Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Title of Each Class: |
Trading Symbol(s) |
Name of Each Exchange on Which Registered: | ||
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
|
☑ |
Smaller reporting company |
| |||
Emerging growth company |
|
• |
the integration of Mylan and the Upjohn Business or the implementation of the Company’s global restructuring program being more difficult, time consuming or costly than expected; |
• |
the possibility that the Company may be unable to achieve expected benefits, synergies and operating efficiencies in connection with the Combination or its global restructuring program within the expected timeframe or at all; |
• |
the possibility that the Company may be unable to successfully integrate Mylan and the Upjohn Business or implement its global restructuring program; |
• |
operational or financial difficulties or losses associated with the Company’s reliance on agreements with Pfizer in connection with the Combination, including with respect to transition services; |
• |
the possibility that the Company may be unable to achieve all intended benefits of its strategic initiatives; |
• |
the potential impact of public health outbreaks, epidemics and pandemics, including the ongoing challenges and uncertainties posed by the COVID-19 pandemic; |
• |
the Company’s failure to achieve expected or targeted future financial and operating performance and results; |
• |
actions and decisions of healthcare and pharmaceutical regulators; |
• |
changes in relevant laws and regulations, including but not limited to changes in tax, healthcare and pharmaceutical laws and regulations globally; |
• |
the ability to attract and retain key personnel; |
• |
the Company’s liquidity, capital resources and ability to obtain financing; |
• |
any regulatory, legal or other impediments to the Company’s ability to bring new products to market, including but not limited to “at-risk launches”; |
• |
success of clinical trials and the Company’s or its partners’ ability to execute on new product opportunities and develop, manufacture and commercialize products; |
• |
any changes in or difficulties with the Company’s manufacturing facilities, including with respect to inspections, remediation and restructuring activities, supply chain or inventory or the ability to meet anticipated demand; |
• |
the scope, timing and outcome of any ongoing legal proceedings, including government inquiries or investigations, and the impact of any such proceedings on the Company; |
• |
any significant breach of data security or data privacy or disruptions to our information technology systems; |
• |
risks associated with having significant operations globally; |
• |
the ability to protect intellectual property and preserve intellectual property rights; |
• |
changes in third-party relationships; |
• |
the effect of any changes in the Company’s or its partners’ customer and supplier relationships and customer purchasing patterns, including customer loss and business disruption being greater than expected following the Combination; |
• |
the impacts of competition, including decreases in sales or revenues as a result of the loss of market exclusivity for certain products; |
• |
changes in the economic and financial conditions of the Company or its partners; |
• |
uncertainties regarding future demand, pricing and reimbursement for the Company’s products; |
• |
uncertainties and matters beyond the control of management, including but not limited to general political and economic conditions and global exchange rates; and |
• |
inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements, and the providing of estimates of financial measures, in accordance with U.S. GAAP and related standards or on an adjusted basis. |
Page |
||||||
PART III |
||||||
ITEM 10. |
1 |
|||||
ITEM 11. |
19 |
|||||
ITEM 12. |
55 |
|||||
ITEM 13. |
58 |
|||||
ITEM 14. |
59 |
|||||
PART IV |
||||||
ITEM 15. |
61 |
|||||
62 |
||||||
A-1 |
ITEM |
10. Directors, Executive Officers and Corporate Governance |
Robert J. Coury |
60 |
Executive Chairman | ||
Michael Goettler |
53 |
Chief Executive Officer (principal executive officer) | ||
Rajiv Malik |
60 |
President | ||
Sanjeev Narula |
60 |
Chief Financial Officer (principal financial officer) | ||
Paul Campbell |
54 |
Chief Accounting Officer and Corporate Controller (principal accounting officer) | ||
Brian Roman |
51 |
Global General Counsel | ||
Andrew Cuneo |
45 |
President, Japan, Australia and New Zealand (“JANZ”) | ||
Anthony Mauro |
48 |
President, Developed Markets | ||
Xiangyang (Sean) Ni |
52 |
President, Greater China | ||
Menassie Taddese |
51 |
President, Emerging Markets |
Name |
Age (1) |
Other Positions with Viatris and Principal Occupation | ||
W. Don Cornwell |
73 |
Retired Chairman & Chief Executive Officer, Granite Broadcasting Corporation | ||
Robert J. Coury |
60 |
Executive Chairman, Viatris | ||
JoEllen Lyons Dillon |
57 |
Retired Executive Vice President, Chief Legal Officer and Corporate Secretary, The ExOne Company | ||
Neil Dimick, C.P.A. (2) |
71 |
Retired Executive Vice President and Chief Financial Officer, AmerisourceBergen Corporation | ||
Michael Goettler |
53 |
Chief Executive Officer, Viatris | ||
Melina Higgins |
53 |
Retired Partner and Managing Director, Goldman Sachs | ||
James Kilts |
73 |
Founding Partner, Centerview Capital | ||
Harry A. Korman |
63 |
Retired Chief Operating Officer, Mylan Inc. | ||
Rajiv Malik |
60 |
President, Viatris | ||
Richard A. Mark, C.P.A. |
67 |
Retired Partner, Deloitte & Touche LLP | ||
Mark W. Parrish |
65 |
Lead Independent Director and Vice Chairman, Viatris; Executive Chairman, TridentUSA Health Services | ||
Ian Read |
67 |
Operating Executive at The Carlyle Group; Retired Executive Chairman, Pfizer | ||
Pauline van der Meer Mohr |
61 |
Former President of the Executive Board at Erasmus University, Rotterdam |
(1) |
Ages as of April 30, 2021. |
(2) |
C.P.A. distinction is “inactive” status. |
* |
C.P.A. distinction is “inactive” status. |
• |
9 out of 13 Directors are independent; |
• |
The Board operates pursuant to robust Corporate Governance Principles, which are reviewed by the Governance and Nominating Committee at least annually; |
• |
Our Executive Chairman possesses deep knowledge of our management, business, and the healthcare industry, and he fosters a culture of robust Board engagement, interaction, and oversight; |
• |
The Board has a strong Lead Independent Director, who is also Vice Chairman, with key areas of expertise and experience (including, among others, public company management, corporate governance, corporate compliance, information security, risk management oversight, and the healthcare industry) that help enhance the Board’s oversight of management and the Company; |
• |
The members of the Board have experience overseeing Mylan and Upjohn, which will help support the ongoing integration of the two businesses and provides the Board with a strong understanding of the opportunities and challenges facing the combined company; |
• |
The Audit, Compensation, Finance, Governance and Nominating, and Risk Oversight Committees are composed entirely of independent Directors (as defined in the applicable NASDAQ listing rules and applicable SEC rules); |
• |
Board approval of any appointment of members to the Audit, Compensation, Compliance, Governance and Nominating, and Risk Oversight Committees must include at least a majority of the independent Directors; |
• |
All Board committees operate pursuant to robust written charters and will conduct annual self-assessments; |
• |
The Risk Oversight Committee assists the Board in its oversight of management’s efforts with respect to CSR-related matters and the Company’s enterprise risk framework, infrastructure and controls, and receives updates from senior management on data security, cybersecurity, and information security-related matters on at least a quarterly basis; |
• |
The independent Directors on the Viatris Board and its committees receive extensive information and input from multiple layers of management and external advisors, engage in detailed discussion and analysis regarding matters brought before them (including in executive session), and actively engage in the development and approval of significant corporate strategies; |
• |
The Viatris Board and its committees have full access to officers and employees of the Company; |
• |
The Viatris Board and its committees have the authority to select, retain, and supervise advisors as necessary to fulfill their mandates; and |
• |
From the closing of the Combination in November 2020 through April 30, 2021, Viatris’ Board has held 7 meetings, which included 5 executive sessions of independent Directors, and its committees have collectively held 21 meetings, including 4 executive sessions. |
Director |
Audit |
Compensation |
Compliance |
Executive |
Finance |
Governance and Nominating |
Risk Oversight |
Science and Technology | ||||||||||||||||||||||||||||||||
W. Don Cornwell |
✓ |
✓ |
||||||||||||||||||||||||||||||||||||||
Robert J. Coury |
Chair |
|||||||||||||||||||||||||||||||||||||||
JoEllen Lyons Dillon |
✓ |
✓ |
✓ |
Chair |
||||||||||||||||||||||||||||||||||||
Neil Dimick |
Chair |
✓ |
✓ |
✓ |
||||||||||||||||||||||||||||||||||||
Michael Goettler |
✓ | |||||||||||||||||||||||||||||||||||||||
Melina Higgins |
Chair |
✓ |
Chair |
✓ |
||||||||||||||||||||||||||||||||||||
Harry A. Korman |
✓ |
✓ |
Chair |
✓ | ||||||||||||||||||||||||||||||||||||
James Kilts |
✓ |
✓ |
||||||||||||||||||||||||||||||||||||||
Rajiv Malik |
✓ | |||||||||||||||||||||||||||||||||||||||
Richard A. Mark |
✓ |
✓ |
✓ |
|||||||||||||||||||||||||||||||||||||
Mark W. Parrish |
✓ |
Chair |
✓ |
✓ |
||||||||||||||||||||||||||||||||||||
Ian Read |
✓ |
Chair | ||||||||||||||||||||||||||||||||||||||
Pauline van der Meer Mohr |
✓ |
✓ |
✓ |
|||||||||||||||||||||||||||||||||||||
Meetings during 2020 |
2 |
1 |
1 |
0 |
0 |
1 |
0 |
0 |
• |
Integrity of the Company’s financial statements and its accounting and financial reporting processes |
• |
Effectiveness of the Company’s internal control over financial reporting |
• |
Qualifications, independence, and performance of the independent registered public accounting firm |
• |
Services to be performed by, and fees payable to, the independent registered public accounting firm |
• |
Internal Audit group |
• |
Company processes and procedures related to risk assessment and risk management of financial and disclosure control-related, as well as SEC reporting-related, matters |
• |
Related party transactions |
• |
Company compliance with applicable legal and regulatory requirements (including U.S. federal securities laws) regarding the preceding matters |
• |
Review of any critical audit matters identified by the independent registered public accounting firm in connection with its audit of the Company’s annual financial statements |
• |
Executive Chairman, CEO, and senior management compensation, including the corporate goals and objectives relevant to such compensation |
• |
Board and committee compensation |
• |
Equity compensation plans in which Directors and/or executives participate |
• |
Compensation and benefits-related disclosures in annual reports and proxy statements |
• |
Relationship between compensation policies and practices and the Company’s risk management with respect to compensation-related matters |
• |
From time to time reviewing reports from management regarding pay equity, human capital management and succession planning |
