Cencora, Inc DEF 14A, filed Jan 29, 2024

Cencora, Inc. (COR)

DEF 14A 2024-01-29 For: 2024-03-12

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Added on June 12, 2026

About this DEF 14A

Cencora, Inc filed this DEF 14A on January 29, 2024.

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	Meeting information
	Time and date Tuesday, March 12, 2024 4:00 p.m., Eastern Time
	Virtual meeting Held virtually-only via live webcast at www.virtualshareholder meeting.com/COR2024
	Who may vote Shareholders of record on January 16, 2024 may vote
	Date of availability This notice and proxy statement, together with our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, are being made available to shareholders on or about January 29, 2024

Agenda		Board recommendation
1	Elect the eleven directors named in this proxy statement		For each nominee
2	Conduct an advisory vote to approve the compensation of our named executive officers		For
3	Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal 2024		For
4	Approve an amendment of our certificate of incorporation to provide for the exculpation of officers as permitted by Delaware law		For
5	Approve miscellaneous amendments to our certificate of incorporation		For
6	Vote on the shareholder proposal set forth in this proxy statement, if properly presented at the 2024 Annual Meeting		Against
7	Transact any other business properly brought before the meeting

				Internet Visit www.proxyvote.com and follow the instructions
				Phone Call toll-free 1.800.690.6903 inside the United States or Puerto Rico and follow the instructions
				Mail If you received a proxy/voting instruction card by mail, you can mark, date, sign and return it in the postage-paid envelope
				Mobile device Scan the QR code provided on your proxy/voting instruction card
				At the meeting Attend the virtual meeting and vote online

	Company highlights			1
	Proxy statement summary			6
	Board and governance matters			10
	Item 1: Election of directors			10
	Our Board of Directors			11
	Corporate governance			21
	Director compensation			36
	Overview			36
	Fiscal 2023 director compensation			38
	Executive compensation			39
	Item 2: Advisory vote to approve the compensation of our named executive officers			39
	Compensation discussion and analysis			40
	Report of the Compensation Committee			61
	Executive compensation tables			62
	CEO pay ratio			75
	Pay versus performance			75
	Audit matters			81
	Item 3: Ratification of the appointment of Ernst & Young LLP as Cencora’s Independent Registered Public Accounting Firm for Fiscal 2024			81
	Selection and engagement of audit firm			82
	Audit and non-audit fees			82
	Pre-approval policies			82
	Report of the Audit Committee			83
	Item 4: Approval of an amendment of the certificate of incorporation to provide for the exculpation of officers as permitted by Delaware law			84

	Item 5: Approval of miscellaneous amendments to the certificate of incorporation			86
	Item 6: Shareholder proposal			88
	Stock ownership information			91
	Security ownership of certain beneficial owners, officers and directors			91
	Equity compensation plan information			93
	Delinquent Section 16(a) reports			93
	Frequently asked questions about the 2024 Annual Meeting of Shareholders and voting at the meeting			94
	Other Information			99
	Availability of the Annual Report on Form 10-K			99
	Requirements for submission of proxy proposals, nomination of directors and other business of shareholders			99
	Appendix A			A-1
	Supplemental information: GAAP to non-GAAP reconciliation			A-1
	Exhibits			A-1
	Exhibit A:
	Proposed amended and restated certificate of incorporation			A-1
	Exhibit B:
	Proposed changes to current amended and restated certificate of incorporation (marked to show changes)			B-1


	Delivered strong financial performance as we continued to benefit from solid underlying business fundamentals, broad-based utilization trends, execution by our team members, and our value creating approach to capital deployment.			United under our new identity as Cencora, better positioning our business to grow globally and leverage our infrastructure efficiently to serve our customers and create value for our stakeholders.			Completed minority investment in OneOncology, deepening our relationship with community oncologists and enhancing our leadership in the oncology platform.			Completed acquisition of PharmaLex, a leading provider of specialized services for the life sciences industry. The acquisition expands and enhances Cencora’s global portfolio of solutions to support partners across the pharmaceutical development and commercialization journey.

