UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.  )

Insulet Corporation

(Name of Registrant as Specified in its Charter)

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

 

 

Notice of Annual Meeting

of Shareholders

Thursday, May 22, 2025

Table of Contents

Proposal 1 Election of Directors

The Company’s Certificate of Incorporation divides the Board of Directors into three classes. One class is elected each year for a term of three years. At this year’s Annual Meeting, the shareholders will elect three Class III Directors. The Class III Directors currently consist of Ashley A. McEvoy, Jessica Hopfield and Elizabeth H. Weatherman. Accordingly, the Board of Directors, consistent with the recommendation of the Nominating, Governance and Risk Committee, has nominated each of the following to be elected to the Board of Directors as a Class III Director, to hold office until the Annual Meeting of Shareholders to be held in 2028, and until her successor has been duly elected and qualified or until her earlier death, resignation or removal:

Director Nominees

Following the Annual Meeting, the Board of Directors will also include:

The Board of Directors knows of no reason why any of the nominees would be unable or unwilling to serve, but if any nominee should for any reason be unable or unwilling to serve, the proxies will be voted for the election of such other person for the office of Director as the Board of Directors may recommend in the place of such nominee. Unless otherwise instructed, the proxy holders will vote the proxies received by them for the nominees named herein (or, if any nominee should for any reason be unable or unwilling to serve, for such other person as the Board of Directors may recommend).

Assuming a quorum is present at the Annual Meeting, the nominees receiving the highest number of affirmative votes of the shares present or represented by proxy and entitled to vote on such matter at the Annual Meeting will be elected as Class III Directors. However, in accordance with the Company’s majority voting policy, in the event that a nominee receives a greater number of “withhold” votes than votes “for” her election, such nominee shall tender her written resignation to the Chairman of the Board and such resignation will be considered by the Nominating, Governance and Risk Committee and the Board of Directors. (For additional information, see “Governance of the Company – Governance Policies and Procedures.”)

Set forth below is certain biographical information concerning our Director nominees, including the experiences, qualifications, attributes, or skills that caused the Nominating, Governance and Risk Committee and the Board of Directors to determine that the person should serve as a Director of the Company. Following the biographical information is a chart that categorizes various skill sets for each Board member.

 

  Class III Director Nominees – Term expires at the 2025 Annual Meeting

Continuing Class I Directors – Term expires at the 2026 Annual Meeting

Continuing Class II Directors – Term expires at the 2027 Annual Meeting

 

Governance of the Company

Our Board of Directors

The business and affairs of the Company are managed under the direction of our Board of Directors, which currently consists of nine members. The Board has four standing committees: an Audit Committee, a Nominating, Governance and Risk Committee (the “Governance Committee”), a Talent and Compensation Committee, and a Science and Technology Committee. Each of these committees operates under a written charter that it reviews at least annually. These charters, which have been approved by the Board, are available in the Corporate Governance section of the Company’s website at http://www.insulet.com. The Board also has an ad hoc Transactions Committee and an informal Board Strategy Working Group. Additional details concerning the role and structure of the Board of Directors are contained in the Board’s Corporate Governance Guidelines, which can be found in the Corporate Governance section of the Company’s website at http://www.insulet.com.

 

  Board Independence

The Board has determined that each of our Directors, other than Ashley A. McEvoy, our President and Chief Executive Officer, and Jessica Hopfield, are independent within the meaning of the director independence standards of The Nasdaq Stock Market, Inc. (“Nasdaq”). Those independent directors are: Luciana Borio, Wayne A. I. Frederick, Michael R. Minogue, Flavia H. Pease, Timothy J. Scannell, Timothy C. Stonesifer, and Elizabeth H. Weatherman. The Audit Committee, Governance Committee, and Talent and Compensation Committee each consist solely of independent Directors.

 

  Board Leadership Structure

The Company’s Board of Directors regularly assesses the Board’s leadership structure to determine the appropriate leadership for the Company. Based on the Board’s most recent assessment, the Board determined that the most advantageous leadership structure for the Company and its shareholders was to continue to have an independent, non-employee Director, Timothy J. Scannell, serve as Chairman of the Board.

