Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.   )

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

TABLE OF CONTENTS

 

Notice is hereby given that the 2023 Annual Meeting of Shareholders (the “Annual Meeting”) will be held virtually on May 2, 2023, at 10:00 a.m. Eastern Time for the following purposes as set forth in the accompanying Proxy Statement:

Holders of record of our common and preferred stock at the close of business on March 13, 2023, will be entitled to vote at the meeting.

This year’s Annual Meeting will be held in a virtual-only meeting format. To be admitted to the Annual Meeting, you will need to visit www.virtualshareholdermeeting.com/BMY2023 and enter the 16-digit control number included on your Important Notice Regarding the Availability of Proxy Materials, on your proxy card, or on the instructions that accompanied your proxy materials. Guests may join the Annual Meeting in a listen-only mode, but they will not have the option to vote shares or ask questions during the virtual meeting. Once admitted, you may submit questions or vote during the Annual Meeting by following the instructions that will be available on the meeting website. You may log into the meeting platform beginning at 9:50 a.m. Eastern Time on May 2, 2023. To submit a question before the meeting, visit www.proxyvote.com with your 16-digit control number and select the “Submit a Question for Management” option. To submit a question during the meeting, visit www.virtualshareholdermeeting.com/BMY2023, enter your 16-digit control number and type your question into the “Ask a Question” field and click “Submit.” The company will provide direct and specific information to shareholder proponents on how they can present their shareholder proposals during the meeting.

By Order of the Board of Directors

 

Kimberly M. Jablonski

Senior Vice President and Corporate Secretary

 

 

Message from Giovanni Caforio,

Dear BMS shareholders,

Over the past three years, Bristol Myers Squibb has been on a transformational journey focused on delivering innovative medicines to patients with serious unmet medical needs. In 2022, we executed against our long-term strategy, delivered three first-in-class medicines to patients and made significant progress in renewing our portfolio. As a result, we are now transitioning our business as one of the youngest and most diverse product portfolios in the industry. Thanks to the strong performance of our R&D organization, we are advancing multiple waves of innovation to drive sustained, long-term growth. We also made important progress in delivering on our inclusion and diversity goals and health equity commitments. This notable work was enabled by our dedicated global workforce who never stop working for our patients, even during the course of a global pandemic.

Last year, we achieved:

We have a strong business that is well-positioned for portfolio renewal, and we are successfully executing our strategy to drive sustained long-term growth. We continue to build breadth and depth across our therapeutic areas, with leading In-Line Products and an exciting New Product Portfolio that has significant potential to expand into additional indications. The growth from these products will be further bolstered by a second wave of innovation coming from six registrational assets, including milvexian, a next-generation anti-thrombotic, LPA-1 in lung fibrosis and repotrectinib, a potential best-in-class ROS1/NTRK inhibitor for non-small cell lung cancer. Combined with a robust early-stage pipeline of 50+ assets, along with our disciplined business development strategy, we are well positioned with multiple paths for growth.

We are advancing key initiatives to ensure that healthcare works for everyone. I am proud of the progress that Bristol Myers Squibb and the Bristol Myers Squibb Foundation (“BMS Foundation”) have made toward the bold inclusion and diversity goals and health equity commitments announced in 2020 to cover five areas: addressing health disparities, increasing clinical trial diversity, expanding supplier diversity, enhancing employee giving and increasing workforce diversity. In 2022, we made remarkable progress on these initiatives, including the location of 58% of U.S. clinical trial sites in highly diverse communities, exceeding our initial commitment of 25% and increasing the representation of women among our global executives to 48.7%. For further discussion on these initiatives and the progress we are making, please see discussion under “Inclusion & Diversity Goals and Health Equity Commitments” beginning on page 43.

As we look to 2023, I am confident in our ability to continue to grow our business this year, renew our portfolio, deliver long-term growth and deliver transformational medicines that help patients with serious unmet medical needs. We ask that you review this report and offer your support for our directors and other items we have put forth in this Proxy Statement. We welcome your feedback, participation in our annual meeting and your future investment.

Thank you for your continued support of our mission. We hope you and your loved ones continue to stay safe and healthy.

Sincerely,

 

Giovanni Caforio, M.D.

Board Chair and Chief Executive Officer

 

Message from Theodore Samuels,

Dear Fellow shareholders and stakeholders,

In the letter from our Board Chair and CEO, Giovanni Caforio, you read about how this has been a transformational year for the Company. Bristol Myers Squibb successfully delivered strong operational and financial performance; building a strong foundation for sustained growth. We advanced our pipeline and successfully renewed our product portfolio; achieving the approval of three first-in-class medicines in 2022 alone. I believe I speak for all BMS independent directors in saying that we are proud of the Company’s progress in the past year, and of the role sound governance and appropriate oversight played in fostering that progress.

Last year, I outlined my commitment to sound corporate governance. In 2022, we focused on several core areas:

Oversight of the Company’s Strategy. In 2022, the Board met 11 times and closely partnered with senior management throughout the year to discuss the strategic direction of the Company, progress made against diversifying and broadening our product portfolio, advancing our product pipeline and ensuring the Company is well-positioned to lead in an increasingly complex and ever-changing healthcare landscape. We built on our strong track record of strategic business development and made significant progress in successfully integrating recent acquisitions, enabling a proper knowledge transfer and cultural assimilation of our workforce.

The Board worked to ensure management had the tools and support needed to invest in our product portfolio and pipeline. BMS now has critical mass across all four of its therapeutic areas, giving the Board and management confidence in the Company’s ability to unlock the potential for multiple avenues of growth in the second half of the decade and beyond.

Delivering Value. A key driver for the Company’s long-term success is ensuring its corporate strategy also delivers value for patients, employees and other stakeholders. Our most recent Global Inclusion & Diversity (“I&D”) Report issued in September 2022, details how BMS is driving equitable advancement and outcomes for all. Oversight of environmental, social and governance (“ESG”) issues remains an important focus for the Board. This includes supervision of health equity and clinical trial diversity initiatives, such as our 2020 combined commitment with the BMS Foundation to each invest $150 million over five years to accelerate our health equity commitments. In 2022, we published our second ESG Report. For further discussion on our ESG strategy, please see “Environmental, Social, Governance & Sustainability” beginning on page 20.

Ensuring the right skills and experience on our Board. At Bristol Myers Squibb, we work to ensure that we have highly qualified directors with diverse backgrounds to help guide and advance the Company’s strategy. To that end, seven out of 11 directors are diverse by gender, race, or ethnicity (four of whom are diverse by race/ethnicity and four by gender). In addition, our directors leverage their vast experience across healthcare, science, finance, risk management and other critical areas to cultivate and support a strong culture centered around continuous engagement and accountability. Board composition is constantly evaluated to help identify areas where new or additional skills and backgrounds could be beneficial in overseeing Bristol Myers Squibb’s strategy and execution. As part of our continued Board refreshment, in June 2022, we welcomed our newest director, Dr. Deepak L. Bhatt, M.D., M.P.H., to the Board. Dr. Bhatt brings more than 20 years of cardiovascular research experience, and his extensive clinical trial knowledge complements and enhances the Board’s collective scientific expertise. Given our focus on ensuring we have the right skills to guide the Company’s success, we were pleased to be recognized as one of Fortune’s 25 most innovative boards.

Constructive Shareholder Engagement. Engagement with our shareholders remains a top priority. It gives us valuable insights that help the Board make informed decisions and provide the most effective guidance possible. We invited our top 50 institutional shareholders and several others, representing approximatively 54% of our shares outstanding, to meet with us in 2022. BMS connected with institutions that accepted our invitation, representing over 23% of voting shares outstanding, and I participated in a few of these calls. These institutions offered feedback on Board composition, leadership structure, our governance practices, ESG and I&D initiatives, our compensation program and other topics. This feedback was shared with the full Board, and we discussed opportunities for improving our responsiveness to shareholders. We look forward to additional opportunities for constructive engagement with our shareholders to help drive progress toward our mutual goal of shareholder value creation.

On behalf of the full Board, I sincerely thank you for your continued trust and investment in BMS. Your vote is important, and we kindly request that you support our voting recommendations contained in this Proxy Statement. We also invite you to share your perspectives with us throughout the year.

 

Theodore R. Samuels

Lead Independent Director

Chair, Committee on Directors and Corporate Governance

 

Our Board of Directors (the “Board”) has nominated 11 current directors, Peter J. Arduini, Deepak L. Bhatt, M.D., M.P.H., Giovanni Caforio, M.D., Julia A. Haller, M.D., Manuel Hidalgo Medina, M.D., Ph.D., Paula A. Price, Derica W. Rice, Theodore R. Samuels, Gerald L. Storch, Karen H. Vousden, Ph.D., and Phyllis R. Yale, to serve as directors of Bristol Myers Squibb. When elected, the directors will hold office until the 2024 Annual Meeting or until their successors are duly elected. We believe that tone is set at the top, so we begin this section on our Board by introducing you to who we are. We follow that with sections on how we are selected and elected, how we govern and are governed, how we are organized, how you can communicate with us and how we are paid. We ask in Item 1 for your voting support so we can continue our important work and build on our significant successes in 2023.

 

 

 

All Director Nominees possess these qualities:

 

The following biographies of our director nominees reflect their Board Committee membership and Chair positions as of the date of this year’s Annual Meeting. Each of our board members has experience and skills in the enumerated categories included in our skills matrix chart above, however, we have designated in the biographies only the top three to five skills to indicate that a director has particular strength in those areas.

 

Our executives and employees put a great deal of thought into talent recruitment and retention, and we at the Board level are similarly committed to identifying and attracting the best directors for our company. In the subsections that follow we describe our standards, policies and processes to achieving this goal.