	Our strategy advances our core business
				Lead with market leaders: creating long-term strategic partnerships with key anchor customers
				Leverage our infrastructure to increase efficiency and to support customers in meeting consumer needs: using our scale and capabilities, we better serve customers and increase the efficiency of the global pharmaceutical supply chain
	Our strategy enhances our capabilities and growth
				Expand on leadership in specialty: building on our leading position to capture the opportunities created as pharmaceutical innovation continues to advance
				Contribute to pharmaceutical outcomes: working collaboratively with partners up- and down-stream to facilitate positive health access and outcomes for patients
	Innovation is a key element of our strategy that advances our core and enhances our capabilities
				Invest in innovation to further drive differentiation: supporting the continuously evolving healthcare landscape by providing leading solutions for customers

	Enabling effective oversight of management
	Majority of director nominees are independent (nine out of eleven) All members of the Audit, Compensation, and Governance Committees are independent Lead Independent Director with clearly-defined responsibilities (see page 22) Thoughtful succession planning process in place for Board and CEO Full Board plays an active role in risk oversight and regularly receives reports on risk exposure from management			Board oversight of ESG reporting and disclosure practices Board oversight of enterprise risk management and legal and regulatory compliance Strict overboarding policy for our CEO and non-employee directors (see page 12) Tenure policy and regular refreshment of the Board and its committee chairs (see page 12) Comprehensive annual review process for the Board and each of its committees (see page 32) Robust shareholder communication and engagement Director stock ownership guidelines

	Enabling accountability to our shareholders
	Majority vote standard Removal of directors with or without cause Right to call special meetings at 25% Proxy access			No supermajority requirement Declassified Board with annual election of all directors No cumulative voting

	Audit Committee
	Committee Members Dennis M. Nally (Chair) Richard W. Gochnauer Henry W. McGee			Report The Report of the Audit Committee is on page 83			All members of the Audit Committee are independent \| Meetings in fiscal 2023: 9

	Compensation & Succession Planning Committee
	Committee members Kathleen W. Hyle (Chair) Lorence H. Kim, M.D. Dennis M. Nally			Report The Compensation Committee Report is on page 61			All members of the Compensation & Succession Planning Committee are independent \| Meetings in fiscal 2023: 6

	Compliance & Risk Committee
	Committee members Lon R. Greenberg (Chair) Ornella Barra Richard W. Gochnauer Redonda G. Miller, M.D.						Meetings in fiscal 2023: 5

	Finance Committee
	Committee members Lorence H. Kim, M.D. (Chair) Ornella Barra Kathleen W. Hyle						Meetings in fiscal 2023: 5

	Governance, Sustainability & Corporate Responsibility Committee
	Committee members Henry W. McGee (Chair) Lon R. Greenberg Redonda G. Miller, M.D.						All members of the Governance, Sustainability and Corporate Responsibility Committee are independent \| Meetings in fiscal 2023: 4

	Due diligence			• We perform extensive due diligence on customers who intend to purchase controlled substances from us and vet discovered information through a best-in-class diversion control team of internal and external experts before granting them permission to purchase. Once approved, customers are subject to ongoing due diligence to identify and mitigate potential issues.
	Order monitoring			• We maintain an order monitoring program with sophisticated technology that tests every controlled substance order against established governing criteria. • Orders identified as potentially suspicious are investigated, canceled, and reported to the DEA and relevant state agencies.
	Daily reporting			• We provide daily reports to the DEA of all controlled substances, including the quantity, type and recipient of each shipped order.
	Licensing			• We ensure that all customers are appropriately licensed by regulatory agencies and continuously monitor those customers for “red flag” behavior. • We discontinue customer relationships where there is an increased potential for diversion by the customer. • We also support law enforcement efforts to investigate entities that attempt to divert controlled substances.

		Board of Directors
		Decision-making body responsible for risk management assessment and alignment to business ethics and the highest standards of integrity.

		Key committees
		The Governance Committee oversees ESG strategy and practices and makes recommendations to the Board. The Audit Committee, Compliance & Risk Committee as well as the Compensation Committee oversee specific aspects of ESG.

		Global ESG Impact Council
		Ensures the integration and coordination of Cencora’s ESG strategy and practices with business strategy and policy. Provides guidance and input to determine ESG areas that should be the highest level of priority for the enterprise.

		Management
		Business segments and corporate functions support the integration of our ESG priorities in line with our purpose.

