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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

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

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March 20, 2015

Dear Hospira Shareholder:

        You are cordially invited to attend the 2015 Annual Meeting of Shareholders of Hospira, Inc. at The Ritz-Carlton San Francisco, 600 Stockton at California Street, San Francisco, CA 91108 on Wednesday, May 6, 2015, at 9 a.m., Pacific Time.

        This booklet includes the notice of annual meeting and the proxy statement. The proxy statement describes the business to be transacted at the meeting and provides other information about our company that you should know when you vote your shares.

        The principal business to be conducted at the meeting will be to: (i) elect ten directors; (ii) consider a shareholder advisory resolution to approve executive compensation; (iii) ratify the appointment of Deloitte & Touche LLP as the firm of independent registered public accountants to serve as Hospira's auditors; and (iv) consider one shareholder proposal, if properly presented at the meeting. It is important that your shares be represented, whether or not you attend the meeting. Shareholders of record can vote their shares via the Internet, by mail or by using a toll-free telephone number. Instructions for accessing the proxy materials appear in the Notice of Internet Availability of Proxy Materials, mailed to you on March 20, 2015. If you hold shares through your broker, bank or other intermediary, that person or institution will provide you with instructions on how to vote your shares. It is especially important that you communicate your voting instructions to your broker, bank or other intermediary, since the New York Stock Exchange does not allow the intermediary to cast votes with respect to the election of directors, the shareholder advisory vote on executive compensation, the shareholder proposal or other non-routine matters, unless it has received instructions from you.

        We look forward to your participation in the 2015 annual meeting.

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 6, 2015

        The 2015 Annual Meeting of Shareholders of Hospira, Inc. will be held at The Ritz-Carlton San Francisco, 600 Stockton at California Street, San Francisco, CA, on Wednesday, May 6, 2015, at 9 a.m., Pacific Time. The purposes of the annual meeting are to:

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elect the ten directors identified in this proxy statement, each for a one-year term (Item 1 on the proxy card);



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approve, by means of a shareholder advisory vote, the executive compensation as disclosed in this proxy statement ("say on pay vote") (Item 2 on the proxy card);



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ratify the appointment of Deloitte & Touche LLP as the firm of independent registered public accountants to serve as Hospira's auditors for 2015 (Item 3 on the proxy card);



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consider a shareholder proposal, if properly presented at the annual meeting (Item 4 on the proxy card); and



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transact such other business as may properly come before the annual meeting or any adjournment or postponement of the annual meeting.

The board of directors recommends that you vote FOR Items 1, 2, and 3 on the proxy card. The board of directors recommends that you vote AGAINST Item 4 on the proxy card.

        Shareholders of record have been mailed a Notice of Internet Availability of Proxy Materials on March 20, 2015, which provides shareholders with instructions on how to access on the Internet the proxy materials and our Annual Report to Shareholders and, if they prefer, how to request paper copies of these materials. Hospira employees who hold Hospira shares in the Hospira 401(k) Retirement Savings Plan or the Hospira Puerto Rico Retirement Savings Plan and other shareholders who previously have requested paper copies of these materials may receive these materials by e-mail or in paper form.

        The board of directors has set the close of business on March 9, 2015, as the record date for the annual meeting. This means that owners of common stock as of that date are entitled to receive notice of, and vote at, the annual meeting and any adjournments or postponements of the annual meeting.

        Your vote is important. We encourage you to read the proxy statement and to submit a proxy so that your shares will be represented and voted even if you do not attend. You may submit your proxy over the Internet, by mail, or by telephone. If you do attend the annual meeting, you may vote in person.

By order of the board of directors.

Royce Bedward
Secretary
March 20, 2015
Hospira, Inc.
275 North Field Drive
Lake Forest, IL 60045
www.hospira.com

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HOSPIRA, INC.

PROXY STATEMENT
FOR
2015 ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON MAY 6, 2015

GENERAL INFORMATION

Why has this proxy statement been made available?

        The board of directors is soliciting proxies for use at our Annual Meeting of Shareholders, to be held on May 6, 2015, and any adjournments or postponements of the annual meeting. The annual meeting will be held at The Ritz-Carlton San Francisco, 600 Stockton at California Street, San Francisco, CA and will begin at 9 a.m., Pacific Time. In order to solicit your proxy, we have made these materials available to you on the Internet, by e-mail, or by mail. We made these materials available to shareholders on or around March 20, 2015.

What will be voted on at the annual meeting?

        Shareholders will vote on the following matters:

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election of the ten directors identified in this Proxy Statement for a one-year term;



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approval, by means of a shareholder advisory vote, of executive compensation as disclosed in this proxy statement;



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ratification of the appointment of Deloitte & Touche LLP as the firm of independent registered public accountants to serve as Hospira's auditors for 2015; and



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consideration of one shareholder proposal, if properly presented at the meeting.

Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?

        Pursuant to rules adopted by the Securities and Exchange Commission (the "SEC"), we have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the "Notice") to our shareholders of record and beneficial owners. All shareholders will have the ability to access the proxy materials, referred to in the Notice, over the Internet or to request a printed set of the proxy materials free of charge. Instructions on how to access the proxy materials over the Internet, or request a printed copy, may be found in the Notice. In addition, shareholders may request to receive proxy materials on an ongoing basis, in printed form by mail or electronically by e-mail. Your election to receive proxy materials by e-mail will remain in effect until you terminate it. If you choose to receive future proxy materials by e-mail, you will receive an e-mail next year with instructions containing a link to those materials and a link to the proxy voting site. Hospira employees who hold Hospira shares in the Hospira 401(k) Retirement Savings Plan or the Hospira Puerto Rico Retirement Savings Plan and other shareholders who previously have requested paper copies of these materials will receive these materials by e-mail or in paper form. We elected to use electronic notice and access for our proxy materials because it reduces our printing and mailing costs, and also reduces the environmental impact of our annual meeting.

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Who may vote at the annual meeting?

        The board of directors has set a record date of March 9, 2015 (the "record date"), meaning that shareholders of record at the close of business on that date are entitled to notice of, and may vote at, the annual meeting, or at adjournments or postponements of the annual meeting.

How many votes do I have?

        You have one vote for each share of common stock you hold.

What constitutes a quorum?

        The presence in person or by proxy of the holders of shares of common stock representing a majority of all issued and outstanding shares of common stock entitled to vote will constitute a quorum. On March 9, 2015, there were 172,380,287 shares of common stock outstanding.

        Your shares will be counted for purposes of determining a quorum if you are present and vote in person at the annual meeting, if you vote on the Internet, by telephone, or if you vote by properly submitting a proxy card or voting instruction form by mail. Shares of common stock represented by a properly completed proxy will be counted as present at the annual meeting for purposes of determining a quorum, even if the proxy indicates that the shareholder is abstaining from voting.

What vote is required to approve each matter?

        Election of Directors.    Directors receiving a majority of the votes cast (the number of shares voted "for" a director must exceed the number of votes cast "against" that director) will be elected as a director.

        Approval of the Say on Pay Vote, Ratification of Auditors, and the Shareholder Proposal.    The affirmative vote of a majority of the votes cast is required for approval of these items. Although the say on pay proposal is advisory in nature, the opinions expressed by shareholders on this matter will be taken into consideration when making future executive compensation decisions.

        Abstentions and broker non-votes, discussed below, will not be counted either for or against these matters for purposes of state law and, assuming the presence of a quorum, abstentions and broker non-votes will have no effect.

What happens if a director nominee does not receive a majority of the votes cast in an uncontested election?

        In 2015, all nominees for the election of directors are currently serving on the board. A nominee who is serving as a director, but who is not elected at the annual meeting, would, under Delaware law, continue to serve on the board as a "holdover director." However, under our bylaws, any director that fails to be elected must tender his or her resignation to the board promptly following certification of the shareholder vote. Our independent directors (excluding the director who tendered the resignation) would be required to determine whether to accept or reject the resignation, or whether to take any other action. The board would then act on the tendered resignation, and publicly disclose its decision within 90 days following certification of the shareholder vote.

How do I vote by proxy?

        If you are a shareholder of record, you have the choice to vote over the Internet, vote by telephone using a toll-free telephone number, vote in person by attending the annual meeting, or vote by requesting and completing a proxy card and mailing it in a postage-paid return envelope. To vote over the Internet or by telephone, follow the instructions provided on your proxy card or with the

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Notice. On May 5, 2015, Internet and telephone voting for shareholders of record will close at 11:59 p.m., Eastern Time. Other deadlines may apply to you if your stock is held of record by a broker, bank, or other nominee.

        The proxies will vote your shares on each matter as you direct. If you do not indicate how your shares are to be voted on a matter, properly completed proxies will be voted for the election of the directors, approval of the advisory vote on executive compensation, the ratification of Deloitte & Touche LLP as the firm of independent registered public accountants to serve as our auditors in 2015, and against the shareholder proposal. Other matters that properly come before the meeting will be voted upon by the proxies in accordance with their best judgment. Our corporate secretary has not received timely and proper notice from shareholders on any other matter to be presented at the meeting.

How do I vote if I hold my shares through a broker, bank or other nominee?