A majority of the votes cast is required to elect directors. Any current director who does not receive a majority of votes cast must tender their resignation as a director within 10 business days after the certification of the shareholder vote. The Committee on Directors and Corporate Governance, without participation by any director tendering their resignation, will consider the resignation offer and recommend to the Board whether to accept it. The Board, without participation by any director tendering their resignation, will act on the Committee’s recommendation at its next regularly scheduled meeting to be held within 60 days after the certification of the shareholder vote. We will promptly disclose the Board’s decision and the reasons for that decision in a broadly disseminated press release that will also be furnished to the U.S. Securities and Exchange Commission (SEC) on Form 8-K. If any nominee is unable to serve, proxies will be voted in favor of the remainder of those nominated and may be voted for substitute nominees, unless our Board of Directors provides for a lesser number of directors.

As specified in our Corporate Governance Guidelines, members of our Board should be persons with broad experience in areas important to the operation and long-term success of our company. These include areas such as business, science, medicine, finance/accounting, law, business strategy, crisis management, corporate governance, education or government. Board members should possess qualities reflecting integrity, independence, leadership, good business judgment, wisdom, an inquiring mind, vision, a proven record of accomplishment and an ability to work well with others. The Corporate Governance Guidelines also express the Board’s belief that its membership should continue to reflect a diversity of gender, race, ethnicity, age, sexual orientation and gender identity.

Our Corporate Governance Guidelines provide that a substantial majority of Board members be independent from management, and the Board has adopted independence standards that meet the listing standards of the New York Stock Exchange. Our Board has determined that, except for Giovanni Caforio, M.D., who is our Chief Executive Officer, each of our directors and each director nominee for election at this Annual Meeting is independent of Bristol Myers Squibb and its management.

In accordance with our Corporate Governance Guidelines, our Board undertakes an annual review of director independence. Under our Corporate Governance Guidelines and the New York Stock Exchange (“NYSE”) listing standards, a director is not independent unless the Board affirmatively determines that he or she does not have a direct or indirect material relationship with the Company. In March 2023, the Board considered all commercial and charitable relationships of our independent directors and director nominees, including the following relationship, which was deemed immaterial under our categorical standards (see Exhibit A):

The Board determined that none of our independent directors had any relationships that would impair their independence under the NYSE’s independence standards or otherwise.

The Committee on Directors and Corporate Governance regularly assesses the appropriate size and composition of our Board. This assessment incorporates the results of the Board’s annual evaluation process, which are described more fully under “Annual Evaluation Process” beginning on page 15. The Committee also considers succession planning for its directors.

In connection with the Board’s ongoing director identification process, the Committee on Directors and Corporate Governance, in consultation with the Board Chair, conducts an initial evaluation of prospective nominees against the established Board membership criteria discussed above. The Committee also reviews the skills of the current directors and compares them to the particular skills of potential candidates, keeping in mind the Board’s commitment to maintain members of diverse experience and background. In particular, the Board is committed to identifying and evaluating highly qualified women and underrepresented ethnic group candidates as well as candidates with other diverse backgrounds, industry experience and unique characteristics.

directors, as applicable. After completing this evaluation and interview process, the Committee on Directors and Corporate Governance makes a recommendation to the full Board as to the persons who should be nominated by our Board, and the full Board determines the nominees after considering the recommendation and any additional information it may deem appropriate.

Following a robust process that began in 2021, Dr. Bhatt was elected to join the Board, effective June 14, 2022. He was identified as a potential candidate for election to our Board by a third-party search firm retained by the Committee on Directors and Corporate Governance and was subsequently interviewed by members of the Board.

The Committee on Directors and Corporate Governance considers and evaluates shareholder recommendations of nominees for election to our Board of Directors in the same manner as other director nominees. Shareholder recommendations must be accompanied by disclosure, including written information about the recommended nominee’s business experience and background with consent in writing signed by the recommended nominee that he or she is willing to be considered as a nominee and, if nominated and elected, he or she will serve as a director. As of the date of this proxy statement, shareholders should send their written recommendations of nominees accompanied by the required documents to: Bristol-Myers Squibb Company, 430 East 29^th Street—14^th Floor, New York, New York 10016, Attention: Corporate Secretary until June 30, 2023. However, as we plan to relocate our principal executive offices, effective July 1, 2023, shareholders should send their written recommendations of nominees, accompanied by the required documents to Bristol-Myers Squibb Company, Route 206 & Province Line Road, Princeton, NJ 08543, Attention: Corporate Secretary.

The Board is very focused on Board composition and refreshment to ensure that your Board has the best mix of skill sets, proficiencies and perspectives to deal with the ever-changing business dynamics of the company and external environment. The Board is also committed to increasing inclusion and diversity, both at the Board level and across the company. In particular, the Board is committed to identifying and evaluating highly qualified women and under-represented ethnic group candidates as well as candidates with other diverse backgrounds, industry experience and unique characteristics. Finally, the Board will continue to rely on our robust board assessment process to review and evaluate the performance and contributions of directors, which improves the overall effectiveness of the Board.

Following extensive engagement with our shareholders, our Board determined to adopt proxy access in 2016, permitting a shareholder or group of up to 20 shareholders holding at least 3% of our outstanding shares of common stock for at least three years to nominate a number of directors constituting the greater of two directors or 20% of the number of directors on our Board, as set forth in detail in our Bylaws. If you wish to propose any action pursuant to our proxy access bylaw provision, you must deliver a notice to BMS containing certain information set forth in our Bylaws, not less than 120 but not more than 150 days before the anniversary of the prior year’s filing of the proxy materials. For our 2024 Annual Meeting, we must receive this notice between October 25, 2023, and November 24, 2023. Shareholders should send their notices to our new principal executive office: Bristol-Myers Squibb Company, Route 206 & Province Line Road, Princeton, NJ 08543, Attention: Corporate Secretary.

Our Board recognizes the critical role Board and Committee evaluations play in ensuring the effective functioning of our Board. It also believes in the importance of continuously improving the functioning of our Board and Board Committees. Under the leadership and guidance of our Lead Independent Director, the Committee on Directors and Corporate Governance continuously assesses the Board evaluation process. For the last few years, the formal Board evaluation process has included a written questionnaire for the Board and the Committees. In addition to the Board and Committee questionnaires, for individual director assessments, the Board Chair and Lead Independent Director use a standard set of questions for their one-on-one discussions with each director. The Lead Independent Director conveys directors’ feedback on an ongoing basis to our Board Chair and has regular one-on-one discussions with the other members of the Board. The formal 2022 Board and Committee evaluation processes were as follows:

In response to feedback received from the 2021 annual evaluation process, the Board added a new director with necessary skills that enhance the composition of our Board. Namely, the Board added Dr. Bhatt, effective June 14, 2022.

Director education is an ongoing, year-round process, which begins when a director joins our Board. Upon joining our Board, new directors are provided with a comprehensive orientation program to learn about our company, including our business, strategy and governance. The orientation program is led by senior business and functional leaders from all areas of the company, where strategic priorities and key risks and opportunities are discussed. All of our directors periodically attend site visits to one or more of our locations. On an ongoing basis, our directors receive presentations on a variety of topics related to their work on the Board and within the biopharmaceutical industry, both from senior management and from experts outside of the company. We also encourage all of our directors to enroll, at our expense, in continuing education programs provided by third parties.

Our business is managed under the direction of our Board pursuant to the Delaware General Corporation Law and our Bylaws. The Board has responsibility for establishing broad corporate policies and for the overall performance of our company. The Board keeps itself informed of company business through regular written reports and analyses from management, and regular discussions with the Chief Executive Officer and other company officers; by reviewing other materials provided by management and by outside advisors; and by participating in Board and Board Committee meetings.

The Committee on Directors and Corporate Governance continually reviews corporate governance issues and is responsible for identifying and recommending the adoption of corporate governance initiatives. In addition, our Compensation and Management Development Committee regularly reviews our compensation policies and procedures and, when appropriate, recommends changes that strengthen our compensation practices. The “Compensation Discussion and Analysis” section beginning on page 39 discusses many of these policies and procedures.

The Board of Directors has adopted Corporate Governance Guidelines that govern its operation and that of its Committees. Our Board annually reviews the Corporate Governance Guidelines and, from time to time, revises them in response to changing regulatory requirements, evolving best practices and feedback from our shareholders and other constituents. Our Corporate Governance Guidelines may be viewed on our website at www.bms.com/ourcompany/governance.

Our Board meets regularly to discuss our company’s strategic direction and the issues and opportunities facing our company in light of trends and developments in the biopharmaceutical industry and the broader business environment. Our Board has been instrumental in determining our short-term and long-term company strategy.

Our Board is dedicated to oversight of risk management and is responsible for risk oversight as part of its fiduciary duty of care to monitor business operations effectively. Specifically, the Board plays a critical role in the determination of the

types and appropriate levels of risk undertaken by the company. Some of the key risks the Board is focused on relate to: (i) potential legislative or other regulatory actions impacting the pharmaceutical industry in the U.S. and internationally, including drug pricing and access; (ii) intellectual property protection and upcoming losses of exclusivity; (iii) competition; (iv) business continuity; (v) key environmental, social and governance risks, inclusive of human capital management and our inclusion and diversity goals; and (vi) cybersecurity, among others.

Our Board administers its strategic planning and risk oversight function as a whole and through its Board Committees. The following are examples of how our Board Committees are involved in this process:

Our Board and Board Committees engage regularly with management on risks to the business, including the risks described above.

The Compensation and Management Development Committee annually conducts a worldwide review of our material compensation policies and practices. Based on this review, the Committee concluded that our material compensation policies and practices are not reasonably likely to have a material adverse effect on the company. On a global basis, our compensation policies and practices contain many design features that mitigate the likelihood of inducing excessive or inappropriate risk-taking behavior. These features include:

Our Board meets on a regularly scheduled basis during the year to review significant developments affecting Bristol Myers Squibb and to act on matters requiring Board approval. It also holds special meetings when important matters require Board action between scheduled meetings. Members of senior management regularly attend Board meetings to report on and discuss their areas of responsibility.