• |
Chief Compliance Officer’s implementation of the Company’s corporate compliance program |
• |
Making recommendations to the Board and/or management with respect to Viatris’ corporate compliance program, the Code of Business Conduct and Ethics, and significant related global policies |
• |
Reviewing significant global compliance-related policies implementing the Company’s Code of Business Conduct and Ethics, or related to the operations of the Company’s business and its mode or methods of doing business, including, for example, policies relating to pricing and/or commercialization of Company products and services |
• |
Reviewing metrics used by management or requested by the Committee to provide insight into the status and efficacy of the corporate compliance program, including the Company’s global compliance systems and organization |
• |
Reviewing reports of significant actual and alleged violations of the Code of Business Conduct and Ethics, corporate policies and procedures, and applicable laws and regulations |
• |
Reviewing checks and balances implemented by the Company designed to support and promote compliance with approved corporate policies, legal rules, and regulations |
• |
Overseeing the Company’s policies and procedures for corporate political and lobbying expenditures |
• |
Assisting the Board in fulfilling its fiduciary responsibilities by exercising those powers of the Board not otherwise limited by a resolution of the Board or by law |
• |
Strategic planning and additional oversight of strategy implementation |
• |
Material mergers, acquisitions, and combinations with other companies |
• |
Capital structure |
• |
Swaps and other derivatives transactions |
• |
The establishment of credit facilities |
• |
Potential financings with commercial lenders |
• |
The issuance and repurchase of the Company’s debt, equity, hybrid or other securities |
• |
Corporate governance matters |
• |
The nomination or re-nomination of Director candidates |
• |
The Board’s review and consideration of shareholder recommendations for, and nominations of, Director candidates |
• |
The annual self-evaluation of the Board and its committees |
• |
Director orientation and continuing education programs |
• |
Reviewing the enterprise risk framework, infrastructure, and controls implemented by management to help identify, assess, manage and monitor material risks |
• |
Reviewing management’s exercise of its responsibility to identify, assess and manage material risks not allocated to the Board or another committee, including, for example, data security programs and cybersecurity and information technology |
• |
Management’s efforts with respect to CSR matters |
• |
Reviewing the overall strategy and direction of the Company’s R&D program |
• |
Reviewing presentations regarding significant emerging scientific and technological developments relevant to Viatris |
• |
The Audit Committee |
• |
The Compensation Committee |
• |
The Compliance Committee |
• |
The Finance Committee |
structure and deployment and/or allocation of capital, material financial matters and transactions, and the risks related to such activities. |
• |
The Governance and Nominating Committee |
• |
The Risk Oversight Committee |
Viatris has a shareholder-aligned compensation philosophy. Viatris empowers people worldwide to live healthier at every stage of life. As the world’s healthcare needs evolve, we believe that the Viatris Global Healthcare Gateway ® Employee health and safety has been a priority throughout the COVID-19 pandemic. Steps were taken throughout 2020 to protect Mylan, Upjohn, and Viatris employees. We utilized screening and safe work protocols, and provided personal protective equipment (PPE) to employees. In addition, we provided bonuses to our frontline workers in recognition of their efforts to help ensure that patients around the world continued to receive essential medications uninterrupted. Employees were also provided with additional benefits during the COVID-19 pandemic, including expansion of Employee Assistance Program counseling and flexible work arrangements, among other supplemental benefit offerings in certain countries. Despite the challenges presented by the global pandemic, we continued to serve the needs of patient access in 2020 . Mylan and Pfizer’s Upjohn division (and Viatris post-Combination) collectively sold approximately 85 billion doses of medicine across 165 countries and territories in 2020 on a full year basis. Our outstanding colleagues around the world maintained consistent supply of product to ensure continued patient access while also effectively managing the integration of two large companies. See pages 22-23 for additional selected highlights. Reported 2020 compensation reflects three distinct programs. Viatris was formed in November 2020 after the Combination of Mylan and Upjohn. As a result, reported 2020 compensation must be viewed as a reflection of three distinct compensation programs: those of Mylan, Upjohn, and Viatris. Our 2020 compensation tables include certain one-time, transaction-related payments. In 2020, certain one-time payments were made to support the successful combination of Mylan and Upjohn and to secure the ongoing services of our NEOs. These payments are reflected in the 2020 compensation tables but will not be part of the executive compensation program going forward. |
Committed to Delivering Significant Shareholder Value Unique global platform Unparalleled global reach and global network with sustainable, diverse, and differentiated portfolio Performance- driven culture Focused on commercial execution, operational excellence, financial discipline, and corporate social responsibility Global Healthcare Gateway ® innovative global infrastructure offers partners ready access to expanded markets as well as our organic development to fuel future growth Execution roadmap to optimize total shareholder return Right internal conditions to maximize value creation with clear execution plan and disciplined capital deployment | |||
The Viatris Compensation Committee took several actions responsive to shareholder feedback in developing its initial executive compensation program. Consistent with shareholder feedback, we eliminated all NEO excise tax gross-ups that otherwise would have carried forward from predecessor companies and froze or eliminated supplemental executive retirement benefits, among other actions described herein. See also pages 25-26. In 2021, the Viatris Compensation Committee and Board implemented a new performance-based, shareholder-aligned compensation program. After closing of the Combination, we implemented a rigorous performance-based compensation program, with approximately 70% of executive target pay opportunity in the form of equity-based awards, and almost 60% of executive target pay opportunity tied to key, shareholder-aligned performance metrics. Our compensation program is designed to promote retention and motivate the senior leadership team to achieve rigorous performance goals that are closely tied to our strategy and which we believe will promote the creation of shareholder value. |
• |
Robert J. Coury, Executive Chairman |
• |
Michael Goettler, Chief Executive Officer |
• |
Rajiv Malik, President |
• |
Sanjeev Narula, Chief Financial Officer |
• |
Anthony Mauro, President, Developed Markets |
• |
Leverage Viatris’ unique and differentiated business model. We intend to leverage Viatris’ unique global scale and geographic reach, sustainable, diverse and differentiated portfolio and pipeline, powerful operating platform and commercial capabilities, performance-driven culture, sustainable cash flows, and disciplined capital allocation to deliver long-term shareholder value. |
• |
Deliver on our financial commitments. In the near term, Viatris is focused on disciplined capital deployment, delevering and rebalancing our business, realizing $1 billion in synergies within 3 years following the closing of the Combination, and deploying our strong cash flow to enable the Company to initiate a dividend in the second quarter of 2021 and repay approximately $6.5 billion in debt by the end of 2023. |
• |
Drive future growth through our Global Healthcare Gateway ® . With our highly-disciplined strategic and capital allocation processes, Viatris believes that the Global Healthcare Gateway ® |
• |
Advance our sustainability priorities in alignment with our business objectives. Viatris is building upon a strong, foundational commitment to corporate responsibility, with a global platform to provide sustainable access to high quality and affordable medicine, as well as a dedication to fostering an engaging and inclusive organization and reducing its environmental impact. The Company partners with more than 100 organizations around the world to help address some of the world’s most pressing health, social and environmental challenges, and is committed to creating lasting, positive impact as it delivers on its mission for patients, employees, shareholders, and other stakeholders. |
The Viatris Compensation Committee and Board’s compensation philosophy for 2021 and beyond reflects the Company’s sustainable, performance-based, TSR-focused business model and is designed to ensure that Viatris can continue to attract and retain high-performing executives given the highly competitive market for executive talent. The compensation program has the following key objectives, among others: | ||||||||||||||||
• Attract, Motivate, and Retain Highly-Skilled Executives. In order to attract and retain the leaders needed to drive execution of our ambitious goals, we provide market competitive compensation with an emphasis on performance-based long-term incentives. We have designed our compensation program to help ensure that the Company, our shareholders and other stakeholders continue to benefit from the talents of our leadership team and global workforce, while also recruiting new talent on an on-going basis. |
||||||||||||||||
• Align with Shareholder Interests. We use long-term incentives, including a relative total shareholder return (“TSR”) modifier for performance-based restricted stock units (“PRSUs”), and share ownership requirements, to align executive interests with those of our shareholders by linking pay to long-term performance and share price appreciation. |
||||||||||||||||
• Drive Company Performance. Our compensation program is designed with metrics carefully linked to our business strategies and financial goals, such as adjusted EBITDA to focus on profitability of operations, product submissions to support long-term sustainability of the business, a leverage metric to encourage rapid delevering, and a cash flow metric to support future strategies and potential dividend growth. |
||||||||||||||||
Our pay mix reinforces our commitment to both shareholder alignment and pay and performance alignment. The chart below highlights the pay mix composition of the executive compensation program for our NEOs during 2021. |
||||||||||||||||
2021 Pay Mix |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consistent with our philosophy of driving long-term company performance, the Viatris Compensation Committee, with the advice of its independent compensation consultant, plans to annually consider a range of potential alternative performance metrics that link to our strategy and align with long-term value creation for our shareholders. |