        If you hold your shares through a broker, bank or other nominee, you may instruct that person to vote your shares by following instructions that person gives you. Most brokers offer voting by mail, by telephone and on the Internet. If you want to vote your shares at the annual meeting, you will need to ask your broker, bank or other nominee to furnish you with a legal proxy. You will need to bring the legal proxy with you to the meeting and hand it in with a signed ballot that will be provided to you at the annual meeting. You will not be able to vote your shares at the annual meeting without a legal proxy. If you do not have a legal proxy, you still can attend the meeting by following the procedures described below under the caption "How can I attend the meeting?" However, you will not be able to vote your shares at the meeting. Accordingly, we encourage you to vote your shares in advance, even if you intend to attend the meeting.

What is a broker non-vote and how does it affect the voting requirements?

        If your shares are held by a broker, the broker will ask you how you want your shares to be voted. If you give the broker instructions, the broker will vote your shares as you direct. If you do not give instructions, one of two things can happen. On matters on which the broker is prohibited from exercising voting authority ("non-routine" matters), which is called a "broker non-vote," your shares will not be voted. Broker non-votes will have no effect on the number of votes required to approve any of the matters being voted on at the meeting. On matters on which the broker is permitted to exercise voting authority ("routine" matters), the broker will vote your shares in its discretion. We believe that the brokers may exercise voting authority on the ratification of the independent public accountants, but may not exercise voting authority on any other items up for vote at this annual meeting. Brokers do not have the ability to cast votes for the election of directors, the advisory vote on executive compensation, or shareholder proposal, unless they have received instructions from the beneficial owner of the shares.

How do I vote if I hold shares through the Hospira 401(k) Retirement Savings Plan or the Hospira Puerto Rico Retirement Savings Plan?

        If you hold shares through the Hospira 401(k) Retirement Savings Plan (the "401(k) Plan") or the Hospira Puerto Rico Retirement Savings Plan (the "Puerto Rico Plan"), you will receive materials that will contain instructions to the respective trustee of each plan's trust as to how to vote your shares. You may vote your shares by completing a proxy card, or you may vote by telephone or Internet by following the instructions provided with the materials. If you do not vote shares you hold in the 401(k) Plan, Fiduciary Counselors Inc. ("Fiduciary Counselors") will vote your shares in its discretion. Fiduciary Counselors is the independent fiduciary of the 401(k) Plan for purposes of monitoring the suitability of acquiring and holding Hospira shares. Fiduciary Counselors may use its own discretion with respect to those shares under the 401(k) Plan for which voting instructions are not received on a timely basis. If you do not vote shares you hold in the Puerto Rico Plan, the trustee of the Puerto Rico

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Plan's trust, Banco Popular de Puerto Rico, will vote your shares in the same proportion as shares voted by the other participants.

How do I vote in person?

        If you are a shareholder of record, you may vote your shares in person at the annual meeting. However, we encourage you to vote by proxy in advance, even if you plan to attend the annual meeting.

Can I revoke a proxy?

        Yes. You can revoke your proxy by:

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giving written notice to our corporate secretary;



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delivering a later-dated proxy or resubmitting your vote by telephone or over the Internet; or



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voting in person at the annual meeting.

If I submit a proxy, will my vote be kept confidential?

        Our policy is that all proxies, ballots, and voting tabulations that can reveal how a particular shareholder has voted be kept confidential and not be disclosed, except:

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where disclosure may be required by law or regulation;



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where disclosure may be necessary in order for us to assert or defend claims;



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where a shareholder expressly requests disclosure;



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to allow the inspectors of election to certify the results of a vote; or



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in other limited circumstances, such as a contested election or a proxy solicitation not approved and recommended by the board of directors.

Who will be tabulating and certifying votes at the meeting?

        We have engaged Broadridge Financial Solutions, Inc. ("Broadridge") to serve as the tabulator of votes and a representative of Broadridge to serve as inspector of election and to certify the votes.

Who will pay the costs and expenses for this proxy solicitation?

        We will pay all costs of soliciting proxies, including charges made by brokers and other persons holding common stock in their names or in the names of nominees, for reasonable expenses incurred in sending proxy materials to beneficial owners and obtaining their proxies. In addition to solicitation by mail, our directors, officers and employees may solicit proxies personally and by telephone, Internet and facsimile, all without extra compensation. We also retained the services of Georgeson Inc. to aid in the solicitation of proxies at a cost of $13,500, plus reimbursement for reasonable out-of-pocket expenses.

How can I attend the meeting?

        Attendance at the annual meeting is limited to shareholders as of the record date or their proxies. If your shares are registered in your name, the Notice serves as your admission ticket and you must present the Notice at the meeting. If your shares are held by a broker, bank or nominee, you must bring to the meeting a brokerage statement showing ownership as of the record date. Directions to the meeting are included on the proxy card. Shareholders will be admitted to the meeting location beginning at 8:30 a.m., Pacific Time.

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What is "householding" and how does it work?

