WEST PHARMACEUTICAL SERVICES INC
For the period ended May 6, 2025. Filed Mar 21, 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.
May 6, 2025 · Filed Mar 21, 2025
Contents
Proxy Summary
Below is a summary of important information you will find in this Proxy Statement. This summary does not contain all the information that you should consider, and you should read the entire Proxy Statement carefully before voting.
Summary of Shareholder Voting Matters
Our Board of Directors is soliciting your vote on matters that will be presented at our 2025 Annual Meeting of Shareholders and at any adjournment or postponement thereof. This Proxy Statement contains information to assist you in voting your shares.
The Notice, the accompanying proxy card or voting instruction card and our 2024 Annual Report, including our annual report wrap, are being mailed starting on or about March 25, 2025.
| | Recommended | ||
|---|---|---|---|
| Proposal 1: Election of Directors | Page 10 | ✔ | FOR |
| Mark A. ButhmanWilliam F. FeeheryRobert F. FrielEric M. GreenJanet B. HaugenThomas W. HofmannMolly E. Joseph | Deborah L. V. KellerMyla P. Lai-GoldmanStephen H. LockhartDouglas A. MichelsPaolo Pucci | Each Nominee | |
| Proposal 2: Advisory Vote to Approve Named Executive Officer Compensation | Page 74 | ✔ | FOR |
| Proposal 3: Amend and Restate Our Articles to Add A Right for Shareholders to Call a Special Meeting | Page 75 | ✔ | FOR |
| Proposal 4: Amend and Restate our Incentive Award Plan | Page 77 | ✔ | FOR |
| Proposal 5: Ratification of the Appointment of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm for 2025 | Page 94 | ✔ | FOR |
| | | | |
2024 Business Highlights
In 2024, the performance of our Company can be attributed to the strong pillars of our market-led approach, global operations and One West philosophy. These core principles have served as the foundation to our performance both in net sales and operating cash flow. We continue to see favorable trends in the pharmaceutical and biotech industries that enable the Company to pursue its long-term growth strategy and fulfill our vision for the future, including:
| ● | Biotechnology continues to be a promising source of therapies and products for patient care, requiring specialized packaging and delivery solutions due to the sensitive nature of these large molecules. We maintain a high participation rate in providing primary containment components for approved new molecular entities, especially large-molecule injectable drugs. |
| * | Certain forward-looking statements are included in this Proxy Statement. They use such words as “will,” “continue,” “estimate,” “expect,” “looking to the future,” and other similar terminology. These statements reflect Management’s current expectations regarding future events and operating performance and speak only as of the date of this document. These statements are based on Management’s beliefs and assumptions, current expectations, estimates, and forecasts. There are many factors that can influence the Company’s future results that are beyond the ability of the Company to control or predict. Because of these known or unknown risks or uncertainties, actual results could differ materially from past results and those expressed or implied in any forward-looking statement. For a description of factors that could cause the Company’s future results to differ from those expressed in any such forward-looking statements, see Item 1A, entitled “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and as revised or supplemented by our quarterly reports on Form 10-Q or Form 8-K. Except as required by law or regulation, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. |
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| ● | The regulatory landscape is evolving with global regulatory bodies updating guidance on review and approval protocols of newer, self-administered combination products with increased attention to quality and documentation. |
| ● | Ongoing research of subcutaneous administration, as an alternative to intravenous administration, prompted by its cost-effectiveness and increased patient adherence, provides more opportunities to develop self-administration technology that places easy-to-use delivery systems in the hands of patients. |
Each year, we have seen interest and demand for our high value product offerings, delivery device platforms and services. Customers turn to West for our scientific expertise and insight into the regulatory landscape that governs our industry. This expertise helps us to build positive relationships with our customers. In 2024, we reported:
| ● | Full-year 2024 net sales of $2.893 billion, a 1.9% decrease; organic net sales decline of 1.5%; currency translation decreased net sales by 20 basis points |
| ● | Full-year 2024 reported-diluted EPS of $6.69, a decline of 15.1%, and full-year 2024 adjusted-diluted EPS of $6.75 decreased 16.5% |
| ● | Full-year 2024 operating profit margin of 19.7%, a decline of 320 basis points, and full-year 2024 adjusted operating profit margin of 19.8%, a decline of 360 basis points |
| ● | Full-year 2024 operating cash flow was $653.4 million, a decrease of 15.9%; capital expenditures were $377.0 million, compared to $362.0 million over the same period last year, and represented 13.0% of full-year 2024 net sales; free cash flow (operating cash flow minus capital expenditures) was $276.4 million, a decrease of 33.3% |
Long-Term Shareholder Return
Examining our Cumulative Annual Growth Rate (“CAGR”) for sales and EPS, the Company delivered against its objectives over the 5-year period. The Company has outperformed both the S&P 500 Index and S&P 500 Health Care Index in Total Shareholder Return (“TSR”) during this same period.
