AbbVie Inc PRE 14A, filed Mar 8, 2021

AbbVie Inc. (ABBV)

PRE 14A 2021-03-08 For: 2021-05-07

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AbbVie Inc.
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PROXY SUMMARY	1
About the Meeting	1
Who We Are	2
Our Business Performance	3
Our Governance Highlights	6
Our Corporate Responsibility 2020 Highlights	8
Executive Compensation Highlights	13

INFORMATION CONCERNING DIRECTOR NOMINEES	14


THE BOARD OF DIRECTORS AND ITS COMMITTEES	21


COMMUNICATING WITH THE BOARD OF DIRECTORS	27


DIRECTOR COMPENSATION	28


SECURITIES OWNERSHIP	30


EXECUTIVE COMPENSATION	32
Compensation Discussion and Analysis	32
Compensation Committee Report	51
Compensation Risk Assessment	51
Summary Compensation Table	53
2020 Grants of Plan-Based Awards	56
2020 Outstanding Equity Awards at Fiscal Year End	58
2020 Option Exercises and Stock Vested	60
Potential Payments upon Termination or Change in Control	64



RATIFICATION OF ERNST & YOUNG LLP AS ABBVIE’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	67


AUDIT INFORMATION	68
Audit Fees and Non-Audit Fees	68
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of the Independent Registered Public Accounting Firm	68
Audit Committee Report	69


SAY ON PAY—ADVISORY VOTE ON THE APPROVAL OF EXECUTIVE COMPENSATION	70


TO APPROVE THE ABBVIE AMENDED AND RESTATED 2013 INCENTIVE STOCK PROGRAM	71


TO APPROVE THE ABBVIE AMENDED AND RESTATED 2013 EMPLOYEE STOCK PURCHASE PLAN FOR NON-U.S. EMPLOYEES	82


MANAGEMENT PROPOSAL TO ELIMINATE SUPERMAJORITY VOTING	88


STOCKHOLDER PROPOSALS	90
Stockholder Proposal on Lobbying Report	90
Stockholder Proposal on Independent Chair	92


ADDITIONAL INFORMATION	95


INFORMATION ABOUT THE ANNUAL MEETING	99
Who Can Vote	99
Notice and Access	99
Voting by Proxy	99
Revoking a Proxy	99
Discretionary Voting Authority	99
Quorum and Vote Required to Approve Each Item on the Proxy	100
Effect of Broker Non-Votes and Abstentions	100
Inspectors of Election	100
Cost of Soliciting Proxies	100
AbbVie Savings Plan	100

The accompanying proxy is solicited on behalf of the Board of Directors for use at the Annual Meeting of Stockholders. This summary highlights selected information in the proxy statement. Please review the entire proxy statement and the AbbVie 2020 Annual Report before voting. The voting items expected to be proposed at the meeting are listed below along with the board’s voting recommendations.	2021 Annual Meeting of Stockholders Information
		Date and Time: Friday, May 7, 2021 at 9:00 a.m. CT
		Place: Via live webcast online at www.virtualshareholdermeeting.com/ABBV2021
		Record Date: March 8, 2021


Proposal 1: Election of Directors			FOR Each Nominee
Roxanne S. Austin Richard A. Gonzalez		Rebecca B. Roberts Glenn F. Tilton
Each of the nominees has the skills and experience necessary to fulfill his or her oversight role with respect to AbbVie’s business and culture. See pages 14-20 for more information about the qualifications of our directors.

Proposal 2: Ratification of Independent Auditor			FOR
Ernst & Young LLP has served as our independent auditor since 2013. The board and the audit committee believe it is in the best interests of the company and its stockholders to retain Ernst & Young LLP as the company’s independent auditor. See page 67 for more information.

Proposal 3: Say on Pay – Advisory Vote on Executive Compensation			FOR
AbbVie’s compensation program aligns executive interests with the drivers of long-term, sustainable growth. Our program balances short- and long-term strategic objectives and directly links compensation to stockholder value. See pages 32-66 for more information.

Proposal 4: To Approve the Amended and Restated 2013 Incentive Stock Program			FOR
AbbVie is seeking approval to increase the number of shares available and extend the term of the program. See pages 71-81 for more information.

Proposal 5: To Approve the Amended and Restated 2013 Employee Stock Purchase Plan for Non-U.S. Employees			FOR
AbbVie is seeking approval to extend the term of the program. See pages 82-87 for more information.

