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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 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))
Definitive Proxy Statement
  Definitive Additional Materials
Soliciting Material under §240.14a-12

Abbott Laboratories

(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 ALL BOXES THAT APPLY):
  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


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Table of Contents

Abbott Laboratories
100 Abbott Park Road
Abbott Park, Illinois 60064-6400 U.S.A.

 

 

 

 

 

 

 

On the Cover: ZULEYMA SANTOS

LOS ANGELES, CALIFORNIA, USA
HEARTMATE 3

Zuleyma relies on Abbott’s
HeartMate 3 Left Ventricular
Assist Device, a mini heart
pump for patients in advanced-stage
heart failure.


Table of Contents

TABLE OF CONTENTS

    PAGE
Notice of 2024 Annual Meeting of Shareholders 2
 
Proxy Summary 3
 
Election of Directors (Item 1 on Proxy Card) 10
 
The Board of Directors and Its Committees 16
Director Independence 16
Director Selection 16
Board Composition and Diversity 17
Leadership Structure 18
Board Oversight 20
Committees of the Board of Directors 21
Board Evaluation Process 24
Board Meetings and Director Commitments 24
Shareholder Engagement 25
Communicating with the Board of Directors 25
Corporate Governance Materials 25
Director Compensation 26
 
Executive Compensation 28
Compensation Discussion and Analysis 28
Compensation Committee Report 54
Compensation Risk Assessment 55
Summary Compensation Table 57
2023 Grants of Plan Based Awards 60
2023 Outstanding Equity Awards at Fiscal Year End 61
2023 Option Exercises and Stock Vested 64
Pension Benefits 64
Potential Payments Upon Termination or Change in Control 68
CEO Pay Ratio 71
Pay Versus Performance 71
    PAGE
Ratification of Ernst & Young LLP as Auditors (Item 2 on Proxy Card) 77
Report of the Audit Committee 78
 
Say on Pay—An Advisory Vote on the Approval of Executive Compensation (Item 3 on Proxy Card) 79
 
Additional Information 81
Security Ownership of Executive Officers and Directors 81
Information Concerning Security Ownership 82
Approval Process for Related Person Transactions 82
Other Matters 83
Date for Receipt of Shareholder Proposals for the 2025 Annual Meeting Proxy Statement 83
Procedure for Recommendation and Nomination of Directors and Transaction of Business at Annual Meeting 83
General 84
 
Information About the Annual Meeting 85
 
Cautionary Statement Regarding Forward-Looking Statements 89

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NOTICE OF 2024 ANNUAL MEETING OF SHAREHOLDERS

DATE AND TIME
Friday, April 26, 2024 at 9:00 a.m. Central Time
     
VIRTUAL MEETING SITE
meetnow.global/ABT2024
     
WHO CAN VOTE
Shareholders of record at the close of business on February 28, 2024

ITEMS OF BUSINESS       Board Voting
Recommendation
Item 1
Election of the 12 director nominees named in this proxy statement to hold office until the next Annual Meeting or until the next meeting of shareholders at which directors are elected
FOR Each Director Nominee
Item 2
Ratification of the appointment of Ernst & Young LLP as auditors of Abbott for 2024
FOR
Item 3
Approval, on an advisory basis, of executive compensation
FOR

Shareholders will also transact such other business as may properly come before the meeting, including any adjournment or postponement thereof.

To attend the Annual Meeting, shareholders will be required to enter a control number. Please see page 85 for further instructions on how to attend the Annual Meeting.

YOUR VOTE IS IMPORTANT

Please sign and promptly return your proxy or voting instruction form in the enclosed envelope, or vote your shares by telephone or using the Internet.

If you are a registered shareholder (you received your proxy materials from Abbott through Abbott’s transfer agent, Computershare), you may vote your shares by telephone (1-800-652-VOTE (8683)) or on the Internet at www.investorvote.com/abt.

If you are a beneficial shareholder (you received your proxy materials from a broker, bank, or other agent), please refer to the voting instructions provided to you by your broker, bank, or other agent.

This proxy statement and the accompanying proxy card, and the Notice of Internet Availability of Proxy Materials, are being provided to shareholders on or about March 15, 2024.

By order of the Board of Directors.

HUBERT L. ALLEN
Secretary

March 15, 2024

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on April 26, 2024

Abbott’s 2024 Proxy Statement and 2023 Annual Report to Shareholders are available at www.abbott.com/proxy.

2        


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PROXY SUMMARY

This summary contains highlights about Abbott and the upcoming 2024 Annual Meeting of Shareholders. This summary does not contain all of the information that you should consider in advance of the meeting, and we encourage you to read the entire proxy statement carefully before voting.

ABBOTT’S DIVERSIFIED BUSINESS MODEL DELIVERS LEADING SHAREHOLDER RETURNS

Abbott’s strong sustainable performance has resulted in total shareholder return (TSR) above the peer median on a five-year basis. Following the acquisitions of St. Jude Medical and Alere Inc. in 2017, Abbott has delivered a cumulative TSR of 225%, significantly outperforming both the S&P 500 (141%) and peers (99%) over that same time horizon. This long-term performance is driven by strong execution, an effective governance structure, and the strength of our diversified business model with leadership positions in some of the largest and fastest growing markets in healthcare and innovative product portfolios across our businesses.

5-Year Total Shareholder Return
7-Year TSR: Durable Growth
Over the past 7 years, Abbott has outperformed the S&P 500 and peers

In addition to delivering significant shareholder returns, Abbott continued to take important steps to position the Company for long-term, sustainable growth.

ROBUST INNOVATION PIPELINE       INVESTING FOR FUTURE GROWTH       SHAREHOLDER RETURNS
Steady cadence of important product approvals across our businesses that will be significant contributors to growth in the coming years.
Increased manufacturing scale and capabilities across several important products.
Invested $2.2 billion in capital projects in the past year.
Returned $3.6 billion to shareholders through dividends in 2023 and announced an 8% increase to our dividend for 2024, marking our 52nd consecutive year of dividend increases.

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EXECUTIVE COMPENSATION

SHAREHOLDER FEEDBACK

In 2023, we contacted shareholders representing over 60% of our outstanding shares, including 100% of our top 20 investors, to engage in an open dialogue and discuss our compensation program and various topics, including:

Board oversight of risks, such as business strategy and operations, enterprise and product cybersecurity, sustainability, and product quality and regulatory compliance.

Our rigorous goal setting process which links executive pay to performance against operating and financial plans, strategic business priorities and initiatives, and human capital metrics.

Human capital management and Abbott’s commitment to diversity, equity, and inclusion, including Abbott’s Diversity, Equity and Inclusion Report which provides goals, our progress against them, and disclosure of EEO-1 data.

Board composition and refreshment, including six new independent directors since 2018, three of whom are women and three of whom are minorities.

KEY FEATURES OF OUR EXECUTIVE COMPENSATION PROGRAM

The following practices and policies ensure alignment of interests between shareholders and management, and effective ongoing compensation governance.

Compensation Practice Abbott Policy More
Information
On Page
Compensation is Market-Based
Yes
Benchmark peers with investment profiles, operating characteristics, and employment and business markets similar to Abbott. Annual incentive plan goals are set to exceed market growth in relevant markets/business segments
30-33
Compensation is Performance-Based
Yes
Short-term and long-term incentive awards are 100% performance based. Annual incentive plan goals are set to exceed market growth in relevant markets and business segments
31-33
Double-Trigger Change in Control
Yes
Provide change in control benefits under double-trigger circumstances only
69-70
Recoupment Policies
Yes
Compensation Committee can seek recoupment of incentive compensation, forfeit existing awards or reduce future awards
54
Robust Share Ownership Guidelines
Yes
Require significant share ownership for officers and directors, and share retention requirements until guidelines are met
27 and 53
Capped Incentive Awards
Yes
Incentive award payments are capped
32 and 56
Independent Compensation Committee Consultant
Yes
Committee consultant performs no other work for Abbott
22
Tax Gross Ups
No
No tax gross ups under our executive officer pay program
52-53
Guaranteed Bonuses
No
No guaranteed bonuses
31-32
Employment Contracts
No
No employment contracts
68
Excessive Risk Taking
No
No highly leveraged incentive plans that encourage excessive risk taking
55-56
Hedging and Pledging of Company Shares
No
No hedging or pledging of Abbott shares is allowed
54 and 56
Discounted Stock Options
No
No discounted stock options are allowed or granted
56

Details of the compensation decisions made for our named executive officers are outlined on pages 40 to 51.

THE STRENGTH OF OUR COMPENSATION PROGRAM IS EVIDENT IN OUR ‘SAY ON PAY’ VOTING RESULTS. IN EACH OF THE PAST FIVE YEARS, ABBOTT ACHIEVED AT LEAST 90% SUPPORT FROM SHAREHOLDERS.

4        


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DIRECTOR NOMINEES

The Board of Directors recommends a vote FOR the election of each of the following nominees for director. All nominees are currently serving as directors. Additional information about each director nominee’s background and experience can be found beginning on page 10.

Name Principal Occupation Age Director
Since
Committee
Memberships
ROBERT J. ALPERN, M.D.
Independent
Professor and Former Dean, Yale School of Medicine
73
2008
Nominations and
Governance
Public Policy
CLAIRE BABINEAUX-
FONTENOT
Independent
CEO, Feeding America
59
2022
Audit
Public Policy
SALLY E. BLOUNT, PH.D.
Independent
President and CEO, Catholic Charities of the Archdiocese of Chicago, and Professor and Former Dean, J.L. Kellogg Graduate School of Management
62
2011
Nominations and
Governance
Public Policy
ROBERT B. FORD
Chairman of the Board and CEO, Abbott Laboratories
50
2019
Executive (Chair)
PAOLA GONZALEZ
Independent
Vice President, Global FP&A, The Clorox Company
52
2021
Audit
Nominations and
Governance
MICHELLE A. KUMBIER
Independent
President, Turf & Consumer Products, Briggs & Stratton, LLC
56
2018
Audit
Compensation
DARREN W. McDEW
Independent
Retired General, U.S. Air Force, and Former Commander of U.S. Transportation Command
63
2019
Nominations and
Governance
Public Policy
NANCY McKINSTRY
Lead Independent
Director
CEO and Chairman of the Executive Board, Wolters Kluwer N.V.
65
2011
Audit (Chair)
Compensation
Executive
MICHAEL G. O’GRADY
Independent
Chairman and CEO, Northern Trust Corporation
58
2023
Compensation
Nominations and
Governance
MICHAEL F. ROMAN
Independent
Chairman, President, and CEO, 3M Company
64
2021
Compensation
Public Policy
(Chair)
Executive
DANIEL J. STARKS
Independent
Retired Chairman, President and CEO, St. Jude Medical, Inc.
69
2017
Compensation
(Chair)
Public Policy
Executive
JOHN G. STRATTON
Independent
Executive Chairman, Frontier Communications Parent, Inc.
63
2017
Audit
Nominations and
Governance (Chair)
Executive

        5


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CORPORATE GOVERNANCE

Abbott is committed to strong corporate governance that is aligned with shareholder interests. Our Board spends significant time with Abbott’s senior management to understand the dynamics, issues, and opportunities for Abbott, and also regularly monitors leading practices in governance and adopts measures that it determines are in the best interest of Abbott and its shareholders.

BOARD GOVERNANCE HIGHLIGHTS

All directors elected annually by majority vote
Eleven out of twelve director nominees are independent
Fully independent Board Committees – Audit Committee, Compensation Committee, Nominations and Governance Committee, and Public Policy Committee
Executive sessions of the independent directors, led by the Lead Independent Director, at each regularly scheduled Board meeting
Annual evaluations of the Board, each Committee, and each director, that are led by the Lead Independent Director and conducted anonymously to facilitate candid feedback
Strong risk oversight, with areas of focus including human capital, cybersecurity and data protection, and sustainability, environmental, and social responsibility practices
Full Board oversight of corporate strategy and senior management succession planning

ROBUST BOARD ASSESSMENT AND REFRESHMENT PROCESS

Evaluation Assessment Refreshment
             
Board regularly reviews Abbott’s governance practices, leadership structure, and Board and Committee composition
All directors also conduct annual self-evaluations to assess Board, Committee, and peer performance
           
Board identifies how it can further its effectiveness through a combination of new perspectives and internal improvements
           
To supplement the Board’s skills and provide fresh perspective, six new independent directors have been nominated since 2018, three of whom are women and three of whom are minorities

6        


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HIGHLY QUALIFIED BOARD, WITH DIVERSE BACKGROUNDS, SKILLS AND EXPERIENCES TO PROVIDE STRONG OVERSIGHT AND GUIDANCE

THE 12 DIRECTOR NOMINEES COMPRISE A WELL-BALANCED, DIVERSE BOARD.
EXPERTISE ALIGNED WITH ABBOTT’S DIVERSIFIED OPERATING MODEL AND LONG-TERM STRATEGY
Healthcare and Medical Device Industry
Finance and Accounting
Risk Management, including Data Protection and Cybersecurity
Global Supply Chain, Operations and Infrastructure Management
Senior Leadership with Multinational Corporations and Diverse Business Models
Regulatory and Compliance
Consumer Products
Government, Military, and NGO Leadership
WELL-BALANCED TENURE
BOARD DIVERSITY

LEAD INDEPENDENT DIRECTOR WITH DISTINCT RESPONSIBILITIES

Elected annually by independent directors
Regularly presides over executive sessions of independent directors at Board meetings and provides feedback to management
Facilitates communication with the Board and liaises between Chairman and independent directors
Authority to call meetings of independent directors
Communicates regularly with the Chairman regarding appropriate agenda topics, schedule sufficiency, and other Board-related matters
Leads the Board’s annual evaluation of the Chairman of the Board and CEO
Leads the annual performance review process
Works with management on corporate governance issues and developments
Confers with the Nominations and Governance Committee and the CEO regarding management succession planning
Engages directly with major shareholders as appropriate

        7


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OUR COMMITMENT TO SUSTAINABILITY

The Board of Directors and its committees have oversight over Abbott’s environmental, social and governance practices. The Board has regular discussions with management on all the below sustainability matters, as well as workplace, management, and Board diversity, emerging governance practices and trends, global compliance matters, and sustainability reporting. Executive compensation is linked to Sustainability commitments, as discussed in more detail on pages 36 through 38.

2030 SUSTAINABILITY PLAN

At Abbott, sustainability means managing our company to deliver long-term impact for the people we serve —shaping the future of healthcare and helping the greatest number of people live better and healthier lives. Our products and services touched the lives of more than 2 billion people in 2022 and we intend to reach 3 billion people a year by 2030.

INNOVATE FOR ACCESS AND AFFORDABILITY

Make access and affordability core to new product innovation      
Transform care for chronic disease, malnutrition and infectious diseases
     
Advance health equity through partnership
Integrate access, affordability and data insights as design principles into our R&D work and portfolio.
Innovate to transform the standard of care for diabetes and deliver break-through technologies to improve clinical outcomes for people with cardiovascular disease.
Deliver scalable, integrated solutions to reduce preventable deaths and infectious diseases with diagnostics, treatment and education programs.
Expand affordable access to healthcare for underserved, diverse and at-risk communities by delivering innovative, decentralized models of care.
Partner with stakeholders to improve health outcomes by advancing standards and building access to affordable, integrated solutions.

BUILD A FOUNDATION FOR THE FUTURE

CLIMATE
Protect a healthy environment
Protect our climate and water, including supporting the Science Based Targets initiative (SBTi) objective of reducing Scope 1, 2 and 3 carbon emissions.
Reduce product packaging and waste, including addressing 50 million pounds of packaging and using circular economy approach to achieve at least 90% waste diversion rate.
     
OUR PEOPLE
Build the diverse, innovative workforce of tomorrow
Create opportunities in Abbott’s STEM programs and internships for more than 100,000 young people.
Achieve gender balance across our global management team and ensure one-third of our U.S. leadership roles are held by people from underrepresented groups.
     