        We have adopted "householding," a procedure approved by the SEC, under which multiple shareholders of Hospira stock who reside at the same address will receive a single copy of the Notice, or a single set of annual report and other proxy materials, unless the affected shareholder has provided contrary instructions. This procedure reduces printing costs and postage fees. If you reside at the same address as another shareholder of Hospira stock and wish to receive a separate copy of the applicable materials, you may do so by making a written or oral request to: Hospira Investor Relations, 275 North Field Drive, Department 051M, Building H1, Lake Forest, Illinois 60045, 224-212-2711. Upon your request, we will deliver promptly a separate copy to you. The proxy statement and our 2014 Annual Report on Form 10-K also are available at www.hospira.com/2015ProxyMaterials. If you participate in householding and you wish to receive a separate Notice or annual report and other proxy materials, you also may contact Broadridge at any time, either by calling toll free 1- 800-542-1061, or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. Any shareholders who share the same address and currently receive multiple copies of the Notice or the annual report and other proxy materials, who wish to receive only one copy in the future may contact their bank, broker, or nominee, or Hospira Investor Relations, or Broadridge at the contact information listed above to request information about householding.

OWNERSHIP OF OUR STOCK

        Based on information contained in Schedules 13G or 13G/A filed by T. Rowe Price Associates, Inc., BlackRock, Inc., The Vanguard Group, Wellington Management Group LLP, and Franklin Mutual Advisers, LLC with the SEC, as of December 31, 2014, they owned the following Hospira shares:

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        The following table sets forth information regarding ownership of our common stock as of March 9, 2015, by each of our directors, and by our chief executive officer, chief financial officer and each of the three other most highly paid executive officers (the "named officers" or "NEOs"), and by all directors and executive officers as a group. Each person named below, individually owns less than 1% of our outstanding common stock. Our current directors and executive officers as a group, collectively own 1.39% of our outstanding common stock. Percentages are based on 172,380,287 shares outstanding on March 9, 2015, adjusted as required by rules promulgated by the SEC.

        Beneficial ownership is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). A person is deemed to be the beneficial owner of any share of common stock if such person has or shares the right to vote or dispose of such common stock, or has the right to acquire beneficial ownership at any time within 60 days of the date of the table. Deferred share units held by directors may not be voted or disposed of by the director until the shares are distributed to the director upon or after termination of the director's service on the board.

        The number of stock options exercisable within 60 days of the date of the table and the number of deferred share units owned by each person are stated separately and not included in the "Number of Shares" column. Based on the information furnished by such persons, we believe that each such person

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has sole voting and dispositive power over the shares indicated as owned by such person unless otherwise indicated.

CONNIE R. CURRAN

        On November 10, 2014, Connie R. Curran, RN, Ed.D, age 67, passed away. Dr. Curran served as one of our independent directors since 2004. In her ten years of leadership on the Hospira board,

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Dr. Curran served in many capacities, and always with a singular and very personal passion to ensure that patients were at the center of every decision we made and every action we took. Dr. Curran also served on the boards of DeVry Education Group, DePaul University, IDX Systems, the University of Wisconsin Foundation, Allegiance Corp., Volcano Corporation and Pyxis.

PROPOSAL 1
ELECTION OF DIRECTORS

        All directors of our company are up for election at the 2015 annual meeting for an one-year term. With the re-election of the Class II directors at this 2015 annual meeting for a one-year term, the board no longer will be classified. Prior to the 2013 annual meeting, there were Class I, II and III seats for directors, with one class of directors being elected for a three-year term at each annual meeting.

        Upon the recommendation of its governance and public policy committee, and consistent with the elimination of the company's classified board, the board of directors has nominated Irving W. Bailey, II, F. Michael Ball, Barbara L. Bowles, William G. Dempsey, Dennis M. Fenton, Roger W. Hale, Heino von Prondzynski, Jacque J. Sokolov, John C. Staley, and Mark F. Wheeler to be elected to hold office until the 2016 annual meeting. No nominations for directors were received properly from shareholders and no other candidates are eligible for election.

        If elected, each nominee will serve until the expiration of his or her term and his or her successor is elected and qualified, or until his or her earlier resignation, removal or death. Each of the nominees is willing to serve if elected, and the board of directors has no reason to believe that any of the nominees will be unavailable for election; but, if such a situation should arise, proxies will be voted in accordance with the best judgment of the proxy holder for such person or persons as may be designated by the board of directors, unless the shareholder has directed otherwise.

        The board of directors recommends that the shareholders vote FOR the election of Irving W. Bailey, II, F. Michael Ball, Barbara L. Bowles, William G. Dempsey, Dennis M. Fenton, Roger W. Hale, Heino von Prondzynski, Jacque J. Sokolov, John C. Staley, and Mark F. Wheeler to the board of directors for a one-year term until the 2016 annual meeting.