	Fiscal 2023 annual compensation for non-employee directors

	Lead Independent Director Compensation ($)
	• Annual retainer			125,000
	• Annual equity award			250,000

	Additional fiscal 2023 annual retainers ($)(1)
	Committee Chair Fee
	• Audit Committee			25,000
	• Compensation & Succession Planning Committee			20,000
	• Compliance & Risk Committee			25,000
	• Finance Committee			20,000
	• Governance, Sustainability & Corporate Responsibility Committee			20,000

Name	Fees earned or paid in cash(1) ($)		Stock awards(2) ($)		Total ($)
Ornella Barra(3)		—		—		—
Werner Baumann(4)		—		—		—
D. Mark Durcan		130,000		250,050		380,050
Richard W. Gochnauer		100,000		200,100		300,100
Lon R. Greenberg		132,500		200,100		332,600
Kathleen W. Hyle		120,000		200,100		320,100
Lorence H. Kim, M.D.		110,000		287,327		397,326
Henry W. McGee		120,000		200,100		320,100
Redonda G. Miller, M.D		75,000		236,819		311,819
Dennis M. Nally		175,255		200,100		375,355
Lauren M. Tyler(4)		—		—		—

Name	Number of share of outstanding restricted stock units (#)
Ms. Barra		—
Mr. Baumann		—
Mr. Durcan		4,458
Mr. Gochnauer		5,485
Mr. Greenberg		9,578
Ms. Hyle		4,125
Dr. Kim		1,892
Mr. McGee		5,465
Dr. Miller		1,562
Mr. Nally		4,125
Ms. Tyler		—

	Name			Title
	Steven H. Collis			Chairman, President and Chief Executive Officer (“CEO”)
	James F. Cleary			Executive Vice President and Chief Financial Officer (“CFO”)
	Robert P. Mauch			Executive Vice President and Chief Operating Officer
	Elizabeth S. Campbell			Executive Vice President and Chief Legal Officer
	Gina K. Clark			Executive Vice President and Chief Communications & Administration Officer

	What we do			What we do not do
	Use financial metrics to make a substantial portion of executive pay contingent on performance Engage with shareholders on compensation Conduct an annual say-on-pay vote Cap payouts under our annual cash bonus plan and performance share plans Require our CEO to own stock equal in value to six times his base salary, and our CFO and other executive officers to own stock equal in value to three times their respective base salaries Require executive officers to retain all equity awards until required ownership levels are met Require our CEO to hold 50% of performance share awards for two years after vesting and other NEOs to hold 50% of performance share awards for one year after vesting Review peer group data, as available, and compensation survey data in establishing executive officer compensation Have our CFO and Chief Accounting Officer review adjustments reflected in our reported, non-GAAP financial results with the Compensation Committee on a quarterly basis The Compensation Committee determines whether to exercise discretion to modify the calculated payouts and approves the final payouts for the prior fiscal year’s incentive plans following fiscal year end Apply robust clawback obligations to annual cash bonus and equity awards for executive officers Require forfeiture of awards upon violation of restrictive covenants Require a double-trigger for change in control payments Consider burn rate in equity grant decisions and manage use of equity awards conservatively			Tie incentive compensation to specific product sales, including prescription opioid medication sales Permit short sales, hedging, or pledging of our stock by our executive officers and directors Backdate or retroactively grant restricted stock units Pay dividends on unearned and unvested performance shares Provide tax gross-ups in the event of a change in control


	• Assess incentive plan performance • Determine final payouts for the prior fiscal year, including whether to exercise discretion to modify the calculated payouts • Assess CEO performance for the prior fiscal year (without the CEO present) • Set NEO compensation for the new fiscal year • Determine the incentive plans’ design and goals for the new fiscal year • Approve equity awards for the new fiscal year • Review, update, and approve the Compensation Committee’s annual governance items • Review the CD&A and approve the Compensation Committee’s Report for the annual proxy statement			• Discuss the results of the Company’s Annual Meeting of Shareholders and Say-on-Pay vote outcomes • Discuss the Company’s executive compensation strategy for the following fiscal year • Review the Company’s CEO succession and contingency readiness plan • Evaluate and discuss the Compensation Committee’s performance for the prior fiscal year			• Preliminary discussion on executive compensation program design for the upcoming fiscal year • Review and approve of the Company’s peer group for the fiscal year • Review the Company’s talent process and key talent assessments			• Discuss market trends for executive compensation and the positioning of the Company’s pay program as compared to market • Review preliminary estimates of incentive plan performance • Discuss proposed executive compensation plan design for the next fiscal year • Review preliminary recommendations on NEO compensation for the next fiscal year

