Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.    )

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Notice is hereby given that the 2020 Annual Meeting of Shareholders will be held at Bristol-Myers Squibb Company, 3401 Princeton Pike, Lawrence Township, New Jersey, on May 5, 2020, at 10:00 a.m. for the following purposes as set forth in the accompanying Proxy Statement:

Holders of record of our common and preferred stock at the close of business on March 16, 2020 will be entitled to vote at the meeting.

We are monitoring developments regarding the coronavirus or COVID-19, including protocols that federal, state and local governments have imposed. We are sensitive to the health and safety concerns related to this ongoing pandemic and our top priority is to protect the health and well-being of our shareholders, employees and the general public. In the event we determine it is necessary or appropriate to hold the meeting by remote communication, we will announce this decision in advance, and details will be posted on our company website and filed with the Securities and Exchange Commission.

By Order of the Board of Directors

 

Katherine R. Kelly
Vice President, Associate General Counsel
and Corporate Secretary

Dated: March 25, 2020

 

Dear BMS shareholders,

At the time that we are issuing this Proxy Statement, we are in the midst of a global pandemic. COVID-19 is taking a significant human toll, and our hearts go out to those who have been impacted and everyone managing through this difficult and uncertain time. As a responsible global citizen, we are taking steps to protect the health and safety of the public and our global workforce, contribute to relief efforts in communities deeply affected by the virus, and carry out our mission of providing life-saving medicines to the patients who depend on us.

At Bristol Myers Squibb (“BMS”), our vision is to transform patients’ lives through science. To do this, we must continually innovate – we must find novel ways to treat some of the most complex and devastating diseases, like cancer. After welcoming our new colleagues from Celgene Corporation (“Celgene”), we are in a better place than ever to do so. Over the last year, we have achieved:

We demonstrate ethics, integrity and quality in everything we do. We have evolved our company behaviors for 2020 into six company values: passion, innovation, urgency, accountability, integrity and inclusion. These core values align with our new culture and aspirational ways of working, engaging employees and strengthening performance. Our ability to innovate is amplified by our talent, passion for science, curiosity for discovery, commitment to quality, and determination to translate scientific and technological advances into new medicines that make a difference for patients and their families. Through company-wide programs, we foster a culture of diversity and inclusion. It is only through the diverse experiences and perspectives of our employees that we elicit the best ideas, drive innovation, and achieve transformative business results.

For example, we have eight People and Business Resource Groups (PBRGs), each focused on a specific element of diversity, which empower employees to apply their perspectives and experiences to drive our patient-focused mission within BMS and in the communities where we live and work. Our more than 15,000 PBRG members have helped to improve health outcomes across several disease areas and populations through work both inside and outside the company, and inspired and worked with young people from diverse backgrounds on STEM education and initiatives. We invite you to read our 2019 Annual Report on our website for additional stories on the impact of these groups.

The result of our efforts, and the milestones we achieved in 2019, reinforce the value of our investments in the business and our culture. I am proud of all that we have accomplished in 2019 and am excited as we further expand the important work we do for patients, embed a new culture and build a leading biopharma company in 2020 and beyond.

We ask for your support for our directors and our pay plans that have carefully designed features governing each of our distinct integration timeframes as well as our long-term operations and sustainability. We also invite your feedback, your participation in our annual meeting, and your future investment. Thank you for helping to enable our work and supporting our patients and all our people. We hope you and your loved ones stay safe and healthy during this uncertain time.

Sincerely,

 

Giovanni Caforio, M.D.
Chairman of the Board and Chief Executive Officer

 

Vicki L. Sato, Ph.D.
Lead Independent Director
Chair, Committee on Directors and Corporate Governance

 

Our Board of Directors has nominated 12 current directors, Peter J. Arduini, Robert Bertolini, Michael W. Bonney, Giovanni Caforio, M.D., Matthew W. Emmens, Julia A. Haller, M.D., Dinesh C. Paliwal, Theodore R. Samuels, Vicki L. Sato, Ph.D., Gerald L. Storch, Karen H. Vousden, Ph.D., and Phyllis R. Yale, to serve as directors of Bristol Myers Squibb. The directors will hold office from election until the 2021 Annual Meeting. We believe that tone is set at the top—not just for integrity, but for excellence, so we open this section on our Board of Directors by introducing you to who we are. We follow that with sections on how we are selected and elected, how we govern and are governed, how we are organized, how you can communicate with us and how we are paid. We ask in Item 1 for your voting support so we can continue our important work and build on our significant successes in 2020.