SUPPLY CHAIN
Ensure a resilient, diverse and responsible supply chain
Certify that 80% of newly contracted direct material spends incorporate social responsibility requirements.
Ensure ethical sourcing from suppliers with high-risk sustainability factors through 100% auditing.
Increase spend with diverse and small businesses by 50%.
DATA AND DATA PRIVACY
Responsibly connect data, technology, and care
Be a trusted healthcare leader in secure and responsible data collection, use, management and privacy, in order to protect our patients and customers, empower them to make better, more complete decisions about their health, and drive innovation through insights and analytics.

8        


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VOTING MATTERS AND BOARD RECOMMENDATIONS

ITEM 1       The Board recommends a vote FOR each nominee.
Election of 12 Director Nominees
Highly qualified Board, with diversity in backgrounds, skills and experiences.
Relevant expertise to provide oversight and guidance for Abbott’s diversified operating model.
See pages 10 to 15 for more information.
ITEM 2
The Board recommends a vote FOR this item.
Ratification of Ernst & Young LLP as Auditors
Independent firm with significant industry and financial reporting expertise.
See pages 77 to 78 for more information.
ITEM 3
The Board recommends a vote FOR the approval of the named officers’ compensation.
Say on Pay: Advisory Vote on the Approval of Executive Compensation
Market-based structure producing differentiated awards based on both company and individual performance, managed with independent oversight by the Compensation Committee.
Aligned to drive Abbott’s strategic priorities, reflects strong sustainable performance resulting in total shareholder return (TSR) above the peer median on a five-year basis.
See pages 79 and 80 for more information.

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ELECTION OF DIRECTORS (ITEM 1 ON PROXY CARD)


      ROBERT J. ALPERN, M.D.
Director Since 2008    Age 73
Ensign Professor of Medicine and Physiology and Professor of Internal Medicine and Cellular and Molecular Physiology, and Former Dean of Yale School of Medicine
PROFESSIONAL BACKGROUND
Ensign Professor of Medicine and Professor of Internal Medicine at Yale School of Medicine since June 2004.
Dean of Yale School of Medicine from June 2004 to January 2020.
Dean of The University of Texas Southwestern Medical School from July 1998 to May 2004.
Served on the Board of Directors of Yale New Haven Hospital from October 2005 to January 2020.
OTHER PUBLIC COMPANY BOARDS
AbbVie Inc.
KEY QUALIFICATIONS AND EXPERTISE
As a result of his long-tenured leadership positions at the Yale School of Medicine and The University of Texas Southwestern Medical School, and as a former Director on the Board of Yale New Haven Hospital, Dr. Alpern contributes valuable insights to the Board through his medical and scientific expertise and his knowledge of the health care environment and the scientific nature of Abbott’s key research and development initiatives.

      CLAIRE BABINEAUX-FONTENOT
Director Since 2022    Age 59
Chief Executive Officer, Feeding America
PROFESSIONAL BACKGROUND
Chief Executive Officer of Feeding America, a U.S. hunger-relief charitable organization, since 2018.
Founder of CBF Consulting Group, LLC, a business consulting firm, since 2017.
Executive Vice President and Global Treasurer of Walmart Inc., a multinational retail corporation operating supercenters, discount department stores, and eCommerce websites, from 2014 to 2017.
Senior Vice President and Chief Tax Officer of Walmart, from 2007 to 2014.
Vice President of Audits and Tax Policy of Walmart, from 2004 to 2007.
Serves on the Board of Directors of New York Life Insurance Company and served on the Board of Directors of Charah Solutions, Inc. from 2018 to 2019.
KEY QUALIFICATIONS AND EXPERTISE
As the Chief Executive Officer of Feeding America, Ms. Babineaux-Fontenot provides Abbott’s Board with substantial experience in organizational governance, strategic planning, and supply chain and infrastructure management, and through her prior financial leadership roles at Walmart, Ms. Babineaux-Fontenot contributes extensive expertise and knowledge of global risk management and corporate finance and accounting matters for a multinational public company.

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      SALLY E. BLOUNT, PH.D.
Director Since 2011    Age 62
President and Chief Executive Officer, Catholic Charities of the Archdiocese of Chicago, and Michael L. Nemmers Professor of Strategy and Former Dean of the J.L. Kellogg Graduate School of Management at Northwestern University
PROFESSIONAL BACKGROUND
President and Chief Executive Officer of Catholic Charities of the Archdiocese of Chicago since August 2020.
Michael L. Nemmers Professor of Strategy at the J.L. Kellogg Graduate School of Management at Northwestern University since 2010.
Dean of the J.L. Kellogg Graduate School of Management at Northwestern University from 2010 to 2018.
Dean of the New York University Undergraduate College and Vice Dean of its Leonard N. Stern School of Business from 2004 to 2010.
Professor at the New York University Leonard School of Business from 2001 to 2010, and became the Abraham L. Gitlow Professor of Management in 2004.
Held academic posts at the University of Chicago’s Graduate School of Business from 1992 to 2001.
Serves on the Board of Directors of the Joyce Foundation.
Served on the Board of Directors of Ulta Beauty, Inc. from 2017 to 2022 and on the Board of Directors of the Economic Club of Chicago from 2017 to 2023.
KEY QUALIFICATIONS AND EXPERTISE
As a professor of management and strategy, having served as Dean of the J.L. Kellogg Graduate School of Management at Northwestern University and as Vice Dean and Dean of the Undergraduate College of New York University’s Leonard N. Stern School of Business, Ms. Blount provides Abbott’s Board with expertise on business organization, strategy, governance and management matters.

      ROBERT B. FORD
Director Since 2019    Age 50
Chairman of the Board and Chief Executive Officer, Abbott Laboratories
PROFESSIONAL BACKGROUND
Chairman of the Board and Chief Executive Officer of Abbott since December 2021.
President and Chief Executive Officer of Abbott from March 2020 to December 2021.
President and Chief Operating Officer of Abbott from 2018 to 2020.
Executive Vice President, Medical Devices of Abbott from 2015 to 2018.
Senior Vice President, Diabetes Care of Abbott from 2014 to 2015.
Held various leadership roles across Abbott’s Diagnostics, Nutrition, and Diabetes Care businesses in the U.S. and Latin America since joining Abbott in 1996.
KEY QUALIFICATIONS AND EXPERTISE
As Abbott’s Chairman of the Board and Chief Executive Officer, and having previously held various leadership positions at Abbott, including Chief Operating Officer, where he was responsible for all of Abbott’s operating businesses, Mr. Ford contributes an extensive knowledge of the Company’s global operations, a wide breadth of experience in strategy and execution, and valuable insights into global healthcare markets.

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      PAOLA GONZALEZ
Director Since 2021    Age 52
Vice President, Global FP&A, The Clorox Company
PROFESSIONAL BACKGROUND
Vice President, Global FP&A of The Clorox Company, a manufacturer and marketer of consumer and professional products, since June 2023.
Vice President and Treasurer of Clorox, responsible for treasury, investor relations, and real estate, from 2018 to 2023.
Vice President of Finance, Household and Lifestyle Segments of Clorox from 2010 to 2017.
Vice President of Finance, Global Strategic Initiatives of Clorox from 2008 to 2010.
Held various leadership roles in finance across Clorox since joining Clorox in 1997.
Prior to Clorox, worked in finance for American Airlines in Latin America.
KEY QUALIFICATIONS AND EXPERTISE
As Vice President, Global FP&A of The Clorox Company, pursuant to which she provides financial leadership across all Clorox businesses and business development efforts, and through her prior roles in treasury, investor relations, and several of Clorox’s businesses, Ms. Gonzalez has considerable experience providing financial leadership to a multinational public company with multiple businesses, contributing significant financial expertise and knowledge of financial statements, corporate finance and accounting matters.

      MICHELLE A. KUMBIER
Director Since 2018    Age 56
President, Turf & Consumer Products, Briggs & Stratton, LLC
PROFESSIONAL BACKGROUND
Senior Vice President and President, Turf & Consumer Products of Briggs & Stratton, LLC, a manufacturer and marketer of engines, batteries, and outdoor power equipment, since March 2022.
Senior Vice President and Chief Operating Officer of Harley-Davidson Motor Company, a motorcycle and related products manufacturer, from 2017 to 2020.
Senior Vice President of Motor Company Product and Operations of Harley-Davidson from 2015 to 2017.
Held various other executive roles across Harley-Davidson, from 1997 to 2015.
Held various positions at Kohler Company, maker of premium plumbing products, from 1986 to 1997.
OTHER PUBLIC COMPANY BOARDS
Teledyne Technologies Incorporated
KEY QUALIFICATIONS AND EXPERTISE
Having served in several executive roles at Harley-Davidson, Ms. Kumbier contributes extensive experience in the management of a multinational public company, including significant manufacturing, product development, commercial, business development and strategic planning experience.

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      DARREN W. MCDEW
Director Since 2019    Age 63
Retired General, United States Air Force, and Former Commander of U.S. Transportation Command
PROFESSIONAL BACKGROUND
Four-star general who served for 36 years in the United States military before retiring in October 2018.
Commander, U.S. Transportation Command, the single manager for global air, land and sea transportation for the U.S. Department of Defense from 2015 to 2018.
Held various leadership roles across the U.S. Military, including Vice Director for Strategic Plans and Policy for the Joint Chiefs of Staff, Military Aide to the President, Director of Air Force Public Affairs, and Chief of Air Force Senate Liaison Division.
Serves on the Board of Directors of United Services Automobile Association, Boys & Girls Club of America, and Manns Home Youth Foundation.
OTHER PUBLIC COMPANY BOARDS
Parsons Corporation, General Electric Company
KEY QUALIFICATIONS AND EXPERTISE
Through his extensive leadership in the U.S. Air Force, General McDew contributes significant experience managing large, complex global operations, including strategic planning, security and risk management, cybersecurity, and supply chain and infrastructure management, succession planning and leadership development.

      NANCY MCKINSTRY
Lead Independent Director
Director Since 2011    Age 65
Chief Executive Officer and Chairman of the Executive Board, Wolters Kluwer N.V.
PROFESSIONAL BACKGROUND
Chief Executive Officer and Chairman of the Executive Board of Wolters Kluwer N.V., a global information, software, and services provider, since September 2003, and a member of its Executive Board since June 2001.
Member of the European Round Table of Industrialists.
Serves on the Board of Directors of Russell Reynolds Associates and the Board of Overseers of Columbia Business School.
Served on the Board of Directors of Telefonaktiebolaget LM Ericsson from 2004 to 2012.
OTHER PUBLIC COMPANY BOARDS
Accenture plc
KEY QUALIFICATIONS AND EXPERTISE
As the Chief Executive Officer and Chairman of the Executive Board of Wolters Kluwer N.V., Ms. McKinstry contributes global perspectives and management experience, including an understanding of key issues facing a multinational business such as Abbott’s.

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      MICHAEL G. O’GRADY
Director Since 2023      Age 58
Chairman and Chief Executive Officer, Northern Trust Corporation
PROFESSIONAL BACKGROUND
Chairman of Northern Trust Corporation, a financial services company, since 2019, Chief Executive Officer since 2018, and President since 2017.
President, Corporate & Institutional Services of Northern Trust from 2014 to 2016.
Chief Financial Officer of Northern Trust from 2011 to 2014.
Managing Director, Investment Banking Group of Bank of America Merrill Lynch from 2000 to 2011.
OTHER PUBLIC COMPANY BOARDS
Northern Trust Corporation
KEY QUALIFICATIONS AND EXPERTISE
As the Chairman and Chief Executive Officer of Northern Trust Corporation, Mr. O’Grady has significant experience leading a global public company in a highly regulated industry, including oversight of operations and risk management, strategy and business development, and corporate governance. Mr. O’Grady also contributes broad financial expertise, including extensive experience in financial advisory and investment banking matters.

      MICHAEL F. ROMAN
Director Since 2021      Age 64
Chairman of the Board, President and Chief Executive Officer, 3M Company
PROFESSIONAL BACKGROUND
Chairman of the Board, President and Chief Executive Officer of 3M Company, a global manufacturing and technology company, since May 2019.
Chief Executive Officer of 3M from July 2018 to May 2019.
Chief Operating Officer and Executive Vice President of 3M from July 2017 to June 2018 with direct responsibilities for 3M’s five business groups and its international operations.
Executive Vice President, Industrial Business Group of 3M from June 2014 to July 2017.
Senior Vice President, Business Development of 3M from May 2013 to June 2014.
Vice President and General Manager of Industrial Adhesives and Tapes Division of 3M from September 2011 to May 2013.
OTHER PUBLIC COMPANY BOARDS
3M Company
KEY QUALIFICATIONS AND EXPERTISE
As Chairman of the Board, President and Chief Executive Officer of 3M Company, Mr. Roman has extensive experience leading a multinational public company with multiple businesses, contributing significant manufacturing, supply chain, technology, and finance experience, as well as valuable insights into corporate strategy and risk management.

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      DANIEL J. STARKS
Director Since 2017      Age 69
Retired Chairman, President and Chief Executive Officer, St. Jude Medical, Inc.
PROFESSIONAL BACKGROUND
Executive Chairman of the Board of St. Jude Medical, Inc., a medical device manufacturer, from January 2016 to January 2017, when Abbott completed its acquisition of St. Jude Medical.
Chairman, President and Chief Executive Officer of St. Jude Medical from 2004 until his retirement in January 2016.
President and Chief Operating Officer of St. Jude Medical from 2001 to 2004.
President and CEO, Cardiac Rhythm Management Business of St. Jude Medical from 1997 to 2001.
KEY QUALIFICATIONS AND EXPERTISE
Having served as St. Jude Medical’s Executive Chairman and its Chairman, President and Chief Executive Officer, and having joined St. Jude Medical in 1996, Mr. Starks contributes not only comprehensive and critical knowledge of the medical device industry, but also extensive business and management experience operating a global public company in a highly regulated industry.

      JOHN G. STRATTON
Director Since 2017      Age 63
Executive Chairman, Frontier Communications Parent, Inc.
PROFESSIONAL BACKGROUND
Executive Chairman of Frontier Communications Parent, Inc., a telecommunications company, since April 2021.
Executive Vice President and President of Global Operations of Verizon Communications Inc. from 2015 to 2018.
Executive Vice President and President of Global Enterprise and Consumer Wireline of Verizon from 2014 to 2015.
President of Verizon Enterprise Solutions from 2012 to 2014.
Chief Operating Officer and Executive Vice President of Verizon Wireless from 2010 to 2012.
Member of The President’s National Security Telecommunications Advisory Committee from 2012 to 2018.
Director of the Cellular Telecommunications Industry Association from 2015 to 2018.
OTHER PUBLIC COMPANY BOARDS
Frontier Communications Parent, Inc., General Dynamics Corporation
KEY QUALIFICATIONS AND EXPERTISE
Through his executive leadership experience, Mr. Stratton contributes extensive business and management expertise operating a global public company such as Abbott, including valuable insights on corporate strategy and risk management. His service on the National Security Telecommunications Advisory Committee enables him to provide government perspective and experience in a highly regulated industry.

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THE BOARD OF DIRECTORS AND ITS COMMITTEES

DIRECTOR INDEPENDENCE

The Board has determined that each of following director nominees is independent in accordance with the New York Stock Exchange listing standards: Robert J. Alpern, M.D., Claire Babineaux-Fontenot, Sally E. Blount, Ph.D., Paola Gonzalez, Michelle A. Kumbier, Darren W. McDew, Nancy McKinstry, Michael G. O’Grady, Michael F. Roman, Daniel J. Starks, and John G. Stratton, as well as William A. Osborn and Glenn F. Tilton, who served as directors for a portion of 2023.

To make this determination, the Board applied the independence standards under the New York Stock Exchange listing standards. The Board also considered whether a director or director nominee has any other material relationships with Abbott or its subsidiaries and concluded that none of them had a relationship that impaired his or her independence. This included consideration of the fact that some of the directors or director nominees or their family members are officers or serve on boards of companies or entities to which Abbott sold products or made contributions or from which Abbott purchased products and services during the year. In making its determination, the Board relied on both information provided by the directors and director nominees and information developed internally by Abbott.

DIRECTOR SELECTION

The Nominations and Governance Committee assists the Board of Directors in identifying individuals qualified to become Board members and recommends to the Board the nominees for election as directors at the next annual meeting of shareholders. The process used by the Nominations and Governance Committee to identify a nominee to serve as a Board member depends on the qualities being sought. From time to time, Abbott engages an executive search firm to assist the Committee in identifying individuals qualified to be Board members.

Board candidates are considered on the basis of a range of criteria and should have demonstrated experience and abilities that are relevant to the Board’s oversight role with respect to Abbott’s business and affairs. When combined, the backgrounds and qualifications of the director nominees should provide a portfolio of experience and knowledge that will serve Abbott’s governance and strategic needs. When selecting and evaluating nominees for the Board, the Nominations and Governance Committee and the Board may consider certain qualifications, such as strong backgrounds in management, medical and scientific research and development, finance, international business, and government. Abbott’s outline of directorship qualifications is included in Abbott’s Governance Guidelines. In addition, all Abbott directors must exhibit:

Global business perspective
Successful track record
Innovative thinking
Knowledge of corporate governance requirements and practices
High integrity
Commitment to good corporate citizenship

A description of the procedure for the recommendation and nomination of directors by shareholders is on pages 83 and 84.

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BOARD COMPOSITION AND DIVERSITY

In the process of identifying nominees to serve as members of the Board of Directors, the Nominations and Governance Committee considers the Board’s diversity of relevant experience, areas of expertise, ethnicity, gender, and geography.

The process used to identify and select nominees has resulted in a well-balanced, diverse, and highly qualified Board of Directors with the backgrounds, skills, and perspectives necessary to provide strong oversight and guidance. Each director nominee’s biography includes the particular experience and qualifications that led the Board to conclude that the nominee should serve on the Board. The director nominees’ biographies are on pages 10 through 15.

EXPERTISE ALIGNED WITH ABBOTT’S DIVERSIFIED OPERATING MODEL AND LONG-TERM STRATEGY
Healthcare and Medical Device Industry
Finance and Accounting
Risk Management, including Data Protection and Cybersecurity
Global Supply Chain, Operations and Infrastructure Management
Senior Leadership with Multinational Corporations and Diverse Business Models
Regulatory and Compliance
Consumer Products
Government, Military, and NGO Leadership
WELL-BALANCED TENURE
BOARD DIVERSITY

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LEADERSHIP STRUCTURE

Abbott’s current Board leadership is comprised of the Chairman of the Board and CEO, a Lead Independent Director, and independent Committee Chairs. The Board reviews its leadership structure at least annually and has determined that this structure is in the best interests of Abbott and its shareholders at this time. This structure balances strong, independent oversight with extensive business knowledge and experience. The Board also retains the flexibility necessary to adopt the leadership structure in the best interests of Abbott and its shareholders based on the specific circumstances and needs of the business over time.

Robert B. Ford currently serves as Chairman of the Board and CEO. The Board has determined that this is in the best interests of Abbott and its shareholders, as it provides cohesive leadership and direction for the Board and executive management, as well as clear accountability and unified leadership in the oversight and execution of strategic initiatives and business plans. Mr. Ford has extensive industry expertise and familiarity with Abbott’s diverse, global businesses, such that his strategic and operational insights provide the Board with a comprehensive vision, from long-term strategic direction to day-to-day execution.

Abbott’s Board also maintains a strong Lead Independent Director with significant roles and responsibilities, who is appointed by and from the independent directors. In selecting a Lead Independent Director, the independent directors consider several factors, including corporate governance expertise, board service and tenure, ability to meet the required time commitment, and operational and leadership experience.

In April 2023, the independent directors appointed Nancy McKinstry as the Board’s new Lead Independent Director. Ms. McKinstry’s tenure with the Abbott Board has given her a deep understanding of Abbott’s diverse portfolio of businesses. In addition, as the Chief Executive Officer of Wolters Kluwer N.V., a global information, software, and services provider headquartered in the Netherlands, Ms. McKinstry contributes a diverse perspective in the operations, corporate strategy, and governance of a global company such as Abbott. In 2023, Ms. McKinstry attended 100% of the meetings of the Board and the Committees on which she served. The independent directors believe that her qualifications, together with her proven commitment and contributions to the Board, make Ms. McKinstry exceptionally qualified to serve as the Board’s Lead Independent Director.

Ms. McKinstry’s key functions and responsibilities include:

Preside at regularly conducted executive sessions of the independent directors and provide feedback to the Chairman and CEO and other senior management, as appropriate,
Preside at all meetings of the Board at which the Chairman is not present,
Facilitate communication with the Board and serve as liaison between the Chairman and the independent directors,
Call meetings of the independent directors,
Communicate regularly with the Chairman regarding appropriate agenda topics, schedule sufficiency, and other Board related matters,
Lead the Board’s annual evaluation of the Chairman of the Board and CEO,
Lead the annual performance review process,
Work with management on corporate governance issues and developments,
Confer with the Nominations and Governance Committee and the CEO regarding management succession planning, and
Engage directly with major shareholders as appropriate.

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Throughout the year, the Board and its Committees conduct a thorough review of Abbott’s corporate governance structures, taking into account the results of the annual shareholders meeting and shareholder feedback; the results of annual Board, Committee, and director assessments; regulatory developments; and advancements in the areas of corporate governance, compensation, and sustainability.

In addition, as part of its regular succession planning, the Board monitors the composition of backgrounds, skills, and experiences contributed by each of the directors, as well as director tenures and upcoming retirements. Based on these ongoing evaluations, the Board takes actions to continue shaping the Board’s leadership structure and composition to best serve the interests of Abbott and its shareholders. Such actions include evaluating director candidates to supplement the Board’s portfolio of skills, appointing new directors well in advance of anticipated retirement to provide sufficient time for onboarding and transfer of institutional knowledge, and adjusting Board Committee leadership and composition to refresh perspectives and further director development.

Abbott’s Board leadership is further strengthened by:

Eleven out of twelve director nominees are independent
Demonstrated commitment to Board refreshment and diversity – six new independent directors in the last six years, three of whom are women and three of whom are minorities
Fully independent Board Committees – Audit Committee, Compensation Committee, Nominations and Governance Committee, and Public Policy Committee
Committee Chairs who are recommended to the Board by the Nominations and Governance Committee and approved by the full Board
Executive sessions of the independent directors, led by the Lead Independent Director, at each regularly scheduled Board meeting
Annual election of directors by majority vote
Annual evaluations of the Board, each Committee, and each director, including the Chairman of the Board and CEO, that are led by the Lead Independent Director and conducted anonymously to facilitate candid feedback

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BOARD OVERSIGHT

Abbott is committed to strong governance that is aligned with shareholder interests. Our Board spends significant time with Abbott’s senior management to understand global dynamics, challenges, and opportunities for Abbott. During these interactions, directors provide insights and ask probing questions, which guide management decision making. This collaborative approach to risk oversight and emphasis on long-term sustainability begins with our leaders and is ingrained in Abbott’s culture.

OVERSIGHT OF RISK

The Board has risk oversight responsibility for Abbott, which it administers directly and with assistance from its Committees. Throughout the year, the Board and its Committees engage with management to discuss a wide range of enterprise risks, such as risks related to Abbott’s businesses, enterprise and product cybersecurity, litigation, and human capital management. The Audit Committee conducts an annual review of the enterprise risk management process, including the program structure, risk assessment, and risk mitigation. The Board and its Committees also consult with advisors, including legal counsel, internal and external auditors, and consultants. Such engagement and consultations are done by the full Board, independent directors in executive sessions, or fully independent Committees, as appropriate.

Specific risk areas of focus for the Board, its Committees, and management include:

BOARD OF DIRECTORS
Business strategy and operations
Management development and succession planning
Human capital and diversity, equity and inclusion
Litigation
                                                                                                
   

AUDIT COMMITTEE
Accounting, internal controls, and financial reporting 
Enterprise cybersecurity
Information security and data protection
Major financial and business risk exposures
COMPENSATION COMMITTEE
Executive officer compensation, including incentive compensation plans
Equity-based plans
Director compensation
NOMINATIONS AND GOVERNANCE COMMITTEE
Board composition, refreshment, and succession planning
Board governance structure
Governance guidelines and practices
PUBLIC POLICY COMMITTEE
Sustainability, environment, and social responsibility
Regulatory compliance, product quality, and global ethics and compliance programs
Product cybersecurity and data privacy

                                                 
   
MANAGEMENT
Design and execution of Abbott’s enterprise risk management process
Identification, evaluation, and prioritization of risks
Development and implementation of mitigating actions
Regular communication with the Board and its Committees on how risks are being managed

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OVERSIGHT OF STRATEGY

One of the Board’s key responsibilities is overseeing and monitoring business strategy. The Board conducts an annual in-depth review of the long-term strategy and areas of focus for Abbott and its businesses. The Board also regularly engages with management throughout the year to review and discuss the strategic planning for Abbott’s businesses, including operating and financial plans, strategic business priorities and initiatives, and key risks and opportunities. These reviews include discussions of matters such as global talent management and succession planning, diversity, equity and inclusion, global market dynamics and changes in regulatory and competitive landscapes, supply chain initiatives and sustainability programs, and significant corporate actions such as acquisitions and capital expenditures.

The Board monitors management’s strategy execution, receiving regular updates to confirm that activities align with such strategies and that progress is made toward strategic objectives. Most years, the Board also visits Abbott facilities and locations around the world to observe business dynamics and strategy execution by the businesses.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has five committees established in Abbott’s By-Laws: Audit Committee, Compensation Committee, Nominations and Governance Committee, Public Policy Committee, and Executive Committee.

All members of the Audit Committee, Compensation Committee, Nominations and Governance Committee, and Public Policy Committee are independent. These Committees are governed by written charters setting forth their respective responsibilities, and each Committee reviews its charter at least annually, with any changes being recommended to the full Board for approval. Copies of the Committee charters are all available in the governance section of Abbott’s investor relations website (www.abbottinvestor.com).

    COMMITTEE MEMBERSHIPS
Current Members       Audit
Committee
*
      Compensation
Committee
      Nominations
and Governance
Committee
      Public Policy
Committee
      Executive
Committee
Robert J. Alpern, M.D.
Claire Babineaux-Fontenot
Sally E. Blount, Ph.D.
Robert B. Ford
Paola Gonzalez
Michelle A. Kumbier
Darren W. McDew
Nancy McKinstry
Michael G. O’Grady
Michael F. Roman
Daniel J. Starks
John G. Stratton
Total Meetings Held in 2023 8 5 4 4 0
Chair      Member

* Each of the committee members is financially literate, as is required of audit committee members by the New York Stock Exchange. The Board of Directors has determined that Nancy McKinstry is an “audit committee financial expert.”
   
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AUDIT COMMITTEE

The Audit Committee assists the Board of Directors in fulfilling its oversight responsibility with respect to:

Abbott’s accounting and financial reporting practices and the audit process,
The quality and integrity of Abbott’s financial statements,
The independent auditors’ qualifications, independence, and performance,
The performance of Abbott’s internal audit function and internal auditors,
Legal and regulatory compliance relating to financial matters, including accounting, auditing, financial reporting, and securities law issues, and
Enterprise risk management, including major financial and cybersecurity risk exposures.

In performing these functions, the Audit Committee meets regularly with the independent auditor, Abbott’s management, and Abbott’s internal auditors to review the adequacy, effectiveness and quality of Abbott’s accounting and financial reporting principles, policies, procedures and controls, as well as Abbott’s enterprise risk management, including Abbott’s risk assessment and risk management policies. The Audit Committee also receives regular reports from management on Abbott’s information security and enterprise cybersecurity risk programs.

A copy of the report of the Audit Committee is on page 78.

COMPENSATION COMMITTEE

The Compensation Committee assists the Board of Directors in carrying out the Board’s responsibilities relating to the compensation of Abbott’s executive officers and directors. Its primary responsibilities include:

Review, approve, and administer the incentive compensation plans in which any executive officer participates and all of Abbott’s equity-based plans. The Compensation Committee may delegate the responsibility to administer and make grants under these plans to management, except to the extent that such delegation would be inconsistent with applicable law or regulation or with the listing rules of the New York Stock Exchange.
Review director compensation annually and recommend to the full Board both the amount and the allocation between equity-based awards and cash. In recommending director compensation, the Compensation Committee takes comparable director fees into account and reviews any arrangement that could be viewed as indirect director compensation.
Engage compensation consultants to provide counsel and advice on executive and non-employee director compensation matters. The consultant and its principal report directly to the Chair of the Committee. The principal meets regularly and as needed with the Committee in executive sessions, has direct access to the Chair during and between meetings, and performs no other services for Abbott or its senior executives.
   
The Committee determines what variables it will instruct the consultant to consider, including peer groups against which performance and pay should be examined, financial metrics to be used to assess Abbott’s relative performance, competitive incentive practices in the marketplace, and compensation levels relative to market practice. The Committee negotiates and approves any fees paid to the consultant for these services.

The Compensation Committee engaged Meridian Compensation Partners, LLC as its compensation consultant for 2023. Meridian performs no other work for Abbott. Based on its evaluation of Meridian’s independence in accordance with the New York Stock Exchange listing standards and information provided by Meridian, the Committee determined that the work performed by Meridian does not present any conflicts of interest.

A copy of the report of the Compensation Committee is on page 54.

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NOMINATIONS AND GOVERNANCE COMMITTEE

The Nominations and Governance Committee assists the Board in fulfilling its oversight responsibility with respect to governance matters. Its primary responsibilities include:

Assist the Board in identifying individuals qualified to become Board members, and recommend to the Board the nominees for election as directors at the next annual meeting of shareholders,
Recommend to the Board the people to be elected as executive officers of Abbott,
Develop and recommend to the Board the corporate governance guidelines applicable to Abbott, and
Serve in an advisory capacity to the Board and the Chairman of the Board on matters of organization, management succession plans, major changes in the organizational structure of Abbott, and the conduct of Board activities.

The process used by this Committee to identify a nominee to serve as a member of the Board of Directors depends on the qualities being sought. From time to time, Abbott engages an executive search firm to assist the Committee in identifying individuals qualified to be Board members. The process used by the Committee to identify nominees is described on page 16 in the section captioned, “Director Selection.”

PUBLIC POLICY COMMITTEE

The Public Policy Committee assists the Board of Directors in fulfilling its oversight responsibility with respect to:

Legal, regulatory, and healthcare compliance matters, including evaluating Abbott’s compliance policies and practices and reviewing Abbott’s compliance program,
Product quality, product cybersecurity, and data privacy matters,
Governmental affairs and political participation, including advocacy priorities, political contributions, lobbying activities, and trade association memberships,
Sustainability and social responsibility policies and practices, and
Social, political, economic, and environmental trends and public policy issues that affect or could affect Abbott’s business activities, performance, and public image.

EXECUTIVE COMMITTEE

The Executive Committee may exercise all the authority of the Board in the management of Abbott, except for matters expressly reserved by law for Board action.

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BOARD EVALUATION PROCESS

Each year, under the leadership of the Lead Independent Director and together with the Chair of the Nominations and Governance Committee, Abbott’s directors evaluate the effectiveness of the Board and its Committees in performing its governance and risk oversight responsibilities. Directors assess the performance of their peers, as well as the full Board of Directors and each of the Committees on which they serve, as follows:



BOARD MEETINGS AND DIRECTOR COMMITMENTS

The Board of Directors held 7 meetings in 2023. Each director nominee attended 100% of the Board meetings and meetings of the committees on which he or she served. Abbott encourages its Board members to attend the annual shareholders meeting. Last year, all of Abbott’s directors attended the annual shareholders meeting.

Directors must devote sufficient time to fulfill their responsibilities as directors in accordance with the criteria set forth in Abbott’s Governance Guidelines, which are available in the corporate governance section of Abbott’s investor relations website (www.abbottinvestor.com). Accordingly, service on the board of directors of other public companies must be limited so as not to conflict with the responsibilities of Abbott directors. Directors are expected to inform the Chairman of the Board and the Chair of the Nominations and Governance Committee of any public company directorships that they have been offered before accepting any such directorship, so as to allow for evaluation of whether the new directorship creates any concerns or potential conflicts of interest. In addition, no director may serve on the board of directors of an Abbott competitor.

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As set forth in Abbott’s Governance Guidelines, in order to be renominated, incumbent directors must demonstrate certain key characteristics, including:

Adequate preparation for board and committee meetings,
Participation in and contributions to board and committee discussions,
Providing on-going advice and counsel to management on the director’s own initiative and when requested by management,
Regular attendance at board and committee meetings, and
Maintaining an independent familiarity with the external environments in which Abbott operates and especially in the director’s own particular fields of expertise.

Each incumbent director is evaluated on the above criteria by each of his or her peers as part of the annual Board evaluation process, which occurs prior to renomination of any incumbent director for the next annual shareholders meeting. The Board’s evaluation process is discussed on page 24.

SHAREHOLDER ENGAGEMENT

In 2023, we contacted shareholders representing over 60% of our outstanding shares, including 100% of our top 20 investors, to engage in an open dialogue and discuss our compensation program and various topics, including:

Board oversight of risks, such as business strategy and operations, enterprise and product cybersecurity, sustainability, and product quality and regulatory compliance.
Our rigorous goal setting process which links executive pay to performance against operating and financial plans, strategic business priorities and initiatives, and human capital metrics.
Human capital management and Abbott’s commitment to diversity, equity, and inclusion, including Abbott’s Diversity, Equity and Inclusion Report which provides goals, our progress against them, and disclosure of EEO-1 data.
Board composition and refreshment, including six new independent directors since 2018, three of whom are women and three of whom are minorities.

COMMUNICATING WITH THE BOARD OF DIRECTORS

Interested parties may communicate with the Board of Directors by writing a letter to the Chairman of the Board, to the Lead Independent Director, or to the independent directors c/o Abbott Laboratories, 100 Abbott Park Road, D-364, AP6D, Abbott Park, Illinois 60064, Attention: Corporate Secretary. The General Counsel and Corporate Secretary regularly forwards to the addressee all letters other than mass mailings, advertisements, and other materials not relevant to Abbott’s business. In addition, directors regularly receive a log of all correspondence received by Abbott that is addressed to a member of the Board and may request any correspondence on that log.

CORPORATE GOVERNANCE MATERIALS

Abbott’s corporate governance guidelines, outline of directorship qualifications, director independence standards, code of business conduct, and the charters of Abbott’s Audit Committee, Compensation Committee, Nominations and Governance Committee, and Public Policy Committee are all available in the corporate governance section of Abbott’s investor relations website (www.abbottinvestor.com).

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DIRECTOR COMPENSATION

Mr. Ford is not compensated for serving on the Board or Board committees. Abbott’s remaining directors, who are all non-employee directors, are compensated for their service under the Abbott Laboratories Non-Employee Directors’ Fee Plan and the Abbott Laboratories 2017 Incentive Stock Program.

The following table sets forth a summary of the non-employee directors’ 2023 compensation.

Name    Fees Earned or
Paid in Cash
($)(1)
   Stock
Awards
($)(2)
   Option
Awards
($)(3)
   Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
($)(4)
   All Other
Compensation
($)(5)
   Total
($)
R. J. Alpern             $ 126,000   $ 199,960          $ 0                 $ 90,475             $ 25,000  $ 441,435
C. Babineaux-Fontenot 130,000 199,960 0 0 25,000 354,960
S. E. Blount 126,000 199,960 0 11,642 25,000 362,602
P. Gonzalez 132,000 199,960 0 0 25,000 356,960
M. A. Kumbier 132,000 199,960 0 0 0 331,960
D. W. McDew 126,000 199,960 0 0 5,227 331,187
N. McKinstry 181,000 199,960 0 0 25,000 405,960
M. G. O’Grady 84,000 199,960 0 0 0 283,960
W. A. Osborn 52,000 0 0 0 0 52,000
M. F. Roman 138,000 199,960 0 0 0 337,960
D. J. Starks 149,333 199,960 0 0 0 349,293
J. G. Stratton 142,000 199,960 0 0 0 341,960
G. F. Tilton 49,000 0 0 0 25,000 74,000
(1)

Under the Abbott Laboratories Non-Employee Directors’ Fee Plan, non-employee directors earn $10,500 for each month of service as a director. Audit Committee members, other than the Audit Committee chair, receive $500 for each month of service on the Audit Committee. Prior to May 1, 2023, Board Committee chairs received monthly fees of: $2,083.33 for the Audit Committee chair, $1,666.66 for the Compensation Committee chair, and $1,250 for the Public Policy Committee chair. In addition, the lead independent director earned $2,500 for each month of such service and did not receive a fee for service as Nominations and Governance Committee chair. Effective as of May 1, 2023, the Board committee chair monthly fees became $2,500 for the Audit Committee chair, $2,083.33 for the Compensation Committee chair, $1,250 for the Nominations and Governance Committee chair, $1,250 for the Public Policy Committee chair, and $3,333.33 for the lead independent director. Fees earned under the Abbott Laboratories Non-Employee Directors’ Fee Plan are paid in cash to the director, paid in the form of vested non-qualified stock options (based on an independent appraisal of their fair value), deferred (as a non-funded obligation of Abbott), or paid currently into an individual grantor trust established by the director. The distribution of deferred fees and amounts held in a director’s grantor trust generally commences when the director reaches age 65, or upon retirement from the Board of Directors, if later. The director may elect to have deferred fees and fees deposited in trust credited to either a guaranteed interest account or to a stock equivalent account that earns the same return as if the fees were invested in Abbott shares. If necessary, Abbott contributes funds to a director’s trust so that as of year-end the stock equivalent account balance (net of taxes) is not less than seventy-five percent of the market value of the related common shares at year-end.

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(2)

The amounts reported in this column represent the aggregate grant date fair value of the awards calculated in accordance with Financial Accounting Standards Board ASC Topic 718. Abbott determines the grant date fair value of stock unit awards by multiplying the number of restricted stock units granted by the average of the high and low market prices of an Abbott common share on the date of grant. In addition to the fees described in footnote 1, each non-employee director elected to the Board of Directors at the annual shareholders meeting receives vested restricted stock units having a value of $200,000 (rounded down) under the Abbott Laboratories 2017 Incentive Stock Program. In 2023, this was 1,816 units. The non-employee directors receive cash payments equal to the dividends paid on the shares covered by the units at the same rate as other shareholders. Upon termination, retirement from the Board, death, or a change in control of Abbott, a non-employee director will receive one common share for each restricted stock unit outstanding under the Incentive Stock Program. Each director is required to own, within five years of becoming a director, the number of Abbott shares having a fair market value equal to five times the annual director fees earned or paid in cash. All directors with five years tenure or more meet or exceed the guidelines. The following Abbott restricted stock units were outstanding as of December 31, 2023: R. J. Alpern, 37,297; C. Babineaux-Fontenot, 1,816; S. E. Blount, 30,557; P. Gonzalez, 3,418; M. A. Kumbier, 9,132; D. W. McDew, 6,891; N. McKinstry, 30,557; M. G. O’Grady, 1,816; M. F. Roman, 4,917; D. J. Starks, 15,514; and J. G. Stratton, 12,077.

(3)

The following options were outstanding as of December 31, 2023: N. McKinstry, 74,818; M. G. O’Grady, 4,576; and D. J. Starks, 8,136.

(4)

The totals in this column include reportable interest credited under Abbott Laboratories Non-Employee Directors’ Fee Plan during the year.

(5)

The amounts reported in this column represent charitable matching grant contributions. Charitable contributions made by Abbott’s non-employee directors are eligible for a matching contribution (up to $25,000 annually).


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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

INTRODUCTION

This Compensation Discussion and Analysis (CD&A) describes Abbott’s executive compensation program in 2023. In particular, this CD&A explains how the Compensation Committee (the Committee) and Board of Directors made compensation decisions for the Company’s executives, including the six named officers: Robert B. Ford, Chairman of the Board and Chief Executive Officer; Robert E. Funck, Jr., Executive Vice President, Finance; Philip P. Boudreau, Senior Vice President, Finance and Chief Financial Officer; Hubert L. Allen, Executive Vice President, General Counsel and Secretary; Lisa D. Earnhardt, Executive Vice President and Group President, Medical Devices; and Daniel G. Salvadori, Executive Vice President and Group President, Established Pharmaceuticals and Nutritional Products.

The CD&A also describes the process the Committee utilizes to examine performance in the context of executive pay decisions, the performance goals and results for each named officer, and recent updates to our compensation program. This year’s CD&A reflects the feedback from our shareholders gathered during our 2023 shareholder outreach described on page 29.

VALUE CREATION FOR SHAREHOLDERS

Abbott’s strong sustainable performance has resulted in total shareholder return (TSR) above the peer median on a five-year basis. Following the acquisitions of St. Jude Medical and Alere Inc. in 2017, Abbott has delivered a cumulative TSR of 225%, significantly outperforming both the S&P 500 (141%) and peers (99%) over that same time horizon. This long-term performance is driven by strong execution, an effective governance structure, and the strength of our diversified business model with leadership positions in some of the largest and fastest growing markets in healthcare and innovative product portfolios across our businesses.

5-Year Total Shareholder Return
7-Year TSR: Durable Growth
Over the past 7 years, Abbott has outperformed the S&P 500 and peers

In addition to delivering significant shareholder returns, Abbott continued to take important steps to position the Company for long-term, sustainable growth.

ROBUST INNOVATION PIPELINE
Steady cadence of important product approvals across our businesses that will be significant contributors to growth in the coming years.
    
INVESTING FOR FUTURE GROWTH
Increased manufacturing scale and capabilities across several important products.
Invested $2.2 billion in capital projects in the past year.
    
SHAREHOLDER RETURNS
Returned $3.6 billion to shareholders through dividends in 2023 and announced an 8% increase to our dividend for 2024, marking our 52nd consecutive year of dividend increases.

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CHANGES BASED ON SHAREHOLDER FEEDBACK AND MARKET PRACTICES

In 2023, we contacted shareholders representing over 60% of our outstanding shares, including 100% of our top 20 investors, to engage in an open dialogue and discuss our compensation program and various topics, including:

Board oversight of risks, such as business strategy and operations, enterprise and product cybersecurity, sustainability, and product quality and regulatory compliance.
Our rigorous goal setting process which links executive pay to performance against operating and financial plans, strategic business priorities and initiatives, and human capital metrics.
Human capital management and Abbott’s commitment to diversity, equity, and inclusion, including Abbott’s Diversity, Equity and Inclusion Report which provides goals, our progress against them, and disclosure of EEO-1 data.
Board composition and refreshment, including six new independent directors since 2018, three of whom are women and three of whom are minorities.

Their feedback was overwhelmingly positive, which was reflected in the 90% support for our Say-on-Pay Proposal.

As illustrated in the table below, over the past several years we have made numerous changes to our program and our proxy statement based on feedback from our shareholders as well as a review of market practices.

CHANGES BASED ON SHAREHOLDER FEEDBACK
Revised annual cash incentive plan to cap payouts at 200% of target
Significantly increased disclosure related to goal setting, measurement and results for both annual and long-term incentives
Enhanced our Pledging Policy to fully prohibit directors and officers from pledging the Company’s stock
Increased the target for vesting of performance-based restricted stock awards
Updated our peer group to reflect increased size and complexity of business
All Officers, including our Chairman and CEO, carry a human capital goal
Increased disclosure related to Abbott’s 2030 Sustainability Plan goals and linkage to executive pay
Revised annual cash incentive plan goals and weighting
Increased director share ownership guidelines
Introduced new long-term incentive measures to reflect sustained performance over a three-year period
Changed performance-based restricted stock awards to vest only over a 3-year term with no more than one-third of the award vesting in any one year

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ABBOTT’S PEER GROUP FOR PAY AND COMPANY PERFORMANCE BENCHMARKING

To determine the competitiveness of our compensation and benefit programs, the Committee, in consultation with its independent consultant, annually compares the level of compensation, pay practices, and our relative performance to those of peer companies. Our Compensation Committee reviewed our peer group in 2023 to determine whether any changes were necessary to better reflect the current size (revenue and market capitalization) and complexity of Abbott’s businesses.

Based on this review, the Compensation Committee removed Mondelez and added Boeing, PepsiCo and Pfizer. This revised peer group is positioned appropriately between size (revenue and market capitalization between approximately one-third and three-times Abbott’s), growth and return profiles, geographic breadth, and management and operating structure. This approach has been overwhelmingly supported by our investors during shareholder outreach.

The peer group is summarized below, showing the primary characteristics for each company selected, including the Abbott business segment(s) represented by the peer company.

Company Name    Sales/
Rev.(1)
(billions)
   Market
Cap(1
)
(billions)
   % Rev.
Outside
U.S.
 
   Similar #
Employees
   Mfg.
Driven/
Consumer-
Facing
   Abbott Business Segment(s)/
Characteristics Represented
3M Company   $ 32.7   $ 60.4 Diagnostics
Becton Dickinson $ 19.5 $ 70.6 Diagnostics, Medical Devices
Boeing $ 77.8 $ 157.7 Diagnostics, Medical Devices
Boston Scientific $ 14.2 $ 84.7 Medical Devices
Bristol-Myers Squibb $ 44.9 $ 104.4 Established Pharmaceuticals
Cisco $ 58.0 $ 205.3 Diagnostics, Medical Devices
The Coca-Cola Company $ 45.0 $ 254.8 Consumer
Danaher Corporation $ 27.6 $ 170.9 Diagnostics
Honeywell International $ 36.7 $ 138.3 Diagnostics, Medical Devices
Johnson & Johnson $ 85.2 $ 377.3 Diagnostics, Established Pharmaceuticals, Medical Devices
Medtronic $ 32.0 $ 109.5 Medical Devices
Merck $ 60.1 $ 276.3 Established Pharmaceuticals
Nike $ 51.5 $ 165.2 Consumer
PepsiCo $ 91.6 $ 233.5 Consumer
Pfizer $ 58.5 $ 162.6 Established Pharmaceuticals
Procter & Gamble $ 83.9 $ 345.4 Consumer
Reckitt Benckiser(2) $ 18.3 $ 38.7 Nutrition
Stryker Corporation $ 20.5 $ 113.8 Medical Devices
Thermo Fisher Scientific $ 42.9 $ 205.1 Diagnostics
Peer Group Median $ 44.9 $ 162.6
Abbott $ 40.1 $ 191.1
Abbott Percentile Rank 42nd 64th
(1) Data source: Nasdaq IR Insight database reflects most recently disclosed (as of January 31, 2024) trailing 12-month sales/revenue. The market cap reflects values on December 31, 2023.
(2) Revenue/Market Cap converted to USD for companies outside the U.S.

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BASIS FOR COMPENSATION DECISIONS

Abbott and its Compensation Committee have designed a compensation program that balances short- and long-term objectives to focus our executives on actions that create value today, while building for sustainable future success. Approximately 85% of our pay is performance-based, directly tying a significant portion of executive compensation to Company performance and shareholder returns.

Our compensation program is market-based (to ensure our ability to attract and retain talented executives) and produces compensation outcomes that are performance-based (to incent the achievement of profitable growth that increases shareholder value).

COMPENSATION PROGRAM IS MARKET-BASED

All components of total direct compensation are market-based. Each year, the Compensation Committee reviews market data with the independent compensation consultant to ensure our programs are aligned and our officers are positioned appropriately relative to the market.

Base Salary

Base salary targets are initially set using the median of the peer group as a benchmark. Base salaries then vary based on market competitiveness and the officer’s experience, expertise, and performance. The average base salary of our executive officers is approximately at the market median.

Annual Incentive Plan

Annual incentive targets are initially set using the median of the peer group as a benchmark. The targets may vary based on other factors, including internal pay comparisons. Further linkage to the market is achieved by setting targets that require our officers to exceed the anticipated growth of the market in which they compete in order to achieve a target payout of their annual incentives.

Long-Term Incentive Plan (LTI)

To set annual LTI award guidelines, the Committee first reviews LTI grants made by peer companies to identify the competitive market range. Each year the guidelines are set at the appropriate level within the competitive market range based on Abbott’s relative performance, as described on pages 33 and 34. To recognize the continued growth focus of Abbott and to directly align the interests of executive officers with the interests of our shareholders, the Compensation Committee grants long-term incentive awards in the form of 50% stock options and 50% performance restricted shares. This mix of incentive awards is consistent with our peers.

COMPENSATION OUTCOMES ARE PERFORMANCE-BASED

Other than base salary, which is the smallest component of our executives’ compensation, all remaining components of Total Direct Compensation (i.e., annual incentive, performance-based restricted stock awards, and stock options) are aligned with individual, business segment and Company performance.

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Annual Incentive Plan

Payouts are determined based upon performance relative to annual goals and are capped at 200% of each participant’s target incentive amount. The following formula summarizes the annual incentive payout process for officers.

For example:

BASE SALARY BONUS TARGET % TOTAL GOAL SCORE AWARD PAYOUT
$525,000 x 90% x 95% = $448,875

The annual incentive plan is formula driven based on financial, strategic, talent and succession, and diversity results. Officer financial goals are based on adjusted financial measures that reflect the true results of our ongoing operations and are set based on the expected market growth of the businesses in the markets in which we compete.

As the pandemic moved to an endemic state, we expected demand for COVID tests to slow. Our 2023 financial targets reflected this shift and were set below our 2022 results due to the anticipated decline in demand for COVID tests. In our base business, which excludes COVID testing sales, we saw strong growth across all of our segments. Our strong performance during 2023 is a direct result of our actions over the last few years which have positioned the Company to be in an even stronger position today than before the start of the pandemic.

The 2023 full year organic sales growth target for our base business (approximately 95% of our total sales) was set 10.2% higher than 2022, and the actual growth was 11.6% higher than 2022. For individual calculations for each named officer, see pages 40 to 51.

Long-Term Incentive Plan

Abbott’s process to determine long-term incentive awards is based on both Company and individual performance. Guidelines are set based on relative performance of the Company to peers. Those guidelines are adjusted, up or down, based on individual officer performance over the prior three years. Performance restricted shares vest only if performance achieves expectations over the following three years, and stock options provide value only through share price appreciation. Conversely, most other companies reflect performance only at the Company level through future relative TSR. Abbott’s process is much more rigorous, reflecting both Company and individual performance over a longer period of time.

The Committee positions LTI award guidelines relative to the market by comparing Abbott’s 3-year TSR performance against our peers. 5- and 1-year TSR performance are also considered to evaluate longer- and shorter-term performance.

For example, guidelines for grants made in February 2023 were set at the 60th percentile of our peer group, reflecting 82nd percentile relative 3- and 5-year TSR performance and 24th percentile relative 1-year TSR performance through 2022.

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Based on performance through 2023, the guidelines for grants made in February 2024 were set at the 50th percentile of our peer group. More information on the grants made in February 2024, for performance through 2023, will be available in the 2025 proxy. This process has ensured close alignment of LTI grant guidelines and relative Company performance across multiple performance years as summarized in the graphic below.

STEP 1: Link to Company Performance
Compare Abbott’s 3-year TSR performance against our peer group, consider 5-, and 1-year TSR to evaluate longer- and shorter-term performance
STEP 2: Link to Market
Position LTI guideline
value relative to
peer group
STEP 3: Link to Individual Performance
Adjust for individual performance
Performance
Period End
5-year relative
TSR Percentile
3-year relative
TSR Percentile
1-year relative
TSR Percentile
   Award
Year
LTI Guideline
Percentile
  
LTI Award guideline adjusted up or down based on individual officer’s sustained 3-year contributions to:
Sales and market share growth
Margin
Strategic metrics
2023 74th 42nd 63rd 2024 50th
2022 82nd 82nd 24th 2023 60th
2021 88th 82nd 82nd 2022 75th
2020 82nd 82nd 82nd 2021 75th
2019 75th 100th 25th 2020 60th

The recommendation for each officer starts with the Company LTI award guideline (based on relative TSR performance and market data as described above) for the officer’s position and is adjusted based upon assessment of their sustained contributions over the last three years. Contribution scores are totaled and used to adjust each officer’s award guideline. Final awards may be increased or decreased based on the long-term impact each individual officer had on the organization. For example:

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Awards granted in 2023 continue to produce strong differentiation, resulting in award adjustments that ranged from 75% to 125% of award guidelines based on individual performance measured over the three-year period ending in 2022. For individual calculations for each named officer, see pages 40 to 51.

Since stock options realize value only through share price appreciation, the value realized upon the exercise of vested stock options directly aligns the compensation earned with the value shareholders received over the same period. Options are also aligned with shareholder value through the impact of relative TSR in determining the LTI award guidelines.

Performance restricted shares vest one-third each year only if the Adjusted Return on Equity (ROE) performance target is achieved. Vesting is absolute—either 100% or 0%. There is no partial vesting if the target is missed and no additional vesting upside if the Company over-performs. The Committee believes Adjusted ROE is the appropriate performance measure for vesting because ROE measures how much profit the Company generates over the long-term with the capital that shareholders have invested and is a measure reflecting deployment of capital or capital allocation.

The adjusted ROE vesting target to determine future vesting is 14%, reflecting a 40% increase since 2014. This is consistent with our stated intent to increase our Adjusted ROE targets over time following the separation of AbbVie, which had a significant impact on our ROE and other return measures, including Return on Assets (ROA).

Prior to the separation of Abbott and AbbVie, the AbbVie business accounted for the majority (65%) of Abbott’s adjusted net income. However, at the separation of AbbVie, Abbott retained the majority (90%) of the equity. While Abbott’s ROE was disproportionally lower following the AbbVie separation, shareholders that retained both their Abbott and AbbVie shares over the past eleven years since the AbbVie separation would have seen a 305% appreciation in their holdings.
     
Impact of Abbott/
AbbVie Separation


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COMPENSATION PROGRAM IS DIRECTLY LINKED TO BUSINESS STRATEGY

Our compensation program is also linked directly to our business strategy, to ensure that officers are focused on those activities that drive our business strategy and create value for shareholders while maintaining the infrastructure necessary to appropriately drive quality and compliance within the organization. These principles are core to our leadership covenant, which is considered the minimum requirement of being an officer at Abbott. Any officer who does not fulfill the covenant can receive a reduction of up to 100% of their annual incentive and/or long-term incentive awards.

The Board conducts an annual in-depth review of the long-term strategy and areas of focus for Abbott and its businesses. The Board also works with management throughout the year to review and discuss the strategic planning, including operating and financial plans, strategic business priorities and initiatives, and key risks and opportunities. These reviews include discussions on matters such as global talent management and succession planning, diversity, equity and inclusion, and global market dynamics. Discussions also address changes in regulatory and competitive landscapes, supply chain initiatives and sustainability programs, as well as significant corporate actions such as acquisitions and capital expenditures.

The Board monitors management’s strategy execution, receiving regular updates to confirm that activities align with such strategies and that progress is made toward strategic objectives.

The table below explains the strategic link of the key metrics used in our annual and long-term incentive plans.

EVALUATION OF PERFORMANCE
METRIC STRATEGIC LINK
Our annual incentive plan is aligned to the following drivers of shareholder value:
Sales Measures Abbott’s ability to compete effectively in the markets in which we participate and focuses management on achieving strong top-line growth, consistent with our business strategy.
Diluted EPS Measures Abbott’s ability to deliver profitable growth, contributing to strong shareholder returns.
Return on Assets Measures profitability and how effectively Company assets are used to generate profit.
Free Cash Flow Recognizes the importance of generating cash to fund ongoing investments in our business and to pay down debt, pay dividends, and fund investments outside of capital expenditures.
Our long-term incentive plan relies on the following Company metrics, and 3-year sustained individual performance metrics, to determine award value:
Total Shareholder Return Measures Abbott’s stock and dividend performance against our peer group. Used to position LTI award guidelines relative to the market.
3-year LTI Contribution Metrics Measures how each officer has performed relative to their sales, margin, and strategic metrics. Used to adjust LTI award guidelines to reflect individual performance.
Return on Equity Measures how much profit Abbott generates over the long-term with the capital that shareholders have invested. Used to determine if performance-based restricted stock awards.

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Officer financial goals are set and assessed based on adjusted measures that the Committee believes more accurately reflect the results of our ongoing operations. We make certain adjustments for specified items, whether favorable or unfavorable, that are unusual or unpredictable, such as cost reduction initiatives, restructuring programs, integration activities and other business acquisition-related costs, and the impact of significant tax changes. We also exclude intangible amortization expense to provide greater visibility on the results of operations excluding these costs, similar to how Abbott’s management internally assesses performance.

The Committee believes these adjusted measures provide a more stable assessment of Abbott’s core business and encourage decision-making that considers long-term value. They also align compensation goals with the financial guidance we communicate to investors, which is also based on adjusted measures.

COMPENSATION LINK TO SUSTAINABILITY

Our leadership covenant specifically states that senior leaders are accountable for the achievement of Abbott’s 2030 Sustainability Plan goals.

The sustainability plan is integrated into our business plans, financial planning processes and existing governance structures. Each senior manager is responsible for taking actions in their organization that help achieve our targeted priority goals regarding:

Making access and affordability core to new product innovation

We established three design principles to embed innovating access and affordability in how we develop new technologies and products. These principles include 1) Design for broader reach and equity with an innovation portfolio that reaches more people, including new geographies and communities with limited access to care, 2) Design for access to identify and overcome barriers to access and adoption, prioritizing inclusive design as well as manufacturing, distribution and technology strategies to reduce costs across the value chain, and 3) Design to optimize reach and value across four factors: people reached, consumer benefit, business and societal value. These design principles can be seen in action in our products, including the FreeStyle Libre® 3 system, which is about one-third the cost of other competing continuous glucose monitoring systems available today; NeuroSphere myPath digital health app, helping doctors more easily access data and improve their patients’ response to therapy; and Eterna spinal cord stimulation system, which can be recharged less than five times a year under normal use making it the lowest recharge burden platform available.

Transforming care for chronic disease, malnutrition, and infectious diseases

We continue to advance technologies to improve the standard of care including the launch of the FreeStyle Libre 3, the world’s smallest, most accurate continuous glucose monitoring (CGM) sensor. In addition, we have begun connecting FreeStyle Libre product to partners like WeightWatchers (WW International Inc.) who we are working with to share glucose monitoring information collected by FreeStyle Libre on the WeightWatchers mobile app so that people living with diabetes can see their glucose data alongside WeightWatchers’ diabetes-tailored program. Building on our decades-long experience in viral surveillance, we also expanded the Abbott Pandemic Defense Coalition, a first-of-its-kind global scientific and public health partnership dedicated to the early detection of, and rapid response to, future pandemic threats. The coalition is designed with a comprehensive approach to containing emerging threats, leveraging the expertise of global centers of excellence in laboratory testing, genetic sequencing, and public health research.

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Advancing health equity through partnership

As part of our ongoing partnership with the Tanzanian government, we completed the first models for emergency care at a district hospital emergency department and at a village emergency dispensary. To date, we have helped serve approximately 1.2 million patients in Tanzania. We established a Diversity in Research Office to further Abbott’s focus on driving diversity within Abbott’s own clinical trials and improving access to care and innovative therapy options among underrepresented populations. By expanding the reach of studies to include diverse groups, we can achieve a clearer image of our products’ impacts in real-world situations. Armed with this information, we can continue to develop solutions that help even more people. In Stockton, California, where we’re working with local partners to remove barriers that prevent people with diabetes from living healthy lives, we partnered with University of the Pacific to develop a sub-specialization in diabetes management within their social work and nursing schools, and provided scholarships for those students committed to working in Stockton post-graduation.

Protecting a healthy environment

Every year we establish and advance projects to sustainably reduce carbon emissions, expand use of renewable energy, manage water use, reduce the impact of our packaging and minimize waste.

By the end of 2022, Abbott reduced absolute Scope 1 and 2 emissions by 5%, compared to the 2018 baseline. Additionally, we completed an assessment to understand our key suppliers’ existing carbon management efforts and their impact on Scope 3 emissions. Our Scopes 1, 2, and 3 targets were approved by the Science Based Targets initiative (SBTi) in September 2022. This includes a commitment that suppliers representing 82% of emissions in our two largest categories – purchased goods and services, and upstream transportation and distribution – will have science-based targets by 2026. Approximately 30% of our suppliers by emissions covering purchased goods and services and upstream transportation and distribution have science-based targets.

We continue to make progress on water, waste and packaging reduction initiatives. Six of our high-water-impact manufacturing sites that operate in areas of water stress have achieved Alliance for Water Stewardship (AWS) certification. In 2022, two manufacturing facilities and four non-manufacturing facilities received Zero Waste-to-Landfill certification. This brings our total Zero Waste-to-Landfill sites to 51 facilities certified since our program began in 2012. Lastly, 29.6 million pounds of packaging were impacted through sustainable design programs in 2020–2022. This includes 1.4 million pounds of packaging transitioned to more circular options annually, and 28.2 million pounds of material eliminated or reduced annually.

Building the diverse, innovative workforce of tomorrow

Each of our officers, including our Chairman and CEO, carry human capital goals to ensure that we have a diverse and innovative workforce that is ready for the future. We do this by providing differentiated benefits, extraordinary development opportunities and a powerful common purpose.

Our goal is to achieve gender balance across our global management team and in our Science, Technology, Engineering, and Mathematics (STEM) roles by 2030 and to ensure one-third of our leadership roles are held by people from underrepresented groups by 2025. Through the end of 2022, 41% of global management positions were filled by women, 45% of our STEM roles were filled by women, and 35% of our leadership roles in the U.S. were held by people from underrepresented groups.

We start early, with highly rated internships that allow us to attract diverse talent that otherwise might not consider a career in STEM. We remain focused on developing future leaders through our mentoring and sponsorship programs that support internal development and succession planning.

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Our market-leading benefits focus on those areas that have real impact for our employees. We were the first company to help U.S. employees save for retirement while repaying student loans through our Freedom 2 Save program, which was recently codified by the federal government through the Secure 2.0 Act. Over $1.7 million total Freedom 2 Save employer contributions to participant retirement accounts were made in 2022, bringing our total to over $5.5 million total employer contributions since the program’s inception in 2019. This program was included by Fortune magazine in its 2023 “Change the World” list, which recognizes companies that deliver shared value by making an important social or environmental impact through their core business strategies and operations.

We know that the skills that make our people successful today may not be the skills that are important for the future. So we offer upskilling programs for new career paths, and pathways to earn college degrees on flexible schedules and at no personal cost. During 2022, we launched a new apprenticeship program that prepares community college students who are studying trades – like HVAC, welding and industrial technologies –for long-term careers with Abbott after they graduate.

Responsibly connecting data, technology and care

We are dedicated to being a trusted healthcare partner and advocate for responsible data collection, access and insights. We developed and published updated global privacy principles and achieved 16 ISO/SOC 2 cybersecurity certifications for key connected Abbott products, including Merlin.net, CardioMEMS, and NeuroSphere Virtual Clinic, providing third-party validation of our security controls. Additionally, we launched a customer cybersecurity portal to provide healthcare delivery organizations direct access to key cybersecurity information on Abbott products.

Creating a resilient, diverse and responsible supply chain

We are committed to maintaining a high-quality, sustainable, and resilient supply chain to deliver products that millions of people depend on worldwide. We work with more than 75,000 suppliers in more than 150 countries; we have a robust supplier selection process and published supplier guidelines. Abbott and the Local Initiatives Support Corporation (LISC) have pledged $37.5 million in growth capital and small business loans to support diverse small businesses in an initiative to advance a more inclusive supply chain for Abbott and other healthcare companies.

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PAY DECISIONS FOR NAMED EXECUTIVE OFFICERS

The following pages detail the goals and metrics used to determine each named officer’s payout under our annual and long-term incentive plans.

Annual Incentive Plan

Each year our annual incentive targets are established to require that officers exceed the anticipated growth of the market in which they compete in order to achieve a target payout of their annual incentives.

2023 financial targets were set below 2022 actuals due to the anticipated year-over-year decline in COVID-19 testing-related sales. During 2022 we delivered $8.4 billion in COVID test sales. Our 2023 Plan assumed $2.0 billion in COVID-19 testing-related sales and actual sales were $1.6 billion. The 2023 full year organic sales growth target for our base business (approximately 95% of our total sales) was set 10.2% higher than 2022, and the actual growth was 11.6% higher than 2022. For individual calculations for each named officer, see pages 40 to 51.

Long-Term Incentive Plan

It is important to note that the amounts shown in the Summary Compensation Table reflect the annual bonus for 2023 performance, but the LTI awards shown are for performance through 2022. Based on performance through 2023, the LTI guidelines for awards granted during 2024 were lowered to the 50th percentile of our peer group. More information on the grants made for performance through 2023 will be available in the 2025 proxy. More information on our approach to compensation, which definitively aligns our LTI grant guidelines with Company performance relative to the market and individual performance based on sustained contributions over the last three years, can be found on pages 33 and 34.

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NAMED EXECUTIVE OFFICER COMPENSATION DECISIONS

ROBERT B . FORD

Chairman of the Board and Chief Executive Officer
 

Base Salary

Mr. Ford’s annual base salary of $1,500,000 did not change in 2023.

Annual Incentive Plan

Mr. Ford’s target bonus of 175% was not changed in 2023. Based on performance in 2023, Mr. Ford received a bonus in February 2024 which was calculated as follows:

GOAL 2022
RESULTS
ACHIEVED
GOAL
WEIGHT
2023 GOAL MEASUREMENT 2023
RESULTS
ACHIEVED
GOAL
SCORE
THRESHOLD TARGET MAXIMUM
FINANCIAL METRICS(1)
Adjusted Sales(2) $44.80B 25% $40.00B $40.24B $40.50B $40.44B 34.5%
Adjusted Diluted EPS $5.34 25% $4.30 $4.40 $4.50 $4.44 30.0%
Adjusted ROA 16.0% 10% 13.3% 13.5% 13.9% 13.7% 12.5%
Free Cash Flow $7.8B 10% $4.8B $5.0B $5.2B $5.1B 11.5%
STRATEGIC METRICS(3)
Diabetes Care Sales Growth 10% 17.5% 20.1% 22.5% 21.9% 13.7%
Key Cardiometabolic Product Sales Growth 10% 80.4%
of Target
Target 120.0%
Of Target
Not
Achieved
0%
HUMAN CAPITAL METRICS
Goal (10% weight): Meet talent, succession planning, and diversity targets. Achieved 10.0%
Total 112.20%
(1) Adjusted Sales exclude the impact of foreign exchange on actual sales relative to the goal target. Adjusted Diluted EPS is diluted earnings per common share from continuing operations excluding specified items, such as intangible amortization expense and various other costs including expenses related to restructuring actions or business acquisitions. Adjusted Return on Assets (ROA) reflects earnings from continuing operations, excluding interest expense and specified items. Adjusted ROA also reflects total assets less current liabilities excluding short-term borrowings. Free Cash Flow equals Operating Cash Flow less acquisitions of property and equipment.
(2) Set based on expected market growth of the businesses and markets in which we compete. To achieve target payout, market share must increase.
(3) Diabetes Care and Key Cardiometabolic Product Sales Growth exclude the impact of foreign exchange.

BASE SALARY BONUS TARGET % TOTAL GOAL SCORE AWARD PAYOUT
$1,500,000 × 175% × 112.20% = $2,945,250

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Long-Term Incentives

Based on the Committee’s review of Abbott and individual performance through 2022, Mr. Ford received an LTI award in February 2023 with a value of $14,875,300, which was 110% of the market value equity award for a CEO in Abbott’s peer group. This award was granted 50% in stock options(1) and 50% in performance restricted shares(2).

LTI AWARD
GUIDELINE
LTI ADJUSTMENT AWARD ALLOCATION AWARD
VALUE
$13,523,000 × 110% × 50% Stock Options(1) = $7,437,650
50% Performance Restricted Shares(2) $7,437,650
Total $14,875,300

INDIVIDUAL LTI PERFORMANCE ASSESSMENT
METRIC 2020 2021 2022 OVERALL
Sales and Market Share Growth Contribution Exceeded (+1) Exceeded (+1) Met (0) +2
Margin Contribution Exceeded (+1) Exceeded (+1) Met (0) +2
Strategic Metrics Exceeded (+1) Did Not Meet (-1) Did Not Meet (-1) -1
Total +3
LTI Adjustment 110%

LTI ADJUSTMENT LEGEND
TOTAL RESULT
+4 or More 125%
+1 to +3 110%
0 100%
-1 or -2 90%
-3 or Less 75%
(1) Stock options realize value only through share price appreciation.
(2) Performance restricted shares vest only if the 14% Adjusted Return on Equity (ROE) performance target is achieved.

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ROBERT E. FUNCK, JR

Executive Vice President, Finance
 

Mr. Funck previously served as Executive Vice President, Finance and Chief Financial Officer. Mr. Funck was appointed to the role of Executive Vice President, Finance effective September 1, 2023.

Base Salary

Mr. Funck’s annual base salary of $875,000 did not change in 2023.

Annual Incentive Plan

Mr. Funck’s target bonus of 115% was not changed in 2023. Based on performance in 2023, Mr. Funck received a bonus in February 2024 which was calculated as follows:

GOAL 2022
RESULTS
ACHIEVED
GOAL
WEIGHT
2023 GOAL MEASUREMENT 2023
RESULTS
ACHIEVED
GOAL
SCORE
THRESHOLD TARGET MAXIMUM
FINANCIAL METRICS(1)
Adjusted Sales(2) $44.80B 10% $40.00B $40.24B $40.50B $40.44B 13.8%
Adjusted Diluted EPS $5.34 20% $4.30 $4.40 $4.50 $4.44 24.0%
Free Cash Flow $7.8B 10% $4.8B $5.0B $5.2B $5.1B 11.5%
STRATEGIC METRICS(3)

Goal (10% weight): Execute milestones related to supply chain continuity and capital structure.
Result: Achieved

10.0%

Goal (12.5% weight): Develop and execute plans to manage cybersecurity and economic risks.
Result: Achieved

12.5%

Goal (7.5% weight): Develop and execute integration plan for Cardiovascular Systems Inc.
Result: Achieved

7.5%

Goal (5% weight): Implement a global guided buying platform.
Result: Mostly Achieved

3.75%

Goal (10% weight): Implement key IT infrastructure initiatives.
Result: Mostly Achieved

7.5%
HUMAN CAPITAL METRICS
Goal (15% weight): Meet talent, succession planning, and diversity targets.
Result: Achieved
  15.0%
Total 105.55%
(1) Adjusted Sales exclude the impact of foreign exchange on actual sales relative to the goal target. Adjusted Diluted EPS is diluted earnings per common share from continuing operations excluding specified items. Free Cash Flow equals Operating Cash Flow less acquisitions of property and equipment.
(2) Set based on expected market growth of the businesses and markets in which we compete. To achieve target payout, market share must increase.
(3) Target not disclosed for competitive reasons.

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BASE SALARY BONUS TARGET % TOTAL GOAL SCORE AWARD PAYOUT
$875,000 × 115% × 105.55% = $1,062,100

Long-Term Incentives

Based on the Committee’s review of Abbott and individual performance through 2022, Mr. Funck received an LTI award in February 2023 with a value of $5,118,700, which was equal to 110% of the market value equity award for a CFO in Abbott’s peer group. Additional calculation details are as follows:

LTI AWARD
GUIDELINE
LTI ADJUSTMENT AWARD ALLOCATION AWARD
VALUE
$4,717,000 × 110% × 50% Stock Options(1) = $2,594,350
50% Performance Restricted Shares(2) $2,594,350
Total $5,188,700

INDIVIDUAL LTI PERFORMANCE ASSESSMENT
METRIC 2020 2021 2022 OVERALL
Sales and Market Share Growth Contribution Exceeded (+1) Exceeded (+1) Met (0) +2
Margin Contribution Exceeded (+1) Exceeded (+1) Met (0) +2
Strategic Metrics Exceeded (+1) Did Not Meet (-1) Did Not Meet (-1) -1
Total +3
LTI Adjustment 110%

LTI ADJUSTMENT LEGEND
TOTAL RESULT
+4 or More 125%
+1 to +3 110%
0 100%
-1 or -2 90%
-3 or Less 75%
(1) Stock options realize value only through share price appreciation.
(2) Performance restricted shares vest only if the 14% Adjusted Return on Equity (ROE) performance target is achieved.

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PHILIP P. BOUDREAU

Senior Vice President, Finance and Chief Financial Officer
 

Mr. Boudreau previously served as Vice President, Finance and Controller. Mr. Boudreau was appointed to the role of Senior Vice President, Finance and Chief Financial Officer effective September 1, 2023.

Base Salary

Mr. Boudreau’s annual base salary was increased in September 2023 to $600,000 in connection with his promotion to Senior Vice President, Finance and Chief Financial Officer.

Annual Incentive Plan

Mr. Boudreau’s target bonus was increased to 90% of base salary during 2023 in connection with his promotion to Senior Vice President, Finance and Chief Financial Officer. Based on performance in 2023, Mr. Boudreau received a bonus in February 2024 which was calculated as follows:

  2022
RESULTS
ACHIEVED
GOAL
WEIGHT
2023 GOAL MEASUREMENT 2023
RESULTS
ACHIEVED
GOAL
SCORE
THRESHOLD TARGET MAXIMUM
FINANCIAL METRICS(1)
Adjusted Sales(2) $44.80B 10% $40.00B $40.24B $40.50B $40.44 13.8%
Adjusted Diluted EPS $5.34 20% $4.30 $4.40 $4.50 $4.44 24.0%
Free Cash Flow $7.8B 10% $4.8B $5.0B $5.2B $5.1B 11.5%
STRATEGIC METRICS(3)
Goal (10% weight): Execute milestones related to new regulatory and financial disclosure requirements.
Result: Achieved
10.0%
Goal (10% weight): Develop and execute plans to manage currency and economic risks.
Result: Mostly Achieved
8.75%
Goal (10% weight): Achieve key financial return metrics.
Result: Achieved
10.0%
Goal (10% weight): Analyze capital structure and potential opportunities and external risks.
Result: Achieved
10.0%
Goal (5% weight): Implement key financial systems in select countries.
Result: Achieved
5.0%
HUMAN CAPITAL METRICS
Goal (15% weight): Meet talent, succession planning, and diversity targets.
Result: Achieved
  15.0%
Total 108.05%
(1) Adjusted Sales exclude the impact of foreign exchange on actual sales relative to the goal target. Adjusted Diluted EPS is diluted earnings per common share from continuing operations excluding specified items. Free Cash Flow equals Operating Cash Flow less acquisitions of property and equipment.
(2) Set based on expected market growth of the businesses and markets in which we compete. To achieve target payout, market share must increase.
(3) Target not disclosed for competitive reasons.

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BASE SALARY BONUS TARGET % TOTAL GOAL SCORE AWARD PAYOUT
$600,000 × 90% × 108.05% = $583,500

Long-Term Incentives

Based on the Committee’s review of Abbott and individual performance through 2022, while serving as Vice President, Finance and Controller, Mr. Boudreau received an LTI award in February 2023 with a value of $1,031,800, which was equal to 110% of his LTI award guideline. Additional calculation details are as follows:

LTI AWARD
GUIDELINE
LTI ADJUSTMENT AWARD ALLOCATION AWARD
VALUE
$938,000 × 110% × 50% Stock Options(1) = $515,900
50% Performance Restricted Shares(2) $515,900
Total $1,031,800

INDIVIDUAL LTI PERFORMANCE ASSESSMENT
METRIC 2020 2021 2022 OVERALL
Sales and Market Share Growth Contribution Exceeded (+1) Exceeded (+1) Met (0) +2
Margin Contribution Exceeded (+1) Exceeded (+1) Met (0) +2
Strategic Metrics Met (0) Did Not Meet (-1) Did Not Meet (-1) -2
Total +2
LTI Adjustment 110%

LTI ADJUSTMENT LEGEND
TOTAL RESULT
+4 or More 125%
+1 to +3 110%
0 100%
-1 or -2 90%
-3 or Less 75%
(1) Stock options realize value only through share price appreciation.
(2) Performance restricted shares vest only if the 14% Adjusted Return on Equity (ROE) performance target is achieved.

In connection with Mr. Boudreau’s promotion to Senior Vice President, Finance and Chief Financial Officer, he received a grant of 10,223 stock options and 2,620 performance restricted shares (valued at $540,800 in total).

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HUBERT L. ALLEN

Executive Vice President, General Counsel and Secretary
 

Base Salary

Mr. Allen’s annual base salary of $830,000 did not change in 2023.

Annual Incentive Plan

Mr. Allen’s target bonus of 105% was not changed in 2023. Based on performance in 2023, Mr. Allen received a bonus in February 2024 which was calculated as follows:

  2022
RESULTS
ACHIEVED
GOAL
WEIGHT
2023 GOAL MEASUREMENT 2023
RESULTS
ACHIEVED
GOAL
SCORE
THRESHOLD TARGET MAXIMUM
FINANCIAL METRICS(1)
Adjusted Sales(2) $44.80B 10% $40.00B $40.24B $40.50B $40.44B 13.8%
Adjusted Diluted EPS $5.34 20% $4.30 $4.40 $4.50 $4.44 24.0%
Free Cash Flow $7.8B 10% $4.8B $5.0B $5.2B $5.1B 11.5%
Other Financial Returns(3) Achieved 10% Target Target Target Achieved 10.0%
STRATEGIC METRICS
Goal (30% weight): Resolve certain key litigation matters and investigations.
Result: Achieved
30.0%
Goal (5% weight): Develop and execute rollout schedule for centralized Consent Management platform.
Result: Mostly Achieved
3.75%
HUMAN CAPITAL METRICS
Goal (15% weight): Meet talent, succession planning, and diversity targets.
Result: Achieved
  15.0%
Total 108.05%
(1) Adjusted Sales exclude the impact of foreign exchange on actual sales relative to the goal target. Adjusted Diluted EPS is diluted earnings per common share from continuing operations excluding specified items. Free Cash Flow equals Operating Cash Flow less acquisitions of property and equipment.
(2) Set based on expected market growth of the businesses and markets in which we compete. To achieve target payout, market share must increase.
(3) Target not disclosed for competitive reasons.

BASE SALARY BONUS TARGET % TOTAL GOAL SCORE AWARD PAYOUT
$830,000 × 105% × 108.05% = $941,700

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Long-Term Incentives

Based on the Committee’s review of Abbott and individual performance through 2022, Mr. Allen received an LTI award in February 2023 with a value of $3,920,000, which was equal to 125% of his LTI award guideline. Additional calculation details are as follows:

LTI AWARD
GUIDELINE
LTI ADJUSTMENT AWARD ALLOCATION AWARD
VALUE
$3,136,000 × 125% × 50% Stock Options(1) = $1,960,000
50% Performance Restricted Shares(2) $1,960,000
Total $3,920,000

INDIVIDUAL LTI PERFORMANCE ASSESSMENT
METRIC 2020 2021 2022 OVERALL
Sales and Market Share Growth Contribution Exceeded (+1) Exceeded (+1) Met (0) +2
Margin Contribution Exceeded (+1) Exceeded (+1) Met (0) +2
Strategic Metrics Met (0) Met (0) Met (0) 0
Total +4
LTI Adjustment 125%

LTI ADJUSTMENT LEGEND
TOTAL RESULT
+4 or More 125%
+1 to +3 110%
0 100%
-1 or -2 90%
-3 or Less 75%
(1) Stock options realize value only through share price appreciation.
(2) Performance restricted shares vest only if the 14% Adjusted Return on Equity (ROE) performance target is achieved.

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LISA D. EARNHARDT

Executive Vice President and Group President, Medical Devices
 

Ms. Earnhardt previously served as Executive Vice President, Medical Devices. Ms. Earnhardt was appointed to the role of Executive Vice President and Group President, Medical Devices effective December 1, 2023.

Base Salary

Ms. Earnhardt’s annual base salary was increased to $740,000 in March 2023. Her base salary was further increased to $790,000 in December 2023 in connection with her promotion to Executive Vice President and Group President, Medical Devices.

Annual Incentive Plan

Ms. Earnhardt’s target bonus of 115% was not changed in 2023. Based on performance in 2023, Ms. Earnhardt received a bonus in February 2024 which was calculated as follows:

GOAL 2022
RESULTS
ACHIEVED
GOAL
WEIGHT
2023 GOAL MEASUREMENT 2023
RESULTS
ACHIEVED
GOAL
SCORE
THRESHOLD TARGET MAXIMUM
FINANCIAL METRICS(1)
Adjusted Division Net Sales(2) $15.60B 20% $16.39B $16.68B $16.86B $16.99B 30.0%
Adjusted Division Margin(3) 20% Target Target 102.4%
of Target
101.10% of
Target
24.6%
Adjusted Division Gross Margin(3) 10% 99.4%
of Target
Target 103.0%
of Target
99.4% of
Target
5.0%
Market Share(3) 10% Target Target Target Achieved 10.0%
Adjusted Division Free Cash Flow(3) 5% Target Target 102.7%
of Target
Not
Achieved
0%
Cash Conversion Cycle(3) 5% 5 days over
Target
Target Target Not
Achieved
0%
STRATEGIC METRICS
Goal (20% weight): Execute strategic financial contribution related to product approvals and production expansion.
Result: Achieved
20.0%
HUMAN CAPITAL METRICS
Goal (10% weight): Meet talent, succession planning, and diversity targets.
Result: Achieved
 
 
10.0%
            Total 99.60%
(1) Adjusted Division Net Sales exclude the impact of foreign exchange on actual sales relative to the goal target. Adjusted Division Margin and Adjusted Division Gross Margin exclude the impact of foreign exchange on actual division margin and gross margin relative to the respective goal target. Adjusted Division Free Cash Flow reflects pre-tax operating cash flow less capital expenditures and excludes the impact of foreign exchange.
(2) Set based on expected market growth of the businesses and markets in which we compete. To achieve target payout, market share must increase.
(3) Target not disclosed for competitive reasons.

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BASE SALARY BONUS TARGET % TOTAL GOAL SCORE FINAL AWARD PAYOUT
$790,000 × 115% × 99.60% = $904,900

Long-Term Incentives

Based on the Committee’s review of Abbott and individual performance through 2022, Ms. Earnhardt received an LTI award in February 2023 with a value of $3,369,000, which was equal to 100% of her LTI award guideline. Additional calculation details are as follows:

LTI AWARD
GUIDELINE
LTI ADJUSTMENT AWARD ALLOCATION AWARD
VALUE
$3,369,000 × 100% × 50% Stock Options(1) = $1,684,500
50% Performance Restricted Shares(2) $1,684,500
Total $3,369,000

INDIVIDUAL LTI PERFORMANCE ASSESSMENT
METRIC 2020 2021 2022 OVERALL
Sales and Market Share Growth Contribution Met (0) Met (0) Met (0) 0
Margin Contribution Met (0) Met (0) Met (0) 0
Strategic Metrics Met (0) Met (0) Met (0) 0
Total 0
LTI Adjustment 100%

LTI ADJUSTMENT LEGEND
TOTAL RESULT
+4 or More 125%
+1 to +3 110%
0 100%
-1 or -2 90%
-3 or Less 75%
(1) Stock options realize value only through share price appreciation.
(2) Performance restricted shares vest only if the 14% Adjusted Return on Equity (ROE) performance target is achieved.

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DANIEL G. SALVADORI

Executive Vice President and Group President, Established Pharmaceuticals and Nutritional Products
 

Base Salary

Mr. Salvadori’s annual base salary of $790,000 was not changed in 2023.

Annual Incentive Plan

Mr. Salvadori’s target bonus of 115% was not changed in 2023. Based on performance in 2023, Mr. Salvadori received a bonus in February 2024 which was calculated as follows:

GOAL 2022
RESULTS
ACHIEVED
GOAL
WEIGHT
2023 GOAL MEASUREMENT 2023
RESULTS
ACHIEVED
GOAL
SCORE
THRESHOLD TARGET MAXIMUM
FINANCIAL METRICS(1)
Established Pharmaceuticals Adjusted Division Net Sales(2) $5.04B 10% $4.90B $4.97B $5.09B $5.08B 14.4%
Nutrition Adjusted Division Net Sales(2) $7.69B 10% $8.23B $8.38B $8.53B $8.20B 0%
Established Pharmaceuticals Adjusted Division Margin(3) 101.1%
of Target
10% Target Target 105.8%
of Target
104.0%
of Target
13.5%
Nutrition Adjusted Division Margin(3) Not
Achieved
10% Target Target 107.1%
of Target
Above
Maximum
15.0%
Established Pharmaceuticals Adjusted Division Gross Margin(3) Not
Achieved
5% 99.4%
of Target
Target 103.7%
of Target
Not Achieved 0%
Nutrition Adjusted Division Gross Margin(3) Not
Achieved
5% 99.5%
of Target
Target 104.8%
of Target
Above
Maximum
7.5%
Established Pharmaceuticals Market Share(3) Achieved 5% Target Target Target Achieved 5.0%
Nutrition Market Share(3) Partially
Achieved
5% Target Target Target Achieved 5.0%
Established Pharmaceuticals Adjusted Division Free Cash Flow(3) 105.8%
of Target
2.5% Target Target 102.8%
of Target
Not Achieved 0%
Nutrition Adjusted Division Free Cash Flow(3) Not
Achieved
2.5% Target Target 102.7%
of Target
Above
Maximum
3.75%
Established Pharmaceuticals Cash Conversion Cycle(3) Achieved 2.5% 5 days over
Target
Target Target Achieved 2.5%
Nutrition Cash Conversion Cycle(3) Not
Achieved
2.5% 3 days over
Target
Target Target Not Achieved 0%
STRATEGIC METRICS
Goal (20% weight): Complete commercialization milestones and implement key capital projects.
Result: Achieved
22.75%
HUMAN CAPITAL METRICS
Goal (10% weight): Meet talent, succession planning, and diversity targets.
Result: Mostly Achieved
 
 
7.5%
            Total 96.90%

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(1) Adjusted Division Net Sales exclude the impact of foreign exchange on actual sales relative to the goal target. Adjusted Division Margin and Adjusted Division Gross Margin exclude the impact of foreign exchange on actual division margin and gross margin relative to the respective goal target. Adjusted Division Free Cash Flow reflects pre-tax operating cash flow less capital expenditures and excludes the impact of foreign exchange.
(2) Set based on expected market growth. To achieve target payout, market share must increase.
(3) Target not disclosed for competitive reasons.

BASE SALARY BONUS TARGET % TOTAL GOAL SCORE AWARD PAYOUT
$790,000 × 115% × 96.90% = $880,300

Long-Term Incentives

Based on the Committee’s review of Abbott and individual performance through 2022, Mr. Salvadori received an LTI award in February 2023 with a value of $3,761,000, which was equal to 100% of his LTI award guideline. Additional calculation details are as follows:

LTI AWARD
GUIDELINE
LTI ADJUSTMENT AWARD ALLOCATION AWARD
VALUE
$3,761,000 × 100% × 50% Stock Options(1) = $1,880,500
50% Performance Restricted Shares(2) $1,880,500
Total $3,761,000

INDIVIDUAL LTI PERFORMANCE ASSESSMENT
METRIC 2020 2021 2022 OVERALL
Sales and Market Share Growth Contribution Exceeded (+1) Exceeded (+1) Did Not Meet (-1) +1
Margin Contribution Exceeded (+1) Exceeded (+1) Did Not Meet (-1) +1
Strategic Metrics Did Not Meet (-1) Met (0) Did Not Meet (-1) -2
Total 0
LTI Adjustment 100%

LTI ADJUSTMENT LEGEND
TOTAL RESULT
+4 or More 125%
+1 to +3 110%
0 100%
-1 or -2 90%
-3 or Less 75%
(1) Stock options realize value only through share price appreciation.
(2) Performance restricted shares vest only if the 14% Adjusted Return on Equity (ROE) performance target is achieved.

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BENEFITS AND PERQUISITES

Each of the benefits described below was designed to support the Company’s objective of providing a competitive total pay program. Individual benefits do not directly affect decisions regarding other benefits or pay components, except to the extent that benefits and pay components must, in aggregate, be competitive.

BENEFITS AND PERQUISITES       DESCRIPTION
Retirement Benefits
The named officers participate in Abbott-sponsored defined benefit plans: the Abbott Laboratories Annuity Retirement Plan and the Abbott Laboratories Supplemental Pension Plan. These plans are described in greater detail in the “Pension Benefits” section of the proxy.
Since officers’ Supplemental Pension Plan benefits cannot be secured in a manner similar to qualified plans, which are held in trust, officers receive an annual cash payment equal to the increase in present value of their Supplemental Pension Plan benefit. Officers have the option of depositing these annual payments to an individually established grantor trust, net of tax withholdings. Deposited amounts may be credited with the difference between the officers’ actual annual trust earnings and the rate used to calculate trust funding (currently 8%) while they are employed. Amounts deposited in the individual trusts are not tax deferred.
Officers do not receive tax gross ups on their grantor trusts. The manner in which the grantor trust will be distributed to an officer upon retirement from the Company generally follows the manner elected by the officer under the Annuity Retirement Plan. Should an officer (or the officer’s spouse, depending upon the pension distribution method elected by the officer under the Annuity Retirement Plan) live beyond the actuarial life expectancy age used to determine the Supplemental Pension Plan benefit and, therefore, exhaust the trust balance, the Supplemental Pension Plan benefit will be paid by the Company.
Deferred Compensation Officers of the Company, like all U.S. employees, are eligible to defer a portion of annual base salary and bonus (in certain cases), on a pre-tax basis, to the Company’s qualified 401(k) plan, up to the IRS contribution limits. Officers are also eligible to defer up to 18% of their base salary, less contributions to the 401(k) plan, to a non-qualified plan. Unlike other U.S. managers, officers are not eligible to elect to defer compensation into the Deferred Compensation Plan. However, up to one hundred percent (100%) of annual incentive awards earned under the Company’s Performance Incentive Plan is eligible for deferral to a non-qualified plan. Officers may defer these amounts to unfunded book accounts or choose to have the amounts paid in cash on a current basis and deposited into individually established grantor trusts, net of tax withholdings. These amounts are credited annually with earnings. Officers do not receive tax gross ups on their grantor trusts. Officers elect the manner in which the assets held in their grantor trusts will be distributed to them upon retirement or other separation from the Company.

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BENEFITS AND PERQUISITES       DESCRIPTION
Change in Control Arrangements All named officers have change in control agreements, the purpose of which is to aid in retention and recruitment, encourage continued attention and dedication to assigned duties during periods involving a possible change in control of the Company, and protect the earned benefits of the officer against adverse changes resulting from a change in control. The level of payments provided under the agreements is established to be consistent with market practices as confirmed by data provided to the Committee by its independent compensation consultant. These arrangements are described in greater detail in the “Potential Payments Upon Termination or Change in Control” section of this proxy.
Financial Planning Named officers are eligible to receive up to $10,000 of fees annually associated with estate planning advice, tax preparation, and general financial planning. If an officer chooses to utilize this benefit, fees for services received up to the annual allocation are paid by the Company and are treated as imputed income to the officer, who then is responsible for payment of all taxes due on the fees paid by the Company.
Company Automobile Named officers are eligible for use of a Company-leased vehicle, with a lease term of 50 months. Seventy-five percent (75%) of the cost of the vehicle is imputed to the officer as income for federal income tax purposes.
Company Aircraft Non-business-related flights on corporate aircraft by Mr. Ford are covered by a time-sharing lease agreement, pursuant to which incremental costs associated with those flights are reimbursed by the executive to the Company in accordance with Federal Aviation Administration regulations.
Disability Benefit In addition to Abbott’s standard disability benefits, the U.S. named officers are eligible for a monthly long-term disability benefit, which is described in greater detail in the “Potential Payments Upon Termination or Change in Control” section of this proxy.

SHARE OWNERSHIP AND RETENTION GUIDELINES

To further promote sustained shareholder returns and to ensure the Company’s executives remain focused on both short- and long-term objectives, the Company has established share ownership guidelines. Each officer has five years from the date appointed/elected to his/her position to achieve the ownership level associated with the position.

ROLE GUIDELINE
Chief Executive Officer 6 times base salary
Executive Vice Presidents 3 times base salary
Senior Vice Presidents 3 times base salary
All other officers 2 times base salary

Any officer who has not achieved at least 50% of the share ownership guideline after three years in their current position will be required to hold 50% of future equity awards until they meet the ownership guideline. All named officers with 5 years tenure in their current position meet or exceed the guidelines.

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HEDGING

Directors and officers are prohibited from entering into or engaging in any financial transaction that is designed to reduce the financial risk associated with owning Abbott shares. These financial transactions include, but are not limited to, engaging in short sales, derivative transactions (such as equity swaps, straddles, puts, or calls), and hedging or monetizing transactions (such as collars, exchange funds, or prepaid forward variable contracts) that are linked directly to Abbott stock.

PLEDGING

Directors and officers are prohibited from holding Abbott stock in a margin account, pledging Abbott stock, or otherwise securing any of their obligations by assigning Abbott stock as collateral.

RECOUPMENT POLICIES

In 2023, Abbott adopted a Dodd-Frank compliant clawback policy.

Additionally, the Compensation Committee maintains broad discretion to administer and implement the Company’s preexisting recoupment policy and seek recoupment of equity or cash incentive awards if it determines that a senior executive engaged in misconduct or failed in a supervisory capacity, resulting in a material violation of law or Abbott policy that causes significant financial harm to Abbott. The Compensation Committee may recover incentive compensation awarded to a senior executive in the prior three years or reduce future awards.

COMPLIANCE

The Committee considers the deductibility of executive compensation in making its compensation decisions, but believes that shareholder interests are best served by not restricting the Committee’s discretion and flexibility in crafting compensation programs, even if such programs may result in certain non-deductible compensation expenses. Accordingly, Abbott may provide compensation that is not deductible.

COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board is primarily responsible for reviewing, approving, and overseeing Abbott’s compensation plans and practices, and works with management and the Committee’s independent consultant to establish Abbott’s executive compensation philosophy and programs. The Committee has reviewed and discussed the Compensation Discussion and Analysis with management and has recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.

Compensation Committee

D. J. Starks, Chair
M. A. Kumbier
N. McKinstry
M. G. O’Grady
M. F. Roman

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COMPENSATION RISK ASSESSMENT

During 2023, Abbott conducted its annual risk assessment of its compensation policies and plan design practices for employees and executives. Abbott’s risk assessment is reinforced by Abbott’s adherence to a number of industry-leading best practices, including:

Compensation Committee chaired by independent, non-employee director
Representation from the Audit Committee on the Compensation Committee
Review of executive compensation programs by the Compensation Committee’s independent consultant
Robust review of compensation program design elements, key performance drivers and pay for performance alignment
Detailed measurement of short- and long-term compensation elements, and related performance metrics and requirements, to ensure balance
Review of Abbott’s historical performance, peer performance and Board-approved strategic plan and related financial goals to determine appropriate incentive plan goals
Incorporation of multiple program requirements that mitigate excessive risk-taking (e.g., updated recoupment policy, stock ownership and share retention guidelines, maximum payouts on short and long-term incentives)

Based on this assessment, Abbott determined its compensation and benefit programs appropriately align employees’ compensation and performance without incentivizing risky behaviors. We concluded that risks arising from compensation policies and practices are not reasonably likely to have a material adverse effect on Abbott or its shareholders.

The following factors were among those considered:

Regular training on code of business conduct and policies and procedures is mandatory for all employees.
Compensation structure encourages employees to regard Abbott as a career employer, to consider the long-term impact of their decisions, and to align their interests with those of Abbott’s shareholders (e.g., equity awards that vest over multi-year periods, ten-year term on stock options, and service-based retirement plans).
Annual competitive benchmarking ensures performance achievement and incentive payout opportunities that are aligned with a peer group that reflects the size, investment profile, operating characteristics, and employment and business markets of Abbott. Appropriateness of this group is assessed annually by the Compensation Committee’s independent consultant and reviewed and approved by the Compensation Committee. Our selection criteria and peer companies are reported each year to our shareholders and have received favorable reviews.
Abbott’s annual incentive plan places an appropriate weighting on earnings achievement by balancing it with other factors, including key operational and strategic measures, disclosed to shareholders. Since earnings are a key component of stock price performance, this aspect of Abbott’s compensation plan promotes alignment with shareholder interests without creating duplication across incentive plans. In 2023, we adopted a maximum payout of 200% of target.
Abbott’s long-term incentive plan focuses on longer-term operating performance and shareholder returns and awards 50% stock options and 50% performance based restricted stock to senior executives. In 2023, roughly 70% of named officer total compensation was in the form of long-term equity incentives that can be earned or vest over multiple years.

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Equity awards are made, and grant prices are set, at the same time each year at the Compensation Committee’s regularly scheduled meeting. In addition, Abbott does not reprice or backdate stock options, award discounted stock options, or immediately vest stock options or restricted stock. Equity awards are based on multiple performance factors and are set at competitive market levels, adjusted by Abbott’s long-term performance vs. our Board-approved peer group. Both executive and Director share ownership guidelines and share retention requirements promote alignment with shareholders.
Abbott’s compensation program does not include features that could encourage excessive risk taking, such as over-weighting toward annual incentives, highly leveraged payout curves, uncapped incentive award payments, unreasonable thresholds, or steep payout cliffs at certain levels that may encourage short-term business decisions to meet payout criteria.
In 2023, Abbott adopted a Dodd-Frank compliant clawback policy. Additionally, the Compensation Committee maintains broad discretion to administer and implement the Company’s preexisting recoupment policy and seek recoupment of equity or cash incentive awards if it determines that a senior executive engaged in misconduct or failed in a supervisory capacity, resulting in a material violation of law or Abbott policy that causes significant financial harm to Abbott. The Compensation Committee may recover incentive compensation awarded to a senior executive in the prior three years or reduce future awards.
Abbott’s hedging policy prohibits directors and officers from entering into financial transactions designed to reduce the financial risk associated with owning Abbott shares.
Abbott’s pledging policy prohibits directors and officers from holding Abbott shares in a margin account, pledging Abbott shares, or securing obligations by assigning Abbott shares as collateral.

This assessment was discussed with the Compensation Committee and its independent compensation consultant. The Committee and the consultant both agreed with the assessment.

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SUMMARY COMPENSATION TABLE

The following table summarizes compensation awarded to, earned by, or paid to the named officers. The section of the proxy statement captioned, “Compensation Discussion and Analysis—Basis for Compensation Decisions” describes in greater detail the information reported in this table.

Name and Principal
Position
    Year   Salary   Stock
Awards
(2)
  Option
Awards(3)
  Non-Equity
Incentive Plan
Compensation(4)
  Change in
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings(5)
  All Other
Compensation(6)
  SEC
Total
  Total
Without
Change in
Pension
Value(7)
Robert B. Ford,
Chairman of the Board and
Chief Executive Officer
2023  $ 1,500,000  $ 7,436,600  $ 7,437,649          $ 2,945,250       $ 3,665,280             $ 283,392  $ 23,268,171  $ 20,373,964
2022 1,500,000 8,699,609 8,699,985 2,231,250 269,586 321,722 21,722,152 21,722,152
2021 1,482,692 8,689,294 8,689,978 3,168,400 2,755,343 129,179 24,914,886 22,485,091
Robert E. Funck, Jr.,(1)
Executive Vice President,
Finance
2023 875,000 2,593,908 2,594,349 1,062,100 1,628,061 238,790 8,992,208 7,992,913
2022 866,154 3,372,286 3,372,494 956,000 236,568 341,718 9,145,220 9,145,220
2021 825,000 2,999,666 2,999,977 1,048,400 1,507,073 159,193 9,539,309 8,373,417
Philip P. Boudreau,
Senior Vice President, Finance
and Chief Financial Officer
2023 513,943 786,041 786,272 583,500 603,343 44,083 3,317,182 2,727,268
Hubert L. Allen,
Executive Vice President,
General Counsel and
Secretary
2023 830,000 1,959,639 1,959,993 941,700 1,500,412 228,916 7,420,660 6,491,684
2022 817,615 2,396,766 2,396,850 871,500 214,873 322,031 7,019,635 7,019,635
2021 760,000 2,115,332 2,115,612 921,700 768,954 172,158 6,853,756 6,395,592
Lisa D. Earnhardt,
Executive Vice President
and Group President,
Medical Devices
2023 737,654 1,684,197 1,684,477 904,900 401,828 85,380 5,498,436 5,196,818
Daniel G. Salvadori,
Executive Vice President and
Group President, Established
Pharmaceuticals and
Nutritional Products
2023 790,000 1,880,183 1,880,493 880,300 411,877 91,977 5,934,830 5,662,042
2022 790,000 2,812,276 2,812,489 600,500 45,607 96,812 7,157,684 7,157,684
2021
 
715,539 2,388,446 2,388,734 925,700 251,604 72,276 6,742,299 6,533,923
(1)Prior to September 1, 2023, Mr. Funck, Jr. served as Executive Vice President, Finance and Chief Financial Officer. Effective September 1, 2023, Mr. Funck, Jr. was appointed Executive Vice President, Finance and Mr. Boudreau was appointed Senior Vice President, Finance and Chief Financial Officer. Mr. Boudreau reports to Mr. Funck, Jr. in his new role.
(2)In accordance with the Securities and Exchange Commission (SEC) rules, the amounts in this column represent the aggregate grant date fair value of the awards in accordance with Financial Accounting Standards Board ASC Topic 718. Abbott determines grant date fair value by multiplying the number of shares granted by the average of the high and low market prices of an Abbott common share on the award’s date of grant.
(3)In accordance with SEC rules, the amounts in this column represent the aggregate grant date fair value of the awards in accordance with Financial Accounting Standards Board ASC Topic 718. These amounts were determined as of the option’s grant date using a Black-Scholes stock option valuation model. These amounts are being reported solely for the purpose of comparative disclosure in accordance with SEC rules. There is no certainty that the amount determined using a Black-Scholes stock option valuation model would be the value at which employee stock options would be traded for cash. The assumptions are the same as those described in Note 9, entitled “Incentive Stock Program” of Abbott’s Notes to Consolidated Financial Statements included under Item 8, “Financial Statements and Supplementary Data” in Abbott’s 2023 Annual Report on SEC Form 10-K.

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(4)This compensation is earned as a performance-based incentive bonus, pursuant to the 1998 Abbott Laboratories Performance Incentive Plan. Additional information regarding the Performance Incentive Plan can be found in the section of this proxy statement captioned, “Compensation Discussion and Analysis—Basis for Compensation Decisions.”
(5)
The plan amounts shown below are reported in this column.
For Messrs. Ford, Funck, Jr., Allen, and Salvadori, the amounts shown alongside the officer’s name are for 2023, 2022, and 2021, respectively. For Mr. Boudreau and Ms. Earnhardt, the amounts shown are for 2023.
Abbott Laboratories Annuity Retirement Plan
R. B. Ford: $116,664 / ($220,128) / $22,149; R. E. Funck, Jr.: $111,386 / ($185,077) / $89,455; P. P. Boudreau: $109,932; H. L. Allen: $95,131 / ($88,718) / $47,024; L. D. Earnhardt: $35,501; and D. G. Salvadori: $30,508 / ($53,150) / $19,272.
Abbott Laboratories Supplemental Pension Plan
R. B. Ford: $2,777,543 / ($2,544,153) / $2,407,646; R. E. Funck, Jr.: $887,909 / ($962,130) / $1,076,437; P. P. Boudreau: $479,982; H. L. Allen: $833,845 / ($770,934) / $411,140; L. D. Earnhardt: $266,117; and D. G. Salvadori: $242,280 / ($442,633) / $189,104.
Non-Qualified Defined Contribution Plan Earnings
The totals in this column include reportable interest credited under the 1998 Abbott Laboratories Performance Incentive Plan, the Abbott Laboratories 401(k) Supplemental Plan, and the 1986 Abbott Laboratories Management Incentive Plan (although none of the named officers currently receives awards under this plan).
R. B. Ford: $771,073 / $269,586 / $325,548; R. E. Funck, Jr.: $628,766 / $236,568 / $341,181; P. P. Boudreau: $13,429; H. L. Allen: $571,436 / $214,873 / $310,790; L. D. Earnhardt: $100,210; and D. G. Salvadori: $139,089 / $45,607 / $43,228.
(6)
The amounts shown below are reported in this column.
For Messrs. Ford, Funck, Jr., Allen, and Salvadori, the amounts shown alongside the officer’s name are for 2023, 2022, and 2021, respectively. For Mr. Boudreau and Ms. Earnhardt, the amounts shown are for 2023.
Earnings on Non-Qualified Defined Contribution Plans (net of the reportable interest included in footnote 5)
R. B. Ford: $153,521 / $240,102 / $8,148; R. E. Funck, Jr.: $164,510 / $268,399 / $86,107; P. P. Boudreau: $216; H. L. Allen: $149,665 / $246,845 / $95,227; L. D. Earnhardt: $18,159; and D. G. Salvadori: $17,270 / $24,607 / $3,566.
Each of the named officers’ awards under the 1998 Abbott Laboratories Performance Incentive Plan is paid in cash to the officer on a current basis. Each of the named officers has a grantor trust into which the awards may be deposited, net of maximum tax withholdings. The named officers also have grantor trusts in connection with the Abbott Laboratories 401(k) Supplemental Plan and the 1986 Abbott Laboratories Management Incentive Plan (although none of the named officers currently receives awards under the Management Incentive Plan). These amounts include the trusts’ earnings (net of the reportable interest included in footnote 5).
Employer Contributions to Defined Contribution Plans
R. B. Ford: $75,000 / $75,000 / $74,135; R. E. Funck, Jr.: $43,750 / $43,308 / $41,250; P. P. Boudreau: $25,697; H. L. Allen: $41,500 / $40,881 / $38,000; L. D. Earnhardt: $36,883; and D. G. Salvadori: $39,500 / $39,501 / $35,777.
These amounts include employer contributions to both Abbott’s tax-qualified defined contribution plan and the Abbott Laboratories 401(k) Supplemental Plan. The Abbott Laboratories 401(k) Supplemental Plan permits eligible Abbott officers to contribute amounts in excess of the limit set by the Internal Revenue Code for employee contributions to 401(k) plans up to the excess of (i) 18% of their base salary over (ii) the amount contributed to Abbott’s tax-qualified 401(k) plan. Abbott matches participant contributions at the rate of 250% of the first 2% of compensation contributed to the plan. The named officers have these amounts paid to them in cash on a current basis and deposited into a grantor trust established by the officer, net of maximum tax withholdings.

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Other Compensation
Mr. Ford’s non-business-related flights on corporate aircraft are covered by time-sharing lease agreements, pursuant to which he reimburses Abbott for certain costs associated with those flights in accordance with Federal Aviation Administration regulations. The following amounts are included in the totals in this column, which reflect Abbott’s incremental cost less reimbursements for non-business-related flights: $54,871 / $6,620 / $46,419.
Abbott determines the incremental cost for flights based on the direct cost to Abbott, including fuel costs, parking, handling and landing fees, catering, travel fees, and other miscellaneous direct costs.
Also included in the totals shown in the table is the cost of providing a corporate automobile less the amount reimbursed by the officer: R. E. Funck, Jr.: $21,513 / $22,480 / $22,661; P. P. Boudreau: $17,620; H. L. Allen: $27,751 / $24,305 / $27,613; L. D. Earnhardt: $20,338; and D. G. Salvadori: $25,207 / $22,704 / $21,933.
The following costs associated with financial planning are included: R. E. Funck, Jr.: $8,990 / $6,895 / $8,175; P. P. Boudreau: $550; H. L. Allen: $10,000 / $10,000 / $10,000; L. D. Earnhardt: $10,000; and D. G. Salvadori: $10,000 / $10,000 / $10,000. The named officers are also eligible to participate in an executive disability benefit described on page 68.
(7)To demonstrate how year over year changes in pension value impact total compensation, as determined under SEC rules, we have included this column to show total compensation without pension value changes. The amounts reported in this column are calculated by subtracting the change in pension value reported in the Change in Pension Value and Non-Qualified Deferred Compensation Earnings column, as described in footnote 5 to this table, from the amounts reported in the SEC Total column. The amounts reported in this column differ from, and are not a substitute for, the amounts reported in the SEC Total column.

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2023 GRANTS OF PLAN BASED AWARDS

Grant
Date
Approval
Date
Estimated Future
Payouts
Under Non-Equity
Incentive Plan
Awards
(1)
Estimated
Future
Payouts
Under
Equity
Incentive
Plan Awards
Target
(#)(2)(3)
All Other
Option
Awards:
Numbers of
Securities
Underlying
Options
(#)(4)
Exercise or
Base Price
of Options
Awards
($/Sh.)
Closing
Market
Price on
Grant Date
Grant Date Fair
Value of Stock
and Option
Awards
Name       Target
($)
  Maximum
($)
         
R. B. Ford 2/17/2023 2/17/2023 70,008         $ 7,436,600 (5)
2/17/2023 2/17/2023 276,082     $ 106.24     $ 106.74 7,437,649 (6)
R. E. Funck, Jr. 2/17/2023 2/17/2023 24,419 2,593,908 (5)
2/17/2023 2/17/2023 96,301 106.24 106.74 2,594,349 (6)
P. P. Boudreau 2/17/2023 2/17/2023 4,855 515,722 (5)
2/17/2023 2/17/2023 19,149 106.24 106.74 515,874 (6)
9/1/2023 6/8/2023 2,620 270,319 (5)
9/1/2023 6/8/2023 10,223 103.18 102.85 270,398 (6)
H. L. Allen 2/17/2023 2/17/2023 18,448 1,959,639 (5)
2/17/2023 2/17/2023