In 2022, the Board met 11 times. The average aggregate attendance of directors at Board and Board Committee meetings was over 97%. No director attended fewer than 90% of the aggregate number of Board and Board Committee meetings during the period he or she served.

During these meetings, our independent directors met in executive sessions to discuss many topics, including the company’s execution of our strategy to renew our product pipeline with new life-changing medicines, executing on key launches to replace revenues from upcoming losses of exclusivity, integration of acquired businesses, and the ongoing refinement of the company’s ESG strategy, among other things.

The Board and Board Committees also held information sessions throughout 2022, which supplemented the regularly scheduled Board and Board Committee meetings. These information sessions were especially important during 2022 and allowed the Board to provide effective oversight and support to our management team. For 2023, the Board and Committees will continue to supplement their regular meetings with information sessions as needed.

It is the expectation of the Board that each director has sufficient time to attend, prepare for and participate during Board and Board Committee meetings. Our Committee on Directors and Corporate Governance periodically reviews the outside board service of our directors and has adopted internal procedures to address when a director’s outside public board service exceeds the limit included in the company’s Corporate Governance Guidelines.

Directors are strongly encouraged, but not required, to attend the Annual Meeting of Shareholders. All of the 2022 nominees for director who were directors as of the 2022 Annual Meeting attended our virtual 2022 Annual Meeting of Shareholders.

The Principles of Integrity adopted by our Board of Directors set forth important company policies and procedures in conducting our business in a legal, ethical and responsible manner. These standards are applicable to all of our employees, including the Chief Executive Officer, the Chief Financial Officer and the Controller.

In addition, the Audit Committee has adopted the Code of Ethics for Senior Financial Officers that supplements the Principles of Integrity by providing more specific requirements and guidance on certain topics. The Code of Ethics for Senior Financial Officers applies to the Chief Executive Officer, the Chief Financial Officer, the Controller, the Treasurer and the heads of major operating units.

Our Board has also adopted the Code of Business Conduct and Ethics for Directors that applies to all directors and sets forth guidance with respect to recognizing and handling areas of ethical issues.

The Principles of Integrity, the Code of Ethics for Senior Financial Officers and the Code of Business Conduct and Ethics for Directors are available on our website at www.bms.com/ourcompany/governance. We will post any substantive amendments to, or waivers from, applicable provisions of our Principles, our Code of Ethics for Senior Financial Officers, and our Code of Business Conduct and Ethics for Directors on our website at www.bms.com/ourcompany/governance within two days following the date of such amendment or waiver.

Employees are required to report any conduct they believe in good faith to be an actual or apparent violation of our Codes of Conduct. In addition, as required under the Sarbanes-Oxley Act of 2002, the Audit Committee has established procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by company employees of concerns regarding questionable accounting or auditing matters.

The Board has adopted a written policy and procedures for the review and approval of transactions involving the company and related parties, such as greater than 5% shareholders, directors, executive officers and their immediate family members. The policy and procedures cover any transaction or series of transactions (an “interested transaction”) in which the amount involved exceeds $120,000, the company is a participant, and a related party has a direct or indirect material interest (other than solely as a result of being a director or less than 10% beneficial owner of another entity). All interested transactions are subject to approval in accordance with the following policy and procedures:

BlackRock, Inc. (“BlackRock”) and The Vanguard Group (“Vanguard”) are each considered a “Related Party” under our related party transaction policy because they each beneficially own more than 5% of our outstanding common stock. The Governance Committee approved the following related party transactions in accordance with our related party policy and procedures and Bylaws:

The Governance Committee approved the above relationships on the basis that these entities’ ownership of our stock plays no role in the business relationship between us and them, and that the engagement of each entity was on terms no more favorable to them than terms that would be available to unaffiliated third parties under the same or similar circumstances.

We provide semi-annual disclosure on our website at the link below of all political contributions to political committees, parties or candidates on both state and federal levels that are made by our employee political action committee, as well as annual disclosure of the portion of our dues or other payments made to trade associations to which we give $50,000 or more that can be attributed to lobbying expenditures. Please see the company's website at: https://www.bms.com/about-us/sustainability/economic-responsibility/political-contributions.html under “Political Contributions.”

At Bristol Myers Squibb, our vision is to transform the lives of patients through science. As a leading purpose-driven biopharma company, we understand our responsibility extends well beyond the discovery, development and delivery of innovative medicines that help patients prevail over serious diseases. We believe that driving long-term business value is at the heart of everything we do, from improving access and affordability so that transformational therapies are not out of reach for any patient, to advancing inclusion, diversity and health equity, to supporting a healthy planet in order to positively impact the communities where we live and work.

Founded more than 135 years ago, we are uniquely positioned to apply our expertise, broad scale, and reach to help solve some of the most challenging global health issues. We do that by focusing our efforts on the areas where we can achieve the greatest impact.

Living our purpose starts with a strong governance profile, which includes direct oversight of ESG opportunities and risks, and relevant disclosure by our Committee on Directors and Corporate Governance. Oversight by this Committee strengthens our ability to operate with the highest levels of quality, integrity and ethics, a critical element of our ESG strategy.

Our ESG strategy builds on a legacy of comprehensive and global sustainability efforts, encompassing the products we make and how we make them, our facilities, our employees and our communities. We have been setting sustainability objectives and reporting on the results since the 1990s, when we first began reporting on environmental objectives. In 2021, after successfully achieving our Sustainability 2020 Goals across the areas of patients, people, supply chain and the environment, we published our inaugural ESG Report detailing our critical risks and opportunities, as well as progress against our targets to accelerate innovation, enhance patient access to medicines, be an employer of choice and reduce our environmental footprint. Our ESG strategy seeks to mobilize our combined capabilities and resources to positively impact the communities where we live, work and serve, with four focus areas:

Our ESG strategy is fully aligned with our corporate strategy and was defined based on a formal assessment of priority issues drawn from senior executives and a broad group of stakeholders with board oversight. Through active engagement with our shareholders and other key stakeholders, we completed the development of our next generation commitments. We will set approved science-based emissions reductions targets in alignment with the Science Based Target Initiative as a key step in the roadmap to delivering these environmental commitments.

The Bristol Myers Squibb mission, values and purpose fully align with global goals. This year marks our 13^th year as a signatory to the United Nations Global Compact and more than 20 years of setting global sustainability goals. Since 2016, we have reported progress toward achieving seven targets within UN Sustainable Development Goal (“SDG”) 3, Good Health and Well-Being, through the efforts of Bristol Myers Squibb Company in collaboration with the separate non-profit entities, the Bristol Myers Squibb Foundation and the Bristol Myers Squibb Patient Assistance Foundation. Utilizing the SDG Compass, we mapped our sustainability efforts across the enterprise and aligned our strategy to the realization of the SDGs. We identified 10 SDGs, defined by our primary and secondary alignment, that we are uniquely able to address, and we track our progress using the UN SDG Action Manager. Also, we are members of the Business Ambition for Climate and Health and Climate Ambition Action Platforms, as well as an ongoing sponsor for the One Young World Lead 2030 Challenge for SDG 10: Reduced Inequalities, with a focus on advancing equality within the LGBTQ community in businesses, and a member of the Inaugural UN Young SDG Innovators Program, supporting SDG 3, with a focus on Mental Health and Wellness.

Our longer-term vision and approach to business growth and planning have given us a clear understanding of how important it is to provide innovative solutions to global sustainability challenges and to incorporate sustainability into our corporate culture and daily business operations. As we work on transforming our models and systems for the future, we remain committed to the continued evolution of environmentally sound and socially responsible growth.

These commitments reflect our comprehensive approach to protecting human and natural resources, now and in the future. For us, sustainability is much more than meeting targets—it is integrated into our culture and is part of our daily thought process. This includes ensuring our clinical trials reflect real world patient populations and incorporating innovative technologies to drive our R&D and manufacturing operations. We continue to bring hope to patients with serious diseases by building capacity and strengthening community services to ensure no patient is left behind.

Through active engagement with our shareholders and other key stakeholders on our ESG performance relative to our financial results, we completed the development of our next generation commitments to environmental responsibility for the global enterprise. By 2030, we intend to purchase 100% of the electricity we use from renewable sources, and by 2040, we intend to be carbon neutral in our Scope 1 (direct) and Scope 2 (indirect) emissions and reach the targets of equitable water use, zero waste to landfill and 100% electric vehicles in our commercial fleet. In addition, by 2050, we commit to Net

Zero emissions in Scope 1, 2 and 3 (value chain), as part of setting science-based emissions reduction targets in alignment with the Science Based Targets Initiative (SBTi)—a key step in the roadmap to delivering these environmental commitments. We intend to have these targets validated by the SBTi by 2024.

 

To date, we have made substantial progress on our inclusion and diversity and health equity initiatives. By the end of 2022, 58% of U.S. clinical trial sites were located in highly diverse communities, exceeding our initial goal of 25%, we increased the number of global executives who are women to 48.7% and our Black/African American and Latino/Hispanic executives increased to 6.1% and 6.1%, respectively. For further discussion on these initiatives and the progress we are making, please see discussion under “Inclusion & Diversity Goals and Health Equity Commitments” beginning on page 43.

In 2022, we published our second ESG Report, as part of our enhanced focus on transparency. We further expanded our reporting with the inclusion of our response to the Global Reporting Initiative, an Anti-Corruption report using the Norges Bank Investment Management guidance, and a Sustainability Accounting Standards Board index. We will publish ESG updates annually that follow these frameworks. Among other updates, we reported on third-party verification of seven scope 3 categories. Our Board remains actively engaged on these issues with direct oversight by our Committee on Directors and Corporate Governance. For more information and to provide feedback, please see the company’s website at https://www.bms.com/about-us/sustainability.html under “Sustainability.”

Additionally, for 2022, we introduced select goals from our ESG commitments as a weighted metric for the measurement of company performance as part of our executives’ annual bonus program. We believe that creating joint executive accountability to achieve our ESG commitments is consistent with our mission as a leading purpose-driven biopharma company. For more information, please see “Environmental, Social, Governance & Sustainability” beginning on page 20.

