowances. The annual business allowances provided to our U.S.-based NEOs in fiscal year 2019 ranged from $24,000 to $40,000. Additionally, it is occasionally appropriate for NEOs to be accompanied during business travel by their spouses. The expenses associated with such travel, while rare, are considered taxable income. The business allowances and travel expenses are included in the “All Other Compensation” column of the Summary Compensation Table.

Corporate Aviation Service

The Medtronic Aviation service provides air transportation for use primarily by the CEO and members of the Board of Directors. Other executives may occasionally use the aviation services for business purposes based on availability and approval by the CEO or General Counsel. The service will help facilitate more effective and efficient travel planning and limited personal use is deemed appropriate in conjunction with scheduled business travel.

Change of Control Policy

Compensation in a change of control situation is designed to protect the compensation already earned by executives and to ensure that they will be treated fairly in the event of a change of control, and to help ensure the retention and dedicated attention of key executives critical to the ongoing operation of the Company. Our change of control policy supports these principles. We believe shareholders will be best served if the interests of our executive officers are aligned with shareholders’ interests, and we believe providing change of control benefits should motivate senior management to objectively evaluate potential mergers or transactions that may be in the best interests of shareholders. Our change of control policy is discussed in more detail in the “Potential Payments Upon Termination or Change of Control” section of “Executive Compensation.”

Our Change of Control (COC) Policy requires a “double trigger” and only applies if a participant is involuntarily terminated without cause or the participant terminates employment for good reason within three years after a COC event. Our COC policy also does not provide for any “golden parachute” excise tax gross-ups.

Compensation Risk Assessment

Compensation policies and practices are also designed to discourage inappropriate risk-taking. While you should refer to the section entitled “Governance of Medtronic — Board Role in Risk Oversight” beginning on page 20 of this proxy statement for a discussion of the Company’s general risk assessment of compensation policies and practices, mitigating factors with respect to our NEOs include the following:

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Executive Compensation Governance Practices and Policies

Stock Ownership and Retention Policy

Medtronic’s executive stock ownership and retention guidelines are meant to align management and shareholder incentives, at the highest levels of Medtronic’s organization. Those guidelines require the CEO to maintain ownership of stock equal to six (6) times annual base salary and other NEOs to maintain stock ownership equal to three (3) times annual base salary. Until the ownership guideline is met, the CEO must retain 75% of after-tax profit shares received through settlement of equity compensation awards and other NEOs must retain 50% of such shares. For purposes of complying with the guidelines shares owned outright, legally or beneficially, by an officer or the officer’s immediate family members, after-tax unvested restricted stock units, and shares held in the tax-qualified and nonqualified retirement and deferred compensation plans count toward the guideline. For share issuances (restricted stock unit vesting), net gain shares are those shares remaining after payment of income taxes.

Compliance with our ownership and retention guidelines is measured at the beginning of the first fiscal month of a new fiscal year by the internal team at the Company responsible for handling executive compensation matters and the results of such measurement are reported to the Nominating and Corporate Governance Committee or Compensation Committee, as applicable, after the measurement. On each measurement date, compliance is measured using each executive officer’s base salary then in effect and the average closing price per share of the Company’s ordinary shares on the NYSE for the six (6) calendar months preceding the measurement date. As of August 1, 2019, all NEOs are in compliance with the stock ownership and retention policy.

Hedging and Pledging Policy

Our insider trading policy prohibits our NEOs and directors (along with others) from engaging in short sales of Medtronic securities (including short sales against the box) or engaging in purchases or sales of puts, calls or other derivative securities based on Medtronic securities. The policy also prohibits our NEOs from purchasing Medtronic securities on margin, borrowing against Medtronic securities held in a margin account or pledging Medtronic securities as collateral for a loan.

Sale and Transfer of Awards

All stock option, restricted stock, restricted stock unit, and performance-based restricted stock/restricted stock unit awards are granted under plans that specifically prohibit the sale, assignment and transfer of awards with limited exceptions such as the death of the award recipient. In addition, the Compensation Committee may allow an award holder to assign or transfer an award.

Incentive Compensation Forfeiture (“Clawback”)

The Company has a comprehensive Incentive Compensation Forfeiture Policy, which is designed to recoup improper awards or gains paid to executive officers. If the Board determines that any executive officer has received an improper payment or gain, which is an incentive payment or grant mistakenly paid or awarded to the executive officer as a result of misconduct (as defined below), the executive officer must return the improper payment or gain to the extent it would not have been paid or awarded had the misconduct not occurred, including interest on any cash payments. “Misconduct” means any material violation of our Code of Conduct or other fraudulent or illegal activity for which an executive officer is personally responsible as determined by the Board. All executive officers are required to agree to this policy in writing.