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THE BOARD OF DIRECTORS

        The board and the governance and public policy committee believe that the combination of the qualifications, skills and experiences of the nominees for election at the 2015 Annual Meeting will contribute to an effective and well-functioning board and that, individually and as a whole, each nominee possesses the necessary qualifications to provide, in combination with the other directors, effective oversight of the business and effective advice and counsel to our management.

        Next to each nominee's biography, below, is an assessment of the nominee's qualifications, attributes, skills and experience that led us to believe that each nominee is well-qualified to serve on the board.

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CORPORATE GOVERNANCE

Board Leadership Structure

        The board of directors is committed to adopting governance policies and practices that promote the most effective and ethical management of our company. In that regard, the board believes that it is important to retain maximum flexibility to determine our company's optimal leadership structure and to choose the best qualified person to serve in the offices of chief executive officer and chair of the board. At this point in time, the board has determined that having an independent, non-executive chair is the optimal leadership structure for our company because it provides the board with independent leadership and allows Mr. Ball, our company's chief executive officer, to concentrate on our company's business operations. In 2013, the independent directors elected Mr. Staley as the non-executive chair, and upon his reelection at the Annual Meeting, he will continue to serve in that position for a term expiring in January 2016. As the non-executive chair, Mr. Staley is responsible for:

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presiding over all meetings of the shareholders and board;



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ensuring the board is fulfilling its roles and responsibilities, as set forth in our company's corporate governance guidelines;



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communicating with the independent directors between meetings, as appropriate;



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working with the chief executive officer, develop board meeting agendas and ensure critical issues are included;



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presiding over all meetings of the independent directors, including executive sessions, and taking the lead role in communicating any feedback to the chief executive officer;



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assisting with the recruitment of board candidates, and with establishing committee memberships and committee chairs;



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working with committee chairs, as necessary, to ensure committee work is conducted at the committee level and appropriately reported to the board;



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recommending consultants and outside advisors to the board, as necessary or appropriate;



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serving as a mentor to the chief executive officer, providing board performance feedback to, and collaborating with, the chief executive officer on setting board meeting schedules and agendas; and



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assisting with the oversight of the annual performance evaluation of the board and the chief executive officer.

        In addition, the chair may call meetings of the board or the independent directors and may attend meetings of committees on which the chair is not a member. A full description of the chair's roles and responsibilities is included in our corporate governance guidelines, which are available in the investor relations section of our website at www.hospirainvestor.com.

Board's Role in Risk Oversight

        As stated in our corporate governance guidelines, the board is committed to overseeing the conduct of our company's business so that it is managed by its officers, managers and employees in the long-term interests of shareholders. As part of that responsibility, the board regularly discusses the processes that are in place to safeguard our company's assets and mitigate our company's risk. The board's role in risk oversight is consistent with our company's leadership structure, with the chief executive officer and other members of senior management having responsibility for assessing and managing our company's risk exposure, and the board and its committees providing oversight in connection with these efforts. For example, the board reviews our company's enterprise risk

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management process, the major risks identified through that process, and management's related mitigation strategies. Throughout the year, the board and its committees receive updates, as necessary, on the identified risks and mitigation plans. In addition, each year, the board reviews our company's strategic direction and objectives, and reviews key operational issues or risks related to the long-term strategic plan. The board holds extensive meetings with senior management to discuss our company's long-term operating plans, including the issues and opportunities facing our company in light of industry developments. Throughout the year, the board continues to engage in dialogue with management related to the progress of these plans, including any significant operational issues or risks encountered by our company in executing the plans. Each of the board committees (audit, compensation, governance and public policy, science and technology, and quality) regularly meet and review the major risks and mitigation activities relating to their respective areas of responsibility and oversight.

Meetings

        The board of directors held nine meetings, and one special telephonic meeting, during 2014. No director attended fewer than 75% of the total number of meetings of the board of directors and the committees of the board of directors on which such director served. Our Corporate Governance Guidelines establish that our directors are expected to regularly attend the annual meeting of shareholders and meetings of the board and board committees on which they serve. All of our directors serving at the time attended in person or by call-in conferencing the 2014 annual meeting. Our independent directors generally meet in an executive session without management present at every regularly scheduled board meeting. As the chair during 2014, Mr. Staley presided at the executive sessions of the full board.