		Role of the compensation committee
		• Is responsible for the design of our executive compensation program, oversight of our incentive plans, and review of our executive talent development strategy and succession planning. • Facilitates the Board of Director’s annual assessment of the CEO’s performance. • Reviews and approves the individual elements of compensation of our NEOs, as well as the design of and awards made under our long-term incentive plan. • Reviews and approves executive benefit plans, programs, and perquisites. • Oversees our savings, retirement, health and welfare plans and has delegated the administration of our benefit plans to an internal Benefits Committee, composed of senior finance, human resources, and legal executives. • As needed, participates in engagements with the Company’s largest shareholders to gather feedback on the Company’s executive compensation program and inform the Compensation Committee’s decision-making process.

		Role of external compensation consultant
		• The Compensation Committee’s independent compensation consultant advises the Compensation Committee on all aspects of executive compensation, including: comparative data; competitive positioning of executive pay; plan design; long-term incentive pay practices; and market trends. • As directed by the Compensation Committee, the consultant prepares analyses and recommendations relating to the compensation of our NEOs, including pay recommendations for our CEO. • The Compensation Committee’s independent compensation consultant attended committee meetings and met privately from time to time with the committee and individual committee members to plan for committee meetings and discuss executive compensation matters.

		Role of management • Our CEO gives the Compensation Committee a performance assessment and pay recommendation for senior management, including each of the other NEOs, and does not participate in discussions regarding his own performance or pay determinations. • Management, in consultation with the Compensation Committee’s compensation consultant, may also make recommendations on matters of compensation philosophy and plan design. • Executives may attend the Compensation Committee meetings, but they are not present when the Compensation Committee meets in executive session and they do not make recommendations regarding their own pay.

Executive	Increase % in base salary for fiscal 2023		New base salary of NEOs
Mr. Collis		—%		$	1,400,000
Mr. Cleary		3%		$	795,000
Mr. Mauch		15%		$	975,000
Ms. Campbell		22%		$	670,000
Ms. Clark		3%		$	640,000

Name	Base salary ($)		x		AIP %		=		AIP target ($)		x		Payout level %(1)		=		Calculated payout ($)
Steven H. Collis		1,400,000		x		175%		=		2,450,000		x		131.9%		=		$	3,231,550
James F. Cleary		795,000		x		100%		=		795,000		x		131.9%		=		$	1,048,605
Robert P. Mauch		975,000		x		125%		=		1,218,750		x		131.9%		=		$	1,607,531
Elizabeth S. Campbell		670,000		x		100%		=		670,000		x		131.9%		=		$	883,730
Gina K. Clark		640,000		x		100%		=		640,000		x		131.9%		=		$	844,160

Name	Performance shares target # of shares		Performance shares grant value(1)			RSUs # of shares		RSUs grant value(1)
Steven H. Collis		47,412		$	7,500,104		31,608		$	5,000,070
James F. Cleary		13,276		$	2,100,130		8,851		$	1,400,140
Robert P. Mauch		18,965		$	3,000,073		12,644		$	2,000,154
Elizabeth S. Campbell		9,103		$	1,440,004		6,069		$	960,055
Gina K. Clark		6,069		$	960,055		4,046		$	640,037

	CEO Equity incentives represented approximately 76% of Mr. Collis’s total target direct compensation
	Other NEOs Equity incentives represented approximately 66%, on average, of the total target direct compensation of the other NEOs

Metric	Weighting	Rationale
Compound Annual Adjusted EPS growth(1)		Key metric used by management to set business goals and for shareholders to evaluate our financial results
Average Annual Adjusted ROIC(2)		Defined as Adjusted Operating Income/Invested Capital Over Time, this measure encourages our NEOs to grow our Company’s profitability
Relative TSR modifier with above median target (55th percentile)(3)	+/- 15%	Stock performance relative to companies in the S&P 500 Healthcare Providers & Services Index(4) further aligns NEO incentives with shareholder interests

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