Equity Compensation Forfeiture

The Company may require the return or forfeiture of cash and shares received or receivable in certain circumstances in which an employee has a termination of employment from the Company or any affiliate. The Company may exercise its ability to require forfeiture of awards if the employee receives or is entitled to receive delivery of shares or proceeds under an equity award program within six (6) months prior to or twelve (12) months following the date of termination of employment if the current or former employee engages in any of the following activities: (a) performing services for or on behalf of any competitor of, or competing with, the Company or any affiliate; (b) unauthorized disclosure of material proprietary information of the Company or any affiliate; (c) a violation of applicable business ethics policies or business policies of the Company or any affiliate; or (d) any other occurrence that is consistent with the intent noted in items a - c, as determined by the Compensation Committee.

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Equity Award Granting Practices

The Compensation Committee typically approves annual long-term incentive awards for NEOs each June at a regular meeting of the Compensation Committee (CEO awards approved by Board of Directors). The awards are granted at the next regularly scheduled grant date. Medtronic typically grants equity on the first trading day of each quarter of the Fiscal Year.

New hire, promotion, retention and other special or ad hoc awards for NEO’s are approved by the Compensation Committee. The grants are typically effective on the next regularly scheduled grant date following Committee approval. Medtronic adheres to the following practices when granting equity awards:

Tax and Accounting Implications

In evaluating compensation programs applicable to our NEOs (including the Company’s annual and long-term incentive plans), the Compensation Committee considers the potential impact on the Company of Section 162(m) of the Internal Revenue Code, which places a limit of $1 million per year on the amount of compensation paid to certain of our executive officers that is deductible by the Company for federal income tax purposes. The Tax Cuts and Jobs Act, enacted on December 22, 2017, eliminates the performance-based exception to the $1 million deduction limit under Section 162(m) effective as of May 1, 2018 (the start of our first taxable year beginning after January 1, 2018). As a result, beginning in fiscal year 2019, compensation paid to our NEOs in excess of $1 million will generally be nondeductible, whether or not it is performance-based (except for certain performance-based compensation paid pursuant to a legally binding arrangement in place on November 2, 2017). The Compensation Committee will continue to maintain maximum flexibility in the design of our compensation programs and in making appropriate payments to NEOs even if not deductible by the Company.

The Compensation Committee also considers accounting treatment in the design of the long-term incentive plan.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed with management the section of this proxy statement entitled “Compensation Discussion and Analysis” required by Item 402(b) of Regulation S-K. Based on such review and discussions, the Compensation Committee recommended to the Board that the section entitled “Compensation Discussion and Analysis” be included in this proxy statement.

COMPENSATION COMMITTEE:

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EXECUTIVE COMPENSATION

2019 Summary Compensation Table

The following table summarizes all compensation for each of the last three fiscal years awarded to, earned by, or paid to the Company’s Chief Executive Officer, Chief Financial Officer, and three other most highly compensated executive officers during fiscal year 2019 (collectively, the named executive officers or “NEOs”). Please refer to the section entitled “Compensation Discussion and Analysis” beginning on page 32 of this proxy statement for a description of the compensation components for Medtronic’s NEOs. A narrative description of the material factors necessary to understand the information in the table is provided below, following the table.

Salary

The salary column represents the base salary earned by the NEO during the applicable fiscal year. This column includes any amounts that the officer may have deferred under the Capital Accumulation Plan, which deferred amounts also are included in the 2019 Nonqualified Deferred Compensation Table on page 59 of this proxy statement. Each of the NEOs also contributed a portion of salary to the Medtronic Savings and Investment Plan, our 401(k) Plan.

Bonus

Ms. Parkhill’s 2017 amount represents a one-time $1,000,000 bonus following the commencement of her employment with the Company. Mr. Lerman’s 2017 amount represents the final $250,000 installment of his original sign-on bonus of $1,000,000.

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Stock Awards

The stock awards column represents aggregate grant date fair value of restricted stock unit awards and performance-based restricted stock units assuming full (maximum) achievement of applicable performance criteria over the performance period (collectively, the “restricted stock awards”) granted in the respective fiscal year as computed in accordance with FASB ASC Topic 718, Compensation— Stock Compensation. Accordingly, the grant date fair value was determined by multiplying the number of restricted stock units awarded by the closing stock price on the date of grant. For a description of the vesting terms of the stock awards, see the narrative disclosure following the 2019 Grants of Plan-Based Awards table on page 54 and the footnotes to the 2019 Outstanding Equity Awards at Fiscal Year End table on page 55 of this proxy statement. Additional information regarding the assumptions used to calculate these amounts is incorporated by reference to Note 13 to the financial statements included in the Company’s Form 10-K for fiscal year 2019.

Option Awards

The option awards column represents the aggregate grant date fair value of stock option awards granted in the respective fiscal year as computed in accordance with FASB ASC Topic 718, Compensation— Stock Compensation. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option valuation model. The following table provides the assumptions underlying this estimate.