Independence

        The board annually determines the independence of directors. No director may qualify as independent unless the board of directors affirms that the director has no material relationship with us. As required by our corporate governance guidelines, the board will consider all relevant facts and circumstances in connection with that determination. Under no circumstances will a director be considered independent if:

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the director is, or has been within the last three years, our employee, or a member of the director's immediate family is, or has been within the last three years, our executive officer;



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the director or a member of the director's immediate family receives more than $120,000 from us in direct compensation, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service), and other than amounts received by an immediate family member for service as a non-executive employee, during any 12-month period in the last three years;



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the director, or a member of the director's immediate family, is a current partner of a firm that is our internal or external auditor;



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the director is a current employee of a firm that is our internal or external auditor;



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a member of the director's immediate family is a current employee of a firm that is our internal or external auditor and personally works on our (or a subsidiary's) audit;



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the director, or a member of the director's immediate family, was within the last three years a partner or employee of a firm that is our internal or external auditor and personally worked on our audit during that time;

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the director or a member of the director's immediate family is employed, or has been employed in the last three years, as an executive officer of another company where any of our present executive officers at the same time serves or served on that company's compensation committee;



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the director is a current employee, or a member of the director's immediate family is a current executive officer, of a company that makes payments to, or receives payments from, us for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company's consolidated gross revenues; and



•

the director is an executive officer of a charitable organization that receives charitable contributions (other than matching contributions) from us that are in excess of the greater of $1 million or 2% of such charitable organization's consolidated gross revenues.

        In February 2015, the board determined that Mr. Bailey, Ms. Bowles, Mr. Dempsey, Dr. Fenton, Mr. Hale, Dr. Sokolov, Mr. Staley, Mr. v. Prondzynski, and Dr. Wheeler are independent within the meaning of our director independence standards and the listing standards of the New York Stock Exchange. In making these independence determinations, the board was not aware of any disqualifying relationship under the above criteria and, additionally, was not aware of any other relationship between such director and Hospira that would affect his or her independence.

        Our director independence standards are included in our corporate governance guidelines, which are available in the investor relations section of our website at www.hospirainvestor.com.

Committees of the Board of Directors

        The board of directors has five committees: the audit committee, the compensation committee, the governance and public policy committee, the quality committee, and the science & technology committee. All committee members, except F. Michael Ball, are independent, non-executive directors.

        Below is a summary of our committee structure and membership information. To read more about the committees, please see the discussion following the chart.

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Audit Committee

        Mr. Bailey (chair), Ms. Bowles, Mr. Dempsey, and Dr. Wheeler serve on the audit committee. For a discussion of director qualifications, separate descriptions for each audit committee member's industry background and credentials to fulfill their responsibilities, please see the section, "The Board of Directors" earlier in this proxy statement. During 2014, the audit committee met ten times. All members of the committee must be independent and must satisfy the audit committee member eligibility requirements of the New York Stock Exchange and the SEC. The board determined that Mr. Bailey, Ms. Bowles, Mr. Dempsey, and Dr. Wheeler are financially literate and eligible to serve on the audit committee. The board has determined that each member of our audit committee also is an "audit committee financial expert" within the meaning of the rules of the SEC.

        The primary functions of the committee include:

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meeting periodically with our management, internal auditors and independent registered public accounting firm regarding our internal controls, accounting and financial reporting;



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appointing, evaluating, compensating, retaining and terminating the independent registered public accounting firm, selecting the lead engagement partner, and reviewing, understanding and approving independent auditor fees, including assessing changes in audit scope, audit team skills and knowledge, fee levels for audit and non-audit services, and other areas;



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reviewing and approving all non-audit services performed by the independent registered public accounting firm;



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reviewing and discussing our financial statements and financial press releases with our management and independent registered public accounting firm;



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reviewing and discussing our major financial risk exposures and the steps management has taken to monitor and control those exposures with our management, internal auditors, and independent registered public accounting firm;



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establishing procedures for the receipt, retention and treatment of complaints received by our company regarding accounting matters, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting matters; and



•

Reviewing the internal audit team's audit plan, competencies, budget and staffing.

        Both the independent registered public accounting firm and the internal auditors regularly meet privately with the audit committee and have unrestricted access to the audit committee.

        The audit committee is governed by a written charter, which is available in the investor relations section of our website at www.hospirainvestor.com. The eligibility criteria for committee members are included in the charter. A copy of the report of the audit committee is on page 52.

Compensation Committee

        Dr. Fenton (chair), Ms. Bowles, Mr. Hale, Dr. Sokolov, and Mr. v. Prondzynski serve on the compensation committee. During 2014, the compensation committee met three times. All members of the compensation committee must be independent, must satisfy the compensation committee member eligibility requirements of the New York Stock Exchange and the SEC, and must be "non-employee directors" for purposes of Rule 16b-3 under the Exchange Act, and "outside directors" for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended. The board determined that each of Dr. Fenton, Ms. Bowles, Mr. Hale, Dr. Sokolov, and Mr. v. Prondzynski is eligible to serve on the committee.