The following biographies of our director nominees reflect their Board Committee membership and Chair positions as of the date of this year’s Annual Meeting.

Our executives and employees put a great deal of thought into talent recruitment and retention, and we at the Board level are similarly committed to identifying and attracting the best directors for our company. In the subsections that follow we describe our standards, policies and processes to achieving this goal.

A majority of the votes cast is required to elect directors. Any current director who does not receive a majority of votes cast must tender their resignation as a director within 10 business days after the certification of the shareholder vote. The Committee on Directors and Corporate Governance, without participation by any director tendering their resignation, will consider the resignation offer and recommend to the Board whether to accept it. The Board, without participation by any director tendering their resignation, will act on the Committee’s recommendation at its next regularly scheduled meeting to be held within 60 days after the certification of the shareholder vote. We will promptly disclose the Board’s decision and the reasons for that decision in a broadly disseminated press release that will also be furnished to the U.S. Securities and Exchange Commission (SEC) on Form 8-K. If any nominee is unable to serve, proxies will be voted in favor of the remainder of those nominated and may be voted for substitute nominees, unless our Board of Directors provides for a lesser number of directors.

As specified in our Corporate Governance Guidelines, members of our Board should be persons with broad experience in areas important to the operation and long-term success of our company. These include areas such as business, science, medicine, finance/accounting, law, business strategy, crisis management, corporate governance, education or government. Board members should possess qualities reflecting integrity, independence, leadership, good business judgment, wisdom, an inquiring mind, vision, a proven record of accomplishment and an ability to work well with others. The Corporate Governance Guidelines also express the Board’s belief that its membership should continue to reflect a diversity of gender, race, ethnicity, age, sexual orientation and gender identity.

 

Our Corporate Governance Guidelines provide that a substantial majority of Board members be independent from management, and the Board has adopted independence standards that meet the listing standards of the New York Stock Exchange. Our Board has determined that, except for Giovanni Caforio, M.D., who is our Chief Executive Officer, each of our directors and each director nominee for election at this Annual Meeting is independent of Bristol Myers Squibb and its management.

In accordance with our Corporate Governance Guidelines, our Board undertakes an annual review of director independence. In February 2020, the Board considered all commercial and charitable relationships of our independent directors and director nominees, including the following relationships, which were deemed immaterial under our categorical standards (see Exhibit A):

The Committee on Directors and Corporate Governance regularly assesses the appropriate size and composition of our Board. This assessment incorporates the results of the Board’s annual evaluation process, which was recently enhanced in 2017 as described more fully under “Annual Evaluation Process” beginning on page 13. The Committee also considers succession planning for its directors.

In connection with the Board’s ongoing director identification process, the Committee on Directors and Corporate Governance, in consultation with the Chairman, conducts an initial evaluation of prospective nominees against the established Board membership criteria discussed above. The Committee also reviews the skills of the current directors and compares them to the particular skills of potential candidates, keeping in mind the Board’s commitment to maintain members of diverse experience and background. In particular, the Board is committed to identifying and evaluating highly qualified women and underrepresented ethnic group candidates as well as candidates with other diverse backgrounds, industry experience and other unique characteristics. Candidates may come to the attention of the Committee on Directors and Corporate Governance through current Board members, third-party search firms, management, shareholders or others. Search firms together with management and directors develop a candidate profile that includes the relevant skills and experiences being sought at that time and incorporates the Board membership criteria. Prospective candidates are identified based on the profile. Additional information relevant to the qualifications of prospective nominees may be requested from third-party search firms, other directors, management or other sources. After this initial evaluation, prospective nominees may be interviewed by telephone or in person by the members of the Committee on Directors and Corporate Governance, the Chairman, the Lead Independent Director and other directors, as applicable. After completing this evaluation and interview process, the Committee on Directors and Corporate Governance makes a recommendation to the full Board as to the persons who should be nominated by our Board, and the full Board determines the nominees after considering the recommendation and any additional information it may deem appropriate. In connection with the Celgene Transaction, the company agreed to add two members of the Celgene Board effective at the closing of the transaction. Dr. Haller and Mr. Bonney were elected to join the Board, effective November 20, 2019, and were identified as a potential candidates for

