A new Becton, Dickinson & Co. (BD) pay disclosure included gains for CEO Tom Polen and other executives, as well as an increase in pay for the device manufacturer’s median worker.
The BD pay disclosure — part of the company’s Securities and Exchange Commission filing ahead of its annual shareholder meeting — also included an update on BD’s new executive severance limits. After failing to defeat a shareholder proposal calling for a cap on executive severance payouts, the board adopted a more limited policy that only applied to cash payouts.
“We received positive feedback on this approach from the shareholders to whom we spoke during our 2023 engagement,” the company said. “Shareholders expressed their belief that this was a reasonable approach for BD to take in response to the proposal, and no investor we engaged with requested the inclusion of accelerated equity vesting in the calculation of the termination pay limit.”
There are no shareholder proposals scheduled for a vote at the upcoming shareholder meeting on Jan. 23, 2024, in Palm Beach, Florida. However, watch the annual “say-on-pay” advisory vote on executive compensation as an indicator of investor support for the cash severance policy.
BD’s medical and interventional segments make it the world’s 11th-largest device company, according to Medical Design & Outsourcing‘s 2023 Medtech Big 100 ranking.
BD pay for CEO Tom Polen and his top executives
BD reported total compensation for CEO Tom Polen at $17.3 million in fiscal 2023 (ended Sept. 30, 2023), up 3.6% from the year before. Polen’s pay included a $1.3 million salary, $9.5 million worth of stock awards, $4 million worth of stock appreciation rights awards, and $1.9 million in cash bonuses for the company’s performance incentive plan (PIP).
BD also disclosed compensation to Polen worth $313,046 for his change in pension value and nonqualified deferred compensation earnings, as well as $257,125 for all other compensation. That compensation included $214,825 worth of personal use of corporate aircraft and $42,300 for defined contribution plan matches.
Polen remains one of medtech’s top-paid CEOs. He ranked among the top 10 for total pay in Medical Design & Outsourcing’s analysis of medical device CEO pay earlier this year (before BD’s latest pay disclosure).
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BD’s second-highest-paid executive is EVP and CFO Christopher DelOrefice at $5.8 million in fiscal 2023. His pay was down about 10% from the year before, primarily due to a reduction in stock awards and his PIP bonus. In fiscal 2022, he also received $230,000 of his cash signing bonus for joining BD from Johnson & Johnson. He made the move in 2021 and received $450,000 of the signing bonus in fiscal 2021.
BD’s third-highest-paid executive is EVP and Medical Segment President Mike Garrison. BD reported nearly $3.7 million in total compensation for Garrison, but did not disclose pay for prior years. BD promoted Garrison to his role in September 2022; he was previously worldwide president of BD Medication Management since 2020 and before that, worldwide president of BD Surgery.
BD’s fourth-highest-paid executive is EVP and Life Sciences Segment Dave Hickey at $3.3 million, up slightly from the year before.
The fifth of BD’s named executive officers is EVP and Chief People Officer Shana Neal at nearly $5.9 million in fiscal 2023. That was up 83% compared to her pay for part of fiscal 2022 after she returned to BD from Owens & Minor in April. She received half of a $750,000 cash signing bonus in each of those two years.
BD pay for the median employee
As required by the SEC, BD calculated its CEO pay ratio to show how much more Polen makes compared to the median employee.
The company estimated total compensation for its median employee at $42,404 in fiscal 2023, up 12% from $37,748 in fiscal 2022. That decreased the CEO pay ratio from 443:1 in 2022 to 408:1 in 2023.
These median employee pay figures are a relatively new requirement from the SEC and offer a unique data point on medtech pay, but they’re hard to compare across companies due to the flexibility they have in calculating the figures.
“The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices,” BD said in the filing. “Therefore, BD’s ratio may not be comparable to the ratios disclosed by other companies based on a number of factors, including differences in employee populations, different geographic distributions of employees, and the nature of the companies’ businesses.”
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