The Viatris Compensation Committee also expects to consider incorporating environmental, social, and governance (“ESG”) goals as part of future executive compensation programs, potentially including one or more of the following: access to medicines, product safety and quality, workforce diversity and inclusion, the environmental impact of our operations, and/or other metrics. The Viatris Compensation Committee has also planned a year-round process to set and monitor our compensation program, as well as to assess shareholder feedback and ensure that feedback is considered in the compensation-setting process. Additional details regarding our 2021 compensation program are on pages 27-28. Governance and Other Considerations Impacting Viatris Compensation Decisions The Viatris Compensation Committee and Board proactively consider external governance-related developments and trends relating to executive compensation. The Viatris Compensation Committee and Board believe that each company must independently assess which market practices and trends are appropriate for the company at any particular time in the company’s history. The Viatris Compensation Committee and Board remain fully committed to maintaining a strong compensation governance philosophy that is aligned with shareholder interests and best practices. See also pages 23-24. In setting or approving executive compensation, the Viatris Compensation Committee and Board also may consider, in addition to any corporate goals and objectives specific to an individual executive, some or all of the following: pay for performance, alignment with long-term shareholder interests, advancement of Company strategic goals, maintenance of an appropriate level of fixed and at-risk compensation, remaining competitive with companies within the Company’s peer group, competition for executive talent, internal pay equity, an executive’s leadership and mentoring skills and contributions, talent management, the executive’s contributions to establishment or execution of corporate strategy, retention, recognition of individual performance and contributions, compliance with the Code of Business Conduct and Ethics, Company policy and applicable law, and/or any other factors determined by the Board or the Viatris Compensation Committee to be in the interests of the Company. |
||||||
• |
Eliminated NEO Excise Tax Gross Ups. The Viatris Compensation Committee agreed with Messrs. Malik and Mauro in November 2020 to eliminate existing excise tax gross ups relating to Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), contained in legacy Transition and Succession Agreements with Mylan. No other Viatris NEO has a right to an excise tax gross up. |
• |
No New Fixed-Term NEO Employment Agreements. The Viatris Compensation Committee and Board determined that, other than Mr. Coury’s previously disclosed 2020 employment agreement, the Board will not approve any new fixed-term NEO employment agreements going forward. |
• |
No Retirement Benefit Agreements. Mylan provided supplemental retirement benefits to certain officers in the form of individual Retirement Benefit Agreements. Following the closing of the Combination, Mr. Malik agreed with the Viatris Compensation Committee to freeze his Retirement Benefit Agreement, and he will no longer accrue any additional benefits under the agreement. No other Viatris executive is party to a Retirement Benefit Agreement. In addition, the Viatris Compensation Committee and Board determined that Viatris will not enter into any new Retirement Benefit Agreements with executives. |
• |
Discontinued Tax Equalization Benefits. Mylan previously provided tax equalization benefits to Mr. Malik relating to his expatriate assignment to the United States. Following the closing of the Combination, the Viatris Compensation Committee discontinued future tax equalization benefits. |
• |
Robust Clawback Policy. The Viatris Board adopted a robust clawback policy, which applies to both performance-based cash and equity awards and covers all senior executives. The policy provides for potential recoupment of incentive compensation under certain circumstances relating to financial restatements, misconduct by executives, and failure to manage others who commit misconduct. See also pages 38-39. |
• |
60% of Equity-Based Awards Delivered as Performance-Based Incentive Awards. For 2021, the Viatris Compensation Committee and the Board set the proportion of equity-based awards granted as PRSUs at 60% of the total mix and did not include stock options among those awards. |
What We Do |
✓ Maintain a significant portion of compensation aligned with shareholder interests and tied to share price or financial and operational business performance |
✓ Employ metrics for annual and long-term incentives that support both short- and long-term strategies and align with shareholder interests |
✓ Base long-term incentives heavily on performance-based metrics and short-term incentives entirely on performance-based metrics |
✓ Set rigorous and measurable performance goals and periodically review and discuss our executives’ performance |
✓ Use double-trigger vesting for annual long-term incentive awards upon a change in control |
✓ Retain independent compensation consultants that report directly to the Compensation Committee |
✓ Maintain strong share ownership guidelines |
✓ Maintain a robust clawback policy |
✓ Engage with shareholders on compensation and governance matters |
✓ Consider peer groups and market data in determining compensation |
What We Don’t Do |
X |
X |
X |
X |
X |
X |
NEO |
Base Salary |
Target Annual Incentive (as % of Base Salary) |
Target LTI (as % of Base Salary) |
|||||||||
Robert J. Coury |
$ |
1,800,000 |
150 |
% |
600 |
% | ||||||
Michael Goettler |
$ |
1,300,000 |
150 |
% |
700 |
% | ||||||
Rajiv Malik |
$ |
1,200,000 |
125 |
% |
600 |
% | ||||||
Sanjeev Narula |
$800,000 |
100 |
% |
350 |
% | |||||||
Anthony Mauro |
$800,000 |
115 |
% |
400 |
% |
Executive |
Base Salary |
Target Annual Incentive |
Target Long-Term Incentive |
2021 Total Target Compensation (1) |
||||||||||||
Robert J. Coury |
$1,800,000 |
$2,700,000 |
$10,800,000 |
$15,300,000 |
||||||||||||
Michael Goettler |
$1,300,000 |
$1,950,000 |
$9,100,000 |
$12,350,000 |
||||||||||||
Rajiv Malik |
$1,200,000 |
$1,500,000 |
$7,200,000 |
$9,900,000 |
||||||||||||
Sanjeev Narula |
$800,000 |
$800,000 |
$2,800,000 |
$4,400,000 |
||||||||||||
Anthony Mauro |
$800,000 |
$920,000 |
$3,200,000 |
$4,920,000 |
(1) |
Total Target Compensation is defined as the sum of base salary, target annual incentive, and target long-term incentive. |
Abbott Laboratories |
Biogen Inc. |
Novartis AG | ||
Abbvie Inc. |
Bristol-Myers Squibb Company |
Pfizer Inc. | ||
Amgen Inc. |
Eli Lilly and Company |
Regeneron Pharmaceuticals, Inc. | ||
Bausch Health Companies Inc. |
Gilead Sciences, Inc. |
Sanofi | ||
Baxter International Inc. |
Merck & Co., Inc |
Teva Pharmaceutical Limited |
NEO |
Legacy Salary |
Viatris Salary |
||||||
Robert J. Coury |
$ |
1,800,000 |
$ |
1,800,000 |
||||
Michael Goettler |
$825,000 |
$ |
1,300,000 |
|||||
Rajiv Malik |
$ |
1,150,000 |
$ |
1,200,000 |
||||
Sanjeev Narula |
$515,000 |
$800,000 |
||||||
Anthony Mauro |
$800,000 |
$800,000 |
NEO |
Target Annual Incentive (as % of Base Salary) |
Target Annual Incentive ($)* |
||||||
Robert J. Coury |
150 |
% |
$ |
2,700,000 |
||||
Rajiv Malik |
125 |
% |
$ |
1,445,355 |
||||
Anthony Mauro |
115 |
% |
$920,000 |
* |
For Mr. Coury, the target annual incentive was established in connection with the Executive Chairman Agreement. For Mr. Malik, the target represents a blended target annual incentive based on his salary of $1.15 million through November 15, 2020 and $1.2 million through the remainder of 2020. Mr. Malik’s target bonus percentage of 125% did not change during the year. |
Metric |
Weighting |
Threshold |
Target |
Maximum |
Mylan Results* | |||||
Adjusted EBITDA** |
50% |
$2,170 million |
$2,290 million -$2,531 million |
$2,652 million |
$2,614 million | |||||
Global Regulatory Submissions*** |
50% |
72 |
80 |
88 |
95 |
* |
Mylan results for the first three fiscal quarters of 2020. |
** |
Adjusted EBITDA is derived from Mylan’s financial statements in the same manner as Mylan’s publicly reported adjusted EBITDA, except that the calculation for the incentive program utilized budgeted foreign exchange rates. Mylan’s adjusted EBITDA for the nine months ended September 30, 2020 is reconciled to the most directly comparable U.S. GAAP measure in Appendix A. |
*** |
The Science and Technology Committee reviewed the actual results of the global submissions included in the incentive compensation program. |
NEO |
Upjohn Division Target Annual Incentive* |
Viatris Target Annual Incentive ** |
Blended 2020 Target Annual Incentive*** |
|||||||||
Michael Goettler |
$ |
732,225 |
$ |
1,950,000 |
$885,279 |
|||||||
Sanjeev Narula |
$ |
207,400 |
$800,000 |
$281,880 |
* |
Upjohn target annual incentive represents full-year target opportunity based on Upjohn salary mid-point and target bonus percentage determined by Pfizer. |
** |
Viatris target annual incentive represents full-year target opportunity based on Viatris base salary and target bonus percentage determined by the Viatris Compensation Committee and Board. |
*** |
Blended target annual incentive represents a blended rate based on Pfizer target annual incentive through November 15, 2020 and through the remainder of 2020 based on Viatris target opportunity. For 2020, the pre-Combination target amount was prorated for 320 days and the post-combination target amount was prorated for 46 days. |
NEO |
PRSU |
RSU |
Stock Options |
|||||||||
Robert J. Coury |
No Annual Equity Grant Provided in 2020 |
|||||||||||
Rajiv Malik |
$ |
3,450,000 |
$ |
2,760,000 |
$ |
690,000 |
||||||
Anthony Mauro |
$ |
1,600,000 |
$ |
1,280,000 |
$ |
320,000 |
Metric |
Weighting |
Threshold |
Target |
Maximum | ||||
ROIC* |
50% |
8% |
10% |
12% | ||||
Adjusted FCF/Credit Agreement Debt** |
50% |
13% |
15% |
18% | ||||
Relative TSR of Peer Group*** |
Multiplier |
At or Below 25th Percentile of Peer Group |
Between 25th and 75th Percentiles of Peer Group |
At or Above 75th Percentile of Peer Group | ||||
Payout Opportunity (as % of Target) |
40% |
100% |
180% |
* |
ROIC would have been calculated as described in Appendix A. |
** |
Adjusted FCF/Credit Agreement Debt would have been first calculated for each year in the performance period as the ratio of Mylan’s adjusted free cash flow (calculated as described in Appendix A) to “indebtedness” (as defined in Mylan’s revolving credit facility dated as of July 27, 2018), and the values for each year in the performance period would then be averaged to determine the ratio of Adjusted FCF/Credit Agreement Debt. Credit Agreement Debt would have been calculated as described in Appendix A, subject to adjustment following the end of the performance period on a pro forma basis in the event of a material acquisition of products or assets during the applicable fiscal year that would have a material impact on indebtedness during the fiscal quarter in which such acquisition closes. |
*** |
Relative TSR would have been calculated by comparing the difference between Mylan’s 30-day trailing average closing ordinary share price at the day before the beginning of the performance period and the day before the end of the performance period plus any dividends paid during the performance period against the same metric for each company in Mylan’s historical peer group. |
• |