The Chairman of the Board is responsible for, among other things, coordinating with the Chief Executive Officer on the creation of the agenda for each meeting, providing input regarding the materials provided to the Board of Directors in advance of each meeting, ensuring that topics at each meeting are effectively covered, chairing executive sessions of the Board, acting as the principal liaison between the independent Directors and management, and serving as the focal point for shareholder requests addressed to the independent Directors. Additionally, pursuant to the Company’s Bylaws and Corporate Governance Guidelines, the Chairman of the Board is responsible for, among other things, receiving Board member resignation letters, calling special meetings, and presiding at Board meetings. The Board believes that having an independent Director serve as Chairman of the Board ensures a greater role for the independent Directors in the oversight of the Company and active participation of the independent Directors in setting agendas and establishing priorities and procedures for the work of the Board.

The Company does not have a policy as to whether the same person should serve as both Chief Executive Officer and Chairman of the Board. The Board believes that it should have the flexibility to make these determinations at any given point in time in the way that it believes provides the most appropriate leadership for the Company at that time. The Company recognizes that, depending on the circumstances, different Board leadership structures may be appropriate. However, the Company believes its current Board leadership structure, which includes an independent Chairman of the Board, supports the CEO in driving the Company’s growth and objectives and currently is the preferable Board leadership structure for the Company.

 

  Director Qualifications

The Governance Committee is responsible for reviewing with the Board from time to time the appropriate qualities, skills, and characteristics desired of members of the Board in the context of the needs of the business and current make-up of the Board. The Governance Committee must be satisfied that each committee-recommended nominee will have high personal and professional integrity, demonstrated exceptional ability and judgment, a broad experience base or an area of particular expertise or experience that is important to the long-term success of the Company, a background that is complementary to that of existing Directors so as to provide management and the Board with a diversity and freshness of views, a level of self-confidence and articulateness to participate effectively and cooperatively in Board discussions, the willingness and ability to devote the necessary time and effort to perform the duties and responsibilities of Board membership, and the experience and ability to bring informed, thoughtful and well-considered opinions for the benefit of all shareholders to the Board and management.

In addition to these minimum qualifications, the Governance Committee will recommend that the Board select persons for nomination to help ensure that (i) a majority of the Board is “independent,” in accordance with the standards established by Nasdaq, (ii) at least one member of the Audit Committee has the experience, education and other qualifications necessary to qualify as an “audit committee financial expert,” as defined by SEC rules, (iii) the Audit Committee, the Talent and Compensation Committee and the Governance Committee are each composed entirely of independent Directors, and (iv) each member of the Audit Committee is able to read and

understand fundamental financial statements, including a balance sheet, income statement and cash flow statement. Finally, in addition to any other standards the Governance Committee may deem appropriate for the overall structure and composition of the Board, the Governance Committee may consider whether a nominee has direct experience in the industry or in the markets in which the Company operates.

 

  Board Refreshment and Director Skills Assessments

At least annually, the Board reviews the skills of its members, as well as the overall composition of the Board, in order to ensure that the Board maintains the diverse set of skills, attributes, experience, perspectives, and breadth of knowledge that is necessary to effectively oversee the Company’s business and strategy. The Board’s continued focus on refreshment has resulted in the addition of six new directors in the last six years.

 

  Meeting Attendance

The Board of Directors met 5 times during the fiscal year ended December 31, 2024. Each of our Directors then in office attended 100% of the aggregate of the total number of meetings of the Board and the committees of the Board on which they served during the fiscal year ended December 31, 2024.

The Company’s policy is that all Directors are encouraged to attend the Annual Meeting of Shareholders. Every Director then in office attended the Annual Meeting of Shareholders held in 2024.

 

  Board Committees

The following table sets forth the current membership and chairs of the three statutory committees of the Board as well as the number of meetings held by each committee in fiscal 2024. In addition to the statutory committees listed below, the Board has a Science and Technology Committee, consisting of Dr. Frederick (Chair), Dr. Borio, and Dr. Hopfield and an ad hoc transactions committee, consisting of Ms. Weatherman (Chair), Dr. Frederick, Dr. Hopfield and Mr. Minogue.

Governance Policies and Procedures

 

  Executive Sessions of Independent Directors

Independent members of the Board of Directors meet without the non-independent Directors of the Company following all regularly scheduled Board meetings and occasionally at specially called meetings arranged by our independent Chairman of the Board. These executive sessions include only those Directors who meet the independence requirements promulgated by Nasdaq. Timothy J. Scannell, as Chairman of the Board, is responsible for chairing these executive sessions.

 

  Succession Planning

The Board views ensuring thoughtful, seamless, and effective transitions of leadership to be a primary responsibility of the Board. The full Board and the Governance Committee periodically review succession planning for our Chief Executive Officer. Our Chief Executive Officer periodically discusses with the Board recommendations and evaluations of potential successors, including in the event of an unexpected emergency, and reviews development plans, if any, recommended for such individuals. The Talent and Compensation Committee also reviews succession plans for the entire Executive Leadership team, discussing individuals identified as emergency successors and individuals zero to three moves of readiness away. Most recently, following thoughtful deliberation, the Board executed on its CEO succession plan and appointed a new President and Chief Executive Officer to lead the Company.

 

  Board and Committee Assessments

Each year, the Nominating, Governance and Risk Committee, together with the Board Chair (who also chairs the Nominating, Governance and Risk Committee), oversees an annual evaluation process. The evaluations help inform the Committee’s discussions regarding Board succession planning and refreshment and complement the Committee’s evaluation of the size and composition of the Board. The Board also recognizes that a robust and constructive evaluation process is an important part of good corporate governance and board effectiveness. Our Board is committed to an annual evaluation process, which the Board believes promotes continuous improvement. The annual self-assessment evaluates the performance of the Board and its committees in accordance with a procedure established by the Nominating, Governance and Risk Committee. In 2024, in addition to the Board Chair having individual discussions with each Board member, the full Board and each Board committee completed anonymous written questionnaires that requested ratings as well as subjective comments in key areas and solicited input for areas of development. The results were compiled and discussed by the Board and each committee, as applicable, and changes in practices or procedures were considered and implemented as appropriate. The evaluation results were reviewed in detail by the Board Chair, who led a discussion with the full Board highlighting both areas of strength and areas of opportunity.

 

  Risk Oversight

The Board of Directors is responsible for overseeing the Company’s risk assessment and management function, considering the Company’s major financial risk exposures, and evaluating the steps that the Company’s management has taken to monitor and control such exposures. For example, the Board receives regular reports from senior management on areas of material risk to the Company, including operational, financial, legal, regulatory, and reputational risks. In particular, the Board reviews cybersecurity risks and incidents as well as other risks and incidents relevant to our information technology system controls and security. The Board also reviews the risks associated with the Company’s strategic plan and discusses the appropriate levels of risk in light of the Company’s business objectives. This is done through an annual strategy review process and throughout the year as part of the Board’s ongoing review of corporate strategy.

The various Committees of the Board are also responsible for monitoring and reporting to the full Board on risks associated with their respective areas of oversight. The Audit Committee, among other things, oversees the management of market and operational risks that could have a financial impact, such as those relating to internal controls, the integrity of the Company’s financial statements and financial liquidity. The Talent and Compensation Committee oversees risks associated with the Company’s compensation practices and programs. The Governance Committee oversees risks relating to the Company’s corporate governance practices, including director independence and the breadth of skills of directors serving on the Board, succession planning for the Chief Executive Officer, and matters relating to regulatory and legal compliance, sustainability, and cybersecurity. In connection with its oversight responsibilities, each Committee often meets with the members of management who are primarily responsible for the management of risk in their respective areas, including, among others, the Company’s Chief Financial Officer, General Counsel, Chief Human Resources Officer, Chief Sustainability Officer, Chief Compliance Officer, Chief Information Security Officer, Vice President of Internal Audit and other senior regulatory, information technology, internal audit, research and development and compliance officers.

 

  Director Overboarding Policy

As provided in our Corporate Governance Guidelines, the Board has established an overboarding policy to help ensure a director’s service on other public company boards does not impair the director’s ability to effectively serve on our Board. To that end, the Board believes that directors who serve as the chief executive officer of any business corporation (including the Company) should not serve on more than two public company boards (inclusive of our Board) and that all other directors should not serve on more than five public company boards (inclusive of our Board).

 

  Code of Conduct and Ethics

The Company has adopted a “code of ethics,” as defined by regulations promulgated under the Securities Act of 1933, as amended, that applies to all of the Company’s Directors and employees worldwide, including its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A current copy of the Code of Business Conduct and Ethics is available in the Investor Relations section of the Company’s website at http://www.insulet.com. A copy of the Code of Business Conduct and Ethics may also be obtained, free of charge, from the Company upon a request directed to: Insulet Corporation, 100 Nagog Park, Acton, Massachusetts 01720, Attention: Secretary. The Company intends to disclose any amendment to, or waiver of, a provision of the Code of Business Conduct and Ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, by posting such information on its website at http://www.insulet.com. For more corporate governance information, you are invited to access the Investor Relations section of the Company’s website available at http://www.insulet.com.

 

  Clawback / Recoupment of Incentive Compensation

The Board of Directors has adopted a compensation recoupment policy (the “Recoupment Policy”) which provides that, if the Company is required to prepare an accounting restatement of its financial statements due to material non-compliance with any financial reporting requirement under U.S. securities laws, the Company will recover on a reasonably prompt basis the amount of any incentive-based compensation received by a covered executive (including former executives) during the recovery period that exceeds the amount that otherwise would have been received had it been calculated based on the financial results reported in the restatement financial statements. The recovery period includes the three completed fiscal years immediately preceding the date the Company is required to prepare the accounting restatement and any transition period, as prescribed under Rule 10D-1 of the Exchange Act.

The Company may effect any recovery under the Recoupment Policy by requiring payment of such amount(s) to the Company by set-off, by reducing future compensation, or by such other means or combination of means as the Committee determines to be appropriate. The Company need not recover the excess amount of incentive-based Compensation if and to the extent that the Committee determines that such recovery is impracticable or not required under Rule 10D-1, including if the Committee determines that the direct expense paid to a third party to assist in enforcing this Policy would exceed the amount to be recovered.

 

  Stock Ownership Guidelines

The Board of Directors has adopted a policy recommending that all Directors and executive officers own a significant equity interest in the Company’s common stock, subject to a phase-in period. The policy advises that Directors own Company common stock with a value at least equal to five times their annual cash retainer. The policy recommends that the Chief Executive Officer own Company common stock with a value at least equal to six times her base salary, and that the other executives own Company common stock with a value at least equal to three times their base salaries. Subject to the phase-in requirements, all of the Directors and executive officers are in compliance with this policy. Further information regarding this policy can be found in the Compensation Discussion and Analysis section of this proxy statement.

 

  Anti-Hedging and Anti-Pledging Policy

The Board of Directors has adopted Insider Trading Procedures which prohibit Directors and officers from:

 

  Majority Voting Policy for Uncontested Director Elections

The Company’s Bylaws provide for plurality voting in Director elections. In February 2012, the Board of Directors adopted a majority voting policy. Pursuant to the Company’s majority voting policy, in any uncontested election of Directors, any nominee for Director who receives a greater number of “withhold” votes than votes “for” his or her election must, within five days following the certification of the shareholder vote, tender his or her written resignation to the Chairman of the Board for consideration by the Governance Committee.

Any resignation tendered pursuant to the majority voting policy will be effective on the earlier of (i) the date such resignation is accepted by the Board or (ii) the 61^st day following the date of the shareholders’ meeting at which the election occurred, unless the Board chooses not to accept such resignation.

The Governance Committee will consider such tendered resignation and, within 30 days following the date of the shareholders’ meeting at which the election occurred, will make a recommendation to the Board concerning the acceptance or rejection of such resignation. In determining its recommendation to the Board, the Governance Committee will consider all factors deemed relevant by the members of the Governance Committee including, without limitation:

The Board will take formal action on the Governance Committee’s recommendation no later than 60 days following the date of the shareholders’ meeting at which the election occurred. In considering the Governance Committee’s recommendation, the Board will consider the information and factors considered by the Governance Committee and such additional information and factors as the Board deems relevant.

Within four business days following the Board’s decision on the Governance Committee’s recommendation, the Company will publicly disclose the Board’s decision in a Form 8-K, providing an explanation of the process by which the decision was reached and, if applicable, the reasons for rejecting the tendered resignation.

Any Director who is the subject of the evaluation described in this section will not participate in Governance Committee or Board deliberations or recommendations regarding the appropriateness of his or her continued service, except to respond to requests for information. If a majority of the members of the Governance Committee are subject to this evaluation process, then the independent Directors on the Board who are not subject to the evaluation will appoint a Board committee amongst themselves solely for the purpose of conducting the required evaluation. This special committee will make the recommendation to the Board otherwise required of the Governance Committee.

 

  Identifying and Evaluating Director Nominees

The Board of Directors is responsible for approving nominees to the Board. Generally, the Governance Committee identifies candidates for Director nominees in consultation with management, through the use of search firms or other advisors, through the recommendations submitted by members of the Board, shareholders, or through such other methods as the Governance Committee deems to be helpful to identify candidates. Once candidates have been identified, the Governance Committee will assess whether the candidates meet all of the minimum qualifications for Director nominees established by the Governance Committee. The Governance Committee may gather information about the candidates through interviews, detailed questionnaires, background checks or other means that the Governance Committee deems helpful in the evaluation process. The Governance Committee then meets as a group to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of the Board. Based on the results of the evaluation process, the Governance Committee recommends candidates to the Board of Directors for approval as nominees for election to the Board of Directors. The Governance Committee also recommends candidates to the Board of Directors for appointment to the Committees of the Board of Directors.

 

  Recommendation of Director Nominees by Shareholders

The Governance Committee will consider stockholder recommendations for Board nominees using the criteria described on page 15 under the heading “Director Qualifications”. The name of any recommended candidate for director, together with a brief biographical sketch, a document indicating the candidate’s willingness to serve, if elected, and evidence of the nominating stockholder’s ownership of the Company’s stock should be sent to the attention of our Secretary, Insulet Corporation, 100 Nagog Park, Acton, Massachusetts 01720. If you wish to formally nominate a candidate, you must follow the procedures described in our Bylaws.

 

  Proxy Access

In February 2022, based on investor feedback, consideration of market practice and an assessment of the appropriateness for Insulet, the Governance Committee recommended, and the Board adopted, proxy access Bylaw provisions. A stockholder or group of up to 20 stockholders who have continuously owned at least 3% of Insulet’s common stock for at least three years have the ability to submit director nominees (up to the greater of two or 20% of the Board) for inclusion in the related proxy statement if the stockholder(s) and the nominee(s) satisfy the requirements specified in Insulet’s Bylaws.

 

  Communicating with the Board of Directors

The Board of Directors provides shareholders with the ability to communicate with the Board of Directors as a whole and with individual Directors on the Board of Directors through an established process for shareholder communication. Shareholders may send such communications by U.S. mail, courier or expedited delivery service to the attention of the Secretary (for full Board communications) or to an individual director at Insulet Corporation, 100 Nagog Park, Acton, Massachusetts 01720, Attn: Secretary/[Director Name]. The Company will forward any such shareholder communication to the Chairman of the Board, or to the Director to whom the communication is addressed, on a periodic basis.

 

  Certain Relationships and Related Party Transactions

The Company’s Related Party Transaction Approval Policy is included in the written charter of our Audit Committee. That policy applies:

Pursuant to the policy, the Audit Committee will consider relevant facts and circumstances in determining whether or not to approve or ratify such a transaction and will approve or ratify only those transactions that are, in its judgment, appropriate or desirable under the circumstances. The Audit Committee determined that, since the beginning of 2024, there were transactions with two entities that qualified as related party transactions.

In February 2021, Insulet entered into a distribution agreement, the terms of which are consistent with those prevailing at arm’s length. The spouse of Jessica Hopfield, one of our Directors, is an executive officer of the parent company of the distributor. In 2024, Insulet recorded $587.8 million of net revenues from the distributor. As of December 31, 2024, the Company also had $113 million of net accounts receivable due from the distributor, and $1.0 million of deferred revenue. These balances are included in accrued expenses and other current liabilities on the consolidated balance sheet.

FMR LLC (“Fidelity”) beneficially owned approximately 11% of our common stock as of December 31, 2024. Fidelity, or one or more of its affiliates, is the third-party administrator for the Company’s equity compensation plan, the Company’s Employee Stock Purchase Plan, and the Non-Employee Directors Deferred Compensation Plan and also provides management services for the Company’s Health Savings Account program. The Company paid Fidelity approximately $190,283 in 2024 related to these services (including for some services provided in 2023 but paid in 2024).

Security Ownership of Certain Beneficial Owners and Management

The following table and accompanying notes provide information about the beneficial ownership of Insulet common stock by: (i) each shareholder known by us to be the beneficial owner of more than 5% of Insulet common stock, (ii) each of our named executive officers (listed in the Summary Compensation Table), (iii) each of our Directors and nominees for Director, and (iv) all of our Directors and executive officers as a group. Except as otherwise noted, the persons identified have sole voting and investment power with respect to the shares of Insulet common stock beneficially owned. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting and investment power with respect to the shares. Except as otherwise noted, the information below is based upon 70,361,846 shares of the Company’s common stock outstanding as of March 26, 2025.

 

Executive Officers

Executive officers are chosen by and serve at the discretion of the Board of Directors. Set forth below are the names and ages of our executive officers, as of April 28, 2025, along with certain biographical information for all but Ashley A. McEvoy, our President and Chief Executive Officer. For Ms. McEvoy’s biographical information, please see page 10.

Compensation Discussion and Analysis

Our Named Executive Officers for 2024

For purposes of the following Compensation Discussion and Analysis (“CD&A”) and executive compensation disclosures, the individuals listed below are referred to collectively as our “named executive officers.” They are our former principal executive officer, our principal financial officer, our former interim principal financial officer, and our three other most highly compensated executive officers (including our former Chief Technology Officer), based on fiscal 2024 compensation.

Our named executive officers for Fiscal 2024 are:

 

Executive Summary

 

  FISCAL 2024 BUSINESS AND FINANCIAL HIGHLIGHTS

Fiscal 2024 was another excellent year, as continued strong adoption of our Omnipod® 5 Automated Insulin Delivery (AID) System helped us exceed $2 billion in revenue for the first time in Insulet’s history, driving revenue growth of 22% - our ninth consecutive year of 20% or more revenue growth on a constant currency basis*. Our gross margin continued to expand in 2024, increasing 150 basis points from the prior year, and our net income increased $212 million, from $206.3 million to $418.3 million.

In 2024, we continued successfully executing across our strategic imperatives and advancing our mission to improve the lives of people with diabetes around the world. In August 2024, Omnipod 5 was cleared for use by people with type 2 diabetes (ages 18 years and older), making it the first and only AID system FDA-cleared for both type 1 and type 2 diabetes management. We have an estimated 500,000 active global customers using Omnipod products, including an estimated 365,000 customers using Omnipod 5. In 2024, Omnipod 5 was the most-prescribed AID system in the U.S. and the number one insulin pump for new pump users in Europe. The continued rapid adoption of Omnipod 5 indicates that customers and clinicians recognize the benefits of this ground-breaking technology.

We continued to advance the Omnipod 5 platform with a cascade of innovation, fueled by data, to lead with growth in both the type 1 and type 2 markets in the U.S., and to drive increased access to Omnipod 5 through international expansion. We increased our sensor of choice offerings for Omnipod 5 in a number of markets and, in the United States, we fully launched the Omnipod App for iPhone, making Insulet the first and only company with an approved tubeless AID system with full control from compatible Android and iOS smartphones. We continued to accelerate our international growth in 2024, introducing Omnipod 5 in France as well as the Netherlands, and plan to bring Omnipod 5 to additional countries in 2025. In January 2025, we announced that Omnipod 5 is commercially available in Italy, Denmark, Finland, Norway, and Sweden.

In 2024, we also opened a 400,000 square foot manufacturing facility in Malaysia, further strengthening our global manufacturing and supply chain capabilities. Throughout the year, we also continued to drive increased awareness of, and access to, Omnipod and continued to successfully drive volume growth through the pharmacy channel.

Our 2024 accomplishments demonstrate our team’s drive to improve the lives of people with diabetes by enabling them to enjoy simplicity, freedom, and healthier lives through our technology. Every day we drive to create better health outcomes for our customers, set new standards in the management of diabetes, and drive success across our organization. As we balance profitability and strategic investments across our innovation pipeline, sales and marketing capabilities, and global manufacturing operations, we continue to build upon our existing robust foundation for sustainable long-term growth.

Due to our strong financial and non-financial results for fiscal 2024, the annual incentive plan (“AIP”) funding level for payouts under the 2024 AIP to our named executive officers was established at a performance level of 177.8%. This result was driven in large part by our annual revenue for the year and bolstered by our increased new customer starts, robust innovation pipeline and focus on the development of our people and culture living within our evolved operating model.

 

  FISCAL 2024 COMPENSATION HIGHLIGHTS

The Talent and Compensation Committee of our Board of Directors (the “Committee”) has adopted an integrated executive compensation program that is intended to align our named executive officers’ interests with those of our shareholders and to promote the creation of shareholder value without encouraging excessive or unnecessary risk-taking. The Committee believes the executive compensation program has played a significant role in our ability to attract, motivate and retain an experienced, successful executive team. Our ability to attract, motivate and retain exceptional talent has been particularly important as we continued to implement our new operating model during 2024.

In establishing the executive compensation program for 2024, the Committee continued to focus on pay for performance and competitive pay, with a focus on total direct compensation.

Emphasis on Performance-Based Total Direct Compensation

Total direct compensation includes three major components: base salary, annual incentive compensation and long-term equity awards, all of which are designed to work together to drive a complementary set of behaviors and outcomes. In balancing these elements, the Committee has tied a majority of our named executive officers’ compensation to key performance measures that contribute to or reflect shareholder value. Specifically:

The charts below illustrate, for fiscal 2024, the distribution of value among the three elements of direct compensation - base salary, target annual incentive awards and target long-term equity incentive awards − for our former Chief Executive Officer and, on average, for the other named executive officers. The components of the long-term equity incentive awards are also illustrated.

 

Of target total direct compensation, 92% of our former Chief Executive Officer’s compensation, and, on average, 81% of our other named executive officers’ compensation was variable, either because it was subject to performance goals, or to fluctuations in stock price, or both. In addition, 83% of our Chief Executive Officer’s target compensation was long-term, while 70% of the target annual compensation of our other named executive officers, on average, was long-term.

Performance Measures Link to Strategy

In setting performance measures for the incentive compensation plans, the Committee first considers the Company’s strategy, contemplating the Company’s long- and short-term goals and how those goals are measured. As the Company has been focused on growth, and, increasingly, profitability, the Committee determined that using the measures of adjusted revenue and adjusted earnings before interest and taxes (EBIT) continued to be appropriate for the incentive compensation plans. These are non-GAAP measures that are used by management to facilitate its operational decision-making and provide key insights into the Company and management’s achievements.

Balanced Approach to Long-Term Incentives

The Committee takes a balanced approach to long-term incentives, and for fiscal 2024 annual grants:

Enhanced Stock Ownership Policy Requirements

In May 2024, pursuant to the recommendation of the Committee, the Board approved an increase in the minimum stock ownership value requirement for the CEO, executive officers and the members of the Board.

 

  LOOKING AHEAD TO 2025

The Committee has made several decisions relating to executive pay for 2025, including:

 

  SHAREHOLDER ENGAGEMENT AND “SAY-ON-PAY”

Each year, the Company holds an advisory “say-on-pay” vote. At our 2024 Annual Meeting of Shareholders, we presented our shareholders with a proposal to approve, on an advisory basis, the compensation of our named executive officers as disclosed in our 2024 proxy statement. Approximately 96% of the shares voted on this proposal were cast in 2024 in support of our 2023 executive compensation program. While the Committee viewed the results of the “say-on-pay” vote as broad shareholder support for our executive compensation programs, the Committee does, and will continue to, consider the results of shareholder advisory votes on executive compensation when making future decisions relating to our executive compensation programs and compensation for named executive officers. During fiscal 2024, we continued to engage with our shareholders, meeting to discuss a variety of corporate governance topics, with particular focus on ESG matters.

 

  POLICIES AND PRACTICES TO SUPPORT EFFECTIVE GOVERNANCE

The Company is committed to best practices in compensation governance. The following aspects of the Company’s compensation program reinforce that commitment: