Iqvia Holdings Inc PRE 14A, filed Feb 18, 2022

Iqvia Holdings Inc. (IQV)

PRE 14A 2022-02-18 For: 2022-04-12

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Proposals	Required Approval	Board Recommendation	Page Reference
Election of Directors	Plurality of votes cast	FOR	17
Amendment to Certificate of Incorporation to declassify the Board over time and provide for the annual election of all directors	Majority of shares present in person or represented by proxy at the meeting and entitled to vote on the matter	FOR	24
Advisory (non-binding) vote to approve executive compensation (say-on-pay)	Not applicable⁽¹⁾	FOR	48
Stockholder proposal, if properly presented	Not applicable⁽¹⁾	AGAINST	98
Ratification of independent auditor	Majority of votes cast	FOR	100
(1) Because this is an advisory vote, there is no required approval threshold.

	Advising Healthcare Actors Throughout the pandemic, we have maintained regular dialogue with governments, regulators, payers and life sciences companies, providing them with up-to-date insights on the spread and impact of COVID-19, including from our AI-based disease trackers and prediction models.

	IQVIA COVID-19 Active Cases Curve Simulator We developed a first-in-kind data model that presents real-time simulations of active cases in countries and regions around the world to support public health decisions. The simulator focused on total active cases, rather than hospitalizations or deaths, as a metric that spoke to the overall impact COVID-19 was having. The simulation showed the number of active cases (per population), shape of increase of the curve, timing of the apex of the curve, and the shape and timing of the decline from the apex.

	The Preparedness and Treatment Equity Coalition IQVIA was one of the founding members of the Preparedness and Treatment Equity Coalition (PTEC), an organization whose vision is to take a metrics-driven approach to close the gaps in pandemic care and services in underserved communities.

	Human Data Science Research Collaborative We created the Human Data Science Research Collaborative, a program to support COVID-19 research activities related to health system issues through collaboration with the world’s leading academic researchers. In 2021, we supported eight publications from high-profile academics that covered drug shortages, pediatric medicine access, changes in patient-provider engagement, mental health, and opioids.

	Developing Vaccines and Therapies We worked on over 300 clinical trials and studies for COVID-19 vaccines and therapies, including four of the five trials that reached phase III and were funded by the U.S. government, providing full clinical trial services for two of them.

✔	Lead Director, elected by the independent directors	✔	Stockholder proxy access
✔	All directors except our Chief Executive Officer are independent	✔	Director resignation policy that requires directors to tender their resignation if they receive a number of withhold votes that exceeds 50% of all votes cast
✔	Regular Board and committee executive sessions of non-management directors	✔	Our common stock is the only class of stock outstanding
✔	Annual Board and committee self-assessments	✔	Multi-year vesting requirements for performance share awards
✔	Director retirement policy at age 74 to encourage board refreshment	✔	Comprehensive whistleblower policy in place
✔	Risk oversight by the Board and committees	✔	Securities Trading Policy in place, including anti-hedging and anti-pledging terms
✔	Audit Committee approval required for related party transactions	✘	No supermajority voting requirement for stockholders
✔	Formal director and CEO searches must include list of female and racially or ethnically diverse candidates	✘	No “poison pill” (stockholder rights plan)
✔	Share ownership guidelines for both directors and key executives	✘	No excise tax gross-ups on severance or change in control payments or benefits

Director	Age	Term Ends	Independent	Audit	N&G	LDC	Director Since
John P. Connaughton	56	2025	Y			X	2008
John G. Danhakl	65	2025	Y		X	X	2016
James A. Fasano	52	2025	Y	Chair			2016
Leslie Wims Morris	51	2025	Y		X		2022
Ari Bousbib, Chairman and CEO	60	2024	N				2016
Carol J. Burt	64	2023	Y	X		X	2019
Colleen A. Goggins	67	2023	Y	X	X		2017
John M. Leonard, M.D., Lead Director	64	2024	Y	X	X		2015
Ronald A. Rittenmeyer	74	2023	Y	X		Chair	2016
Todd B. Sisitsky	50	2024	Y		Chair	X	2016
Sheila A. Stamps	64	2023	Y	X			2022