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        The primary functions of the committee include:

•

reviewing and determining the executive officers' compensation;



•

reviewing and, as it deems appropriate or as required by regulations, recommending to the board of directors, policies, practices and procedures relating to the compensation of our executive officers, other managerial employees and non-employee directors, and the establishment and administration of our employee benefit plans; and



•

exercising authority under our employee equity incentive plan and management incentive plans. The committee may delegate the responsibility to administer and make grants under these plans to management except to the extent such delegation would be inconsistent with applicable laws or regulations.

        For a description of how the compensation committee administers our executive compensation program, please see the section, "2014 Compensation Discussion and Analysis—Discussion of Compensation Program—General Administration" later in this proxy statement. The compensation committee has engaged Towers Watson as its independent compensation consultant. Towers Watson provides counsel and advice on executive and non-employee director compensation matters, including providing information regarding the peer groups against which performance and pay should be examined. For a further description of the services provided by Towers Watson, please see "2014 Compensation Discussion and Analysis—Discussion of Compensation Program—General Administration" later in this proxy statement.

        The compensation committee has adopted a policy that prohibits Towers Watson from providing any other services to our company other than the services Towers Watson performs as the compensation committee's independent consultant. This is intended to strengthen the independence of Towers Watson and avoid any conflicts of interest. However, in 2014, Towers Watson provided to the company compensation survey data for one country outside the U.S., for which we paid Towers Watson approximately $6,500. For services rendered to the committee related to executive compensation, in 2014, the committee authorized payment to Towers Watson of approximately $250,000 (excluding expenses). The compensation committee assessed the independence of Towers Watson in 2014 pursuant to the rules of the SEC and the listing standards of the New York Stock Exchange, and concluded that Towers Watson's work for the compensation committee does not raise any conflict of interest.

        The compensation committee is governed by a written charter, which is available in the investor relations section of our website at www.hospirainvestor.com. The eligibility standards for committee members are included in the charter. A copy of the report of the compensation committee is on page 51.

Governance and Public Policy Committee

        Ms. Bowles (chair), Mr. Hale, Dr. Sokolov, and Mr. Staley serve on the governance and public policy committee. During 2014, the governance and public policy committee met five times. All members of the governance and public policy committee must be independent. The board determined that Ms. Bowles, Mr. Hale, Dr. Sokolov, and Mr. Staley are eligible to serve on the committee.

        The functions of the committee include:

•

developing the general criteria for selecting members of the board of directors and assisting the board in identifying and attracting qualified candidates;



•

recommending to the board of directors the nominees for election as directors, considering the criteria described herein and any potential nominees recommended by our shareholders;



•

recommending to the board of directors persons to be elected as executive officers;

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•

reviewing and assessing the adequacy of our corporate governance guidelines;



•

providing general oversight over certain compliance programs, policies and procedures; and



•

providing general oversight over certain company political and charitable activities.

        The process followed by the committee to identify a nominee to the board of directors depends on the qualities being sought. Board members should have backgrounds that, when combined, provide a portfolio of experience and knowledge that will serve our governance and strategic needs. Candidates will be considered on a range of criteria, including broad-based business knowledge and relationships, prominence and excellent reputations in their primary fields of endeavor, global business perspectives, and commitment to good corporate citizenship. Directors should have demonstrated experience and ability that is relevant to the board's oversight role with respect to our business and affairs. The committee's criteria for the selection of, and qualifications desirable in, members of the board, are included in an outline for directorship qualifications, which is Exhibit B to our company's corporate governance guidelines, and can be found in the investor relations section of our website, www.hospirainvestor.com. The criteria include, among other attributes, strong management experience, experience with multinational operations or experience in hospital products, hospital administration, medical or pharmaceutical products, medical research and development, finance or international business. It is also the committee's desire for the board to include a range of ages and a diversity of ethnicity, gender, experience, knowledge and geography. The committee defines diversity broadly and evaluates candidates not only on the attributes described above, but also considers whether the candidate enhances the current diversity of the board. In addition, as part of the annual self-evaluation process, the board and each committee assesses whether the board and the committees have appropriate diversity, as well as appropriate experience, education and skills for the current issues facing our company.

        Director candidates can be referred to the committee from a variety of sources, including by our officers, directors and shareholders. The committee has from time to time enlisted a third-party search firm to assist it in identifying and evaluating qualified candidates. The committee has the sole authority to engage director candidate search firms.

        If the board determines to seek a new member and a candidate is referred to the committee, the committee will review the candidate's qualifications in light of the attributes being sought by the board. If the committee determines that a candidate's qualifications are potentially suitable for service on the board, the committee will conduct an investigation of the candidate's background. Typically, candidates are interviewed by one or more members of the committee, and our chair before being nominated for election to the board.