Proposal 6: Management Proposal to Eliminate Supermajority Voting			FOR
AbbVie is again seeking stockholder approval to eliminate supermajority voting thresholds in our charter and by-laws. See pages 88-89 for more information.

Stockholder Proposals

Proposal 7:	Stockholder Proposal on Lobbying Report		AGAINST


Proposal 8:	Stockholder Proposal on Independent Chair		AGAINST

~ 47,000 employees worldwide	In more than 70 countries, AbbVie employees are working every day to advance health solutions for people around the world.
~ 47,000 employees worldwide		Since becoming a public company in 2013, AbbVie’s mission has been to create an innovation-driven, patient focused biopharmaceutical company capable of achieving sustainable top-tier performance through outstanding execution and a consistent stream of new medicines. In 2020, AbbVie continued to advance its robust mid- and late-stage pipeline. Collectively, the new medicines that AbbVie has introduced since inception—including new therapies in rheumatoid arthritis, psoriasis, hematologic oncology and hepatitis C virus—represented approximately a quarter of AbbVie’s total sales in 2020 and will be important contributors in 2021 and beyond. AbbVie delivered another year of outstanding performance in 2020, which reflects the continued strength of its execution across business priorities. AbbVie’s products are focused on treating conditions such as chronic autoimmune diseases in rheumatology, gastroenterology, and dermatology; oncology, including blood cancers; virology, including hepatitis C virus and human immunodeficiency virus; neurological disorders, such as Parkinson’s disease; metabolic diseases, including thyroid disease and complications associated with cystic fibrosis; as well as other serious health conditions. AbbVie also has a pipeline of promising new medicines in clinical development across such important medical specialties as immunology, oncology, and neuroscience. In May 2020, AbbVie completed its acquisition of Allergan plc. Allergan is a global pharmaceutical leader focused on developing, manufacturing, and commercializing branded pharmaceutical, device, biologic, surgical, and regenerative medicine products for patients around the world. Allergan markets a portfolio of brands and products focused on key therapeutic areas such as aesthetics, eye care, neuroscience, women’s health, and gastroenterology.


Launched in 2013


Millions of patient lives touched
Millions of patient lives touched


AbbVie’s Principles are foundational:

Transforming Lives We inspire hope and transform lives every day. We make decisions based on our deep caring and compassion for people, delivering a lasting impact to our patients, their families, our employees and the community.	Acting with Integrity We strive to always do the right thing. With uncompromising integrity at the heart of everything we do, we pursue the highest standards in quality, compliance, safety and performance.	Driving Innovation We innovate relentlessly in everything we do to tackle unmet needs. We invest in the discovery and development of new medicines and healthcare approaches for a healthier world.	Embracing Diversity & Inclusion We treat everyone equally, with dignity and respect. Around the world, our employees embrace diverse backgrounds and perspectives, which allows us all to achieve our best.	Serving the Community We are proud to serve and support the community and do our part to protect the environment. We make a remarkable impact that's felt within healthcare and beyond.


		13.6% Adjusted net revenues - compound annual growth rate (CAGR)*			334.1% 8 year total stockholder return

		~$11BN Revenues in 2020 from products launched since inception (excludes Allergan portfolio)			~$135BN Increase in market capitalization - added significant stockholder value

		18.9% Adjusted diluted earnings per share - compound annual growth rate*			225% Increase in quarterly dividend - raised quarterly dividend to $1.30 per share from $0.40 per share at inception

		1,170 bps Operating margin expansion, adjusted*			90+ Active clinical development programs - more than 50 compounds, devices, or indications in mid- and late-stage development