Independent Board	All our directors are independent except for our Chairman and Chief Executive Officer.
Independent Board committees	Each of our three Board committees is made up solely of independent directors.
Independent Lead Director; regular executive sessions	Our independent Lead Director has comprehensive duties set forth in our Corporate Governance Guidelines, including leading regular executive sessions of the Board, where independent directors meet without management present.
Annual Board and committee self-assessment process	The Board and each Board committee conducts a self-assessment annually to determine whether it is functioning efficiently and meeting its governance responsibilities.
Robust Code of Conduct	Our Code of Conduct, Doing the Right Thing, applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer, controller and individuals performing similar functions. The Code of Conduct is a guide to the responsibilities we share for ethical business conduct and paints a clear picture of what we stand for as an organization, what we expect from ourselves, and what we must do to maintain our reputation.
Prohibition on hedging or pledging of IQVIA stock	Our securities trading policy prohibits hedging transactions with respect to, and the pledging of, our securities, including prepaid variable forward contracts, equity swaps, collars, and exchange funds, and otherwise prohibits our directors, officers, employees or their immediate family members from engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our securities, except where the individual receives prior written approval from the General Counsel. In 2021, the General Counsel did not approve any stock hedging or pledging transactions and none of our current executive officers or directors have entered into any such hedging or pledging transactions.
Share ownership requirements	We have robust share ownership guidelines, which require our named executive officers to hold IQVIA stock valued at between three times and six times their base salary and our directors to hold stock valued at five times their annual cash retainer.
Requirement to include gender and racially or ethnically diverse candidates in director and CEO searches	The Company’s Corporate Governance Guidelines require the initial list of external candidates in any search for new directors or the Chief Executive Officer position to include qualified female and racially or ethnically diverse candidates.
No supermajority stockholder vote required	Our stockholders may act by majority vote on actions that may be taken by stockholders, including approving amendments to the Bylaws and removing for cause a director or the entire Board from office and filling the vacancy or vacancies.
Clawback policy	Our clawback policy, which applies to current and former executive officers, among others, provides for the recoupment of short- and long-term incentive compensation in the event of a financial restatement under specified circumstances.
Director resignation policy	Directors are required to tender their resignation if they receive a number of withhold votes that exceeds 50% of all votes cast in an uncontested election.
Proxy access right	Eligible stockholders may, subject to certain requirements, include their own director nominees in our proxy materials.


	IQVIA HOLDINGS INC. 83 Wooster Heights Road Danbury, Connecticut 06810

	JOHN P. CONNAUGHTON	Age: 56
	Director since: 2008 INDEPENDENT LDC Committee

	JOHN G. DANHAKL	Age: 65
	Director since: 2016 INDEPENDENT LDC Committee Nominating and Governance Committee

	JAMES A. FASANO	Age: 52
	Director since: 2016 INDEPENDENT Audit Committee (Chair) Audit Committee Financial Expert

	LESLIE WIMS MORRIS	Age: 51
	Director since: 2022 INDEPENDENT Nominating and Governance Committee

	CAROL J. BURT	Age: 64
	Director since: 2019 INDEPENDENT LDC Committee Audit Committee Audit Committee Financial Expert

	COLLEEN A. GOGGINS	Age: 67
	Director since: 2017 INDEPENDENT Audit Committee Nominating and Governance Committee Leads Sustainability Oversight for the Board

	RONALD A. RITTENMEYER	Age: 74
	Director since: 2016 INDEPENDENT Audit Committee LDC Committee (Chair) Audit Committee Financial Expert

	SHEILA A. STAMPS	Age: 64
	Director since: 2022 INDEPENDENT Audit Committee Audit Committee Financial Expert

	ARI BOUSBIB	Age: 60
	Director since: 2016 Chairman and Chief Executive Officer


IQVIA HOLDINGS INC. 2022 Proxy Statement	1


IQVIA HOLDINGS INC. 2022 Proxy Statement	2


IQVIA HOLDINGS INC. 2022 Proxy Statement	3


IQVIA HOLDINGS INC. 2022 Proxy Statement	4

	JOHN M. LEONARD, M.D.	Age: 64
	Director since: 2015 INDEPENDENT Lead Director Audit Committee Nominating and Governance Committee Audit Committee Financial Expert

	TODD B. SISITSKY	Age: 50
	Director since: 2016 INDEPENDENT LDC Committee Nominating and Governance Committee (Chair)

Board Matter	Responsibility
Communicating with directors	Liaising between non-management directors and management
Executive sessions	Presiding at executive sessions of non-management directors
Board meetings	Presiding at Board meetings when the Chairman is not present
Agendas	Consulting with the Chairman on matters pertinent to the Company and the Board, including meeting agendas, schedules and information sent to the Board
Communicating with stockholders	Engaging with major stockholders, as appropriate

85%	85%	84%	85%
feel engaged with IQVIA	feel they are acquiring the knowledge and skills needed to be effective in their jobs	would recommend IQVIA as a great place to work	feel they are part of a team
4 points better than prior year and 4 points above the Fortune 500 company benchmark	1 point better than prior year	3 points better than prior year	1 point better than prior year

Drug Expenditure Dynamics 1995–2020: Understanding Medicine Spending in Context		Digital Health Trends: Innovation, Evidence, Regulation and Adoption
Estimates total drug spending, including by hospitals and net of discounts and rebates, for eleven countries to shed light on the composition and dynamics of drug expenditures.		Reviews digital health tools, including mobile health apps and wearable sensors, and covers trends in four areas — innovation, evidence, regulation and adoption — to assess how these new tools are becoming an entirely new therapeutic modality.

Global Trends in Research and Development (R&D): Overview through 2020		Evolving Oncology Endpoints: A New Horizon for Oncology Outcomes
Examines the trends in pharmaceutical research and development through the end of 2020 and provides an analysis of initiated clinical trials, including the impact of the pandemic and COVID-19-specific research.		Examines trends in new and evolving oncology endpoints being studied in clinical trials, and looks closely at how these evolving endpoints could potentially be used to evaluate clinical benefit, support regulatory approval and inform payer reimbursement decisions effectively and efficiently.


Sustainability goal achieved
We are committed to reducing waste. In 2021, we successfully met our goal of removing 100% of single-use plastic from all our office facilities. Conscious of the impact to the environment of plastic waste, we worked across our global office facilities to remove vending machine snacks, replace bottled drinking water supplies with reusable glass containers using filtered water, and stock compostable or reusable cups. We continue to evaluate our waste footprint and will determine appropriate next steps to reduce our impact in 2022.

GHG Scope	Description	Primary Driver
Scope 1	All direct emissions	Emissions associated with activities under our direct control, including fuel combustion from company vehicles and gas emissions from boilers and air-conditioning refrigerant leaks
Scope 2	Indirect emissions⁽¹⁾	Emissions associated with electricity purchased and used by IQVIA to power facilities heating, cooling and computer / IT equipment
Scope 3	All other indirect emissions	Emissions associated with IQVIA business travel
(1) We use the market-based method, which takes into account emissions from energy contracts and instruments (such as renewable energy credits), to report our Scope 2 emissions.

	2018	2019	2020
Scope 1	37,342	39,211	10,471
Scope 2	53,345	47,021	38,180
Scope 3	90,872	81,034	22,884