We firmly believe that prescription medicines are such a vital part of human healthcare that everyone who needs them should have access to them. We have been, and remain committed to facilitating access to our medicines, and to furthering our mission to help patients prevail over serious diseases. We price our medicines based on a number of factors, including, among others, the value of scientific innovation for patients and society in the context of overall healthcare spend; economic factors impacting the healthcare systems’ capacity to provide appropriate, rapid and sustainable access to patients; and the necessity to sustain our R&D investment in innovative, high-quality medicines that address the unmet medical needs of patients with serious diseases and improve their life needs.

At Bristol Myers Squibb, we believe in the value our medicines bring to patients and society and our role in transforming care to help patients live longer, healthier and more productive lives. We focus on medicines that meaningfully change patient outcomes and improve quality of life, and over the last 30 years, we have made significant contributions in areas such as HIV, hepatitis, cardiovascular disease, immunology, hematology and, most recently, immuno-oncology.

After our acquisition of Celgene, we are now moving to the next generation of treatment options, such as CAR T and CELMoDs. We are pursuing medicines with transformational potential in therapeutic areas such as oncology (including solid tumor and hematology), cardiovascular, immunology, fibrosis and neuroscience. Many of our medicines are breakthroughs in innovation―truly differentiated medicines that have changed the standard of care and help patients live longer and healthier lives. For example, in melanoma, prior to the availability of immuno-oncology treatment options, 25% of patients diagnosed with metastatic melanoma survived one year. This increased to 74% with immuno-oncology therapies. Through Revlimid and Pomalyst, we transformed the treatment of multiple myeloma.

Advances like these have transformed the treatment of certain cancers and changed survival expectations for patients. Collectively, we have delivered eight new products in the past three years, including 18 major market approvals in 2022. These breakthrough medicines are possible because of our sustained investment in R&D. We have emerged as an industry leader in R&D investment, investing (including Acquired IPRD) approximately $22 billion, $11 billion and $10 billion annually for 2020, 2021, and 2022, respectively. As a percentage of revenue, R&D investment was approximately 53%, 24% and 22% for 2020, 2021 and 2022, respectively. Our goal is to ensure access to our currently approved medicines while continuing to fuel the development of medicines for the future.

We take a thoughtful approach to pricing our products and have internal processes and controls in place to ensure that pricing decisions are thoroughly and appropriately vetted with the highest levels of management prior to implementation. This process includes routine presentations to the Board on drug pricing strategies. In addition, on balance, our revenue growth has been primarily attributable to increased volume arising from increased demand for our products rather than price increases.

We have and continue to disclose the average net selling price increase for our U.S. products in our annual report on Form 10-K and our quarterly reports on Form 10-Q. Our average net selling price increase for 2020, 2021 and 2022 for our products was approximately, 1%, 2% and 4%, respectively. We believe we have the appropriate governance mechanisms and internal controls and processes in place to ensure that pricing decisions are made in line with our values and commitment.

Demonstrating our ongoing efforts to responsibly price our medicines while balancing investment in new innovation, we expect U.S. net prices across our portfolio, which reflect discounts, rebates, and other price concession, to remain largely flat in 2023, as they have been for the last several years. Any list price increases apply to medicines with ongoing clinical research and reflect our ongoing efforts to responsibly price our medicines while balancing economic factors, including inflation and investment in new innovation. Any patient having issues obtaining or affording a BMS medicine should visit our patient support website hub at https://www.bmsaccesssupport.bmscustomerconnect.com/patient.

In addition, the Compensation Management and Development Committee annually completes a thoughtful and rigorous evaluation of our executive compensation program to ensure that the program is aligned with our mission and

delivers shareholder value, while not encouraging excessive or inappropriate risk taking by our executives. When setting incentive plan targets each year, the Compensation Management and Development Committee is aware of the risks associated with drug pricing, among other things, and ensures our plans do not incentivize risky behavior in order to meet targets.

We remain committed to working with policymakers, thought leaders, patient advocates and other stakeholders to shape a comprehensive system that provides accessible and affordable health care with the goal of achieving universal coverage and quality patient care, while continuing to fuel innovation. We support efforts to make medicines more affordable, from access assistance to innovative ways to address costs more directly.

Individuals who cannot afford our medicines and have no other means of coverage, public or private, may be eligible to be provided with our medicines, at no charge, through a number of programs, including product donations to various independent charitable organizations, such as the Bristol Myers Squibb Patient Assistance Program Foundation, Inc., an independent 501(c)(3) charitable organization and other company sponsored patient support programs. We estimate that in 2022, we donated more than $3 billion worth of medicines to assist more than 156,000 patients in the U.S. at no cost to these patients.

We promote health equity globally and strive to increase access to life-saving medicines for populations disproportionately affected by serious diseases and conditions, giving new hope and help to some of the world’s most vulnerable people. Indeed, increasing access to patients was one of our 2020 Sustainability Goals. We have a network of patient support programs, rebates, and copay assistance programs in the United States and around the world, as allowed by local requirements.

In instances of disproportionate disease impact, we support the use of tiered pricing between distinct groups of countries. For example, for over a decade, Bristol Myers Squibb has maintained a policy of tiered pricing and voluntary licensing for our HIV and HCV medicines to reduce barriers that delay broad and accelerated access to treatment for patients around the world.

In addition, as part of our commitment to helping patients prevail over serious diseases, we also drive and support a number of programs designed to build capacity and raise patient awareness, including prevention, diagnosis, and access to treatment and care. Through donations to the Bristol Myers Squibb Foundation, an independent 501(c)(3) charitable organization, we support community-based programs that promote cancer awareness, screening, care and support among high-risk populations in the United States, as well as China, Brazil and sub-Saharan Africa. Examples include the Bristol Myers Squibb Foundation Global Cancer Disparities program.

We recognize this remains a challenging time for everyone, and we know patients may be facing additional hardships. Our existing patient support programs continue to be available to help eligible patients in the U.S. who have been prescribed a Bristol Myers Squibb medicine and have lost employment and health insurance due to the COVID-19 pandemic. Under these programs, eligible patients are provided certain Bristol Myers Squibb medicines for free or at a reduced cost.

As a company, we have made remarkable improvements in delivering life-saving medicines to patients and offering creative solutions for access; however, we understand concerns that our healthcare system as a whole is too expensive, and we are interested in finding ways to improve our system. Therefore, we re-assert our commitment to proactively work with governments, payers, health care providers and other stakeholders around the world to develop sustainable solutions that will better assist patients in need.

In December 2021, the company issued its 2021 Global Access Report that detailed Bristol Myers Squibb’s efforts and progress towards advancing access to healthcare and health equity globally through its own efforts and in partnership with other stakeholders. We invite you to view this report on our website at https://www.bms.com/assets/bms/us/en-us/pdf/global-access-report.pdf.

The below disclosure is published in response to a shareholder proposal that was filed regarding the Company's access strategies as they are associated with patents which are filed subsequent to the main active ingredient/molecule patent(s).

Innovation and patient access to it are taken very seriously at BMS and are regularly reviewed by management and the Board of Directors, as we strive to ensure that our innovations can make a meaningful impact for patients.

In our competitive pharmaceutical industry, the majority of an innovative product’s commercial value is usually realized during the period in which the product has market exclusivity. A product’s market exclusivity is generally determined by two forms of intellectual property: patent rights held by the innovator company and any regulatory forms of exclusivity to which the innovative drug is entitled. Without a meaningful period of exclusivity, our ability to invest in R&D to discover and develop new medicines may be limited and could prevent promising new medicines from reaching patients. Patents are a key determinant of market exclusivity for most of our branded pharmaceuticals. Patents provide BMS with the right to exclude others from practicing an invention related to the medicine for a limited period of time. Patents may cover, among other things, the active ingredient(s), various uses of a drug product, pharmaceutical formulations, drug delivery mechanisms and processes for (or intermediates useful in) the manufacture of products.

Patent applications are each subject to rigorous review and only granted when the applicable regulatory bodies recognize both the significant R&D that takes place from discovery and drug development through commercialization, and are satisfied that the patent applications meet the rigorous standards of patentability before a patent is granted. If one or more patents are granted, protection for individual products extends for varying periods in accordance with the expiration dates of patents in the various countries. The protection afforded, which may also vary from country to country, depends upon the type of patent, its scope of coverage and the availability of meaningful legal remedies in the country. In the U.S., most of our key products are protected by patents with varying terms depending on the type of patent and the filing date. In our annual filings on Form 10-K, including our 2022 10-K, we disclose the various estimated minimum patent exclusivity dates for each of our key products.

In addition, in deciding how to exercise our legitimate intellectual property rights, the Company considers all aspects of our mission to discover, develop and deliver transformational medicines. For example, we are committed to fair dealing and conscientious citizenship, including with respect to arms-length, commercial patent settlements we may enter into with generic manufacturers. This means that Bristol Myers Squibb obtains intellectual property only by lawful and ethical means, and enforces only those intellectual property rights we believe to be valid. We place the highest priority on obtaining intellectual property for those innovations that provide the greatest medical benefit to patients.

To illustrate further, we have achieved transformation in the treatment of metastatic melanoma with our immuno-oncology treatment, Opdivo plus Yervoy. Prior to the availability of this treatment option, 25% of patients diagnosed with metastatic melanoma survived one year. This increased to 74% with immuno-oncology therapies. As noted in our recent Form 10-K filing, the estimated minimum patent exclusivity date for Opdivo in the U.S. is 2028. Subsequent to the initial composition of matter patent filing, the Company has used its innovative R&D capabilities to pursue various indications for Opdivo, as well as combinations with other oncology therapies, offering durable treatment options for patients with different forms of cancers, including non-small cell lung, head and neck, kidney, liver and bladder, among others. However, the patents that have been granted for these additional indications or combinations do not extend the patent life of earlier patents covering the initial innovations---biosimilar manufacturers can potentially offer options for those initial innovations as early as 2028. Similarly, Orencia was initially introduced as an intravenous product while later important innovations led to the introduction of a sub-cutaneous, injectable product. Later filed and expiring patents on the subcutaneous formulation of Orencia do not prevent biosimilars from being introduced on the original intravenous formulation.

It is important to note that many decisions whether to file for patents are often made many years before the Company will know whether an early pipeline candidate will be sufficiently safe and effective to advance through clinical development to regulatory approval or can effectively evaluate the patient-access situation for the innovation we seek to protect.

As described above, patents must be sought early in the development process for a compound, subsequent indication or other innovation, often at a time well before the Company can determine:

When we discover and develop new innovations that lead to more life-saving medicines or subsequent patient-centered innovation (e.g., better methods of drug delivery to patients), we may seek additional patent protection on these innovations after the main active ingredient/molecule patent(s) have been filed. Additionally, access necessarily is considered at different stages in the drug development process. Of note, we look at each case differently, particularly given the timing of when we file our patents against where a product is in drug development. It is often the case that we must complete our patent filings ahead of clinical trials and before we know whether a compound, new indication, or innovation is actually able to be commercialized. Therefore, generally, our more realistic timing for material consideration around access is after approval and during litigation or licensing, but as noted, it is a consideration during filing as the drug is more realistically heading toward approval.

As a result, our general approach is to file for core intellectual property rights that we believe protect important innovations, while remaining deeply committed to making decisions about enforcement or licensing of those rights in a manner consistent with our mission and commitment. For example, we evaluate the impact on patient access, among other things, when considering:

Our commitment to increase patient access is fundamental to our business and woven into every step of our R&D process, in particular, our access strategy is integrated into our overall product development and commercialization planning process.

Our innovation engine is focused on the most critical unmet medical needs and involves patients at every step of the R&D process. BMS also collaborates with other stakeholders to strengthen global R&D and help advance biomedical research beyond our strategic portfolio. We incorporate access considerations with a view to ensuring our medicines can benefit diverse patient populations in a variety of contexts. For example, our long-term work to advance diversity in clinical trials directly confronts disparities early in the product development lifecycle.

To enable timely product access, we support mechanisms that can help make medicines available (e.g., WHO prequalification) where appropriate. We also engage in marketing authorization, value assessment and reimbursement processes. We aim to meet health systems where they are by deploying a range of delivery approaches that take into consideration local country context to optimize supply chain and distribution as well as ensure affordability for the greatest number of patients. This includes value-based pricing, patient support and reimbursement programs, product donations, tiered pricing, voluntary licensing, and direct imports.

Building our access strategy into our overall product development and commercialization planning process, allows us to take an intentional approach in broadening access to all of our medicines.

In particular, our access strategy development is integrated into our overall product development and commercialization planning process. This process is led by the Senior Vice President & Head of Worldwide Value, Access, Pricing and Health Economics and Outcomes Research, who sits on BMS’ governance committees for access: Commercialization & Development Operating Committee, Research & Early Development Operating Committee, the Pipeline Steering Committee and the Global Pricing Strategy Governance Committee. The market access strategic review of any product culminates in an intensive and in-depth cross-market assessment with the BMS Board Chair and CEO responsible for the final decision.

Typically, the process begins right from the design phase of the registration trials. In some cases, the Access team starts working with the development team during the Phase II proof of concept phase of the product development life cycle. For products that are externally acquired, the access process usually starts as a part of the business development evaluation process. The development of each product’s access strategy and programs is overseen by the Executive Vice President & Chief Commercialization Officer and the Worldwide Value and Access Marketing team in close collaboration with a matrix of functions, with our Board Chair and CEO responsible for the final decision. In addition, this process includes routine presentations to the full Board on our patent and access strategy.

There are several criteria that go into determining product specific access decisions and strategies including:

Along the process, input is also collected from Global Policy & Government Affairs, Global Product Development & Supply, BMS Health Equity, and Global Advocacy. Numerous decisions are made along the way, including:

In evaluating what intellectual property rights to seek and how to enforce them, Bristol Myers Squibb considers a number of the criteria, including:

Taken together, this robust process ensures we are taking an intentional approach to enabling broad access to all of our medicines.

The company’s governance documents provide the Board with flexibility to select the appropriate leadership structure for the company. They establish well-defined responsibilities with respect to the Board Chair and Lead Independent Director roles, including the requirement that the Board have a Lead Independent Director if the Board Chair is not an independent director. This information is set forth in more detail on our website at www.bms.com/ourcompany/governance.

Our Board has dedicated significant consideration to our leadership structure, particularly in connection with the election of Dr. Caforio as the Board Chair at the 2017 Annual Meeting. The Board evaluates our leadership structure annually. The Board’s most recent analysis of our leadership structure considered many factors, including the specific needs of the Board and the company, the strong role of our Lead Independent Director, our Corporate Governance Guidelines (including our governance practices that provide for independent oversight of management), the integration of acquired businesses into our company, the challenges specific to our company, and the best interests of our shareholders.

After thoughtful and rigorous consideration, the Board determined that combining the Board Chair and Chief Executive Officer positions and electing Dr. Caforio as the Board Chair continues to be in the best interest of the company and our shareholders and is the best leadership for the company and its shareholders at this time. Specifically, our Board believes having Dr. Caforio serve in the combined role of Board Chair and Chief Executive Officer confers distinct advantages at this time, including:

The Board recognizes the importance of appointing a strong Lead Independent Director to maintain a counterbalancing structure to ensure that the Board functions in an appropriately independent manner. The Lead Independent Director is selected annually by the independent directors. The independent directors of the Board have elected Mr. Samuels to serve in that position.

The Lead Independent Director’s responsibilities include, among others:

The Board’s culture is open and promotes transparent dialogue and rigorous discussion. The Board deliberates on all major decisions with and without management present and effectively utilizes executive sessions under the leadership of the Lead Independent Director to drive board alignment.

The Board believes this structure provides an effective, high-functioning Board, as well as appropriate safeguards and oversight. Our Board will continue to evaluate its leadership structure in light of changing circumstances and will do so on at least an annual basis and make changes at such times as it deems appropriate.

Please see “Board’s Role in Strategic Planning and Risk Oversight” on page 16.

Our Bylaws specifically provide for an Audit Committee, Compensation and Management Development Committee, and Committee on Directors and Corporate Governance, all of which are composed entirely of independent directors. Our Bylaws also authorize the establishment of additional committees of the Board and, under this authorization, our Board of Directors established the Science and Technology Committee. Our Board has appointed individuals from among its members to serve on these four standing committees and each committee operates under a written charter adopted by the Board, as amended from time to time. These charters are published on our website at http://bms.com/ourcompany/governance/Pages/board_committees_charters.aspx. Each of these Board Committees has the necessary resources and authority to discharge its responsibilities, including the authority to retain consultants or experts to advise the committee.

The table below indicates the current members of our standing Board Committees and the number of meetings held in 2022:

The following descriptions reflect each standing Board Committee’s membership and Chair effective as of May 2, 2023.

We, members of the Board of Directors, know that we must actively seek information from a wide variety of sources—and not just from individuals and entities that work for us—to do our jobs optimally. We therefore create multiple means to hear from shareholders, employees at all levels, patients, medical professionals, policy experts and others to inform our work.

You can communicate with us via many of these means. You can provide us comments on your proxy when you are voting. You can attend our annual meeting and ask questions. You can accept our invitations to engage or ask us for a meeting when that is of value to you. You can participate in our various Investor Relations functions which we listen to both directly and indirectly. You can write to us via mail or use any of our reporting functions such as so-called Whistle Blower hotlines. And, of course, we pay close attention to your voting and investment decisions as well.

Our Board has created a process for anyone to communicate directly with our Board, any committee of the Board, the non-employee directors of the Board collectively or any individual director, including our Board Chair and Lead Independent Director. Any interested party wishing to contact our Board may do so in writing by sending a letter to Bristol-Myers Squibb Company, 430 East 29th Street—14th Floor, New York, New York 10016, Attention: Corporate Secretary or, if after July 1, 2023, to Bristol-Myers Squibb Company, Route 206 & Province Line Road, Princeton, NJ 08543, Attention: Corporate Secretary.

Any matter relating to our financial statements, accounting practices or internal controls should be addressed to the Chair of the Audit Committee. All other matters should be addressed to the Chair of the Governance Committee.

Our Corporate Secretary or her designee reviews all correspondence and forwards to the addressee all correspondence determined to be appropriate for delivery. Our Corporate Secretary periodically forwards to the Governance Committee a summary of all correspondence received. Directors may at any time review a log of the correspondence we receive that is addressed to members of the Board as well as copies of any such correspondence. Our process for handling communications to our Board has been approved by the independent directors.

We continued to place a high priority on our proactive engagement with our shareholders in 2022, reaching out to over 50 of our top shareholders, representing approximately 54% of our shares outstanding. In 2022, management and members of the Board, including our Lead Independent Director, met with many of our shareholders and had a productive dialogue on a number of topics, including board composition and leadership, company strategy and execution, inclusion and diversity, ESG strategy and risk oversight, and executive compensation.

The feedback received was generally positive and was shared with the entire Board and members of senior management. In addition, in early 2023, we continued to engage with shareholders, seeking active feedback and offering additional insights on current topics of interest, such as our Board leadership structure, inclusion and diversity, our ESG strategy and executive compensation and corporate governance topics, including the shareholder proposals included in our 2022 Proxy Statement.

We encourage our registered shareholders to use the space provided on the proxy card to let us know your thoughts about BMS or to bring a particular matter to our attention. If you hold your shares through an intermediary or received the proxy materials electronically, please feel free to write directly to us.