2 | 2025 Annual Meeting and Proxy Statement
| (1) | Please refer to Appendix A of this Proxy Statement for the reconciliation of Non-U.S. GAAP financial measures. |
| (2) | Sources: IR Insight |
| (3) | Non-proprietary products |
Our Director Nominees
You are being asked to vote on the directors nominated on page 10.
All directors are elected annually by a majority of votes cast, except in the case of a contested election where the number of nominees exceeds the number of open positions, in which case plurality voting is used. The chart below summarizes some key characteristics of the members of our Board of Directors. All data is as of March 21, 2025. Detailed information about each director’s background and areas of expertise can be found beginning on page 10.
4 | 2025 Annual Meeting and Proxy Statement
Corporate Governance Highlights
Corporate Governance Features
Annual director elections with majority voting in uncontested elections
Significant risk management oversight by the Board and its Committees
Flexible Board leadership structure which permits a director as non-executive Chair or appointment of Lead Independent Director
Board commitment to corporate sustainability issues
Strong culture of Compliance and Ethics, Philanthropy, Health and Safety and Quality built into our Mission, Vision and Values
Three new directors appointed within the past four years
Effective self-assessment and evaluation procedures that include individual interviews with Board members
Annual evaluation of all directors to ensure the right mix of experience and diversity of opinion and background
Executive officer and Board succession planning
Comprehensive curriculum of topics regularly presented to the Board to aid in their understanding of our business, the markets in which we operate and the Board’s responsibilities with respect to all of our stakeholders
Effective executive and Board stock ownership guidelines
Prohibition on pledging or hedging of securities by members of the Board and executive officers
2024 Board Governance Activities and Accomplishments
Approved and monitored Management’s enterprise business strategy
Reviewed performance of Chief Executive Officer against pre-established goals and strategy
Monitored enhancements to our Enterprise Risk Management, Business Continuity and Cyber-risk management processes
Monitored Management’s human resources strategy to create a pipeline of talent to ensure we have the highest skilled teams with a variety of experiences and expertise to further drive our culture and meet the needs of our customers
Reviewed the Company’s capital allocation strategy, increasing the annual dividend and continuing strategic share buyback program
Broad assessment and updating of Board succession planning and committee membership and leadership rotation schedules to ensure diversity of opinion, breadth of experience and refreshment of ideas
Multiple awards, increased rankings and international recognition of our corporate sustainability and philanthropic efforts
Continued development of corporate sustainability strategy and key actions consistent with evolving regulatory requirements
Virtually all of the Directors attended 100% of the combined Board and Committee meetings in 2024 and all of the Directors attended at least 90% of these meetings
Directors received an average of 95.5% support from shareholders in 2024
2024 Executive Compensation Highlights
Executive Compensation Program Features
Strong linkage between pay and performance and support by shareholders regarding our performance metrics, targets and goals as evidenced by a 95.5% shareholder Say-on-Pay approval rate of our executive compensation program
Competitive total direct compensation (“TDC”), which is the sum of an officer’s base salary, short-term incentive target and long-term incentive target, targeted at the median level and appropriately adjusted by our Compensation Committee based on individual performance, skills and experience
Annual Incentive Plan (“AIP”) based on EPS, Consolidated Net Sales and Operating Cash Flow (“OCF”) with individual performance adjustments is intended to encourage Management to improve shareholder value in day-to-day decision making
Challenging long-term incentive (“LTI”) plan utilizing stock options and performance share units based upon return on invested capital (“ROIC”) and sales consolidated annual growth rate (“CAGR”) to ensure long-term profitable growth and alignment with shareholders’ interests
Use of two comparator groups to benchmark competitive pay standards to ensure Company can attract and retain the best talent
Share ownership guidelines for all officers and directors
Standard Change in Control (“CIC”) agreements for our corporate officers containing double trigger provisions requiring termination of the executive following a CIC before payments are made; payments are reduced if excise tax threshold is exceeded
Strong incentive compensation recovery (clawback) that exceeds legal requirements, anti-hedging and anti-pledging policies
Rigorous use of realizable pay analysis, performance metric difficulty analysis and similar tools to ensure our compensation programs remain linked to performance and consistent with Board expectations
Executive Compensation Actions & Results
Reaffirmed West’s commitment to a pay-for-performance philosophy that aligns executives’ incentive compensation with Company performance and stakeholder interests on both a short and long-term basis, while mitigating excessive risk
Confirmed the ongoing use of a two-comparator group approach for executive and director pay and pay-for-performance benchmarking; conducted a thorough review of the Business Segment Comparator Group
Delivered 2024 AIP payouts to our named executive officers (“NEO”) at 20.0% of their individual AIP target amounts. The 2024 Corporate AIP pool was funded at 26.7% resulting from payout levels of 0.0% for EPS, 71.2% for Consolidated Net Sales and 62.1% for OCF. The Committee further adjusted the payouts for each NEO based on achievement against business objectives.
Awarded LTI plan PSUs for the 2022-24 period at 30.06% of target amount based on a CAGR performance payout level of 0.0% and an ROIC payout level of 60.12%
6 | 2025 Annual Meeting and Proxy Statement
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