		Net Revenues: AbbVie reported worldwide net revenues of $45.8 billion in 2020. Worldwide net revenues increased by 38% on a reported basis and on a constant currency basis, which included $10.3 billion of contributed revenues from the Allergan acquisition, growth in the immunology portfolio from Skyrizi, Rinvoq and the continued strength of Humira in the U.S., as well as revenue growth from Imbruvica and Venclexta. Gross and Operating Margins: In 2020, AbbVie reported a gross margin of 66.4% on a GAAP basis or 82.1% of net revenues on an adjusted basis. AbbVie’s operating margin was 24.8% on a GAAP basis or 48.0% of net revenues on an adjusted basis. The adjusted operating margin reflects an improvement of 70 basis points versus 2019. Earnings Per Share: For 2020, AbbVie reported full-year diluted EPS of $2.72 on a GAAP basis and adjusted diluted EPS of $10.56, up 18.1%. For 2021, AbbVie provided a diluted EPS guidance range of $6.69 to $6.89 on a GAAP basis and $12.32 to $12.52 on an adjusted basis. The midpoint of the 2021 adjusted guidance represents growth of 17.6% over 2020, reflecting strong operating dynamics in the underlying business. Business Development: AbbVie acquired Allergan, creating a more diversified biopharmaceutical company positioned for success with a comprehensive product portfolio that has leadership positions in key therapeutic areas of immunology, hematologic oncology, aesthetics, neuroscience, eye care, and women's health. AbbVie also entered into collaboration agreements with Genmab to research, develop, and commercialize investigational bispecific antibody therapeutics for the treatment of cancer, as well as I-Mab Biopharma for the development and commercialization of lemzoparlimab for the treatment of multiple cancers.
		Regulatory Milestones: AbbVie also achieved a number of regulatory milestones in markets worldwide for several key products, including regulatory approvals for Imbruvica in combination with rituximab for the treatment of previously untreated patients with chronic lymphocytic leukemia (CLL) or small lymphocytic lymphoma (SLL), full approval of Venclexta in combination with azacitidine or decitabine or low-dose cytarabine in newly diagnosed acute myeloid leukemia (AML) patients ineligible for intensive chemotherapy, Oriahnn for the management of heavy menstrual bleeding due to uterine fibroids in pre-menopausal women, and Juvederm Voluma XC for the augmentation of the chin region to improve the chin profile in adults over the age of 21. AbbVie also submitted regulatory applications for Rinvoq in three additional indications: the treatment of adult patients with active psoriatic arthritis (PsA), for the treatment of adult patients with active ankylosing spondylitis (AS), and for the treatment of adults and adolescents with moderate to severe atopic dermatitis (AD).
		Pipeline Development: With more than 50 programs in mid- and late-stage development, AbbVie made significant pipeline advancements in 2020. The company initiated several important Phase 3 programs including studies for Skyrizi in ulcerative colitis, Venclexta in myelodysplatic syndrome (MDS), and navitoclax in myelofibrosis. AbbVie also reported positive data from Phase 3 studies in other areas of the pipeline, including atogepant for migraine prevention and AGN-190584, an investigational ophthalmic solution, for the treatment of presbyopia.


	Topic:	Actions taken by our board:
	Stockholder Voting Rights	approved a management proposal to eliminate supermajority voting in this proxy statement (Item 6) to seek stockholder approval to amend the company’s Amended and Restated Certificate of Incorporation to provide for a simple majority of shares outstanding for all provisions previously subject to a supermajority provision, as described in Item 6 and previously submitted the same proposal to stockholder vote in 2020, 2019, and 2018 as well as a declassification management proposal to a stockholder vote in 2018, 2017, and 2016
	Proxy Access	approved and implemented in 2016 a proxy access by-law provision, as further detailed in the company’s By-Laws
	Lead Independent Director Role	significantly expanded disclosure on the lead independent director responsibilities in the 2019 and 2018 proxy statements, to better inform our stockholders on the robust leadership that the role provides changed the election criteria for the lead independent director, so that the lead independent director can be elected from all of AbbVie’s independent directors, instead of the role being linked to the chair of the nominations and governance committee appointed the lead independent director to all committees in 2019, further strengthening his active leadership role
	Board Skills Disclosure	shared our board skills matrix beginning in 2016, which contains the skills considered by the nominations and governance committee to be the most relevant to the board’s oversight role with respect to AbbVie’s business and affairs and to drive our culture of innovation and responsibility
	Environmental, Social, and Governance (ESG) Disclosures	disclosed detailed data on the diversity of AbbVie’s U.S. workforce by publishing AbbVie’s EEO-1 report on our website in 2020 incorporated an overview of AbbVie’s corporate responsibility approach and initiatives in the proxy statement beginning in 2018 expanded the description of AbbVie’s clawback policy, starting in the 2019 proxy statement added board diversity data, starting in the 2019 proxy statement, along with an expanded discussion of the value of director diversity in this proxy statement


Additional highlights of our governance practices include:

Director independence ✓ Eleven of AbbVie’s twelve directors are independent and regularly meet in executive session ✓ Since our inception, we have had a lead independent director with robust responsibilities ✓ All members of our audit, compensation, nomination and governance, and public policy committees are independent	Stockholder rights ✓ Adopted a proxy access By-Law provision for 3%/3 years ✓ We do not have a stockholder rights plan or “poison pill” ✓ Our directors are elected by a majority vote of our stockholders for uncontested elections, and we have a resignation policy if the director fails to receive a majority of the votes cast	Board and executive accountability ✓ Annual executive succession planning, including an assessment of the diversity of executive candidates ✓ Minimum stock ownership guidelines are in place for the CEO and other NEOs ✓ We have a related person transaction policy to ensure appropriate oversight ✓ We hold an annual say-on-pay advisory vote on executive compensation


Board composition and effectiveness ✓ Our governance guidelines restrict the number of boards our directors may serve on to prevent overboarding ✓ Annual board and committee self-assessments and annual board succession planning ✓ For inclusion on the board, the nominations and governance committee considers diversity of race, ethnicity, gender, and geography, together with other voluntarily identified diversity criteria	Clawback and anti-hedging and anti-pledging policies ✓ The Board has broad authority to recover incentive plan awards ✓ Directors and executive officers are prohibited from buying or selling any financial instruments designed to hedge or offset any decrease in the market value of AbbVie equity securities they hold ✓ Directors and executive officers are prohibited from pledging AbbVie stock as collateral for a loan	Other ESG practices ✓ All executives have performance goals related to protecting the reputation and driving the sustainability of the company ✓ We are guided by strong ethics programs and supplier guidelines ✓ We disclose our corporate political contributions, our trade association memberships, and oversight process on our website



1	Using our expertise and resources to contribute to the fight against COVID-19	2	Driving meaningful change within AbbVie and our broader communities on equity, equality, diversity, and inclusion, as well as racial justice	3	Proactively addressing other environmental, social, and governance (ESG) topics material to AbbVie


Proactively addressing environmental, social, and governance priorities

EXTERNAL RECOGNITION
DiversityInc. Top 50 Companies for Diversity Ranked in the top 20	FORTUNE 100 Best Companies to Work For Included for three consecutive years	Great Place to Work World’s Best Workplaces Included for four consecutive years


Human Rights Campaign Corporate Equality Index Scored 100% for five consecutive years	Working Mother 100 Best Companies Top 10 for three consecutive years	Dow Jones Sustainability World Index Included in the index for eight consecutive years


3BL Media 100 Best Corporate Citizens Top 30	EcoVadis Advanced ranking	PEOPLE’s 50 Companies that Care Included for two consecutive years


PROXY SUMMARY


	PROXY SUMMARY


PROXY SUMMARY


	PROXY SUMMARY


1	Align executive interests with the drivers of stockholder returns and profitable growth		2	Support achievement of the company’s primary business goals to have a remarkable impact on patients’ lives		3	Attract and retain world-class executives whose talents and contributions sustain the growth in long-term stockholder value


Element	Type	Primary Objective	Key Characteristics

Base Salary	Fixed	Attract & retain top talent	Individual salaries are established relative to market median based on each NEO’s individual performance, skills, experience, and internal equity, as well as the company’s annual operating budget

Short-Term Incentives	At-Risk	Encourage achievement of company’s primary business goals	Plan utilizes non-GAAP financial goals as well as an assessment of individual performance against strategic objectives: — Net revenues — Income before taxes — Operating margin — Return on assets — Strategic and leadership goals

Long-Term Incentives	At-Risk	Align NEO interests with stockholders	Long-term incentive annual awards are granted in the form of: — Performance shares and performance vested restricted stock units (80% of NEO’s LTI award) — Non-qualified stock options (20% of NEO’s LTI award)

	Roxanne S. Austin Director Since: 2013 Age: 60 Committees: Audit and Compensation Primary Occupation: President, Austin Investment Advisors

Business Experience: Ms. Austin is president of Austin Investment Advisors, a private investment and consulting firm, and chairs the U.S. Mid-market Investment Advisory Committee of EQT Partners. Previously, Ms. Austin also served as the president and chief executive officer of Move Networks, Inc., a provider of Internet television services. Ms. Austin served as president and chief operating officer of DIRECTV, Inc. Ms. Austin also served as executive vice president and chief financial officer of Hughes Electronics Corporation and as a partner of Deloitte & Touche LLP. Ms. Austin is also a director of Abbott Laboratories, Crowdstrike, Inc., Teledyne Technologies, Inc., and Verizon Communications Inc. Ms. Austin has notified Teledyne of her intent to resign from its Board of Directors at the company’s next annual meeting of stockholders, currently planned for April 2021. Ms. Austin also served as a director of Telefonaktiebolaget LM Ericsson from 2008 to 2016.

Key Contributions to the Board:
· Through her extensive management and operating roles, including her financial roles, Ms. Austin contributes significant oversight and leadership experience to the board, including financial expertise and knowledge of financial statements, corporate finance, and accounting matters.

	Richard A. Gonzalez Director Since: 2013 Age: 67 Primary Occupation: Chairman of the Board and Chief Executive Officer, AbbVie Inc.

Business Experience: Mr. Gonzalez is the chairman and chief executive officer of AbbVie. He served as Abbott’s executive vice president of the pharmaceutical products group from July 2010 to December 2012, and was responsible for Abbott’s worldwide pharmaceutical business, including commercial operations, research and development, and manufacturing. He also served as president, Abbott Ventures Inc., Abbott’s medical technology investment arm, from 2009 to 2011. Mr. Gonzalez joined Abbott in 1977 and held various management positions before briefly retiring in 2007, including: Abbott’s president and chief operating officer; president, chief operating officer of Abbott’s Medical Products Group; senior vice president and president of Abbott’s former Hospital Products Division; vice president and president of Abbott’s Health Systems Division; and divisional vice president and general manager for Abbott’s Diagnostics Operations in the United States and Canada.

Key Contributions to the Board:
· As a result of his service as Abbott’s executive vice president, Pharmaceutical Products Group, his previous service as Abbott’s president and chief operating officer and his more than 30-year career at Abbott, Mr. Gonzalez has developed valuable business, management, and leadership experience, as well as extensive knowledge of AbbVie and its global operations. · Mr. Gonzalez’s experience and knowledge enable him to contribute to AbbVie’s board key insights into strategic, management, and operational matters.

	Rebecca B. Roberts Director Since: 2018 Age: 68 Committees: Nominations & Governance and Public Policy Primary Occupation: Retired President of Chevron Pipe Line Company

Business Experience: Ms. Roberts served as president of Chevron Pipe Line Company from 2006 until her retirement in 2011. She previously served as the president of Chevron Global Power Generation from 2003 to 2006, in addition to various technical and management positions during her thirty-six year career with Chevron. Ms. Roberts began her career as a chemist and research scientist. Ms. Roberts currently serves on the board of directors at Black Hills Corporation and MSA Safety Incorporated. Ms. Roberts served as a director of Enbridge, Inc. from 2015 to 2018.

Key Contributions to the Board:
· Ms. Roberts brings management, operational, safety, and strategy development expertise with a scientific background and extensive global experience at Chevron. · She provides an informed perspective to the board on regulatory and operational matters faced by a complex international company.

	Glenn F. Tilton Director Since: 2013 Age: 72 Committees: Audit, Compensation, Nominations & Governance, and Public Policy Primary Occupation: Retired Chairman and Chief Executive Officer of the UAL Corporation Lead Independent Director

Business Experience: Mr. Tilton was chairman of the Midwest for JPMorgan Chase & Co. from 2011 until his retirement in 2014. From October 2010 to December 2012, Mr. Tilton also served as the non-executive chairman of the board of United Continental Holdings, Inc. From September 2002 to October 2010, he served as chairman, president and chief executive officer of UAL Corporation, and chairman and chief executive officer of United Air Lines, Inc., its wholly owned subsidiary. Prior to becoming the vice chairman of Chevron Texaco following the merger of Texaco Inc. and Chevron Corp., Mr. Tilton enjoyed a 30-year multi-disciplinary career with Texaco Inc., culminating in his election as chairman and chief executive officer. Mr. Tilton is also a director of Abbott Laboratories and Phillips 66. Mr. Tilton also served on the board of directors of Lincoln National Corporation from 2002 to 2007, of TXU Corporation from 2005 to 2007, of Corning Incorporated from 2010 to 2012, and of United Continental Holdings, Inc. from 2010 to 2012.

