QUEST DIAGNOSTICS INC
For the period ended May 15, 2025. Filed Apr 4, 2025.
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May 15, 2025 · Filed Apr 4, 2025
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
| [_] | Preliminary Proxy Statement |
|---|---|
| [_] | CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (as permitted by Rule 14a-6(e)(2)) |
| [X] | Definitive Proxy Statement |
| [_] | Definitive Additional Materials |
| [_] | Soliciting Material Pursuant to Section 240.14a-12 |
Quest Diagnostics Incorporated
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| [X] | No fee required |
|---|---|
| [_] | Fee paid previously with preliminary materials |
| [_] | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
Notice of 2025 Annual Meeting of Stockholders
and
Proxy Statement
April 4, 2025
The Quest Way
| Purpose Why we exist | Working together to create a healthier world, one life at a time | |
| We help people make the best decisions to improve health by providing high-quality, innovative, convenient and affordable diagnostic testing insights and services using our scale and extensive reach | ||
| Strategy How we grow | ● | Collaborating with healthcare providers and partners to leverage our broad access | |
| ● | Offering an industry-leading menu of testing and other services | ||
| ● | Leveraging our data assets and services to improve population health and enable value-based care | ||
| ● | Continuously improving our quality and efficiency by leveraging the Quest Management System and by embracing innovative technologies, such as automation and artificial intelligence (“AI”) | ||
| Who we serve: physicians, hospitals, patients and consumers, health plans, employers, emerging retail healthcare providers, government agencies, pharmaceutical companies and other commercial clinical laboratories | |||
| Culture How we work | Customer first, Care, Collaboration, Continuous improvement, Curiosity |
Notice of 2025 Annual Meeting of StockholdersQuest Diagnostics Incorporated One Insights Drive Clifton, New Jersey May 15, 2025, 10:30 a.m. Eastern Time
April 4, 2025
Dear Fellow Stockholder:
It is my pleasure to invite you to attend Quest Diagnostics’ 2025 Annual Meeting of Stockholders (the “Annual Meeting”). At the Annual Meeting, stockholders will vote on the following, in addition to any other business as may properly come before the Annual Meeting or any adjournment or postponement thereof:
| ● | to elect ten directors; |
| ● | to approve, on an advisory basis, the executive compensation disclosed in the accompanying proxy statement; |
| ● | to ratify the appointment of our independent registered public accounting firm for 2025; and |
| ● | to consider a stockholder proposal, as described in the accompanying proxy statement, if properly presented at the Annual Meeting. |
Attendance at the Annual Meeting is limited to stockholders at the close of business on March 17, 2025, or their duly appointed proxy holder.
We enclose our proxy statement, our Annual Report and a proxy card; distribution of these materials is scheduled to begin on April 4, 2025. Your vote is very important. We urge you to submit your proxy even if you plan to attend the Annual Meeting. Most stockholders may submit a proxy via mail, telephone or the Internet. Instructions on how to submit your proxy are included with your proxy card and these proxy materials. Please submit your proxy promptly.
Thank you for your continued support of Quest Diagnostics.
Sincerely,
James E. Davis
Chairman of the Board,
Chief Executive Officer and President
PROXY SUMMARY
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.
2025 Annual Meeting of Stockholders
| Time and Date: | 10:30 a.m. Eastern Time, May 15, 2025 |
|---|---|
| Place: | One Insights Drive, Clifton, New Jersey |
| Record date: | March 17, 2025 |
| Voting: | Record date stockholders only: One vote per share |
| Meeting Agenda | Board Recommendation | |
| 1. | To elect ten directors | FOR EACH NOMINEE |
| 2. | To approve, on an advisory basis, the compensation of our named executive officers disclosed in our Proxy Statement | FOR |
| 3. | To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2025 | FOR |
| 4. | To consider a stockholder proposal regarding calling a special meeting of stockholders, if properly presented at the Annual Meeting | AGAINST |
2026 Annual Meeting of Stockholders
Stockholder proposals submitted pursuant to SEC Rule 14a-8 must be received by Quest Diagnostics Incorporated (“Quest Diagnostics,” the “Company,” “we” or “our”) by December 5, 2025.
Notice of stockholder proposals outside of SEC Rule 14a-8, including nominations (other than proxy access nominations) for the Board of Directors (the “Board”), must be received by the Company no earlier than January 15, 2026 and no later than February 14, 2026 and must comply with the requirements set forth in our by-laws. In addition to the requirements set forth in our by-laws, stockholders who intend to solicit proxies for nominations for election to the Board other than the Company’s nominees in reliance on the universal proxy rules (Rule 14a-19 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) must also comply with the additional requirements of Rule 14a-19.
Notice of proxy access director nominations must be received by the Company no earlier than November 5, 2025 and no later than December 5, 2025.
| i | 2025 Proxy Statement |
Board Nominees
The following table provides summary information about our director nominees.
| Name | Age | Director Since | Occupation | Current Committee Memberships | Other Public Company Boards |
|---|---|---|---|---|---|
| Robert B. Carter | 65 | 2024 | Retired Executive Vice President and Chief Information Officer, FedEx Corporation | AFC CS | ● N/A |
| James E. Davis | 62 | 2022 | Chairman, Chief Executive Officer and President, Quest Diagnostics Incorporated | EX | ● N/A |
| Luis A. Diaz, Jr., M.D. | 54 | 2023 | Head of the Division of Solid Tumor Oncology, Memorial Sloan Kettering Cancer Center | CS QC | ● N/A |
| Tracey C. Doi | 64 | 2021 | Retired Chief Financial Officer and Group Vice President of Toyota Motor North America, Inc. | AC/FE QC | ● Pentair plc |
| Vicky B. Gregg | 70 | 2014 | Cofounder/Partner, Guidon Partners LLC and Retired CEO, Blue Cross and Blue Shield of Tennessee | CC GC QC (Chair) | ● Acadia Healthcare Company |
| Wright L. Lassiter III | 61 | 2020 | CEO, CommonSpirit Health | AC QC | ● Fortive Corporation |
| Timothy L. Main | 67 | 2014 | Non-Executive Chairman of WNS (Holdings) Limited | AC CS (Chair) GC | ● WNS (Holdings) Limited |
| Denise M. Morrison | 71 | 2019 | Founder, Denise Morrison & Associates and Retired President and CEO, Campbell Soup Company | CC(Chair) CS GC | ● MetLife, Inc. ● Visa, Inc. |
| Gary M. Pfeiffer | 75 | 2004 | Retired Senior Vice President and Chief Financial Officer, E.I. du Pont de Nemours and Company | AC/FE (Chair) CC EX GC | ● N/A |
| Timothy M. Ring, Lead Independent Director | 67 | 2011 | Retired Chairman and CEO, C. R. Bard, Inc. | CC EX (Chair) GC (Chair) | ● Becton, Dickinson and Company |
| AC | Audit and Finance Committee | CC | Compensation and Leadership Development Committee |
|---|---|---|---|
| CS | Cybersecurity Committee | EX | Executive Committee |
| GC | Governance Committee | QC | Quality and Compliance Committee |
| FE | Financial Expert | ||
| 2025 Proxy Statement | ii |
2024 Executive Compensation Highlights
| Type · Form · Percentage of Equity Award for Named Executive Officers (%) · Terms | |||||
|---|---|---|---|---|---|
| Equity | ● | Performance Shares | 50 | ● | Performance metrics for 2024-2026 performance cycle: revenue growth, 50%; average return on invested capital, 30%; relative total stockholder return (relative to S&P 500 Healthcare Index companies), 20% |
| ● · Vest after 3-year performance period | |||||
| ● | Stock Options | 25 | ● | 3-year ratable vesting | |
| ● | Restricted Share Units (“RSUs”) | 25 | ● | 3-year ratable vesting | |
| Cash | ● | Salary | ● | Reviewed and approved annually | |
| ● · Annual Incentive Compensation · ● · Based on financial and non-financial goals | |||||
| Retirement | ● | 401(k) Plan | ● | Company matching contributions | |
| ● · Supplemental Deferred Compensation Plan · ● · Company matching contributions | |||||
Our Board is firmly committed to pay for performance. The table above outlines the main components of our compensation program for executive officers in 2024. The objectives of our program are to attract and retain talented executives who have the skills and experience required to help us achieve our strategic objectives, and to align the interests of our executives to those of our stockholders, in each case to advance the long-term interests of our stockholders. The compensation opportunity for our named executive officers is directly tied to company performance, including both financial and non-financial results, and individual performance. We are making changes to further emphasize profitable earnings growth in the 2025 annual incentive program, as highlighted in the Compensation Discussion and Analysis.
The average 2024 annual incentive payout for our named executive officers on our annual cash incentives under the Senior Management Incentive Plan (“SMIP”) was 97% of target. Payout on performance shares for the 3-year performance period ended December 31, 2024 was 157% of target. The following table summarizes annual incentive plan and performance share payouts for the two most recent performance periods for our named executive officers.
| Annual Incentive Payout (% of target) | Performance Share Payout for 3-year performance period (% of target) | |
|---|---|---|
| Performance period ended December 31, 2024 | 97 (average) | 157 |
| Performance period ended December 31, 2023 | 78 (average) | 186 |
Our Compensation Discussion and Analysis, which includes a discussion of our program’s “Best Practices,” begins on page 31. The 2024 compensation of our named executive officers is set forth in tables beginning at page 45.
| iii | 2025 Proxy Statement |
2024 Business Performance Highlights
Leveraging our Capabilities and Collaborating
| ● | We increased revenues by 6.7% to $9.87 billion. |
|---|---|
| ● | We generated diluted earnings per share (“EPS”) of $7.69 and adjusted diluted EPS of $8.93. |
| ● | Our strong relationships with health plans were a key driver of growth in 2024. We extended our health plan access to over 90% of U.S. insured lives nationwide, including in new geographies through collaborations with Elevance Health and Sentara Health Plans, which took effect January 1, 2025. |
| ● | We continued to work with health systems to help them execute their lab strategy. In 2024, our Professional Laboratory Services offering generated approximately $800 million in revenues and management fees supporting hospitals in the operation of their own labs. |
| ● | In Advanced Diagnostics, we continued to invest to further differentiate and grow our advanced diagnostics value proposition. We grew our Advanced Diagnostics portfolio through the addition of the sensitive p-tau217 and p-tau181 biomarkers to our AD-Detect blood-based test menu for assessing Alzheimer’s disease risk and launching the first H5 avian influenza test from a commercial laboratory based on a pandemic preparedness contract from the U.S. Centers for Disease Control and Prevention. |
| ● | In 2023, we acquired Haystack Oncology, Inc., a cancer testing company that developed a highly sensitive testing technology for detecting minimal-residual disease (“MRD”). In 2024, we engaged approximately 75 academic, health system and community oncology centers in our Haystack MRD Early Experience Program, which provided oncologists with advanced access to our Haystack MRD blood test. |
| ● | Our Consumer-initiated testing service, QuestHealth.com, generated strong growth in 2024, increasing total revenues approximately 40%. We expanded our consumer-initiated test platform to include approximately 135 tests and increased to more than 39 million registered users in our MyQuest® health portal at the end of 2024. |
| ● | We consummated eight acquisitions, including LifeLabs in Canada and four hospital outreach lab acquisitions. |
Continuous Improvement
| ● | We delivered our Invigorate cost excellence program goal of annual savings and productivity improvements of 3% of our costs. |
|---|---|
| ● | We continue to make progress in using front end automation to enhance specimen processing. We automated core laboratory processes at three additional major regional laboratories, improving quality, customer experiences and productivity. |
| ● | Improving workforce engagement continued to be a major priority and our retention rates significantly improved across multiple job categories. |
| ● | We expanded our use of artificial intelligence (“AI”) to continue to help drive innovation and operational efficiency. For example, we extended our AI capabilities in microbiology to include the ability to segregate out specimens with no evidence of microbial growth so our medical scientists can concentrate on reviewing those with the greatest likelihood of disease. |
| ● | We are leveraging automation and AI to improve productivity and quality across our entire value chain, not just in the laboratory. We continued to broaden our use of AI in customer service to help our representatives access answers more quickly, improving their effectiveness and service quality. Other areas of focus include reducing denials and patient concessions, enhancing the digital experience, and selecting and retaining talent. |
Disciplined Capital Deployment
| ● | In February 2025, we announced the fourteenth increase in our quarterly cash dividend since the beginning of 2012, increasing the dividend by approximately 6.7%, from $0.75 per share of common stock to $0.80 per share. |
|---|---|
| ● | We repurchased approximately $150 million of our common stock in 2024. |
| ● | Through the end of 2024 since the beginning of 2012 we have returned approximately $11.0 billion to stockholders: $7.7 billion through common stock repurchases (including $1.8 billion associated with pre-tax proceeds from divestitures), and $3.3 billion through dividends. |
| 2025 Proxy Statement | iv |
| PROXY STATEMENT | QUEST DIAGNOSTICS INCORPORATED Contents |
|---|
| Proxy Summary | i |
|---|---|
| Information About Our Corporate Governance | 1 |
| Proposal No. 1—Election of Directors | 1 |
| Governance Practices | 7 |
| Corporate Responsibility | 8 |
| Director Independence | 8 |
| Stockholder Access and Outreach | 9 |
| Board Nomination Process | 10 |
| Board Committees | 12 |
| Board Leadership Structure | 17 |
| Board Oversight of Company Culture and Human Capital | 18 |
| Board, Committee and CEO Evaluation Process | 18 |
| Board Role in Risk Oversight | 19 |
| Related Person Transactions | 20 |
| Policies Regarding Insider Trading, Window Periods and Hedging and Pledging our Common Stock | 20 |
| 2024 Director Compensation Table | 21 |
| Stock Ownership Information | 23 |
| Information Regarding Executive Compensation | 25 |
| Proposal No. 2—Advisory Resolution to Approve Executive Officer Compensation | 25 |
| Compensation Discussion and Analysis | 25 |
| Executive Summary | 25 |
| Executive Compensation Philosophy | 28 |
| Independent Compensation Consultant | 31 |
| Say on Pay, Stockholder Outreach, and Feedback | 32 |
| Setting Executive Compensation | 32 |
| Pay Components | 33 |
| Base Salary | 33 |
| Annual Cash Incentive Compensation | 34 |
| Long-Term Incentive Awards | 38 |
| 2025 Actions | 42 |
| Other | 42 |
| Risk Assessment | 43 |
| Share Ownership and Retention Guidelines | 44 |
| Policies Regarding Hedging or Pledging our Common Stock | 44 |
| Compensation and Leadership Development Committee Report | 44 |
| 2024 Summary Compensation Table | 45 |
| 2024 Grants of Plan-Based Awards Table | 46 |
| Additional Information Regarding 2024 Summary Compensation and Grants of Plan-Based Awards Tables | 46 |
| Outstanding Equity Awards at 2024 Fiscal Year-End | 48 |
| 2024 Option Exercises and Stock Vested Table | 49 |
| 2024 Nonqualified Deferred Compensation Table | 49 |
| 2024 Potential Payments Upon Termination or Change in Control | 50 |
| Pay Ratio | 53 |
| Equity Compensation Plan Information | 53 |
| Pay Versus Performance | 54 |
| Description of Pay Versus Performance Relationships | 60 |
| Audit | 63 |
| Proposal No. 3—Ratification of Appointment of Independent Registered Public Accounting Firm | 63 |
| Pre-Approval of Audit and Permissible Non-Audit Services | 64 |
| Fees and Services of PwC | 64 |
| Audit and Finance Committee Report | 65 |
| Additional Action Items | 66 |
| Proposal No. 4—Stockholder Proposal Regarding Calling a Special Meeting of Stockholders | 66 |
| Frequently Asked Questions | 69 |
| Annex A Reconciliation of Non-GAAP and GAAP Information | A-1 |
| Annex B Performance Share Units and Annual Incentive Compensation Payouts | B-1 |
2025 Proxy Statement
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.