PRSU Awards. Each outstanding PRSU award in respect of Mylan ordinary shares was converted into an award of Viatris RSUs on a one-for-one basis assuming target level performance. These Viatris RSU awards cliff vest on the third anniversary of the grant date of the original award, subject to accelerated vesting in connection with qualifying terminations of employment. |
• |
RSU Awards. Each outstanding RSU award in respect of Mylan ordinary shares was converted into a Viatris RSU award on a one-for-one basis. These Viatris RSU awards vest ratably in three equal installments on each anniversary of the grant date of the original award, subject to accelerated vesting in connection with qualifying terminations of employment. |
• |
Stock Options. Each outstanding stock option to purchase Mylan ordinary shares was converted into the right to receive an option to purchase shares of Viatris common stock on a one-for-one basis and the exchange was value-neutral, as the Black-Scholes-Merton value of the stock options was kept constant in the conversion. These Viatris options vest ratably in three equal installments on each anniversary of the grant date of the original award, subject to accelerated vesting in connection with qualifying terminations of employment. |
NEO |
Cash Long-Term Incentive Award |
|||
Michael Goettler |
$ |
2,400,000 |
||
Sanjeev Narula |
$425,000 |
NEO |
Forfeited Pfizer Long-Term Incentive Value |
Number of Make-Whole Viatris RSUs |
||||||
Michael Goettler* |
$ |
2,759,055 |
177,432 |
|||||
Sanjeev Narula** |
$330,367 |
21,246 |
* |
The forfeited value for Mr. Goettler is a total of $54,408, $839,042 and $1,865,605 from Pfizer awards granted in 2018, 2019 and 2020, respectively. The forfeited values were granted as three separate Make-Whole Awards in the amount of 3,499, 53,958 and 119,975 RSUs, respectively, that will vest following the Pfizer vesting schedule in 2021, 2022 and 2023. |
** |
The value for Mr. Narula is the amount forfeited from Pfizer awards granted in 2020 that will vest following the Pfizer vesting schedule in 2023. |
• |
Each NEO receives a car allowance or the use of a leased vehicle and payment of certain ancillary expenses. The NEOs are responsible for paying any taxes incurred relating to this perquisite. |
• |
Our NEOs take an extraordinarily active approach to overseeing and managing Viatris’ global operations, which will necessitate a significant amount of U.S. domestic and international travel time after the lifting of COVID-based restrictions due to our diverse business centers, manufacturing and other facilities, and many client and vendor locations around the world. Viatris provides management with access to corporate aircraft to assist in the management of Viatris’ global platform by providing a more efficient and secure traveling environment, including where sensitive business issues may be discussed or reviewed, as well as maximum flexibility to our executives in the conduct of business. For reasons of business efficiency and continued security-related concerns (including personal security, especially given the global nature of Viatris’ business, as well as privacy of business information and communications), we also may from time-to-time require certain executives to use corporate aircraft for business and personal purposes. |
• |
For reasons of continued security-related concerns, we may from time-to-time provide certain NEOs with personal security. |
• |
In 2020, in connection with the relocation of Messrs. Goettler and Narula to the United States and then to Pittsburgh, Pennsylvania, we provided certain limited repatriation and relocation benefits to each of them. |
Position |
Ownership Requirement |
|||
Executive Chairman |
6x |
|||
Chief Executive Officer |
6x |
|||
President |
4x |
|||
Other NEOs |
3x |
Name and Principal Position |
Fiscal Year |
Salary ($) (1) |
Bonus ($) (2) |
Stock Awards ($) (3) |
Option Awards ($) (4) |
Non-Equity Incentive Plan Compensation ($) (5) |
Changes in Pension Value and Non- qualified Deferred Compensation Earnings ($) (6) |
All Other Compensation ($) (7) |
Total ($) |
|||||||||||||||||||||||||||
Robert J. Coury Executive Chair man |
2020 |
1,800,000 |
10,000,000 |
12,451,936 |
— |
4,405,590 |
— |
399,850 |
29,057,376 |
|||||||||||||||||||||||||||
Michael Goettler Chief Executive Officer |
2020 |
871,875 |
1,000,000 |
2,400,000 |
— |
951,675 |
— |
249,355 |
5,472,905 |
|||||||||||||||||||||||||||
Sanjeev Narula Chief Financial Officer |
2020 |
539,183 |
1,000,000 |
425,000 |
— |
303,021 |
— |
661,719 |
2,928,923 |
|||||||||||||||||||||||||||
Rajiv Malik President |
2020 |
1,155,769 |
2,500,000 |
6,210,015 |
690,001 |
2,358,386 |
336,290 |
851,522 |
14,101,983 |
|||||||||||||||||||||||||||
Anthony Mauro President, Developed Markets |
2020 |
800,000 |
1,000,000 |
2,880,022 |
320,005 |
1,501,164 |
— |
243,446 |
6,744,637 |
(1) |
Represents the base salary actually paid to the NEO for the full calendar year 2020, including the salary paid by Mylan or Upjohn, as applicable, prior to the closing of the Combination and by Viatris after the closing of the Combination. For Mr. Coury, the amount includes the cash retainer received while serving as Mylan’s non-executive Chairman from January 1, 2020 through April 15, 2020, his base salary for serving as Mylan’s Executive Chairman from April 15, 2020 to the closing of the Combination, and his base salary for serving as Viatris’ Executive Chairman for the remainder of 2020. |
(2) |
In connection with the Combination, Mr. Coury received a one-time cash recognition award of $10 million (which recognized and rewarded Mr. Coury for, among other things: the fact that Mr. Coury assumed an executive role with Mylan in April 2020 but did not receive an annual equity grant at that time (which, had it been awarded, would have been valued at approximately $10.8 million); his strategic leadership of Mylan; the unexpected and significantly increased efforts expended by Mr. Coury on company matters since April 2020, including during the COVID-19 pandemic; his significant leadership in the analysis and negotiation relating to the Combination and integration planning matters with respect to the Combination; and his expected leadership, direction and efforts for the combined company so that shareholders can realize the significant opportunity and benefits that are expected from the Combination). In connection with the Combination, Messrs. Goettler and Narula each became entitled to receive a $1 million transaction-related payment previously granted to them by Pfizer. In connection with the Combination, Mr. Malik and Mr. Mauro received cash awards equal to $2.5 million and $1 million, respectively, in recognition of their significant efforts in connection with integration planning matters related to the Combination in addition to their customary responsibilities. |
(3) |
Represents the grant date fair value of the long-term incentive awards granted to the NEO in 2020, as applicable. With respect to Mr. Coury, the grant date fair value represents the 1.6 million PRSUs granted by Viatris in connection with the Combination pursuant to his Value Creation Award, based on the Monte Carlo value equal to $12,451,936. For details regarding this performance-based program see “Executive Chairman Employment Agreement” on page 35 of this Form 10-K/A. With respect to Messrs. Goettler and Narula, the grant date fair value represents cash-based awards granted by Pfizer in 2020 prior to the Combination, equal to $2,400,000 and $425,000, respectively. In connection with the Combination, these and certain other Pfizer awards were canceled and forfeited and Messrs. Goettler and Narula were granted Viatris RSUs to replace such forfeited Pfizer awards. For more information on the conversion of Pfizer awards into Viatris RSUs upon the closing of the Combination, see “Combination-Related Treatment of Pfizer’s 2020 Long-Term Incentive Grants to Legacy Upjohn Executives” on page 34 of this Form 10-K/A. |
With respect to Messrs. Malik and Mauro, the grant date fair value represents RSUs and PRSUs granted by Mylan in 2020 prior to the Combination. In the case of PRSUs, value is based on the target value as follows: Mr. Malik ($3,450,010) and Mr. Mauro ($1,600,014). If the maximum achievement of performance goals had been assumed, the grant date fair value of such PRSUs would have been as follows: Mr. Malik ($6,210,032) and Mr. Mauro ($2,880,040). For information regarding assumptions used in determining the expense of such awards, please refer to Note 13 to the Company’s Consolidated Financial Statements contained in the Original Filing. In connection with the Combination, PRSUs were converted into an award of Viatris RSUs on a one-for-one basis assuming target level performance and RSUs were also converted into Viatris RSUs on a one-for-one basis. For more information on the conversion of Mylan PRSUs and RSUs into Viatris equity awards upon the closing of the Combination, see “Mylan’s 2020 Long-Term Incentive Grants to Legacy Mylan Executives” on page 33 of this Form 10-K/A. |
(4) |
Represents the grant date fair value of the option awards granted by Mylan in 2020 prior to the Combination. For information regarding assumptions used in determining the expense of such awards, please refer to Note 13 to the Company’s Consolidated Financial Statements contained in the Original Filing. In connection with the Combination, these option awards were converted into options to purchase shares of Viatris common stock on a one-for-one basis. For more information on the conversion of Mylan options into Viatris options upon the closing of the Combination, see “Mylan’s 2020 Long-Term Incentive Grants to Legacy Mylan Executives” on page 33 of this Form 10-K/A. |
(5) |
Represents amounts paid under the Company’s non-equity incentive compensation plan. Since the Combination did not close until November 16, 2020, annual incentive awards for 2020 represented a combination of payments in respect of Mylan and Upjohn’s bonus programs for three-quarters of 2020 and assumed target level performance for the remainder of 2020. For a discussion of this plan, see “2020 Annual Incentive Compensation Programs” on page 30 of this Form 10-K/A. |
(6) |
Represents the aggregate change in present value of Mr. Malik’s accumulated benefit under the Malik RBA. As described herein, the Malik RBA was frozen as of the Combination and Mr. Malik no longer accrues additional benefits under the agreement. In computing this amount, we used the same assumptions that were used to determine the expense amounts recognized in our 2020 financial statements. In 2020, the impact of a decrease in the applicable discount rates led to an increase in the present value of accumulated benefits of $336,290 for Mr. Malik. For further information concerning the Malik RBA, see the Pension Benefits for 2020 Table set forth below “Certain Arrangements with Messrs. Malik and Mauro,” beginning on page 36 of this Form 10-K/A. Messrs. Goettler and Narula participated in pension plans of Pfizer prior to the Combination, and Pfizer retained all liabilities with respect to such plans. |
(7) |
Amounts shown in this column are detailed in the following chart. |
Name |
Fiscal Year |
Use of Company Provided Automobile ($) (a) |
Personal Use of Company Aircraft ($) (b) |
Expatriate Benefits ($) (c) |
401(k) and Profit Sharing Plan Matching and Profit Sharing Contribution ($) (d) |
Restoration Plan Contribution ($) (e) |
Other ($) (f) |
Total ($) |
||||||||||||||||||||||||
Robert J. Coury |