What We Heard		What We Did
The Company should consider declassifying its Board and, more generally, continue on its multi-year trajectory of further enhancing stockholder rights		• We included a management proposal in this Proxy Statement to (i) declassify the Board and (ii) permit stockholders to remove directors elected for one-year terms with or without cause
The Company should hold say-on-pay advisory votes annually		• Following last year’s say-on-frequency advisory vote, the Board adopted annual say-on-pay until the next required say-on-frequency vote
There is significant interest in our ongoing ESG efforts and the Board’s oversight of ESG matters, and in aligning our ESG disclosures to one or more of the major ESG reporting frameworks		• We amended the charter of the N&G Committee to formally include oversight of ESG matters as a committee responsibility • We committed to aligning our 2021 ESG Report with the disclosure guidelines promulgated by the GRI, SASB, and TCFD
Consider explicitly tying executive compensation to the achievement of ESG-related objectives		• We added ESG performance objectives and responsiveness to employee survey feedback to the metrics that determine short-term incentive awards for our named executive officers
Diversity among our directors is a top priority, and stockholders want more transparency on this topic		• We included gender, racial and ethnic diversity statistics for the Board in this Proxy Statement
Stockholders asked us to consider filling the next director slot with a racially or ethnically diverse director		• We added two ethnically and racially diverse women as directors to the Board
Increase disclosure of workforce demographic data		• We are publishing our EEO-1 report, and we have included other additional diversity disclosures for our US employees in this Proxy Statement

Payment	Annual Compensation ($)
Cash retainer (paid in quarterly installments)	100,000
Equity retainer fair value (payable in fully-vested restricted stock units (RSUs))	200,000
Lead Director fee	42,500
Committee chair fees:
Audit	30,000
Leadership Development and Compensation	25,000
Nominating and Governance	20,000
Committee member (other than chair) fees:
Audit	10,000
Leadership Development and Compensation	5,000
Nominating and Governance	5,000

Iqvia Holdings Inc PRE 14A, filed Feb 18, 2022

Financial Highlights

Our human capital management

Board oversight of human capital management

Strategy

Name	Fees Earned or Paid in Cash ($)	Stock Awards ($)⁽¹⁾	Total ($)
Carol J. Burt	115,000	199,997	314,997
John P. Connaughton⁽²⁾	—	—	—
John G. Danhakl⁽³⁾	110,000	199,997	309,997
James A. Fasano⁽²⁾	—	—	—
Colleen A. Goggins⁽³⁾	115,000	199,997	314,997
John M. Leonard, M.D.	157,500	199,997	357,497
Ronald A. Rittenmeyer	135,000	199,997	334,997
Todd B. Sisitsky⁽²⁾	—	—	—
(1) In accordance with our non-employee director compensation program, restricted stock units were granted to Mses. Burt and Goggins, Messrs. Danhakl and Rittenmeyer and Dr. Leonard with a grant date of April 15, 2021 (934 restricted stock units each). These restricted stock units were fully vested when granted. Amounts reflect the aggregate grant date fair value of the restricted stock units at April 15, 2021 ($214.13 per share) computed in accordance with Accounting Standards Codification Topic 718, or ASC 718, excluding the impact of estimated forfeitures. Assumptions used in the calculation of these amounts in 2021 are included in Notes 1 and 17 to our consolidated audited financial statements for the year ended December 31, 2021, included in Part II of our Annual Report on Form 10-K. (2) Messrs. Connaughton, Fasano, and Sisitsky do not participate in the non-employee director compensation program due to their relationships with current or former SHA Parties (as defined under the section titled “Certain Relationships and Related Person Transactions — Shareholders Agreement.”) (3) Mr. Danhakl and Ms. Goggins deferred 100% of their annual cash Board retainers and committee fees under our Director Deferral Plan, described below. These amounts were converted into deferred shares that are payable in shares of IQVIA common stock following a termination of the director’s Board service or the director’s death, or upon a change in control of the Company. As of December 31, 2021, Mr. Danhakl and Ms. Goggins have 497 and 2,104 deferred shares outstanding, respectively, under the Director Deferral Plan.


	Table of contents

	Executive Summary	50
	2021 Named Executive Officers	50
	2021 Business Performance Highlights	50
	Elements of Our Executive Compensation Program	52
	Compensation and Governance Practices	53
	Named Executive Officer Compensation at a Glance	54
	Say-on-Pay	54
	Compensation Philosophy	55
	Compensation of Our Chief Executive Officer	55
	Overview of Our Executive Compensation Program	56
	Roles of the LDC Committee, the Board and Management in Compensation Decisions	56
	Use of Compensation Consultants	57
	Benchmarking	57
	Key Features to Align Executive Pay with Stockholder Interests	58
	Elements of Compensation	59
	Base Salary	59
	Short-Term Incentive Awards	59
	Long-Term Incentive Awards	62
	2021 Compensation Determinations	64
	2021 Base Salary	64
	2021 Short-Term Incentive Awards	64
	2021 Long-Term Incentive Awards	76
	Retirement, Perquisites and Termination Benefits	78
	Rigorous Accountability, Risk-Mitigation and Recovery Provisions	79
	Share Ownership Guidelines	79
	Clawback Policy	80
	Risk Assessment	80
	Tax Deductibility	80


Financial	• Revenue of $13.9 billion, up 22.1% compared to 2020 • Adjusted EBITDA⁽¹⁾ of $3 billion, up 27% compared to 2020 • Adjusted Diluted EPS⁽¹⁾ of $9.03, up 41% compared to 2020 • Free Cash Flow⁽¹⁾ of $2.3 billion • Total Stockholder Return of 57.5%
Strategic Growth	• Closed the year with a record $10.1 billion of contracted net new business in R&DS. This brought our backlog to a record $24.8 billion, up 10.2% compared to 2020. Our next twelve months revenue from backlog increased to $7 billion • Continued to invest in rich clinical data assets, which now stand at over 1.2 billion non-identified patients globally • Gained additional traction in DCTs, with over 300 studies under way utilizing our industry-leading capabilities and enrolling over 300,000 patients in 80 countries with more than 30 indications • Expanded our presence in the Commercial Technology space, with over 3,000 clients having adopted IQVIA’s technology platforms, and over 350 clients adopting one or more applications in our OCE platform since launch • Launched IQVIA Next Best Action, an AI-driven recommendation engine for life sciences that embeds key insights and intelligence into commercial workflows to deliver the right content at the right time and place and enhance customer engagement • Continued the rollout of our Orchestrated Clinical Trials (OCT) platform, with over 350 clients having adopted at least one module in the suite. Launched our Clinical Data Analytics Suite, a SaaS-based platform that integrates and transforms structured and unstructured data from clinical trials into predictive insights • Expanded the reach of our award-winning Electronic Clinical Outcomes Assessment (eCOA) tool to over 150 projects across 35 therapeutic areas. Over 70 customers are using this platform, including 8 of the top 10 pharmaceutical companies • Expanded our investment in the lab business by purchasing the remaining non-controlling interest in our central lab joint venture from Quest Diagnostics and acquiring Myriad Rules Based Medicine • Ended 2021 with a net leverage ratio of 3.56x, significantly exceeding the target of 4.0x
Capital Deployment	• Deployed total capital investment of $640 million, principally in new product development and technology infrastructure • Returned approximately $395 million to stockholders through repurchase of 1.7 million shares • Invested $2,216 million in acquisitions in key strategic areas⁽²⁾
Environmental, Social, and Governance (ESG)	• Prepared our reporting on climate impact in alignment with the TCFD framework, the leading set of standards for investors seeking to understand an organization’s climate approach • Aligned our 2021 ESG Report with the GRI and SASB reporting frameworks • Explicitly tied progress on ESG-related matters to executive compensation by including ESG objectives in the short-term incentive award program for each of our named executive officers • Added two racially/ethnically diverse women as directors to our Board • 63% of new hires in the US identifying as women and 38% identifying as Non-White, including 13% who identified as Black or African American • Reduced our total and per-employee GHG emissions year-over-year beyond our expectations • Published our EEO-1 report and enhanced other workforce and Board diversity disclosure • Added two new groups to our ERG program and saw total participation in ERGs increase by 60% • To further strengthen our D&I efforts, we appointed a senior leader of our D&I program • Implemented the IQVIA Future of Work initiative, a company-wide effort examining all aspects of how and where we do our work, as well as the technology and tools we will need to succeed • Progressed toward setting a science-based target to reduce GHG emissions by the end of 2023 • Removed all single use plastic from our offices worldwide, a goal we set out to achieve in 2021

Key Components	How Paid	Overview	Key Benchmarks/Performance Measures
Base Salary	Cash	Fixed compensation to attract and retain executives and balance performance-linked compensation	• Benchmarked to peer group • Adjusted for experience, role, and performance
Annual Incentive Awards	Cash	Variable annual compensation to motivate and reward executives for achieving annual goals and strategic milestones that are critical to our strategic priorities Limit: 0%-200% of target	• Revenue/Profit • Cash Flow • Balance Sheet/Liquidity • Operational/Strategic • Leadership/ESG
Long-Term Incentive Awards	Performance Shares 50%	Variable long-term equity-based compensation to motivate and reward executives for achieving key longer-term financial performance and stockholder return objectives Final awards determined based on achievement relative to pre-established corporate performance metrics for a three-year performance period Limit: 0%-200% of target	• Adjusted Diluted EPS Growth (75%) • Relative TSR (25%)
	Stock Appreciation Rights 25%	Variable long-term equity-based compensation to encourage absolute performance and long-term value creation Awards vest ratably over three years and have a ten-year exercise term	• Stock price appreciation
	Restricted Stock Units 25%	Variable long-term equity-based compensation to encourage long-term value creation and provide increased retentive value Awards vest ratably over three years	• Stock price

WHAT WE DO
✔	Align significant percentage of executive pay with performance	✔	Use an objective, formulaic approach to determining short-term incentive awards
✔	Set challenging yet achievable performance objectives for our named executive officers	✔	Offer transparent disclosure of achievements for all performance measures and metrics used to determine short-term incentive awards
✔	Appropriately balance short- and long-term incentives	✔	Limit LDC Committee discretion to adjust short-term incentive awards to no more than 1/6th of the final award
✔	Align executive compensation with stockholder returns by providing the majority of total compensation in the form of performance-based long-term incentive awards	✔	Include non-solicitation and non-competition provisions in award agreements
✔	Align executive compensation with progress on ESG matters by including specific ESG-related objectives in our short-term incentive award program	✔	Conduct an annual compensation risk review and assessment
✔	Use multi-year vesting requirements for long-term awards	✔	Utilize expertise of an external independent compensation consultant
✔	Implement meaningful share ownership guidelines	✔	Disclose targets for long-term incentive awards upon vesting
✔	Conduct annual performance evaluations of the named executive officers at the LDC Committee level	✔	Impose a robust clawback policy for our cash and equity incentive compensation in the event of financial restatements

WHAT WE DON’T DO
✘	No contracts with multi-year guaranteed salary increases or non-performance bonus arrangements	✘	No repricing of underwater stock options or Stock Appreciation Rights (SARs) without stockholder approval
✘	No excise tax gross-ups	✘	No payment of unearned dividends prior to vesting
✘	No single trigger equity vesting	✘	No hedging or pledging of Company shares

Chief Executive Officer	Average of other Named Executive Officers

Industry	Company Name
Biotechnology	Regeneron Pharmaceuticals, Inc.
Capital Markets	S&P Global, Inc.
Healthcare Providers and Services	Boston Scientific Corporation Laboratory Corp of America Holdings Quest Diagnostics, Inc.
IT Services	Cognizant Technology Solutions Corp. Fiserv, Inc.
Pharmaceuticals	Bausch Health Companies Inc.
Professional Services	Nielsen Holdings PLC Thomson Reuters Corp.
Software	salesforce.com, inc.

Compensation Component	Link to Strategy	Strategy and Performance Alignment
Annual Plan	• A significant portion of our named executive officers’ individual performance goals is tied to one or more of our strategic goals • Compensation is linked to corporate performance through our use of specified Revenue, Adjusted EBITDA and Adjusted Diluted EPS goals and liquidity and cash flow metrics to determine annual cash incentive awards • Compensation is linked to ESG performance through our inclusion and evaluation of ESG-related objectives when determining annual cash incentive awards	Aligns named executive officers with stockholders’ interests by: • Rewarding individual achievement of strategic goals that are made more challenging each year and are designed to position the Company as an industry leader • Incentivizing behavior consistent with strong annual Revenue/Profit, Cash Flow and Balance Sheet/Liquidity performance • Reinforcing the importance of long-term sustainability
Long-Term Incentive Awards	• We ensure the long-term incentive awards have sufficient retentive value because retaining our named executive officers is crucial to realizing our strategic goals • We consider individual performance (which is tied to our strategic goals) in setting the value of our named executive officers’ long-term equity grants	Further aligns named executive officers’ interests with stockholders’ interests by: • Linking a substantial portion of total compensation to long-term corporate performance using long-term incentive awards, including performance shares based on Relative TSR and Adjusted Diluted EPS targets set at the time of grant • Setting three-year vesting periods for our long-term incentive awards that link their payouts to our long-term corporate and share price performance • Including a clawback of equity awards in the event of a restatement of our financial statements


Revenue/Profit	Revenue and profit achievement create a direct link between executive compensation and the Company’s results of operations. As further described below, the component metrics for this performance measure are Revenue, Adjusted EBITDA, and Adjusted Diluted EPS, which align with how such metrics are calculated in the Company’s publicly disclosed earnings releases.
Cash Flow	Cash flow is a key measure of the Company’s financial performance. The cash flow performance measure includes Free Cash Flow as a metric, and may include additional metrics such as past due balances and Net Days Sales Outstanding in a given year based on the LDC Committee’s determination, taking into account the views and recommendations of senior management as to what cash flow metrics the Company should prioritize based on our strategic goals.
Balance Sheet/Liquidity	The LDC Committee selected balance sheet strength and liquidity as a performance measure because maintaining a strong balance sheet, with high liquidity levels and sound working capital management, is a key indicator of the Company’s financial health. This performance measure will include Net Leverage Ratio as a metric, and may include additional metrics such as interest expense, debt maturities and/or repatriations in a given year based on the LDC Committee’s determination, taking into account the views and recommendations of senior management as to what balance sheet/liquidity metrics the Company should prioritize based on our strategic goals.
Operational/Strategic	The LDC Committee selected operational and strategic performance as a performance measure because we are engaged in a strategic transformation of our business, and the achievement of specific operational and strategic goals—beyond annual financial measures—is critical to achieving our short- and long-term financial objectives. The LDC Committee establishes individualized metrics for this performance measure annually for each named executive officer.
Leadership/ESG	Leadership and ESG actions and achievements can have a profound influence on the Company’s success or failure, its long-term risk management, and sustainability. The LDC Committee establishes individualized metrics for this performance measure annually for each named executive officer.

Metric	Description and Reason Selected
Revenue	• “Revenue” is defined as the Company’s revenue from our Consolidated Statements of Income • The LDC Committee believes Revenue is a key driver of stockholder value and earnings growth over time
Adjusted EBITDA	• “Adjusted EBITDA” is defined as the Company’s income or loss from our Consolidated Statements of Income before interest income and expense, income taxes, depreciation and amortization, and further adjusted to eliminate restructuring and related charges, income from non-controlling interests, stock-based compensation, acquisition and integration-related costs, deferred revenue purchase accounting adjustments, loss on extinguishment of debt, and other expense. This definition is the same, and reconciled to the nearest comparable GAAP financial measure in the exact same manner, as Adjusted EBITDA included in the Company’s earnings releases • The LDC Committee believes Adjusted EBITDA is an important measure of financial performance and the ability to service debt and reflects our near- and longer-term goal of increasing profitability
Adjusted Diluted Earnings Per Share	• “Adjusted Diluted Earnings Per Share” or “Adjusted Diluted EPS” means our earnings per share, as reported, excluding all adjustments made to Net income or loss from our Consolidated Statements of Income to arrive at Adjusted EBITDA with the exception of interest expense and depreciation and amortization, as well as incremental adjustments for purchase accounting amortization and royalty hedge gain (loss) and any extraordinary nonrecurring items. This definition is the same, and reconciled to the nearest comparable GAAP financial measure in the exact same manner, as Adjusted Diluted EPS included in the Company’s earnings releases • The LDC Committee believes Adjusted Diluted EPS is an important measure of Company performance and a fundamental metric for the investment community