The Committee on Directors and Corporate Governance considers and evaluates shareholder recommendations of nominees for election to our Board of Directors in the same manner as other director nominees. Shareholder recommendations must be accompanied by disclosure, including written information about the recommended nominee’s business experience and background with consent in writing signed by the recommended nominee that he or she is willing to be considered as a nominee and, if nominated and elected, he or she will serve as a director. Shareholders should send their written recommendations of nominees accompanied by the required documents to: Bristol-Myers Squibb Company, 430 East 29^th Street—14^th Floor, New York, New York 10016, Attention: Corporate Secretary.

Following extensive engagement with our shareholders, our Board determined to adopt proxy access in 2016, permitting a shareholder or group of up to 20 shareholders holding 3% of our outstanding shares of common stock for at least three years to nominate a number of directors constituting the greater of two directors or 20% of the number of directors on our Board, as set forth in detail in our Bylaws. If you wish to propose any action pursuant to our proxy access bylaw provision, you must deliver a notice to BMS containing certain information set forth in our Bylaws, not less than 120 but not more than 150 days before the anniversary of the prior year’s filing of the proxy materials. For our 2021 Annual Meeting, we must receive this notice between October 27, 2020 and November 25, 2020. Shareholders should send their notices to: Bristol-Myers Squibb Company, 430 East 29th Street—14^th Floor, New York, New York 10016, Attention: Corporate Secretary.

Our Board recognizes the critical role Board and Committee evaluations play in ensuring the effective functioning of our Board. It also believes in the importance of continuously improving the functioning of our Board and committees. Under the leadership and guidance of our Lead Independent Director, the Committee on Directors and Corporate Governance continuously assesses the Board evaluation process. In 2017, following discussions with and input from the full Board of Directors, the Committee enhanced the Board assessment process to include a written questionnaire. This year, the directors completed the questionnaire electronically. The formal 2019 Board and Committee evaluation processes are as follows:

The formal annual Board and Committee evaluations are supplemented by regular informal one-on-one discussions between the Chairman and Chief Executive Officer and each director throughout the year. The Lead Independent Director actively conveys directors’ feedback on an ongoing basis to our Chairman and Chief Executive Officer and has regular one-on-one discussions with the other members of the Board.

In response to feedback received from the annual evaluation process, we completed rotations in our committee memberships.

Director education is an ongoing, year-round process, which begins when a director joins our Board. Upon joining our Board, new directors are provided with a comprehensive orientation to our company, including our business, strategy and governance. New directors participate in an orientation program with senior business and functional leaders from all areas of the company, during which there is discussion on strategic priorities and key risks and opportunities, and participate in site visits to one or more of our locations. On an ongoing basis, directors receive presentations on a variety of topics related to their work on the Board and within the biopharmaceutical industry, both from senior management and from experts outside of the company. We also encourage directors to enroll in continuing education programs sponsored by third parties at our expense.

Our business is managed under the direction of our Board of Directors pursuant to the Delaware General Corporation Law and our Bylaws. The Board has responsibility for establishing broad corporate policies and for the overall performance of our company. The Board keeps itself informed of company business through regular written reports and analyses and discussions with the Chief Executive Officer and other officers of Bristol Myers Squibb; by reviewing materials provided to Board members by management and by outside advisors; and by participating in Board and Board Committee meetings.

The Committee on Directors and Corporate Governance continually reviews corporate governance issues and is responsible for identifying and recommending the adoption of corporate governance initiatives. In addition, our Compensation and Management Development Committee regularly reviews compensation issues and recommends adoption of policies and procedures that strengthen our compensation practices. The “Compensation Discussion and Analysis” beginning on page 33 discusses many of these policies and procedures.

The Board of Directors has adopted Corporate Governance Guidelines that govern its operation and that of its Committees. Our Board annually reviews the Corporate Governance Guidelines and, from time to time, our Board revises them in response to changing regulatory requirements, evolving best practices and the concerns of our shareholders and other constituents. Our Corporate Governance Guidelines may be viewed on our website at www.bms.com/ourcompany/governance.

Our Board meets regularly to discuss the strategic direction and the issues and opportunities facing our company in light of trends and developments in the biopharmaceutical industry and general business environment. Our Board has been instrumental in determining our next steps as a company.

For further discussion on how our Board administers its strategic planning and risk oversight function as a whole and through its Board Committees, please see the discussion under the header “How We Are Organized” beginning on page 20.

The Compensation and Management Development Committee annually conducts a worldwide review of our material compensation policies and practices. Based on this review, we have concluded that our material compensation policies and practices are not reasonably likely to have a material adverse effect on the company. On a global basis, our compensation programs contain many design features that mitigate the likelihood of inducing excessive or inappropriate risk-taking behavior. These features include:

Our Board meets on a regularly scheduled basis during the year to review significant developments affecting Bristol Myers Squibb and to act on matters requiring Board approval. It also holds special meetings when important matters require Board action between scheduled meetings. Members of senior management regularly attend Board meetings to report on and discuss their areas of responsibility. In 2019, the Board met 12 times. The average aggregate attendance of directors at Board and committee meetings was over 99%. No director attended fewer than 93% of the aggregate number of Board and committee meetings during the period he or she served. In addition, our independent directors met 10 times during 2019 to discuss such topics as our independent directors determined, including the evaluation of the performance of our current Chief Executive Officer.

Directors are strongly encouraged, but not required, to attend the Annual Meeting of Shareholders. All of the 2019 nominees for director attended our 2019 Annual Meeting of Shareholders except for Mr. Arduini, who had a long-standing previous commitment.

The Principles of Integrity adopted by our Board of Directors set forth important company policies and procedures in conducting our business in a legal, ethical and responsible manner. These standards are applicable to all of our employees, including the Chief Executive Officer, the Chief Financial Officer and the Controller.

In addition, the Audit Committee has adopted the Code of Ethics for Senior Financial Officers that supplements the Principles of Integrity by providing more specific requirements and guidance on certain topics. The Code of Ethics for Senior Financial Officers applies to the Chief Executive Officer, the Chief Financial Officer, the Controller, the Treasurer and the heads of major operating units.

Our Board has also adopted the Code of Business Conduct and Ethics for Directors that applies to all directors and sets forth guidance with respect to recognizing and handling areas of ethical issues.

The Principles of Integrity, the Code of Ethics for Senior Financial Officers and the Code of Business Conduct and Ethics for Directors are available on our website at www.bms.com/ourcompany/governance. We will post any substantive amendments to, or waivers from, applicable provisions of our Principles, our Code of Ethics for Senior Financial Officers, and our Code of Business Conduct and Ethics for Directors on our website at www.bms.com/ourcompany/governance within two days following the date of such amendment or waiver.

Employees are required to report any conduct they believe in good faith to be an actual or apparent violation of our Codes of Conduct. In addition, as required under the Sarbanes-Oxley Act of 2002, the Audit Committee has established procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by company employees of concerns regarding questionable accounting or auditing matters.

We provide semi-annual disclosure on our website at the link noted below of all political contributions to political committees, parties or candidates on both state and federal levels that are made by our employee political action committee, as well as annual disclosure of the portion of our dues or other payments made to trade associations to which we give $50,000 or more that can be attributed to lobbying expenditures. Please see the company's website at: https://www.bms.com/about-us/sustainability/economic-responsibility/political-contributions.html under “Political Contributions.”

Patients are at the center of everything we do. Our work is focused on the discovery and development of medicines that transform patients’ lives in a way that incorporates good corporate citizenship, environmental stewardship and social responsibility. This year, we celebrate our 10th year as a member of the UN Global Compact and 20 years’ of setting global Sustainability Goals. These commitments reflect our comprehensive approach toward protecting human and natural resources, now and in the future. For us, Sustainability is much more than meeting targets – it is integrated into our culture and is part of our daily thought process. This includes ensuring our clinical trials reflect real world patient populations and the incorporation of innovative technologies to drive our R&D and manufacturing operations. We continue to bring hope to patients with serious disease by building capacity and strengthening community services to ensure no patient is left behind. Our Sustainability 2020 Goals are:

While we are pleased with the progress we have made to date, we know there is still much more work to do to ensure the health of the planet and its people. We are actively engaged with our shareholders and other key stakeholders on our environmental, social and governance performance relative to our financial results and on the development of our next generation sustainability strategy and goals for the integrated company. Our Board remains actively engaged on these issues with direct oversight by our Committee on Directors and Corporate Governance. For more information and to provide feedback, please see the company’s website at https://www.bms.com/about-us/sustainability.html under “Sustainability.”

The company’s governance documents provide the Board with flexibility to select the appropriate leadership structure for the company. They establish well-defined responsibilities with respect to the Chairman and Lead Independent Director roles, including the requirement that the Board have a Lead Independent Director if the Chairman is not an independent director. This information is set forth in more detail on our website at www.bms.com/ourcompany/governance.

Our Board has dedicated significant consideration to our leadership structure, particularly in connection with the election of Dr. Caforio as the Chairman of the Board at the 2017 Annual Meeting. The Board’s analysis of our leadership structure took into account many factors, including the specific needs of the Board and the company, the strong role of our Lead Independent Director, our Corporate Governance Guidelines (including our governance practices that provide for independent oversight of management), the acquisition of Celgene and integration of Celgene businesses into our company, the challenges specific to our company, and the best interests of our shareholders. After thoughtful and rigorous consideration, the Board determined that combining the Chairman and Chief Executive Officer positions and electing Dr. Caforio as the Chairman of the Board continues to be in the best interest of the company and our shareholders, and is the best leadership for the company and its shareholders at this time. Specifically, our Board believes that to have Dr. Caforio serve in the combined role of Chairman and Chief Executive Officer confers distinct advantages at this time, including:

The Board recognizes the importance of appointing a strong Lead Independent Director to maintain a counterbalancing structure to ensure that the Board functions in an appropriately independent manner. The Lead Independent Director is selected annually by the independent directors. The independent directors have elected Dr. Vicki Sato to serve in that position.

The Lead Independent Director’s responsibilities include, among others:

The Board believes this structure provides an effective, high-functioning Board, as well as appropriate safeguards and oversight. Our Board will continue to evaluate its leadership structure in light of changing circumstances and will evaluate the Board’s leadership structure on at least an annual basis and make changes at such times as it deems appropriate.

Our Board administers its strategic planning and risk oversight function as a whole and through its Board Committees. The following are examples of how our Board Committees are involved in this process:

Our Bylaws specifically provide for an Audit Committee, Compensation and Management Development Committee, and Committee on Directors and Corporate Governance, all of which are composed entirely of independent directors. Our Bylaws also authorize the establishment of additional committees of the Board and, under this authorization, our Board of Directors established the Science and Technology Committee. Our Board has appointed individuals from among its members to serve on these four standing committees and each committee operates under a written charter adopted by the Board, as amended from time to time. These charters are published on our website at http://bms.com/ourcompany/governance/Pages/board_committees_charters.aspx. Each of these Board Committees has the necessary resources and authority to discharge its responsibilities, including the authority to retain consultants or experts to advise the committee.

The table below indicates the current members of our standing Board Committees and the Integration Committee and the number of meetings held in 2019:

In addition, in 2019, the Board established an ad hoc Board Finance Committee to oversee and approve additional acquisition finance-related matters, including, final terms of the notes issuance and debt exchange transactions that were contemplated by the Celgene transaction as well as future debt exchanges or other related financing transactions, among other things. The members of the Board Finance Committee were Peter J. Arduini, Giovanni Caforio, M.D., Theodore R. Samuels and Gerald L. Storch. The Board Finance Committee met two times during 2019.

We, members of the Board of Directors, know that we must actively seek information from a wide variety of sources—and not just from individuals and entities that work for us—to do our jobs optimally. We therefore create multiple means to hear from shareholders, employees at all levels, patients, medical professionals, policy experts and others to inform our work.

You can communicate with us via many of these means. You can provide us comments on your proxy when you are voting. You can attend our annual meeting and speak with us. You can accept our invitations to engage or ask us for a meeting when that is of value to you. You can participate in our various Investor Relations functions which we listen to both directly and indirectly. You can write to us via mail or use any of our reporting functions such as so-called Whistle Blower hotlines. And, of course, we pay close attention to your voting and investment decisions as well.

Our Board has created a process for anyone to communicate directly with our Board, any committee of the Board, the non-employee directors of the Board collectively or any individual director, including our Chairman and Lead Independent Director. Any interested party wishing to contact our Board may do so in writing by sending a letter to Bristol-Myers Squibb Company, 430 East 29th Street—14th Floor, New York, New York 10016, Attention: Corporate Secretary.

Any matter relating to our financial statements, accounting practices or internal controls should be addressed to the Chair of the Audit Committee. All other matters should be addressed to the Chair of the Governance Committee.

Our Corporate Secretary or her designee reviews all correspondence and forwards to the addressee all correspondence determined to be appropriate for delivery. Our Corporate Secretary periodically forwards to the Governance Committee a summary of all correspondence received. Directors may at any time review a log of the correspondence we receive that is addressed to members of the Board as well as copies of any such correspondence. Our process for handling communications to our Board has been approved by the independent directors.

We continued to place a high priority on our proactive engagement with our shareholders in 2019, reaching out to over 50 of our top shareholders, representing nearly 58% of our shares outstanding. In 2019, management and members of the Board, including our Lead Independent Director, met with many of our shareholders and had a productive dialogue on a number of topics, including board composition, company strategy and execution, sustainability and risk oversight, as well as executive compensation.

The feedback received was generally positive and was shared with the entire Board and members of senior management. In addition, we continued to engage with shareholders, seeking active feedback and offering additional insights on shareholder proposals included in our most recent Proxy Statements, including those related to drug pricing and executive compensation and the threshold to call special shareholder meetings.

We aim to provide a competitive compensation program to attract and retain high quality directors. The Committee on Directors and Corporate Governance (when used in this Compensation of Directors’ section, the “Committee”) annually reviews our directors’ compensation program, including a review of the director compensation programs at our executive compensation peer groups. Furthermore, for 2019 planning, we again engaged an outside consultant, Frederic W. Cook & Co., Inc. (“FWC”), to review market data and competitive information on director compensation. FWC recommended, and the Committee determined, that our executive compensation peer groups should be the primary source for determining director compensation.

Upon reviewing FWC’s analysis in December 2018, the Committee determined to make no changes to the director compensation program for service as a director in 2019. However, in June 2019, in light of the substantial efforts of certain directors related to the acquisition and integration of Celgene Corporation, the Committee determined to increase the Lead Independent Director annual retainer by $15,000 and to establish committee chair and member annual retainers for the Celgene Integration Committee at $25,000 for the committee chair and $15,000 for the other committee members.

The Committee also engaged FWC to conduct an updated market assessment of our director compensation program in December 2019. In light of the fact that our core director compensation program had been unchanged since 2018 and was between the 25th percentile and median of our peer groups, among other reasons, the Committee determined to increase the annual equity award for service as a director for 2020 by $5,000 and the member annual retainer for service on the Committee on Directors and Corporate Governance by $7,500. The Committee submitted its recommendations for director compensation to the full Board for approval. Giovanni Caforio, M.D. does not receive any additional compensation for serving as a director.

The Committee believes the total compensation package for directors we offered in 2019 was reasonable, and appropriately aligned the interests of directors with the interests of our shareholders by ensuring directors have a proprietary stake in our company.

In 2019, non-employee directors who served for the entirety of 2019 received:

On February 1, 2019, all non-employee directors serving on the Board at that time received an annual award of deferred share units valued at $185,000 under the 1987 Deferred Compensation Plan for Non-Employee Directors. These deferred share units are non-forfeitable at grant and are settleable solely in shares of our common stock. A new member of the Board who is eligible to participate in the Plan receives, on the date the director joins the Board, a pro-rata number of deferred share units based on the number of share units payable to participants as of the prior February 1.

Our Lead Independent Director received an additional annual retainer of $35,000, which was increased to $50,000 in June 2019. Our Board has determined to award this retainer in light of the increased duties and responsibilities demanded by this role, which duties and responsibilities are described in further detail on page 21.

All non-employee directors are required to acquire a minimum of shares and/or units of company stock valued at not less than five times their annual cash retainer within five years of joining the Board and to maintain this ownership level throughout their service as a Director. We require that at least 25% of the annual retainer be deferred and credited to a deferred compensation account, the value of which is determined by the value of our common stock, until a non-management director has attained our share retention requirements.

A non-management director may elect to defer payment of all or part of the cash compensation received as a director under our company’s 1987 Deferred Compensation Plan for Non-Employee Directors. The election to defer is made in the year preceding the calendar year in which the compensation is earned. Deferred funds for compensation received in connection with service as a director in 2019 were credited to one or more of the following funds: a United States total bond index, a short term fund, a total market index fund or a fund based on the return on our common stock. Deferred portions are payable in a lump sum or in a maximum of 10 annual installments. Payments under the Plan begin when a participant ceases to be a director or at a future date previously specified by the director.

Each director who joined the Board prior to December 2009 participates in our Directors’ Charitable Contribution Program. Upon the death of a director, we will donate up to an aggregate of $500,000 to up to five qualifying charitable organizations designated by the director. Individual directors derive no financial or tax benefit from this program since the tax benefit of all charitable deductions relating to the contributions accrues solely to the company. In December 2009, the Board eliminated the Charitable Contributions Program for all new directors.

In addition, each director was able to participate in our company-wide matching gift program in 2019. We matched dollar for dollar a director’s contribution to qualified charitable and educational organizations up to $30,000. This benefit was also available to all company employees. In 2019, each of the following non-employee directors participated in our matching gift programs as indicated in the Director Compensation Table below: Drs. Haller, Sato and Vousden, Messrs. Arduini, Bertolini, Emmens, Grobstein, Lacy, Paliwal, Samuels and Ms. Yale.

2019 was an exciting year for Bristol Myers Squibb. The acquisition of Celgene Corporation has been a transformative event for our company, an important next step in our biopharma strategy. We believe that this combination will lead to great outcomes for our shareholders, patients, and employees.

Managing executive compensation through such a transaction is complex. The Compensation and Management Development Committee (when used in this CD&A, the “Committee” or “CMDC”) has been deeply involved in ensuring that the executive compensation programs, particularly during these transition years, align, support and reinforce the company’s business and people strategy. For our Named Executive Officers (or “NEOs”), our goal each year is to create an executive compensation framework that provides clear lines-of-sight into the key value drivers that we believe will create long-term value for our shareholders and patients.

From an executive compensation perspective, we had four distinct focus areas over the past year and these will also guide us in our work in 2020. As you read our Compensation Discussion & Analysis (“CD&A”), you will see these distinct focus areas reflected throughout. They include:

Our Committee also focuses on the development mandate outlined in our charter. In this regard, the Committee continued its longstanding practice of reviewing with the CEO the performance, potential and development opportunities for the senior executives who make up the leadership team, with a view toward prudent succession planning. As part of this effort, members of the Committee were involved in the interviews and onboarding of key Celgene executives who joined the BMS leadership team. Two of these executives are now NEOs.

During 2019 and into 2020, we have engaged with a large number of our shareholders on a variety of topics, including executive compensation as well as the impact of the Celgene Transaction. As we create the blueprint for the 2021 post-integration executive compensation program, we will continue to engage with shareholders and give full consideration to their feedback.

Finally, it has been an honor to serve as Chair of this Committee and as a member of your Board, advancing our mission for patients. It has been a pleasure to serve with such a dedicated and talented group of individuals, including Gerald Storch, who will succeed me as Chair of the Committee.

We welcome your input.

 

Michael Grobstein, Chair.

BMS delivered strong financial results for our shareholders in 2019; the most direct sign of this was our total return to shareholders, which was 28%. Our strong performance allowed us to increase our dividend by 10%.

2019 was an exciting year for the company. In January, we entered into an agreement to acquire Celgene Corporation (as used in this CD&A, “Celgene,” and the acquisition, the “Celgene Transaction” or “Transaction”), which was approved by BMS and Celgene shareholders in April and closed in November, bringing together two innovative companies to create a leading biopharmaceutical company focused on transforming patients’ lives through science. Our new company leadership includes executives from both BMS and Celgene and we welcomed two Celgene directors to our Board upon the closing of the Transaction (as used in this CD&A, the “Closing” or the “Close”). More information on the Transaction is available in the “Celgene Transaction” section beginning on page 36.

Following the Closing, we have a stronger portfolio of marketed medicines, a broader and deeper pipeline, and significant free cash flow generation potential, which will further increase our financial flexibility. We already see that happening; in 2019, our revenues grew by 16%, 10% of which came from our legacy BMS business led by Eliquis and Opdivo, and 6% of which came from net sales of Celgene products from November 20 through the end of the year led by Revlimid.

Over time, that potential to drive increased free cash flow will allow us to deliver on our commitments to reduce our debt, and continue to invest in future innovation to do what we do best: find ways to transform patients’ lives through science.

Our mission to help patients is fueled by our ability to develop innovative new medicines, and each year we focus on building and renewing our robust development pipeline. We are focused on innovative medicines for patients with cancer and other serious diseases. As a combined company, our pipeline is considerably broader, with platforms and technologies that provide significant opportunities for new approaches to the treatment of serious diseases.

Guided by our continued vision of transforming patients’ lives through science, during 2019 we redesigned the R&D and Commercialization organizations to drive the continued growth of our highly successful marketed portfolio, maximize the multiple near-term launch opportunities and deliver the value of the combined pipeline.

2019 was a busy executive compensation year at BMS. The Celgene Transaction and the associated changes in the composition of our executive team, demanded extensive attention from the Committee. That attention included broad transaction-related shareholder outreach (in addition to our robust annual engagement program). Collectively, the Committee reviewed and approved: (i) adjustments to in-progress short-term and long-term awards to account for the Transaction and (ii) development of a transition pay program to focus executives on our people and realizing the synergy in the new combined entity, while ensuring focus on executing the core of our strategy. In addition, the Committee reviewed initial plans for unified compensation and benefits arrangements for our employee population, including our Named Executive Officers (or “NEOs”).

2019 is the first year in a multi-year integration journey to bring our NEOs together under a common compensation and benefits framework. The following is a high-level roadmap on our plan to execute on executive compensation integration for the Celgene Transaction.

 

In connection with the redesign of our R&D and Commercialization organizations as described above, we announced on June 5, 2019 that our then-Chief Scientific Officer, Thomas J. Lynch, Jr., M.D., would transition out of the company by October 1, 2019. At that time, we also announced that Rupert Vessey, M.A., B.M., B.Ch., F.R.C.P., D.Phil., was appointed EVP and President, Research & Early Development (“R&ED”) to lead R&ED as a cohesive unit across Discovery, Early Development and Translational Medicine to advance promising programs and assets from discovery through proof-of-concept. Samit Hirawat, M.D., joined BMS in June 2019 as EVP & Chief Medical Officer, Global Drug Development to lead late-stage product