2020 |
25,111 |
30,363 |
— |
28,300 |
275,306 |
40,770 |
399,850 |
||||||||||||||||||||||||
Michael Goettler |
2020 |
2,400 |
— |
43,863 |
9,750 |
193,199 |
143 |
249,355 |
||||||||||||||||||||||||
Sanjeev Narula |
2020 |
2,400 |
— |
631,856 |
7,231 |
20,089 |
143 |
661,719 |
||||||||||||||||||||||||
Rajiv Malik |
2020 |
2,204 |
9,482 |
606,221 |
31,222 |
182,052 |
20,341 |
851,522 |
||||||||||||||||||||||||
Anthony Mauro |
2020 |
19,200 |
— |
— |
31,484 |
189,360 |
3,402 |
243,446 |
(a) |
In the case of Messrs. Coury, Goettler, Narula and Mauro, these numbers represent a vehicle allowance and ancillary expenses associated with such vehicle. In the case of Mr. Malik, this number represents the cost of a vehicle (based on lease value), insurance and ancillary expenses associated with such vehicle. |
(b) |
Amounts disclosed represent the actual aggregate incremental costs associated with the personal use of corporate aircraft (Mr. Coury, $30,363 and Mr. Malik, $9,482). Incremental costs include annual average hourly fuel and maintenance costs, landing and parking fees, customs and handling charges, passenger catering and ground transportation, crew travel expenses, away from home hanger fees and other trip-related variable costs. Because the aircrafts are used primarily for business travel, incremental costs exclude fixed costs that do not change based on usage, such as pilots’ salaries, aircraft purchase or lease costs, home-base hangar costs and certain maintenance fees. Aggregate incremental cost as so determined with respect to personal deadhead flights is allocable to the NEO. In certain instances where there are both business and personal passengers, the incremental costs per hour are pro-rated. |
(c) |
In the case of Messrs. Goettler and Narula, amounts disclosed include the value of certain expatriate, repatriation and relocation benefits of $43,863 and $631,856, respectively, paid by Pfizer and/or Viatris in 2020. Repatriation for Messrs. Goettler and Narula occurred on September 30, 2020. Expatriate benefits for Mr. Malik represent income taxes paid by Mylan in connection with Mr. Malik’s expatriate assignment to the United States from India effective January 1, 2012. Specifically, Mr. Malik is responsible for, and has continued to pay taxes equal to those he would have been obligated to pay had he maintained his principal work location and residence in India rather than having transferred, at Mylan’s request, to the United States, while Mylan generally paid for all additional taxes, including Mr. Malik’s tax obligations on the imputed income associated with Mylan’s payment of taxes on his behalf. Amount shown for 2020 for Mr. Malik is net of Mylan’s estimated tax refunds for each year. The estimated refund was $274,822 for 2020. As of the Combination, Mr. Malik will no longer be eligible for legacy tax equalization benefits that he had historically received from Mylan. |
(d) |
Amounts disclosed for each NEO include a matching contribution for Messrs. Coury ($11,200), Narula ($1,231), Malik ($14,122), and Mauro ($14,384), and a profit sharing contribution received in March 2021 in respect of fiscal year 2020 for Messrs. Coury ($17,100), Goettler ($9,750), Narula ($6,000) and to each of Messrs. Malik and Mauro ($17,100). |
(e) |
Amounts disclosed include, for Messrs. Coury, Goettler and Mauro, a matching contribution under the Restoration Plan of $215,857, $36,467 and $130,584, respectively, and a profit sharing contribution under the Restoration Plan received in March 2021 in respect of fiscal year 2020 for each of Messrs. Coury, Malik and Mauro equal to $59,449, $182,052, and $58,776, respectively. Amounts disclosed for Messrs. Goettler and Narula include Retirement Savings Contributions under Pfizer’s plans in the amount of $156,732 and $20,089, respectively. |
(f) |
Represents health insurance for Messrs. Coury ($29,102) and Malik; certain personal security services for Messrs. Coury and Malik; events for Mr. Malik; tax preparation services related to U.K. tax returns for Messrs. Coury and Mauro; long-term disability premiums for Messrs. Coury, Goettler, Narula, Malik and Mauro; and international travel assistance premiums for Messrs. Coury, Malik and Mauro. |
Estimated Future Payments Under Non-Equity Incentive Plan Awards (1) |
Estimated Future Payments Under Equity Incentive Plan Awards (2) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
NAME |
Grant Date |
Approval Date |
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
All Other Stock Awards: Number of Shares of Stock or Units (#) (3) |
All Other Option Awards: Number of Securities Underlying Options (#) (4) |
EXERCISE OR BASE PRICE OF OPTION AWARDS ($/SH) |
Grant Date Fair Value of Stock and Option Awards ($) (5) |
||||||||||||||||||||||||||||||||||||||||||||
Robert J. Coury |
1,350,000 |
2,700,000 |
5,400,000 |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||||
11/23/2020 |
11/20/2020 |
— |
— |
— |
320,000 |
960,000 |
1,600,000 |
— |
— |
— |
12,451,936 |
|||||||||||||||||||||||||||||||||||||||||||||
Michael Goettler |
442,640 |
885,279 |
1,770,558 |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||||
2/27/2020 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
2,400,000 |
(6) | ||||||||||||||||||||||||||||||||||||||||||||
Sanjeev Narula |
140,940 |
281,880 |
563,760 |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||||
2/27/2020 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
425,000 |
(6) | ||||||||||||||||||||||||||||||||||||||||||||
Rajiv Malik |
722,678 |
1,445,355 |
2,890,710 |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2020 |
2/19/2020 |
— |
— |
— |
78,948 |
197,369 |
355,265 |
— |
— |
— |
3,450,010 |
|||||||||||||||||||||||||||||||||||||||||||||
3/2/2020 |
2/19/2020 |
— |
— |
— |
— |
— |
— |
157,895 |
— |
— |
2,760,005 |
|||||||||||||||||||||||||||||||||||||||||||||
3/2/2020 |
2/19/2020 |
— |
— |
— |
— |
— |
— |
— |
84,871 |
17.48 |
690,001 |
|||||||||||||||||||||||||||||||||||||||||||||
Anthony Mauro |
460,000 |
920,000 |
1,840,000 |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2020 |
2/19/2020 |
— |
— |
— |
36,614 |
91,534 |
164,762 |
— |
— |
— |
1,600,014 |
|||||||||||||||||||||||||||||||||||||||||||||
3/2/2020 |
2/19/2020 |
— |
— |
— |
— |
— |
— |
73,227 |
— |
— |
1,280,008 |
|||||||||||||||||||||||||||||||||||||||||||||
3/2/2020 |
2/19/2020 |
— |
— |
— |
— |
39,361 |
17.48 |
320,005 |
(1) |
The performance goals under the annual incentive compensation program applicable to the NEOs during 2020 are described above in the CD&A. Since the Combination did not close until November 16, 2020, annual incentive awards for 2020 represented a combination of payments in respect of Mylan’s and Upjohn’s annual incentive programs for three-quarters of 2020 and assumed target level performance for the remainder of 2020. For a discussion of these awards, see “2020 Annual Incentive Compensation Programs” on page 30 of this Form 10-K/A. |
(2) |
For Messrs. Malik and Mauro, consists of PRSUs awarded under Mylan’s Amended and Restated 2003 Long-Term Incentive Plan (the “Amended 2003 Plan”). The vesting terms applicable to these awards are described above in the CD&A and below following the Outstanding Equity Awards at the End of 2020 table. In connection with the Combination, these PRSUs were converted into an award of Viatris RSUs on a one-for-one basis assuming target level performance. For more information on the conversion of Mylan PRSUs into Viatris RSUs upon the closing of the Combination, see “Mylan’s 2020 Long-Term Incentive Grants to Legacy Mylan Executives” on page 33 of this Form 10-K/A. For Mr. Coury, represents the 1.6 million PRSUs Mr. Coury received in connection with the Combination pursuant to his Value Creation Award. For details regarding this performance-based program see “Executive Chairman Employment Agreement” on page 35 of this Form 10-K/A. |
(3) |
Consists of RSUs awarded under Mylan’s Amended 2003 Plan. The vesting terms applicable to these awards are described above in the CD&A and below following the Outstanding Equity Awards at the End of 2020 table. In connection with the Combination, these RSUs were converted into an award of Viatris RSUs on a one-for-one basis. For more information on the conversion of Mylan RSUs into Viatris RSUs upon the closing of the Combination, see “Mylan’s 2020 Long-Term Incentive Grants to Legacy Mylan Executives” on page 33 of this Form 10-K/A. |
(4) |
Represents the grant of stock options awarded under the Amended 2003 Plan. Stock options were granted with an exercise price equal to the closing price of Mylan’s shares on the date of grant. The vesting terms applicable to these awards are described below following the Outstanding Equity Awards at the End of 2020 table. In connection with the Combination, these option awards were converted into options to purchase shares of |
Viatris common stock on a one-for-one basis. For more information on the conversion of Mylan options into Viatris options upon the closing of the Combination, see “Mylan’s 2020 Long-Term Incentive Grants to Legacy Mylan Executives” on page 33 of this Form 10-K/A. |
(5) |
Represents the grant date fair value of the specific award granted to the NEO. For information regarding assumptions used in determining such value, please refer to Note 13 to the Company’s Consolidated Financial Statements contained in the Original Filing. |
(6) |
Represents cash-based awards granted by Pfizer to Messrs. Goettler and Narula in 2020. In connection with the Combination, Viatris granted Make-Whole RSU awards to Messrs. Goettler and Narula to replace the Pfizer equity awards forfeited by such NEOs. The vesting terms applicable to these awards are described above in the CD&A and below following the Outstanding Equity Awards at the End of 2020 table. For more information on the conversion of Pfizer awards into Viatris RSUs upon the closing of the Combination, see “Combination-Related Treatment of Pfizer’s 2020 Long-Term Incentive Grants to Legacy Upjohn Executives” on page 34 of this Form 10-K/A. |
Option Awards |
Stock Awards |
|||||||||||||||||||||||||||||||||||||||
NAME |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable (1) |
Option Exercise Price ($a) |
Option Expiration Date |
|
|
Number of Shares or Units of Stock That Have Not Vested (#) (2) |
Market Value of Shares or Units of Stock That Have Not Vested ($) (3) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (3) |
||||||||||||||||||||||||||||||
Robert J. Coury |
4,413 |
— |
22.66 |
3/2/2021 |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||
4,266 |
— |
23.44 |
2/22/2022 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
3,236 |
— |
30.90 |
3/6/2023 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
58,952 |
— |
55.84 |
3/5/2024 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
63,235 |
— |
50.66 |
11/17/2025 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
82,776 |
— |
46.27 |
2/17/2026 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
— |
— |
— |
— |
250,000 |
4,685,000 |
— |
— |
|||||||||||||||||||||||||||||||||
— |
— |
— |
— |
— |
— |
1,600,000 |
(4) |
29,984,000 |
||||||||||||||||||||||||||||||||
Michael Goettler |
— |
— |
— |
— |
3,499 |
(5) |
65,571 |
— |
— |
|||||||||||||||||||||||||||||||
— |
— |
— |
— |
53,958 |
(5) |
1,011,173 |
— |
— |
||||||||||||||||||||||||||||||||
— |
— |
— |
— |
119,975 |
(5) |
2,248,332 |
— |
— |
||||||||||||||||||||||||||||||||
Sanjeev Narula |
— |
— |
— |
— |
21,246 |
(5) |
398,150 |
— |
— |
