HENRY SCHEIN INC
For the period ended May 22, 2025. Filed Apr 9, 2025.
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May 22, 2025 · Filed Apr 9, 2025
Contents
Components of the Executive Compensation Program
The Company’s executive compensation program consists of four main components: (i) base salary; (ii) annual incentive compensation opportunity; (iii) long-term equity-based awards and (iv) benefits and perquisites. As described below, annual and long-term performance-based awards represent a major portion of total compensation for the Named Executive Officers. The combination of these four components of our executive compensation program is designed to balance Company annual operating objectives and earnings performance with longer-term Company stockholder value creation goals.
A major portion of total compensation for our Named Executive Officers is placed at risk through annual and long-term incentives tied to the achievement of performance metrics and/or stock appreciation. In fiscal 2024, the sum of annual incentive compensation (under the heading“Non-Equity Incentive Plan Compensation”), PSUs (based on target achievement) and RSUs represented (i) 82% of the total compensation for our CEO and (ii) between 67% and 77% of the total compensation for the Named Executive Officers (other than our CEO). We seek to provide competitive compensation that is commensurate with performance. We generally target compensation at the median of the market and calibrate both annual and long-term incentive opportunities to generate less-than-median awards when goals are not fully achieved and greater-than-median awards when goals are exceeded. (See “Pay Levels and Benchmarking” set forth below.)
Base Salary. The Compensation Committee annually reviews and approves base salary for the Named Executive Officers.
Annual Incentive Compensation. The components of the Company’s annual incentive compensation (i.e., bonuses under the HSIP) are set by the Compensation Committee annually and are designed to reward the achievement ofpre-established performance goals.
Each executive officer’s annual incentive compensation under the HSIP (other than Mr. Bergman’s) is based on the following weighted components:
| • | the Company’s corporate financial (i.e., EPS) goal (subject to the adjustments as described herein); |
| • | the executive officer’s specific business unit financial goals and individual performance goals; and |
| • | financial goals and performance objectives set forth in the Company’s strategic scorecard, which goals are directly tied to the Company achieving its then-current three-year strategic plan. |
Mr. Bergman’s annual incentive compensation under the HSIP is based on the following weighted components:
| • | the Company’s corporate financial (i.e., EPS) goal (subject to the adjustments as described herein); and |
| • | financial goals and performance objectives set forth in the Company’s strategic scorecard which goals are directly tied to the Company achieving its then-current three-year strategic plan. |
Long-Term Equity-Based Awards. The Compensation Committee approved equity-based awards for fiscal 2024 (“2024 LTIP”) under the Company’s Long Term Incentive Program under the Henry Schein, Inc. 2024 Stock Incentive Plan as amended and restated as of May 21, 2024 (the “2024 Stock Incentive Plan”) that contained a strong performance-based focus and consisted of PSUs and time-vested restricted stock units. Consistent with the approach taken in fiscal 2023, the following approach was taken with respect to the 2024 LTIP grants:
| • | In fiscal 2024, our CEO received 65% PSUs and 35% RSUs and our other Named Executive Officers received 50% PSUs and 50% RSUs; and |
| • | PSUs granted in fiscal 2024 to participants, including the Named Executive Officers, are tied to the Company’s (i) EPS performance over the three-year performance period (weighted at 75% of the total PSU award) and (ii) return on invested capital performance over the three-year performance period (weighted at 25% of the total PSU award), in each case subject to any potential required adjustments as described below. When the Company successfully achieves its three-year cumulative EPS goal (“EPS goal”) and its three-year average return on invested capital goal (“ROIC goal”), participants, including the Named Executive Officers, are paid shares under their PSUs at target levels. When the Company’s performance exceeds the EPS goal and/or the ROIC goal, participants, including the Named Executive Officers, receive additional shares under their PSUs (with respect to the applicable weighted component of the PSU that exceeded the goal) up to a 200% maximum payout. When the |
Company’s performance does not meet the EPS goal and/or the ROIC goal, shares paid to participants (including the Named Executive Officers) under their PSUs (with respect to the applicable weighted component of the PSU that did not meet the goal) are reduced or eliminated.
Benefits and Perquisites. The Company provides a program commensurate with competitive practices that is generally consistent with the benefits provided to other employees. The Company does not provide any taxgross-ups to our Named Executive Officers (other than for relocation expenses). See “Compensation Structure—Pay Elements—Details—Benefits and Perquisites” set forth below.
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