Throughout the last few years, we have actively solicited feedback from shareholders on topical issues and offered additional insights on shareholder proposals that were submitted or included in our recent Proxy Statements. The results of these discussions are noted below:

We aim to provide a competitive compensation program to attract and retain high quality directors. The Committee on Directors and Corporate Governance (when used in this Compensation of Directors’ section, the “Committee”) annually reviews our directors’ compensation program, including a review of the director compensation programs at our executive compensation peer groups. For 2022 planning, we again engaged an outside consultant, Frederic W. Cook & Co., Inc. (“FWC”), to review market data and competitive information on director compensation. FWC recommended, and the Committee determined, that our executive compensation peer groups should be the primary source for determining director compensation.

Upon reviewing FWC’s analysis in December 2021, considering our core director compensation program had been unchanged since 2020 and was between the 25th percentile and median of our peer groups, among other reasons, the Committee determined to increase the annual equity award for service as a director for 2022 by $10,000 to $200,000. The Board also determined to increase the member annual cash retainer for service on the Board by $5,000 to $105,000. These changes place director compensation at the median of our peer groups. The Committee submitted its recommendations for director compensation to the full Board for approval, and the full Board approved the changes. Giovanni Caforio, M.D. does not receive any additional compensation for serving as a director.

The Committee believes the total compensation package for directors we offered in 2022 was reasonable, and appropriately aligned the interests of directors with the interests of our shareholders by ensuring directors have an equity stake in our company.

In 2022, non-employee directors who served for the entirety of 2022 received:

On February 1, 2022, all non-employee directors serving on the Board at that time received an annual award of deferred share units valued at $200,000 under the 1987 Deferred Compensation Plan for Non-Employee Directors. These deferred share units are non-forfeitable at grant and are settleable solely in shares of our common stock. A new member of the Board who is eligible to participate in the Plan receives, on the date the director joins the Board, a pro-rata number of deferred share units based on the number of share units payable to participants as of the prior February 1.

Our Lead Independent Director received an additional annual retainer of $50,000. Our Board has determined to award this retainer in light of the increased duties and responsibilities demanded by this role, which duties and responsibilities are described in further detail on page 28.

All non-employee directors are required to acquire a minimum of shares and/or units of company stock valued at not less than five times their annual cash retainer within five years of joining the Board and to maintain this ownership level throughout their service as a Director. We require that at least 25% of the annual retainer be deferred and credited to a deferred compensation account, the value of which is determined by the value of our common stock, until a non-employee director has attained our share retention requirements.

A non-employee director may elect to defer payment of all or part of the cash compensation received as a director under our company’s 1987 Deferred Compensation Plan for Non-employee Directors. The election to defer is made in the year preceding the calendar year in which the compensation is earned. Deferred funds for compensation received in connection with service as a director in 2022 were credited to one or more of the following funds: a U.S. total bond index, a short-term fund, a total market index fund or a fund based on the return on our common stock. Deferred portions are payable in a lump sum or in a maximum of 10 annual installments. Payments under the Plan begin when a participant ceases to be a director or at a future date previously specified by the director.

Each director who joined the Board prior to December 2009 participates in our Directors’ Charitable Contribution Program. Upon the death of a director, we will donate up to an aggregate of $500,000 to up to five qualifying charitable organizations designated by the director. Individual directors derive no financial or tax benefit from this program since the tax benefit of all charitable deductions relating to the contributions accrues solely to the company. In December 2009, the Board eliminated the Charitable Contributions Program for all new directors.

In addition, each director was able to participate in our company-wide matching gift program in 2022. We matched dollar for dollar a director’s contribution to qualified charitable and educational organizations up to $30,000. This benefit was also available to all company employees. Starting in 2020, as part of our overall inclusion and diversity initiatives, we committed to matching on a 2-to-1 basis through the Bristol Myers Squibb Foundation all employee and director donations to organizations that fight disparities and discrimination. In 2022, except for Drs. Bhatt and Hidalgo Medina, all of our directors participated in our matching gift programs as indicated in the Director Compensation Table below.

The following table sets forth information regarding the compensation earned by our non-employee directors in 2022.

 

Message from Gerald Storch,

Chair of the Compensation and

In 2022, the Compensation and Management Development Committee (when used in this Compensation Discussion & Analysis (“CD&A”), the “Committee” or “CMDC”) was steadfastly focused on ensuring BMS’s total rewards and talent development programs stay competitive to attract, engage and retain critical talent. These efforts supported the Company’s long-term growth vision while aligning with the interests of our investors and other stakeholders. As I reflect on the past year, I am incredibly proud of our global workforce and the life-saving medicines that resulted from their tireless work.

Challenges posed by the current labor market and the macroeconomic environment, the evolution of BMS’s strategic priorities and geopolitical events have made the engagement of our workforce a continued priority for the Committee. In addition to our focus on the engagement and retention of employees, we evolved our well-being, pay and benefits programs to support the continuity of BMS’s strong corporate culture. In doing so, we aimed to preserve our inclusive community, which empowers employees around the world to be their authentic selves.

Key priorities helped guide the Committee’s work in 2022:

On behalf of the Board, we look forward to continuing these conversations and receiving additional shareholder input in 2023.

 

Gerald Storch, Chair

2022 was another transformational year for our company and employees, as we continued to navigate the challenges of the ongoing COVID-19 pandemic and other issues, such as supply chain constraints, inflation and a tightening labor market. Despite the challenges, we prioritized the health and safety of our workforce and delivered strong results.

Critical to our performance in 2022, and the future of our company, was our continued focus on growth and innovation: bringing truly transformational medicines to patients. Working together, we delivered strong operational and financial results, launched new products and leveraged our strong innovation engine through execution of internal discovery efforts and external relationships. In addition, we achieved significant regulatory and clinical milestones that have strongly positioned the company to successfully renew our therapeutic portfolio and sustain growth over the long term.

We have delivered on our synergy expectation from the Celgene transaction and have established a strong foundation for Bristol Myers Squibb as a biopharma leader with a bright future ahead. Our strategy to focus on transformational innovation has demonstrated success. For example, we have launched nine new medicines since 2019, including three medicines launched during 2022. We have established leadership positions across oncology, hematology, cardiovascular, and immunology. In each of these businesses, we have leading in-line medicines, significant short-term launch opportunities and a rich pipeline, with platforms and technologies that provide significant opportunities for new approaches to the treatment of serious diseases. Our financial strength and flexibility, along with our differentiated business development strategy, will allow us to drive long-term value.

Looking ahead, we are very excited about where we are as a company. We are well positioned for growth and we are confident in our ability to deliver long-term sustainable value. We will remain focused on our key priorities and believe we will be able to demonstrate the strength of our continuing business, despite the challenges of losses of exclusivity for some of our key medicines like Revlimid.  Business development remains a top priority to complement our portfolio for long-term growth and this was evident in 2022. We acquired Turning Point Therapeutics, a precision oncology company, and entered into many promising business development transactions, including with Immatics and BridgeBio, further strengthening our oncology franchise. Together, these transactions demonstrate our commitment to leveraging creative deal-making to accelerate innovation and create value for our shareholders.

Finally, our strategy extends well beyond the discovery, development and delivery of transformative medicines that help patients prevail over serious diseases. We believe that driving long-term business value is at the heart of living our purpose, from improving access and affordability to advancing inclusion and diversity and health equity in our communities. To that end, we took key steps in 2022 to advance the initiatives we announced in August 2020 around inclusion, diversity and health equity. For further discussion on these initiatives and our progress to date, please see discussion under “Inclusion & Diversity Goals and Health Equity Commitments” beginning on page 43.

We believe our pay programs, and particularly our incentive design, should reinforce our strategic priorities. For 2022, our executive pay programs remained focused on the company’s mission to discover, develop and deliver innovative medicines, but evolved from supporting the Celgene integration to increasing our focus on renewing our portfolio and achieving our ESG commitments. During the previous three years, we had been focused on achieving the value of the Celgene transaction, including harmonizing our compensation and benefits programs to support one culture and

focusing on engaging our expanded workforce. This included specific incentive metrics on synergy achievement and employee engagement and attrition. In 2022, we introduced new program metrics centered on growing our New Product Portfolio and delivering on our ESG commitments, which are both critical strategic priorities for BMS.

Throughout 2022, we continued to implement unified benefits and work-life programs. In some countries, this will continue into 2023.  Over the next few years, we anticipate continuing to evolve our executive compensation and benefits programs. While some of these changes are the result of finalizing our Celgene integration work, we are also continuing to respond to changing cultural, economic and workforce dynamics, particularly as it relates to the well-being of our workforce.

This Compensation Discussion and Analysis describes the actions taken by the Committee in more detail as applied to our Named Executive Officers. In particular, the compensation program for 2022 was designed to provide the Committee with the tools and flexibility to appropriately incentivize, reward and retain our executives and align pay with company performance and our evolving strategic priorities.

This CD&A is intended to explain how our executive compensation program is designed and how it operates for our NEOs. The table below lists our 2022 NEOs.

In January 2023, the R&D organization was reorganized and this resulted in the involuntary termination “without cause” (as defined in the Company’s Senior Executive Severance Plan and our Stock Award and Incentive Plans) of Dr. Rupert Vessey, who held the position of Executive Vice President, Research and Early Development at that time. Dr. Vessey will separate from the company by July 3, 2023. He will be entitled to (i) severance benefits in accordance with the Company’s Senior Executive Severance Plan, and (ii) (A) pro-rated vesting of Market Share Units (MSUs) and Performance Share Units (PSUs) and (B) full vesting of his 2019 Restricted Stock Units Inducement Award, in each case, in accordance with the Company’s equity award agreements under the Company’s 2012 and 2021 Stock Award and Incentive Plans. In addition, Dr. Vessey will receive a pro-rated annual incentive payout for 2023 in the amount of $550,855.

2022 was a successful year for our company, one of significant clinical and regulatory achievements that broadened our product portfolio and advanced our pipeline.

We leveraged our leading science and clinical development capabilities to achieve significant milestones:

 

As a company, we are building on a strong foundation in inclusion and diversity. We are accelerating the progress we have made through this journey to better serve our patients. In August 2020, the company and the Bristol Myers Squibb Foundation announced that each would invest $150 million over five years, totaling $300 million to address our health equity commitments. In addition, the company also announced inclusion and diversity goals. Together, these initiatives are currently focused on five key priorities: 1) addressing health disparities, 2) increasing clinical trial diversity, 3) enhancing our supplier diversity program, 4) expanding our U.S. & Puerto Rico Employee Giving Program and 5) increasing our workforce diversity at the executive levels.

 

In September 2022, we issued our second Global Inclusion and Diversity Report, highlighting our transformative business model, our EEO-1 data, goals for our people and culture, including our goals to achieve gender parity at the executive level globally and double executive representation of both Black/African American and Latino/Hispanic employees in the U.S. by the end of 2022. We made significant progress on these goals in 2022 and these are highlighted below. In March 2023, we announced our expanded workforce representation goals to increase the representation of Black/African American executives at the executive director and above level (ED+) in the U.S. to 10% by 2025 and increase the representation of Hispanic/Latino executives (ED+) in the U.S. to 11% by 2025. In addition, to advance our health equity commitments, we announced an additional investment of 10 million in grant funding during 2023 to 17 U.S. organizations focused on addressing social determinants of health, including healthcare access and literacy to help close gaps and increase access to healthcare. We are proud of the journey and progress made to date on our inclusion & diversity goals and health equity commitments, and we are conscious that we still have more to do and are committed to further transparency and continued sharing of our progress.

 

We believe that our approximately 34,000 employees represent the best and the brightest people in the industry. They are the foundation of our success and our competitive advantage. They work together to bring our mission to life to help patients prevail over serious diseases.

Bristol Myers Squibb is a science-based company, but first and foremost, we are a global community of compassionate, diverse professionals who are devoted to helping improve the lives of patients. Our people are the heart and soul of our globally unified culture. Our People Strategy is designed to foster an energizing and engaging work experience to not only attract and retain crucial talent that reflects the diverse cultures, backgrounds, and experiences of our patients and communities around the world, but also to optimize individual and collective potential in the workplace. We strive to inspire career experiences that enable our people to realize their own aspirations; nurture healthy, energizing and flexible workplaces that foster collaboration and innovation; cultivate an inclusive environment and diverse workforce where everyone feels a sense of belonging and valued for their unique perspectives; and excel in the pursuit of science and innovation for patients.

The Committee continues to be very focused on the topic of human capital management, particularly during the ongoing global pandemic and changes in workplace dynamics and labor markets. This is a topic that is regularly discussed at our Committee and Board meetings.

We are working together to build a diverse and inclusive organization. We are committed to the advancement of women in leadership positions. We have taken significant steps inside our organization toward transforming our inclusive culture — efforts that have already achieved measurable progress across our workforce including reaching gender parity in 2015. As of year-end 2022, global female executives increased from 38.9% to 48.7%.

As highlighted in our inaugural Global Inclusion & Diversity Report, we committed to double executive representation of both Black/African American and Latino/Hispanic employees in the U.S. by the end of 2022. As noted above, we more than doubled the U.S. Black/African American executive representation from 3.0% to 6.1% and increased the U.S. Latino/Hispanic executive representation from 3.7% to 6.1%.

Our eight People and Business Resource Groups (“PBRGs”) represent a key strategic lever we use to support the business objectives, career advancement and development needs of our employees. Each PBRG is focused on a specific dimension of diversity. Our more than 13,000 PBRG members who span over 200 chapters in 41 countries as of December 2022, have applied their perspectives and experiences to drive our patient-focused mission within BMS and in the communities where we live and work. Approximately 40% of BMS employees are members of one or more PBRG.

Our PBRGs are sponsored by members of our leadership team and are led by a full-time dedicated global leader who reports directly to a member of our leadership team. Our PBRGs include the Black Organization for Leadership and Development, the Bristol Myers Squibb Network of Women, the Cultivating Leadership and Innovation for Millennials and Beyond, the Disability Advancement Workplace Network, the PRIDE Alliance, the Organization for Latino Achievement, the Pan Asian Network and the Veterans Community Network.

We also routinely conduct confidential surveys of our global workforce, which provide feedback on employee satisfaction and engagement and cover a variety of topics such as company culture and values, execution of our strategy, inclusion and diversity and individual development, among others. Survey results are reviewed by our executive officers and Board of Directors, who analyze areas of progress or opportunity both at a company level as well as at a function level. Individual managers use survey results to implement actions and activities intended to increase the well-being of our employees. We believe that our employee engagement initiatives, competitive pay and benefit programs and career growth and development opportunities help increase employee satisfaction and tenure and reduce voluntary turnover. The average global tenure of our employees is approximately seven years. Given the criticality of an engaged and motivated workforce, select employee engagement goals are incorporated in our annual bonus program metrics for our executives.

We are committed to protecting our workforce, communities and patients, and ensuring the continued supply of life-saving medicines. Our focus is directed towards ensuring that all of our employees, as well as temporary contractors and visitors to our sites, can work safely. We prioritized the health and safety of our employees during the COVID-19 pandemic, while continuing the supply of medicines to our patients and driving strong business performance. As a science-based company, we have a social responsibility to help reduce the spread of the pandemic. As noted above, vaccinations are required for generally all of our employees in the U.S. and Puerto Rico subject to any local regulation which limit or restrict vaccine mandates. We recognize the important role that vaccination plays in reducing the impact of COVID-19 and the overwhelming majority of our global workforce has been vaccinated.

We provide highly competitive benefits, compensation and work-life offerings that reflect a competitive rewards and well-being strategy to enable our workforce to deliver on our business strategy and transform patients' lives through science. Our rewards programs include competitive base salaries, an annual bonus program, sales-based incentives, special allowances, long-term incentives and peer-to-peer individual recognition. With respect to executives, a substantial proportion of their pay is variable, at-risk based on our financial and operational results and delivered in the form of equity, and this supports the alignment of our executive compensation plan with the creation of long-term value for our shareholders. Our benefits plans and programs (which necessarily vary by country) include in the U.S. choices for health coverage, including medical, pharmacy, dental, vision, pretax savings and spending accounts; financial protections through life insurance, supplemental health insurance and personal coverage and protections; and financial savings through a highly competitive 401(k) savings plan and financial well-being services. To promote the well-being of our workforce, we developed our Living Life Better strategy, which includes programs across the globe to support physical, emotional and financial wellbeing. The Living Life Better strategy is a cornerstone of our People and Total Rewards strategies, as the health of our workforce is critical to ensuring they can meet our important mission to help patients. Signature programs include on-site fitness centers and support for gym memberships, a global employee assistance program to provide support in times of crisis or hardship, a mental health peer-to-peer allies network, financial management seminars and tools and a generous tuition reimbursement program. As part of our work-life offerings, we provide support for welcoming and nurturing family members through paid parental leave to care for a new child, bridge back parent leave to ease transition of new parents back into work, adoption/surrogacy reimbursement, fertility/infertility benefits, support for traveling mothers and paid family care leave. We assist employees in managing life during the workday and beyond through child, elder and pet care resources, commuter accounts and paid sick time; and provide our employees with opportunities to recharge and give back to our communities through vacation, holidays and annual paid volunteer days, paid bereavement

leave, paid military leave and paid military family care leave. In addition, we offer market, competitive-base salaries as part of our overall total rewards package - annual incentives that recognize and reward company performance as well as individual results and long-term equity incentives that spur employees’ focus on long-term value creation.

 

As noted above, we also grant equity-based compensation, with vesting conditions, as part of our total rewards strategy to create an ownership culture and better align employees’ interests with those of our shareholders. A total of approximately 11,083,082 Restricted Share Units (“RSU”), Market Share Units (“MSU”) and Performance Share Units (“PSU”) awards were granted in 2022. Of those awards, our NEOs received MSU and PSU grants in 2022 of approximately 489,801 units, of which 100% are performance-based and at risk; and all other employees received grants in 2022 of approximately 10,551,102 units. In addition, non-employee directors received grants in 2022 of approximately 42,179 units.

In 2022, we reached out to more than 50 of our top shareholders, representing roughly 54% of our total shares outstanding. As in previous years, we engaged on many important topics related to our executive compensation and corporate governance programs, including board composition and leadership, company strategy and execution, risk oversight, and board and company-wide diversity, the inclusion of ESG priorities in our incentive programs and other sustainability and social responsibility topics. The feedback we received from shareholders was generally positive and supportive of our governance practices and our compensation program. Our 2022 say-on-pay proposal was approved by 91% of our shareholders, confirming continued support for our executive compensation program.

We used the feedback from these engagement conversations as vital input into Committee discussions. The Committee remains committed to ongoing shareholder engagement and it will continue to actively consider shareholder feedback as it evaluates and adjusts our executive compensation program in the future.

2022 marked a critical period as we built on the transformational Celgene transaction and focused on our long-term strategic priority of revenue renewal through the remainder of the decade. The CMDC reviewed our program in light of our strategic priorities to ensure alignment. As a result, 15% of annual incentives for 2022 were based on achieving revenue goals for our New Product Portfolio, and in combination with our total revenue goal, revenue goals accounted for a total of 35% of the annual incentive plan. Additionally, for the long-term incentive plan, the revenue metric was increased from 33% to 40% for performance stock units.

To demonstrate the critical role of our ESG commitments in our company strategy, and following thoughtful discussions with the CMDC, our Board, management and shareholders, we shifted focus from Key Integration metrics to a balanced ESG Scorecard measuring achievement against sustainability and social goals, which reflected 10% of the annual incentive plan for 2022. Synergy achievement continued to be included in individual performance assessments and was removed from the annual incentive plan company goals as a result of our strategic shift from integration to growth.