Key Contributions to the Board:
· As chairman of the Midwest for JPMorgan Chase & Co. and having previously served as non-executive chairman of the board of United Continental Holdings, Inc., and chairman, president, and chief executive officer of UAL Corporation and United Air Lines, vice chairman of Chevron Texaco and as interim chairman of Dynegy, Inc., Mr. Tilton acquired strong management experience overseeing complex multinational businesses operating in highly regulated industries, as well as expertise in finance and capital markets matters. · His experience as non-executive chairman of the board of United Continental Holdings, Inc. also enhances his contributions as AbbVie’s lead independent director.

	William H.L. Burnside Director Since: 2013 Age: 69 Committees: Audit and Nominations & Governance Primary Occupation: Retired Senior Vice President and Director at The Boston Consulting Group

Business Experience: Mr. Burnside is a retired senior vice president and director at The Boston Consulting Group (BCG), where he currently serves as an advisor. Prior to becoming managing partner of BCG’s Los Angeles office in 1987, he worked in BCG’s London and Chicago offices, servicing clients in telecommunications, media, defense, financial services, and manufacturing.

Key Contributions to the Board:
● Through his experience with The Boston Consulting Group, Mr. Burnside contributes knowledge and understanding of corporate finance and capital markets matters to the board, as well as global and domestic strategic advisory experience across a broad base of industries.

	2016 50 Executive Vice President and Chief Administrative Officer, United Airlines Holdings, Inc.
	Thomas C. Freyman Director Since: 2020 Age: 66 Committees: Compensation Primary Occupation: Retired Executive Vice President, Finance and Administration, Abbott Laboratories

Business Experience: Mr. Freyman served as a director at Allergan from 2018 to 2020, when AbbVie acquired Allergan plc. Mr. Freyman previously served as executive vice president, finance and administration at Abbott Laboratories from 2015 until his retirement in 2017. He previously served at Abbott as chief financial officer and executive vice president, finance and was first appointed chief financial officer and senior vice president, finance in 2001. He also serves as a director of Tenneco Inc. and Hanger, Inc.

Key Contributions to the Board:
· Mr. Freyman’s extensive experience as a leader in the healthcare industry, knowledge of the Allergan businesses, and expertise in complex accounting and financial issues provides the board with significant global industry experience, continuity in oversight of the Allergan businesses, and finance and risk expertise.

	Brett J. Hart Director Since: 2016 Age: 51 Committees: Nominations & Governance and Public Policy Primary Occupation: President, United Airlines Holdings, Inc.

Business Experience: Mr. Hart is the president of United Airlines Holdings, Inc. (UAL) and United Airlines, Inc. He served as executive vice president and chief administrative officer between March 2019 and May 2020, executive vice president, chief administrative officer and general counsel between May 2017 and March 2019, and as executive vice president and general counsel between February 2012 and May 2017. Mr. Hart also served as acting chief executive officer of UAL and United Airlines, Inc. from October 2015 to March 2016. From December 2010 to February 2012, he served as senior vice president, general counsel and secretary of UAL, United and Continental. From June 2009 to December 2010, Mr. Hart served as executive vice president, general counsel and corporate secretary at Sara Lee Corporation.

Key Contributions to the Board:
· As president and as executive vice president and general counsel for two large public companies with international operations and having served as an acting CEO, Mr. Hart contributes operational and strategic acumen with expertise in risk management, legal strategic matters, government and regulatory affairs, customer and external facing matters, corporate governance, and compliance.

	Edward J. Rapp Director Since: 2013 Age: 63 Committees: Audit and Nominations & Governance Primary Occupation: Retired Group President for Resource Industries of Caterpillar Inc.

Business Experience: Mr. Rapp served as the Caterpillar Inc. group president for resource industries from 2014 until his retirement in mid-2016. He previously served at Caterpillar as group president based in Singapore in 2013 and 2014 and as the chief financial officer from 2010 to 2013, and he was named a group president in 2007. He is currently a member of the University of Missouri College of Business Advisory Board. Mr. Rapp previously served as a director of FM Global.

Key Contributions to the Board:
· As a result of his tenure as group president and chief financial officer at Caterpillar Inc., Mr. Rapp has acquired management, operational, and financial expertise with extensive global experience and provides the board with an informed perspective on financial and operational matters faced by a complex international company.

	Robert J. Alpern, M.D. Director Since: 2013 Age: 70 Committees: Nominations & Governance and Public Policy Primary Occupation: Ensign Professor of Medicine, Professor of Internal Medicine, and Former Dean of Yale School of Medicine

Business Experience: Dr. Alpern has served as the Ensign Professor of Medicine and Professor of Internal Medicine at Yale School of Medicine since June 2004. He served as Dean of Yale School of Medicine from June 2004 to January 2020. From July 1998 to May 2004, Dr. Alpern was the Dean of The University of Texas Southwestern Medical Center. Dr. Alpern served on the board of Yale-New Haven Hospital from October 2005 to January 2020. Dr. Alpern also serves as a director of Abbott Laboratories and Tricida, Inc.

Key Contributions to the Board:
· Through his position as Ensign Professor of Medicine, Professor of Internal Medicine, as well as his previous service as Dean of Yale School of Medicine, Dean of The University of Texas Southwestern Medical Center, and 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 AbbVie’s key research and development initiatives.

	Edward M. Liddy Director Since: 2013 Age: 75 Committees: Compensation and Public Policy Primary Occupation: Retired Chairman & CEO, The Allstate Corporation

Business Experience: Mr. Liddy served as a partner in the private equity investment firm Clayton, Dubilier & Rice, LLC from January 2010 to December 2015. At the request of the Secretary of the U.S. Department of the Treasury, Mr. Liddy served as interim chairman and chief executive officer of American International Group, Inc. (AIG), a global insurance and financial services holding company, from September 2008 to August 2009. From January 1999 to April 2008, Mr. Liddy served as chairman of the board of The Allstate Corporation (insurance). He served as chief executive officer of Allstate from January 1999 to December 2006, president from January 1995 to May 2005, and chief operating officer from August 1994 to January 1999. Mr. Liddy currently serves on the board of directors of Abbott Laboratories. Mr. Liddy also served as a director at 3M Company from 2000 to 2020 and The Boeing Company from 2010 to 2020.

Key Contributions to the Board:
· Mr. Liddy’s executive leadership at Allstate and AIG and his board service at several Fortune 100 companies enable him to provide our board with valuable insights on corporate strategy, risk management, corporate governance, and other issues facing large, global enterprises. · Additionally, as a former chief financial officer, audit committee chair at Goldman Sachs and 3M, and a private equity firm partner, Mr. Liddy provides our board with significant knowledge and understanding of corporate finance, capital markets, financial reporting, and accounting matters.

	Melody B. Meyer Director Since: 2017 Age: 63 Committees: Audit and Public Policy Primary Occupation: Retired President, Chevron Asia Pacific Exploration and Production

Business Experience: Ms. Meyer is president of Melody Meyer Energy, LLC, a private consulting firm, a position she has held since June 2016. From March 2011 to April 2016, Ms. Meyer served as the president of Chevron Asia Pacific Exploration and Production Company. She previously served as president of Chevron Energy Technology Company from 2008 to 2011, in addition to various other roles over her thirty-seven year career at Chevron. Ms. Meyer is also a director at bp p.I.c. and NOV, Inc.

Key Contributions to the Board:
· As a result of her tenure at Chevron, Ms. Meyer has acquired operational, management, strategic planning, and financial expertise with extensive global experience and provides an informed perspective to the board on financial and operational matters faced by a complex international company.

	Frederick H. Waddell Director Since: 2013 Age: 67 Committees: Audit and Compensation Primary Occupation: Former Chairman of the Board and Chief Executive Officer of Northern Trust Corporation and The Northern Trust Company

Business Experience: Mr. Waddell served as chairman of the board of Northern Trust Corporation and The Northern Trust Company from November 2009 until his retirement in January 2019. He previously served as chief executive officer from 2008 through 2017, as president from 2006 to 2011 and again from October to December 2016, and chief operating officer from 2006 to 2008. Mr. Waddell is also a director of International Business Machines Corporation.

Key Contributions to the Board:
· As former chairman and chief executive officer of Northern Trust Corporation and The Northern Trust Company, Mr. Waddell contributes broad financial services experience with a strong record of leadership in a highly regulated industry.


	Healthcare Industry	Relevant to an industry understanding and review of our business and strategy for continued innovation.
	Leadership	For a board that can successfully advise and oversee the company’s business performance and represent stockholders’ interests.
	Global Business and Strategy	For oversight of a complex global organization like AbbVie to successfully advise and oversee the strategic development and direction of the company.
	Corporate Governance and Public Company Board	Ensuring directors have the background and knowledge to perform oversight and governance roles.
	Finance or Accounting	Enabling our directors to analyze our financial statements, oversee our capital structure, and consider financial transactions.
	Government Relations and Regulatory	For an understanding of the complex regulatory and governmental environment in which our business operates.


Members	Key Characteristics and Responsibilities	Meetings in 2020: 3
R. Alpern B. Hart (Chair) E. Liddy M. Meyer R. Roberts G. Tilton	✓ The public policy committee is governed by a written charter. ✓ This committee assists the board of directors in fulfilling its oversight responsibility with respect to AbbVie’s public policy, certain areas of legal and regulatory compliance, governmental affairs, healthcare compliance, and social responsibility and environmental matters that affect or could affect AbbVie. ✓ Other topics within the committee’s purview include but are not limited to ethics and compliance matters, government and regulatory trends relevant to AbbVie’s business, political contributions, and corporate philanthropy.


							Change in
							Pension Value
							and
							Nonqualified
	Fees		Restricted				Deferred
	Earned or		Stock Unit		Option		Compensation		All Other
	Paid in Cash		Awards		Awards		Earnings		Compensation		Total
Name	($)(1)		($)(2)		($)(3)		($)(4)		($)(5)		($)
R. Alpern		112,917		194,934		0		44,483		25,000		377,334
R. Austin		137,917		194,934		0		0		25,000		357,851
W. Burnside		118,917		194,934		0		0		25,000		338,851
T. Freyman		67,083		194,934		0		0		0		262,017
B. Hart		132,917		194,934		0		0		25,000		352,851
E. Liddy		132,917		194,934		0		0		0		327,851
M. Meyer		118,917		194,934		0		0		25,000		338,851
E. Rapp		138,917		194,934		0		0		26,321		360,172
R. Roberts		112,917		194,934		0		0		25,000		332,851
G. Tilton		168,917		194,934		0		0		30,699		394,550
F. Waddell		118,917		194,934		0		0		26,319		340,170


		Stock Options	Stock
	Shares	Exercisable	Equivalent
	Beneficially	within 60 days	Units
Name	Owned^(1)(2)(3)	of January 31, 2020
R. Gonzalez	315,815	678,291	0
R. Alpern	28,440	0	7,602
R. Austin	119,447	0	0
W. Burnside	19,881	0	0
T. Freyman	123,674	0	0
B. Hart	12,395	0	0
E. Liddy	25,002	0	27,440
M. Meyer	9,421	0	0
E. Rapp	35,870	0	19,289
R. Roberts	6,651	0	0
G. Tilton	44,837	0	33,651
F. Waddell	21,881	0	0
R. Michael	20,270	65,935	0
L. Schumacher	177,541	373,300	0
C. Alban	155,341	445,047	0
M. Severino	67,281	460,189	0
All directors and executive officers as a group⁽⁴⁾	1,522,722	4,444,067	87,982


Name and Address of Beneficial Owner	Shares Beneficially Owned	Percent of Class
The Vanguard Group	142,563,074	8.08	%
100 Vanguard Blvd.
Malvern, PA 19355
BlackRock, Inc.	124,423,484	7.0	%
55 East 52^nd Street
New York, NY 10055


EXECUTIVE SUMMARY	33	COMPENSATION PLAN ELEMENTS	44
Unique Events In 2020	33	Base Salary	44
Compensation Philosophy	33	Short-Term Incentives	44
Business Overview	34	Long-Term Incentives	47
Business Performance Highlights	35	Benefits	48
Components of our Compensation Program	39	Employment Agreements	49
2020 Performance Results	39	Excise Tax Gross-Ups	49
Stockholder Engagement	41	Change in Control Agreements	49
Compensation Program Governance Summary	42

EXECUTIVE COMPENSATION PROCESS	43	OTHER MATTERS	50
Commitment to Performance-Based Awards	43	Stock Ownership Guidelines	50
Committee Process for Setting Total Compensation	43	Clawback Policy	50
Compensation Benchmarking	43	Anti-Hedging and Anti-Pledging Policies	50
Role of the Compensation Consultant	43
Compensation Risk Oversight	44