|||||||||||||||||||||||||||||||
Rajiv Malik |
34,389 |
— |
55.84 |
3/5/2024 |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||
41,637 |
— |
50.66 |
11/17/2025 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
50,168 |
— |
46.27 |
2/17/2026 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
65,574 |
— |
45.18 |
3/3/2027 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
47,733 |
23,867 |
40.97 |
3/2/2028 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
20,018 |
40,035 |
27.45 |
3/1/2029 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
— |
84,871 |
17.48 |
3/2/2030 |
14,645 |
274,447 |
— |
— |
|||||||||||||||||||||||||||||||||
— |
— |
— |
— |
73,225 |
(6) |
1,372,237 |
— |
— |
||||||||||||||||||||||||||||||||
— |
— |
— |
— |
67,031 |
1,256,161 |
— |
— |
|||||||||||||||||||||||||||||||||
— |
— |
— |
— |
125,684 |
(6) |
2,355,318 |
— |
— |
||||||||||||||||||||||||||||||||
— |
— |
— |
— |
157,895 |
2,958,952 |
— |
— |
|||||||||||||||||||||||||||||||||
— |
— |
— |
— |
197,369 |
(6) |
3,698,695 |
— |
— |
||||||||||||||||||||||||||||||||
Anthony Mauro |
4,266 |
— |
23.44 |
2/22/2022 |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||
3,236 |
— |
30.90 |
3/6/2023 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
12,009 |
— |
55.84 |
3/5/2024 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
16,265 |
— |
50.66 |
11/17/2025 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
27,314 |
— |
46.27 |
2/17/2026 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
29275 |
— |
45.18 |
3/3/2027 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
19,889 |
9,944 |
40.97 |
3/2/2028 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
9,284 |
18,567 |
27.45 |
3/1/2029 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
— |
39,361 |
17.48 |
3/2/2030 |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||
— |
— |
— |
— |
6,102 |
114,351 |
— |
— |
|||||||||||||||||||||||||||||||||
— |
— |
— |
— |
30,511 |
(6) |
571,776 |
— |
— |
||||||||||||||||||||||||||||||||
— |
— |
— |
— |
31,087 |
582,570 |
— |
— |
|||||||||||||||||||||||||||||||||
— |
— |
— |
— |
58,288 |
(6) |
1,092,317 |
— |
— |
||||||||||||||||||||||||||||||||
— |
— |
— |
— |
73,227 |
1,372,274 |
— |
— |
|||||||||||||||||||||||||||||||||
— |
— |
— |
— |
91,534 |
(6) |
1,715,347 |
— |
— |
(1) |
In connection with the Combination, Mylan option awards were converted into Viatris option awards on a one-for-one basis. Vesting dates applicable to unvested stock options are as follows, in each case, generally subject to continued employment with Viatris: on March 2, 2021, the unvested options at the $40.97 exercise price for Messrs. Malik and Mauro vested; one-half of the unvested stock options at the $27.45 exercise price for Messrs. Malik and Mauro vested on March 2, 2021; and the unvested stock options at the $17.48 exercise price for Messrs. Malik and Mauro will vest in three equal annual installments beginning March 2, 2021. Subject to applicable employment agreement provisions, following termination of employment, vested stock options will generally remain exercisable for 30 days following termination, except that (i) in the case of termination because of disability, 100% of options become vested and vested options will remain exercisable for two years following termination; (ii) in the case of a termination due to a reduction in force, vested options will remain exercisable for one year following termination; (iii) in the case of death, including within two years following termination because of disability, or, in the case of options granted prior to January 1, 2017, retirement, 100% of options become vested and vested options will remain exercisable for the remainder of the original term; and (iv) in the case of an involuntary termination without cause or a voluntary resignation for good reason that occurs within two years following a change in control, 100% of options become vested (double-trigger awards) and remain exercisable for the remainder of the original term. For more information on the conversion of Mylan options into Viatris options upon the closing of the Combination, see “Mylan’s 2020 Long-Term Incentive Grants to Legacy Mylan Executives” on page 33 of this Form 10-K/A. |
(2) |
In connection with the Combination, Mylan RSUs were converted into Viatris RSU awards on a one-for-one basis. On March 2, 2021, 14,645 RSUs for Mr. Malik and 6,102 RSUs for Mr. Mauro vested. Of the 67,031 RSUs for Mr. Malik, 33,515 vested on March 2, 2021, and 33,516 will vest on March 2, 2022; of the 31,087 RSUs for Mr. Mauro, 15,543 vested on March 2, 2021, and 15,544 will vest on March 2, 2022. 157,895 RSUs for Mr. Malik and 73,227 RSUs for Mr. Mauro vest in three equal annual installments beginning on March 2, 2021, and 250,000 RSUs for Mr. Coury will vest on June 24, 2021. In accordance with their terms, all of these awards would vest upon an involuntary termination without cause or a voluntary resignation for good reason that occurs within two years following a change in control (double-trigger awards) or upon the executive’s death or disability. For more information on the conversion of Mylan RSUs into Viatris RSUs upon the closing of the Combination, see “Mylan’s 2020 Long-Term Incentive Grants to Legacy Mylan Executives” on page 33 of this Form 10-K/A. |
(3) |
The market value of RSUs and PRSUs was calculated using the closing price of the Company’s shares as of December 31, 2020, $18.74. |
(4) |
In connection with the Combination, Viatris granted 1.6 million PRSUs to Mr. Coury pursuant to his Value Creation Award. The PRSUs were granted on November 23, 2020 and are divided into five separate vesting tranches requiring share price appreciation and shareholder returns (including dividends and other distributions) of 25%, 50%, 75%, 100% and 150% from the date of grant through December 30, 2025. In the case of the first three tranches, the PRSUs are subject to a retention requirement through the first anniversary of achieving the shareholder return goal, and in the case of the final two tranches, the PRSUs are subject to a retention requirement through the term of the award. The PRSUs would vest in full upon termination of employment without cause, resignation for good reason, disability or death. For details regarding these PRSUs see “Executive Chairman Employment Agreement” on page 35 of this Form 10-K/A. |
(5) |
In connection with the Combination, Viatris granted Make-Whole RSU awards to Messrs. Goettler and Narula to replace the Pfizer equity awards forfeited by such NEOs. These Make-Whole RSU awards have the same vesting schedule as the original Pfizer awards and will cliff-vest on the third anniversary of the original grant date. On February 22, 2021, 3,499 RSUs vested for Mr. Goettler; Mr. Goettler is expected to vest in 53,958 RSUs on February 28, 2022; Mr. Goettler is expected to vest in 119,975 RSUs and Mr. Narula is expected to vest in 21,246 RSUs on February 27, 2023. In accordance with their terms, all of these awards would vest upon an involuntary termination without cause or a voluntary resignation for good reason that occurs within two years following a change in control (double-trigger awards) or upon the executive’s death or disability. For any other |
termination reason, these RSUs will be forfeited. For more information on the conversion of Pfizer awards into Viatris RSUs upon the closing of the Combination, see “Combination-Related Treatment of Pfizer’s 2020 Long-Term Incentive Grants to Legacy Upjohn Executives” on page 34 of this Form 10-K/A. |
(6) |
In connection with the Combination, all outstanding Mylan PRSUs were converted into Viatris RSU awards on a one-for-one basis assuming target level performance. On March 2, 2021, Mr. Malik vested in 73,225 shares and Mr. Mauro vested in 30,511 shares or 100% of their original target PRSUs. On March 2, 2022, Mr. Malik is expected to vest in 125,684 shares and Mr. Mauro is expected to vest in 58,288 shares which represents 100% of their original target PRSUs. On March 2, 2023, Mr. Malik is expected to vest in 197,369 shares and Mr. Mauro is expected to vest in 91,534 shares. In accordance with their terms, all of these awards would vest upon an involuntary termination without cause or a voluntary resignation for good reason that occurs within two years following a change in control (double-trigger awards) or upon the executive’s death or disability. The remaining converted Viatris RSUs are expected to vest upon the earliest to occur of (i) March 2, 2022 or March 2, 2023, as applicable, (ii) an involuntary termination without cause or a voluntary resignation for good reason within two years following a change in control, and (iii) the executive’s death or disability. For more information on the conversion of Mylan PRSUs into Viatris RSUs upon the closing of the Combination, see “Mylan’s 2020 Long-Term Incentive Grants to Legacy Mylan Executives” on page 33 of this Form 10-K/A. |
Option Awards |
Stock Awards |
|||||||||||||||||||
NAME |
Number of Shares Acquired on Exercise (#) |
Value Realized on Exercise ($) |
Number of Shares Acquired on Vesting (#) |
Value Realized on Vesting ($) |
||||||||||||||||
Robert J. Coury |
— |
— |
— |
— |
||||||||||||||||
Michael Goettler |
— |
— |
— |
— |
||||||||||||||||
Sanjeev Narula |
— |
— |
— |
— |
||||||||||||||||
Rajiv Malik |
— |
— |
91,544 |
1,548,563 |
||||||||||||||||
Anthony Mauro |
— |
— |
41,013 |
693,861 |
Name |
Plan Name (1) |
Number of Years of Credited Service (#) |
Present Value of Accumulated Benefit ($) (2) |
Payments During Last Fiscal Year ($) |
||||||||||
Robert J. Coury |
N/A |
N/A |
— |
— |
||||||||||
Michael Goettler |
N/A |
N/A |
— |
— |
||||||||||
Sanjeev Narula |
N/A |
N/A |
— |
— |
||||||||||
Rajiv Malik |
The Executive Plan for Rajiv Malik (3) |
N/A |
441,652 |
— |
||||||||||
Rajiv Malik |
Retirement Benefit Agreement (4) |
14 |
5,342,449 |
— |
||||||||||
Anthony Mauro |
N/A |
N/A |
— |
— |
(1) |
Messrs. Coury, Goettler, Narula, and Mauro are not party to a defined benefit pension arrangement. |
(2) |
See pages 38 and 42 of this Form 10-K/A for further information on the value of the accumulated pension benefit. |
(3) |
This is a deferred compensation plan established for the benefit of Mr. Malik. The Company is no longer contributing to this plan. |
(4) |
Retirement Benefit Agreement has been frozen. Mr. Malik will no longer accrue any additional benefits under the agreement. |
NAME |
Aggregate Balance at Last FYE |
Executive Contributions in Last FY |
Company Profit Sharing and Match Contributions in Last FY |
Aggregate Earnings (Loss) in Last FY |
Aggregate Withdrawals/ Distributions |
Aggregate Balance at FYE |
||||||||||||||||||
Robert J. Coury |
— |
39,633 |
39,633 |
6,530 |
— |
85,796 |
||||||||||||||||||
Michael Goettler |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
Sanjeev Narula |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
Rajiv Malik |
421,610 |
— |
152,198 |
135,440 |
— |
709,248 |
||||||||||||||||||
Anthony Mauro |
2,356,177 |
75,984 |
226,782 |
(145,112 |
) |
— |
2,513,831 |
Name |
Fees Earned or Paid in Cash ($) |
|
RSUs ($) (4) |
Option Awards ($) (4) |
All Other Compensation ($) (5) |
Total ($) |
||||||||||||
W. Don Cornwell (1) |
12,500 |
— |
— |
— |
12,500 |
|||||||||||||
JoEllen Lyons Dillon (2) |
197,500 |
165,011 |
50,008 |
25,898 |
438,417 |
|||||||||||||
Neil Dimick (2) |
185,000 |
165,011 |
50,008 |
29,538 |
429,556 |
|||||||||||||
Melina Higgins (2) |
177,500 |
165,011 |
50,008 |
23,177 |
415,695 |
|||||||||||||
James Kilts (1) |
12,500 |
— |
— |
— |
12,500 |
|||||||||||||
Harry A. Korman (2) |
148,750 |
165,011 |
50,008 |
14,791 |
378,559 |
|||||||||||||
Richard Mark (2) |
125,000 |
165,011 |
50,008 |
6,667 |
346,686 |
|||||||||||||
Mark W. Parrish (2) |
265,000 |
165,011 |
50,008 |
24,013 |
504,031 |
|||||||||||||
Ian Read (1) |
12,500 |
— |
— |
— |
12,500 |
|||||||||||||
Pauline van der Meer Mohr (2) |
130,000 |
(3) |
165,011 |
50,008 |
10,136 |
355,155 |
(1) |
The amounts reported reflect fees earned by Messrs. Cornwell, Kilts and Read, each of whom was elected to the Board in connection with the Combination, during the period beginning on November 16, 2020 and ending on December 31, 2020. Information regarding the compensation earned by each of them in 2020 for their service to Pfizer can be found in Pfizer’s 2021 Proxy Statement. |
(2) |
The amounts reported reflect fees earned by Messrs. Dimick, Korman, Mark and Parrish and Mses. Dillon, Higgins and van der Meer Mohr, a portion of which relates to his or her service on the Mylan Board from January 1, 2020 to November 16, 2020, and the remaining portion of which relates to his or her service on the Viatris Board following the Combination through December 31, 2020. |
(3) |
Fees earned by Ms. van der Meer Mohr were paid in Euros. Such amounts were converted into Euros using the monthly conversion rate in effect when each payment was made. |
(4) |
Represents the grant date fair value of the specific award granted to the Non-Employee Director. RSU awards and option awards granted in 2020 vested on March 2, 2021. For information regarding assumptions used in determining the amounts reflected in the table above, please refer to Note 13 to the Company’s Consolidated Financial Statements contained in the Original Filing. The number of unvested RSUs held by each of the Non-Employee Directors, as of December 31, 2020, were as follows: Ms. Dillon, 9,440; Mr. Dimick, 9,440; Ms. Higgins, 9,440; Mr. Korman, 9,440; Mr. Mark, 9,440; Mr. Parrish, 9,440; and Ms. van der Meer Mohr, 9,440. The aggregate number of shares subject to stock options held by the Non-Employee Directors, as of December 31, 2020, were as follows: Ms. Dillon, 24,780; Mr. Dimick, 24,780; Ms. Higgins, 31,403; Mr. Korman, 30,770; Mr. Mark, 12,260; Mr. Parrish, 24,780; and Ms. van der Meer Mohr, 13,949. |
(5) |
Represents a reimbursement for certain U.K. taxes that were incurred as a result of attendance at Mylan Board Meetings in the U.K. from 2015 through 2020. |
• |
The Chair of the Audit Committee received an additional fee of $30,000 per year; |
• |
The Chair of the Compensation Committee received an additional fee of $25,000 per year; |
• |
The Chair of the Compliance Committee received an additional fee of $30,000 per year; |
• |
The Chair of the Finance Committee received an additional fee of $25,000 per year; |
• |
The Chair of the Governance and Nominating Committee received an additional fee of $25,000 per year; |
• |
The Chair of the Risk Oversight Committee received an additional fee of $25,000 per year; |
• |
The Chair of the Science and Technology Committee received an additional fee of $25,000 per year; |
• |
Each member of the Executive Committee who was a Non-Employee Director received an additional fee of $30,000 per year; |
• |
Each member of the Audit Committee, Compensation Committee, Governance and Nominating Committee, and Risk Oversight Committee received an additional fee of $15,000 per year; |
• |
Each member of the Compliance Committee, Finance Committee, and each Non-Employee Director of the Science and Technology Committee received an additional fee of $10,000 per year; and |
• |
The Lead Independent Director received an additional fee of $60,000 per year. |
Element of Compensation |
Amount |
|||
Board Member Retainer |
$ |
150,000 |
||
Committee Chair Fee |
$25,000 |
|||
Executive Committee Member Fee |
$25,000 |
|||
Lead Independent Director Compensation |
$50,000 |
|||
Annual Equity Grant Value (RSUs) |
$ |
200,000 |
ITEM 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Name of Beneficial Owner |
Amount and Nature of Beneficial Ownership |
Options Exercisable and Restricted Shares Vesting within 60 days |
Percent of Class |
|||||||||
W. Don Cornwell |
3,000 |
— |
* |
|||||||||
Robert J. Coury |
1,383,587 |
462,465 |
(1) |
* |
||||||||
JoEllen Lyons Dillon |
25,067 |
(2) |
24,780 |
* |
||||||||
Neil Dimick |
60,703 |
24,780 |
* |
|||||||||
Michael Goettler |
6,081 |
— |
* |
|||||||||
Melina Higgins |
122,571 |
(3) |
31,403 |
* |
||||||||
James Kilts |
64,905 |
— |
* |
|||||||||
Harry A. Korman |
36,141 |
30,770 |
* |
|||||||||
Rajiv Malik |
722,701 |
(4) |
331,694 |
* |
||||||||
Richard A. Mark |
18,668 |
12,260 |
* |
|||||||||
Anthony Mauro |
168,124 |
(5) |
153,886 |
* |
||||||||
Sanjeev Narula |
7,314 |
— |
* |
|||||||||
Mark W. Parrish |
67,753 |
24,780 |
* |
|||||||||
Ian Read |
— |
— |
* |
|||||||||
Pauline van der Meer Mohr |
15,705 |
13,949 |
* |
|||||||||
All Directors and executive officers as a group (20 persons (6) ) |
2,739,662 |
1,239,883 |
* |
* |
Less than 1%. |
(1) |
Includes 250,000 RSUs scheduled to vest on June 24, 2021. |
(2) |
Includes 18 shares of common stock held by Ms. Dillon’s spouse. |
(3) |
Includes 74,000 shares of common stock held by Ms. Higgins’ spouse. |
(4) |
Includes 88,365 shares held in a grantor retained annuity trust of which Mr. Malik is the sole trustee and 460,319 shares held in an irrevocable trust for the benefit of Mr. Malik’s spouse and children. |
(5) |
Includes 5,574 shares held in Mr. Mauro’s 401(k) account. |
(6) |
Includes the 15 individuals set forth above as well as Messrs. Campbell, Cuneo, Ni, Roman and Taddese. |
Name and Address of Beneficial Owner |
Amount and Nature of Beneficial Ownership |
Percent of Class |
||||||
The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355 |
129,072,141 |
(1) |
10.68% |
|||||
BlackRock, Inc., 55 East 52nd Street, New York, NY 10055 |
89,526,414 |
(2) |
7.41% |
|||||
Wellington Management Group LLP and affiliates, 280 Congress Street, Boston, MA 02210 |
69,811,210 |
(3) |
5.78% |
(1) |
Based on the Schedule 13G filed by The Vanguard Group with the SEC on January 8, 2021, The Vanguard Group has sole voting power over 0 shares of common stock, shared voting power over 2,028,926 shares of common stock, sole dispositive power over 123,690,942 shares of common stock and shared dispositive power over 5,381,199 shares of common stock. |
(2) |
Based on the Schedule 13G filed by BlackRock, Inc. with the SEC on February 2, 2021, BlackRock, Inc. has sole voting power over 78,521,524 shares of common stock, shared voting power over 0 shares of common stock, sole dispositive power over 89,526,414 shares of common stock and shared dispositive power over 0 shares of common stock. |
(3) |
Based on the Schedule 13G filed by Wellington Management Group LLP, Wellington Group Holdings LLP, Wellington Investment Advisors Holdings LLP and Wellington Management Company LLP with the SEC on February 4, 2021, Wellington Management Group LLP has sole voting power over 0 shares of common stock, shared voting power over 67,990,306 shares of common stock, sole dispositive power over 0 shares of common stock and shared dispositive power over 69,811,210 shares of common stock; Wellington Group Holdings LLP has sole voting power over 0 shares of common stock, shared voting power over 67,990,306 shares of common stock, sole dispositive power over 0 shares of common stock and shared dispositive power over 69,811,210 shares of common stock; Wellington Investment Advisors Holdings LLP has sole voting power over 0 shares of common stock, shared voting power over 67,990,306 shares of common stock, sole dispositive power over 0 shares of common stock and shared dispositive power over 69,811,210 shares of common stock; and Wellington Management Company LLP has sole voting power over 0 shares of common stock, shared voting power over 67,257,978 shares of common stock, sole dispositive power over 0 shares of common stock and shared dispositive power over 67,280,712 shares of common stock. Based on the Schedule 13G, the securities as to which the Schedule 13G was filed are owned of record by clients of one or more investment advisers identified therein directly or indirectly owned by Wellington Management Group LLP. Those clients have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, such securities. |
ITEM 13. |
Certain Relationships and Related Transactions, and Director Independence |
ITEM 14. |
Principal Accounting Fees and Services |
In Millions |
||||||||
|
2020 |
2019 |
||||||
Audit Fees(1) |
$11.93 |
$10.29 |
||||||
Audit Related Fees (2) |
0.21 |
0.56 |
||||||
Tax Fees (3) |
2.38 |
0.22 |
||||||
All Other Fees (4) |
— |
0.04 |
||||||
|
|
|
|
|||||
Total Fees |
$14.52 |
$11.11 |
(1) |
Represents fees for professional services provided for the audit of the Company’s annual consolidated financial statements, the audit of the Company’s internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002, reviews of the Company’s quarterly condensed consolidated financial statements, audit services provided in connection with other statutory or regulatory filings, and accounting, reporting and disclosure matters. |
(2) |
Represents fees for assurance services related to the audit of the Company’s annual consolidated financial statements, including statutory audits of certain of the Company’s subsidiaries, the audit of the Company’s employee benefit plans, comfort letters, certain SEC filings and other agreed-upon procedures. |
(3) |
Represents fees primarily related to tax return preparation, tax planning and tax compliance support services, as well as fees related to tax advice provided in connection with the Combination. |
(4) |
Represents fees related primarily to advisory services. |
ITEM 15. |
Exhibits |
10.1 |
||
31.1 |
||
31.2 |
||
104 |
Cover Page Interactive Data File—the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101). | |
* |
Denotes management contract or compensatory plan or arrangement, and is a corrected filing of Exhibit 10.8 to the Original Filing. |
Date: April 30, 2021 |
VIATRIS INC. | |||
By: |
/s/ Sanjeev Narula | |||
Sanjeev Narula Chief Financial Officer (Principal Financial Officer) |
Nine months ended September 30, 2020 |
||||||||
(in millions) |
As Reported |
Adjusted for Currency Impact |
||||||
U.S. GAAP net earnings (loss) |
$ |
245.9 |
$ |
222.7 |
||||
Add/(deduct) adjustments: |
||||||||
Clean energy investments pre-tax loss |
37.4 |
37.4 |
||||||
Income tax provision (benefit) |
46.4 |
42.0 |
||||||
Interest expense (a) |
353.4 |
353.5 |
||||||
Depreciation and amortization (b) |
1,263.0 |
1,263.4 |
||||||
EBITDA |
$ |
1,946.1 |
$ |
1,919.0 |
||||
Add/(deduct) adjustments: |
||||||||
Share-based compensation expense (income) |
49.8 |
49.8 |
||||||
Litigation settlements and other contingencies, net |
36.5 |
36.5 |
||||||
Restructuring , acquisition related and other special items (c) |
606.6 |
609.5 |
||||||
Adjusted EBITDA |
$ |
2,639.0 |
$ |
2,614.8 |
(a) |
Includes clean energy investment financing and accretion of contingent consideration. |
(b) |
Includes purchase accounting related amortization. |
(c) |
Includes restructuring related costs, acquisition related costs (primarily including SG&A) and other special items, including cost of sales, research and development expense, selling, general and administrative expense, and other expense. |
Exhibit 10.1
December 3, 2020
Anthony Mauro
c/o Mylan Inc.
1000 Mylan Boulevard
Canonsburg, Pennsylvania 15317
Re: Retention Agreement
Dear Mr. Mauro:
As you know, Mylan N.V. (Mylan) and Upjohn Inc. (Upjohn) consummated the combination of Mylan and Upjohn pursuant to the Business Combination Agreement between Pfizer Inc., Upjohn, Mylan and the other parties thereto to create Viatris Inc. (the Company), a new champion for global health, on November 16, 2020. In recognition of your efforts in connection with the consummation of the combination (the Closing), and in order to incentivize you to remain employed with the Company and its affiliates, the Company hereby grants you the following retention bonus opportunity.
1. Retention Bonus Opportunity. If you remain an active full-time employee of the Company or its affiliates through the expiration of the 24-month period beginning on the day following the date of Closing (the Vesting Date), you will receive a cash payment equal to $6,553,800 (the Retention Bonus), representing the cash amount you would receive upon a termination of employment as of the Closing under Section 5(a) of your Transition and Succession Agreement with Mylan Inc., dated as of February 25, 2008, as has been or may be amended from time to time (the Transition and Succession Agreement), which will be paid to you in a lump sum on or about the first payroll date following the Vesting Date; provided, however, that in the event you receive any severance payments or severance benefits pursuant to Section 5(a) of your Transition and Succession Agreement, you will not be entitled to receive the Retention Bonus. In no event will you receive the Retention Bonus if your employment terminates for any reason prior to the Vesting Date. For the avoidance of doubt, in the event of a qualifying termination of employment (e.g., a termination without Cause, a termination due to Death or Disability or a resignation for Good Reason, each as defined in your Transition and Succession Agreement) on or prior to the 24-month anniversary of the date of Closing, you will remain eligible to receive the severance payments and benefits pursuant to your Transition and Succession Agreement, in accordance with the terms of such agreement, subject to your execution of a general release of claims against the Company and its affiliates and such release becoming effective and irrevocable no later than 60 days following the date of termination.
2. Section 280G Matters. The parties hereto acknowledge and agree that in consideration of the benefits provided under this letter agreement and for other good and valuable consideration, Section 8 of the Transition and Succession Agreement is hereby amended and restated in its entirety as follows:
Notwithstanding any other provision of this Agreement or any other plan, program, arrangement, agreement or policy with or maintained by any of the Affiliated Companies:
(a) In the event it is determined by an independent nationally recognized public accounting firm, which is engaged and paid for by the Company prior to the consummation of any transaction constituting a Change of Control (which for purposes of this Section 8 shall mean a change in ownership or control as determined in accordance with the regulations promulgated under Section 280G of the Code), which accounting firm shall in no event be the accounting firm for the entity seeking to effectuate the Change of Control (the Accountant), which determination shall be certified by the Accountant, that part or all of the consideration, compensation or benefits to be paid to the Executive under this Agreement or under any other plan, program, arrangement, agreement or policy with or maintained by any of the Affiliated Companies constitute parachute payments under Section 280G(b)(2) of the Code, then, if the aggregate present value of such parachute payments, singularly or together with the aggregate present value of any consideration, compensation or benefits to be paid to the Executive under any other plan, arrangement or agreement which constitute parachute payments (collectively, the Parachute Amount) exceeds the maximum amount that would not give rise to any liability under Section 4999 of the Code, the amounts constituting parachute payments which would otherwise be payable to the Executive or for his benefit shall be reduced to the maximum amount that would not give rise to any liability under Section 4999 of the Code (the Reduced Amount); provided that such amounts shall not be so reduced if the Accountant determines that without such reduction the Executive would be entitled to receive and retain, on a net after-tax basis (including, without limitation, any excise taxes payable under Section 4999 of the Code), an amount which is greater than the amount, on a net after-tax basis, that the Executive would be entitled to retain upon receipt of the Reduced Amount. In connection with making determinations under this Section 8(a), the Accountant shall take into account any positions to mitigate any excise taxes payable under Section 4999 of the Code, such as the value of any reasonable compensation for services to be rendered by the Executive before or after the Change of Control, including any amounts payable to the Executive following the Executives Termination of Employment with respect to any non-competition provisions that may apply to the Executive, and the Company shall cooperate in the valuation of any such services, including any non-competition provisions.
(b) If the determination made pursuant to Section 8(a) results in a reduction of the payments that would otherwise be paid to the Executive except for the application of Section 8(a), the Company shall promptly give the Executive notice of such determination. Such reduction in payments shall be first applied to reduce any cash payments that the Executive would otherwise be entitled to receive (whether pursuant to this Agreement or otherwise) and shall thereafter be applied to reduce other payments and benefits, in each case, in reverse order beginning with the
payments or benefits that are to be paid the furthest in time from the date of such determination, unless, to the extent permitted by Section 409A of the Code, the Executive elects to have the reduction in payments applied in a different order; provided that, in no event may such payments be reduced in a manner that would result in subjecting the Executive to additional taxation under Section 409A of the Code.
(c) As a result of the uncertainty in the application of Sections 280G and 4999 of the Code at the time of a determination hereunder, it is possible that amounts will have been paid or distributed by the Company to or for the Executives benefit pursuant to this Agreement or under any other plan, program, arrangement, agreement or policy with or maintained by any of the Affiliated Companies which should not have been so paid or distributed (each, an Overpayment) or that additional amounts which will have not been paid or distributed by the Company to or for the Executives benefit pursuant to this Agreement or under any other plan, program, arrangement, agreement or policy with or maintained by any of the Affiliated Companies could have been so paid or distributed (each, an Underpayment), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the Accountant, based upon the assertion of a deficiency by the Internal Revenue Service against either the Company or the Executive which the Accountant believes has a high probability of success, determines that an Overpayment has been made, any such Overpayment paid or distributed by the Company to or for the Executives benefit shall be repaid by the Executive to the Company together with interest at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code; provided, however, that no such repayment shall be required if and to the extent such deemed repayment would not either reduce the amount on which the Executive is subject to tax under Sections 1 and 4999 of the Code or generate a refund of such taxes. In the event that the Accountant, based on controlling precedent or substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the Executives benefit together with interest at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code.
3. Employee Covenants. For the avoidance of doubt, you shall remain bound by the confidentiality, non-solicitation, non-competition and any other restrictive covenants to which you are subject pursuant to the Transition and Succession Agreement, the Executive Employment Agreement between you and Mylan Inc., dated as of February 25, 2019, and the Agreement Relating to Patents, Copyrights, Inventions, Confidentiality and Proprietary Information between you and Mylan Inc. and any and all amendments and supplements thereto, and any other plans or agreements of or between you and the Company or any of its affiliates.
4. Withholding; Not an Employment Agreement. Please note that the Retention Bonus will not be taken into consideration for any purpose under any pay-based benefit, compensation or severance plan or program maintained by the Company. Nothing herein shall constitute an employment contract or employment agreement or a guarantee of continued employment. All payments hereunder are subject to withholdings and deductions as required by applicable law. You are solely liable for all taxes, including federal, state, local or foreign income, employment and social security taxes, and tax penalties that may arise in connection with this letter agreement (including any taxes arising under Section 409A
of the Internal Revenue Code of 1986, as amended (the Code)), and none of the Company or its affiliates shall have any obligation to indemnify or otherwise hold you harmless from any or all such taxes.
5. Section 409A. It is intended that the provisions of this letter agreement comply with Section 409A of the Code, and all provisions of this letter agreement shall be construed and interpreted in a manner consistent with Section 409A of the Code.
6. Governing Law. This letter agreement shall be governed by, construed and interpreted in accordance with, the laws of the State of Pennsylvania, without regard to its principles of conflicts of laws.
7. Amendments. This letter agreement may not be modified or amended except in writing signed by each of the parties hereto.
[remainder of page intentionally left blank]
We thank you for your dedicated service and look forward to your continued service during this exciting time.
Very truly yours, | ||
VIATRIS INC. | ||
By: | /s/ Brian Roman | |
Name: | Brian Roman | |
Title: | Global General Counsel |
Acknowledged and accepted: |
/s/ Anthony Mauro |
ANTHONY MAURO |
Exhibit 31.1
Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
I, Michael Goettler, certify that:
1. I have reviewed this Form 10-K/A of Viatris Inc.; and
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
/s/ Michael Goettler |
Michael Goettler |
Chief Executive Officer |
(Principal Executive Officer) |
Date: April 30, 2021 |
Exhibit 31.2
Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
I, Sanjeev Narula, certify that:
1. I have reviewed this Form 10-K/A of Viatris Inc.; and
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
/s/ Sanjeev Narula |
Sanjeev Narula |
Chief Financial Officer |
(Principal Financial Officer) |
Date: April 30, 2021 |