In support of our compensation philosophy to align executive compensation to shareholder value by providing compensation that is at risk based on share price performance, the threshold and maximum payouts for market share units were increased from 60% to 80% and 200% to 225%, respectively.

Certain modifications, highlighted below with the dotted lines, describe these updates to the 2022 executive compensation program from 2021 that were made to encourage and reward our executives’ ongoing commitment to execute on our long-term strategic priorities.

 

At Bristol Myers Squibb, the cornerstone of our compensation philosophy and program structure is aligning pay to the achievement of both our short-term and long-term goals, engagement of our employees, the achievement of our mission and the delivery of value to our shareholders.

Each year, when evaluating company and senior management performance and making its pay decisions, the Committee considers our compensation philosophy and program structure, which underscores competitive compensation and pay for performance, with the goal of striking the appropriate balance among (i) directly aligning executives’ compensation with the fulfillment of our mission and the delivery of shareholder value, (ii) making a substantial portion of our executives’ compensation variable and at risk based on operational, financial, strategic and share price performance, and (iii) attracting, retaining and engaging executives who are capable of leading our business in a highly competitive, complex, and dynamic business environment. In addition, the Committee considers the information and recommendations it receives and may exercise discretion in modifying any recommended adjustments or awards to executives based on considerations it deems appropriate.

After reviewing our financial and operational performance, our share price performance, and the individual performance of our executives, the Committee determined that the compensation of our executives under the program design continues to be appropriate.

Based on this philosophy, our compensation program is designed with the following principles in mind:

In general, our executive compensation program seeks to provide total direct compensation at the median of our primary peer group (as defined below) when targeted levels of performance are achieved. In any given year, however, total direct compensation for a particular executive may be above or below the median of our primary peer group due to multiple factors. These factors include qualifications, experience, responsibilities, contribution, individual performance, role criticality and/or potential as well as attracting and retaining talent within the highly competitive biopharmaceutical industry. We define total direct compensation as base salary plus target annual incentive award plus the grant date fair value of annual long-term equity incentive awards.

Providing competitive pay when targeted levels of performance are achieved allows us to attract and retain the talent we need to continue driving performance, while enabling us to maintain a competitive cost base with respect to compensation expense.

The Committee's independent compensation consultant annually conducts and shares with the Committee a review of compensation for our Named Executive Officers, including compensation information compiled from publicly filed disclosures of our primary and extended peer groups. Pay levels of our peers, among other factors, are used as a reference point when determining individual pay decisions (i.e., base salary levels, target annual incentive levels and long-term equity incentive award size). For 2022, the independent compensation consultant was Farient Advisors LLC (“Farient”).

We regularly monitor the composition of our peer groups and make changes when appropriate. The Committee, with the help of Farient, reviewed our peer groups for 2022 and determined that all of the peer companies continued to be appropriate and that we would not make any changes to the peer groups. Our peer groups in 2022 consisted of the following companies:

 

Primary Peer Group:  The Committee believes the companies included in our 2022 primary peer group are appropriate given the unique nature of the biopharmaceutical industry. These companies represent our primary competitors for executive talent and operate in a similarly complex regulatory and research-driven environment.

In determining our primary peer group, we believe emphasis should be placed on whether a company competes directly with us for the specialized talent necessary to further drive our success in creating the leading global biopharmaceutical company. We also consider company size in determining our peer group. In particular, BMS’ revenue approximates the median 2021 revenue of our primary peer group. The median revenue of our primary peer group was $38.5 billion in 2021.

Extended Peer Group:  We also selectively utilize an extended peer group, which comprises the eight companies in our primary peer group plus five companies based outside the U.S. This extended peer group serves as an additional reference point for compensation practices, including an understanding of the competitive pay environment as it relates to the global nature of both our business and the competition for talent. Our extended peer group is also used to determine the relative Total Shareholder Return (“TSR”) component of our performance share unit awards.

2022 was Dr. Caforio’s 7^th year as our CEO. His 2022 target compensation was between the median and the 75^th percentile of Chief Executive Officers within our primary peer group. The Committee believes Dr. Caforio's compensation package positions him appropriately among his peers when considering multiple factors, including his tenure as an executive officer and our CEO. On average, our other Named Executive Officers were between the median and the 75^th percentile of our primary peer group, with some variation by position.

The following charts provide an overview of the 2022 executive compensation components for the CEO and other NEOs, as originally granted, and highlights the percentage of target compensation that is variable and at risk.

 

Base salaries are used to help us attract talent in a highly competitive labor market. The salaries of our executives are primarily based on the salary levels of comparable positions within our primary peer group as well as the specialized qualifications, experience and criticality of the individual executive and/or his or her role. Salary increases for our executives are additionally determined based on both the performance of an individual and the size of our annual salary increase budget in a given year. There may be adjustments to salary from time to time to recognize, among other things, when an executive assumes significant increases in responsibility and/or is promoted, and to reflect competitive pay based on market data for individual executive roles.

In 2022, in accordance with our company-wide merit review process, employees, including the Named Executive Officers, were eligible for a merit increase provided that their performance fully met or exceeded expectations on both Results and Values (as defined below). Employees who are determined to be below the fully performing level typically receive either a reduced merit increase or no salary increase depending on the extent to which they are below the fully performing level. In addition, the position of total compensation relative to market is also considered in determining whether to provide a base salary increase to each executive. Effective April 1, 2022, all NEOs other than Drs. Caforio and Boerner received a base salary increase of 3%. Dr. Boerner received a base salary increase of 4.5%. Dr. Caforio’s base salary was aligned to market and as a result, the Committee determined that no increase would be provided for 2022.

Our annual incentive plan is designed to reward performance that supports our business strategy of creating the leading biopharmaceutical company and our mission to help patients prevail over serious diseases. The annual plan aligns with our business strategy and mission by sharpening management’s focus on key financial, pipeline and ESG goals, as well as by rewarding individual performance (both Results and Values), consistent with our pay-for-performance philosophy and our focus on not only the Results achieved but whether those results were achieved while demonstrating our BMS Values. Our executives are not only expected to demonstrate our BMS Values but they are also expected to be role models of those values for the broader organization.

Each NEO’s target annual incentive is expressed as a percentage of base salary, which is set at a level to ensure competitive total direct compensation. Annual incentive awards for each NEO are determined by evaluating both company performance (as measured by the Company Performance Factor) and individual performance (as measured by the Individual Performance Factor (“IPF”)). The maximum incentive opportunity for each NEO is 200% of target.

The Company Performance Factor can range from 0% to 152%, based on financial achievements, ESG scorecard and pipeline results, and the IPF can range from 0% to 160%, based on individual performance (both Results and Values), subject to a 200% of target maximum payout. The graphic below illustrates the calculation used to determine annual incentive plan awards.

The target annual incentive for each NEO is expressed as a percentage of the executive’s base salary. If mid-year salary adjustments are made, the target annual incentive award will include the pro-rated impact of the adjustments.

Our 2022 annual incentive plan design has the following corporate-wide measures, which apply to all employees at the level of Vice President and above, including our Named Executive Officers.

Our pipeline metric highlights the importance of pipeline delivery to the near-term and long-term success of the company. This metric measures the sustainability and output of our R&D pipeline portfolio and is comprised of goals in two categories, Near-Term Value and Long-Term Growth Potential with a Qualitative Overlay on the entire metric:

At the beginning of each year, the Committee undertakes an incentive target setting process to establish targets that it believes will motivate our executives appropriately to deliver the high performance that drives shareholder value creation in both the short- and long-term.

Financial targets are:

Pipeline performance targets are:

The S&T Committee also identifies those highest-value assets and the integration of acquired assets, among other factors, the importance of which will inform the application of a qualitative overlay.

In establishing targets and goals each year, the Committee considers budget, operational priorities, long-term strategic plans, historical performance, product pipeline and external factors, including external expectations, competitive developments, and the regulatory environment, among other things. Threshold, target, and maximum performance goals are evaluated independently and are set to provide appropriate awards across a wide but reasonable set of performance outcomes.

The Committee set incentive targets in the first quarter of 2022 in consideration of anticipated performance, in line with guidance provided to the market in early 2022 and in line with commercial, pipeline and ESG expectations. Later in the year, we met or exceeded financial and operational goals in certain key areas, including growth of both revenues and non-GAAP earnings, positive regulatory and development milestones, important business development activities, and disciplined expense management, resulting in a revision of guidance to the market for the year.

When establishing our financial targets and our revenue target in particular, we take into account expected product price increases. For a discussion on how we price our medicines, please see “Responsible Drug Pricing Strategy & Transparency” beginning on page 23.

For the 2022 annual bonus plan, for our employees at the level of Vice President and above, including our NEOs, 10% of the company performance factor was based on an ESG Scorecard metric. This metric was included to incentivize our executives to timely achieve important ESG milestones established as part of our company commitments. We chose to include the ESG scorecard in the annual bonus program as it incentivizes important steps to meet, in some cases, long-term commitments with varying completion dates, while also giving us the opportunity to annually re-align the metric goals to our strategic priorities and prior achievements. Below is a summary of the goals we selected for 2022, and we anticipate these goals to change to some degree each year.

In selecting the goals for inclusion in this new metric, the CMDC included those across the broad pillars of our strategy—environmental, clinical trial and supplier diversity, executive representation and employee engagement. For each goal, the CMDC selected objective and measurable performance metrics linked to the Company’s strategy and long-term initiatives. In particular:

The selection and evaluation of these metrics were the product of a robust governance process. Namely, the goals and achievements were (i) established by the CMDC, (ii) reviewed by our Committee on Directors and Corporate Governance, which has primary oversight responsibility of our ESG strategy, and (iii) were finalized and approved by the CMDC.

The payouts for the 2022 annual incentive plan were based on an executive’s target bonus amount, the Company Performance Factor, and the Individual Performance Factor for each executive.

Company performance results for the year led to a Company Performance Factor of 104.08% for 2022. The calculation was based on the following performance against goals: