Organon & Co.
For the period ended Jun 10, 2025. Filed Apr 25, 2025.
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What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
Jun 10, 2025 · Filed Apr 25, 2025
Contents
Pay vs. Performance
In accordance with Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between compensation of our chief executive officer (“CEO” as used in the tables) and other named executive officers (“other NEOs”) and certain financial performance measures of Organon. For further information on Organon’s pay-for-performance philosophy and how executive compensation aligns with the company’s performance, refer to the CD&A section of this proxy statement.
Pay vs. Performance Table
| AverageSummary · Average · Value of Initial Fixed $100Investment Based On: | ||||||||
|---|---|---|---|---|---|---|---|---|
| Year | SummaryCompensationTable Total forCEO(1&2) | CompensationActually Paidto CEO(1&3) | CompensationTable Total forOtherNEOs(1&2) | CompensationActually Paidto OtherNEOs(1&3) | TotalShareholderReturn(4) | Peer GroupTotalShareholderReturn(4) | NetIncome(millions)(5) | AdjustedEBITDA(millions)(6) |
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) |
| 2024 | $17,117,424 | $16,377,730 | $4,418,474 | $4,221,915 | $48.05 | $129.75 | $864 | $2,109 |
| 2023 | $14,832,272 | $(553,768) | $4,067,136 | $761,713 | $43.71 | $126.39 | $1,023 | $2,000 |
| 2022 | $13,532,980 | $11,727,234 | $4,131,865 | $3,726,599 | $79.65 | $120.52 | $917 | $2,232 |
| 2021 | $18,550,737 | $14,257,800 | $5,306,233 | $4,039,153 | $83.72 | $114.88 | $1,351 | $1,441 |
| 1. | Kevin Ali served as the company’s CEO for the entirety of 2021, 2022, 2023, and 2024 and the company’s other NEOs for the applicable years were as follows: |
| Year | Other NEOs |
| 2024 | Matthew Walsh, Juan Camilo Arjona Ferreira, M.D., Susanne Fiedler, Joseph Morrissey |
| 2023 | Matthew Walsh, Susanne Fiedler, Joseph Morrissey, Kirke Weaver, Sandra Milligan, M.D. |
| 2022 | Matthew Walsh, Susanne Fiedler, Sandra Milligan, M.D., Joseph Morrissey |
| 2021 | Matthew Walsh, Susanne Fiedler, Sandra Milligan, M.D., Deborah Telman |
| 2. | Amounts reported in this column represent (i) the total compensation reported in the Summary Compensation Table for the applicable year in the case of Mr. Ali and (ii) the average of the total compensation reported in the Summary Compensation Table for the applicable year for our other NEOs. |
| 3. | To calculate compensation actually paid (“CAP”), adjustments were made to the amounts reported in the Summary Compensation Table for the applicable year. A reconciliation of the adjustments for Mr. Ali and for the average adjustments of the other NEOs for 2024 is set forth in the following table. For prior year reconciliations, please refer to the Pay vs Performance section of our 2024 Proxy Statement. Amounts do not reflect actual compensation earned by or paid to our NEOs during the applicable year. |
Reconciliation from Summary Compensation Table to Compensation Actually Paid
| CEO | Other NEO Average(f) | |
|---|---|---|
| 2024 | 2024 | |
| Summary Compensation Table Total(a) | $17,117,424 | $4,418,474 |
| Less: Reported Fair Value of Equity Awards(b) | $11,910,552 | $2,652,784 |
| Less: Reported Change in Pension Value(c) | $— | $59,439 |
| Add: Year-End Fair Value of Equity Awards Granted in the Year(d) | $9,562,193 | $2,129,746 |
| Add: Change in Fair Value (from Prior Year-End to Vesting Date) of Equity Awards Granted in Prior Years that Vested in the Year(d) | $1,356,184 | $258,948 |
| Add: Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years(d) | $(599,551) | $(103,417) |
| Add: Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | $852,032 | $184,466 |
| Add: Service Cost and Prior Service Cost For Benefit and Actuarial Pension Plans(e) | $— | $45,920 |
| Compensation Actually Paid | $16,377,730 | $4,221,915 |
| (a) | Represents “Total Compensation” as reported in the Summary Compensation Table for the indicated fiscal year. With respect to the other NEOs, amounts shown represent averages. |
|---|---|
| (b) | Represents the aggregate grant date fair value reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the indicated year. |
| (c) | Represents the aggregate change in actuarial present value of the accumulated benefit under all defined benefit and actuarial pension plans reported in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column in the Summary Compensation Table for the indicated year, calculated using the same methodology as used in the company’s financial statements under generally accepted accounting principles. |
| (d) | In accordance with Item 402(v) requirements, the fair values of unvested and outstanding equity awards to our NEOs were remeasured starting with the date that Organon’s common stock became publicly traded in June 2021, and subsequently as of each vesting date and as of the end of the indicated fiscal year, as applicable. |
| For options, a lattice valuation model was used to estimate the fair value as of the various measurement dates. For market-based PSUs, fair values were estimated using a Monte Carlo simulation model. The assumptions used in calculating the fair value of the equity awards did not differ in any material respect from the assumptions used to calculate the grant date fair value of the awards as reported in the Summary Compensation Table, except that the fair value calculations of (i) the options granted on or between May 1, 2020 and March 31, 2024 used an expected term between 6.40 – 7.29 years in 2024, as compared to an expected life of 5.89 years used to calculate the grant date fair value of such awards, and a dividend yield between 5.4% and 7.2% in 2024, as compared to a yield between 3.1% - 6.0% used to calculate the grant date fair value of the awards, and (ii) for the 2022 and 2023 performance awards that vest based on a Free Cash Flow metric, the PSU awards assumed a payout below target at the end of 2024 as compared to the grant date fair value calculations which assumed a payout at target. For performance awards granted in 2024, the Free Cash Flow metric payout assumption remains at target and the Cumulative Constant Currency metric payout was above target. For more information, see “Stock-Based Compensation Plans” in the Notes to Consolidated Financial Statements contained in the company’s Annual Report on Form 10-K for the corresponding fiscal year, where we explain assumptions made in valuing equity awards at grant. | |
| (e) | Represents the sum of the actuarial present value of the benefits under all defined benefit and actuarial pension plans attributable to services rendered during the indicated fiscal year, calculated using the same methodology as used in the company’s financial statements under generally accepted accounting principles. |
| (f) | See footnote 1 above for the other NEOs included in the average for the indicated year. |
| 4. | The amounts reflect the cumulative total shareholder return of Organon common stock (column (f)) and the NYSE Arca Pharmaceutical Index (column (g)) at the end of each fiscal year. In each case, the comparison assumes an initial investment of $100 on June 3, 2021 (the day on which regular-way trading of Organon common stock commenced) in our common stock, and reinvestment of dividends. Historic stock price performance is not necessarily indicative of future stock price performance. Because we were not an independent company prior to the spinoff, we have assumed a $100 investment as of the first day of regular trading of our stock following the spinoff. |
| 5. | The dollar amounts reported represent the net income reflected in Organon’s audited financial statements for the applicable year. |
| 6. | While we use numerous financial and non-financial performance measures to evaluate performance under our compensation programs, Adjusted EBITDA is the financial performance measure that, in Organon’s assessment, represents the most important performance measure used to link compensation actually paid to NEOs to company performance in 2024. See Appendix A of this proxy statement for a reconciliation of 2024 Adjusted EBITDA used for purposes of determining the AIP, a non-GAAP measure, to the most directly comparable GAAP measure. The Adjusted EBITDA reported within this table differs from the Adjusted EBITDA amount reported in our fiscal year end earnings release filed with the SEC, because the Adjusted EBITDA reported herein was adjusted to exclude the impact of foreign currency exchange rates and certain business development expenses. The amount reported for 2021 ($1.441B) represents the Adjusted EBITDA for the post-spin period from June to December 2021. |
Pay vs. Performance
Pay vs. Performance Table Discussion and Analysis
In accordance with Item 402(v) requirements, we are providing the following charts to describe the relationships between information presented in the Pay vs. Performance table above.
Relationship Between Compensation Actually Paid (CAP) to CEO and Average CAP to Other NEOs vs. Cumulative TSR of Company and the Peer Group
The following chart shows the relationship between CAP to our CEO and average CAP to our other NEOs, and Organon’s TSR, as well as the relationship between Organon’s TSR and the TSR of our peer group (the NYSE Arca Pharmaceutical Index).
Relationship Between CAP to CEO and Average CAP to Other NEOs vs. Net Income and Adjusted EBITDA
The following chart shows the relationship between CAP to our CEO and average CAP to our other NEOs, and Organon’s Net Income and Adjusted EBITDA. Organon does not currently utilize Net Income as a metric in any of our incentive programs for our CEO and other NEOs. Meanwhile, Adjusted EBITDA is a component of the AIP and serves as a threshold for the Free Cash Flow and Cumulative Constant Currency portions of the 2024 PSUs.
| (1) | 2021 Adjusted EBITDA of $1,441M used for purposes of determining the AIP awards only reflects the post-spin period from June to December 2021. |
Most Important Company Performance Measures for Determining Executive Compensation
Below is a list of financial performance measures, which in the company’s assessment represent the most important financial performance measures used by the company to link CAP to the NEOs for 2024. Please see the CD&A (beginning on page 52) for a further description of these metrics and how they are used in the company’s executive compensation program, including the AIP and 2024 PSUs:
· Adjusted EBITDA
· Constant Currency Revenue
· Free Cash Flow
· Relative TSR
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.