        A shareholder may recommend persons as potential nominees for director by submitting the names of such persons in writing to the chair of the governance and public policy committee or to our secretary. Recommendations should be accompanied by a statement of qualifications and confirmation of the person's willingness to serve. A nominee who is recommended by a shareholder following these procedures will receive the same consideration as other comparably qualified nominees. The committee will consider potential nominees recommended by shareholders and in so doing, will apply the same evaluation criteria used for each person considered for nomination to the board.

        The governance and public policy committee is governed by a written charter, which is available in the investor relations section of our website at www.hospirainvestor.com. The eligibility standards for committee members are included in the charter.

Quality Committee

        Mr. Dempsey (Chair), Dr. Fenton, Dr. Sokolov, Mr. v. Prondzynski, and Dr. Wheeler serve on the quality committee. The committee provides assistance to the board in carrying out certain oversight

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responsibilities of the board relating to product quality and product safety. During 2014, the committee met five times.

        The functions of the committee include:

•

Overseeing our policies, practices and procedures relating to compliance with laws and regulations administered by the U.S. Food and Drug Administration ("FDA") and similar state, local and foreign agencies, including keeping apprised of all FDA warning letters and the responses to such letters, and steps taken to implement our responses;



•

Reviewing our overall quality strategy and monitoring our quality system and metrics used to monitor product quality and product safety, including reviewing the organization, implementation and effectiveness of our quality and compliance programs, the adequacy of resources for those programs, and the results of those product quality and quality system assessments by our company and external regulators (including the FDA and other regulatory bodies);



•

Keeping apprised of significant regulatory actions and correspondence from regulatory agencies, including our responses to such correspondence, and the steps taken to implement our responses;



•

Reviewing the corporate quality audit plan; receiving reports on the outcomes of quality audits and the progress of any material corrective actions taken in response to such audits; and



•

Assisting the board with its oversight responsibility for enterprise risk management in areas affecting our product quality and product safety, quality processes and quality strategy.

        The quality committee is governed by a written charter, which is available in the investor relations section of our website at www.hospirainvestor.com.

Science and Technology Committee

        Serving on the science and technology committee are Dr. Wheeler (chair), Mr. Bailey, Mr. Ball, Ms. Bowles, Mr. Dempsey, Dr. Fenton, Mr. Hale, Dr. Sokolov, Mr. Staley, and Mr. v. Prondzynski. The committee provides general oversight over strategic goals, objectives, and the direction of our research and development programs, including our product pipeline. The committee met four times during 2014.

        The functions of the committee include overseeing our company's research and development and technology initiatives, including review of the following matters:

•

strategic goals, objectives, progress and direction of our company's research and development programs, including our company's product pipelines;



•

our company's major technology positions and strategies relative to emerging technologies, emerging concepts of therapy and health care, and changing market requirements;



•

our company's approaches to acquiring and maintaining technology positions (including contracts, grants, collaborative efforts, alliances and venture capital) or other scientific aspects of major acquisitions and business development transactions;



•

reviewing our company's intellectual property strategy and portfolio;



•

allocation of our company's resources to research and development overall, and selected significant programs; and



•

assisting the board with its oversight responsibility for enterprise risk management in areas affecting our company's research and development and technology initiatives.

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        The science and technology committee is governed by a written charter, which is available in the investor relations section of our website at www.hospirainvestor.com.

Director Share Ownership Guidelines

        Within five years after joining the board, each non-employee director is required to own and retain a minimum number of shares of Hospira common stock or deferred stock units equal to the lesser of (i) 7,500 shares, or (ii) the number that is five times such director's annual retainer fees (currently $325,000). The director must maintain that minimum throughout his or her service on the board. For purposes of the ownership guidelines, common stock includes restricted stock, restricted stock units and deferred stock units awarded to non-employee directors. All non-employee directors are in compliance with the guidelines.

Director (Tenure) Experience

        Our board members represent a broad array of experience and expertise in various areas of our business, factors we consider very important. We also believe that it is important for the board to have continuity. Currently, only 30% of our non-executive directors have been on the board nine years or more—the period of time ISS considers "lengthy tenure." We, therefore, believe our board is well-balanced in terms of the tenure of its members.

Communicating with the Board of Directors

        You may communicate with the board of directors by writing a letter to our chair. You may contact our independent directors by writing a letter to the chair of our audit committee (for accounting or disclosure matters), or any of our other independent directors.

        The letter should be addressed to:

Director Communications
c/o General Counsel and Secretary
Hospira, Inc.
275 North Field Drive
Department NLEG, Building H-1
Lake Forest, Illinois 60045

        Our general counsel and secretary will review the communication and forward it to the addressee or, in the absence of an addressee, to the most appropriate director or directors.

Corporate Governance Materials

        Our corporate governance guidelines, our code of business conduct and ethics, and the charters of our audit committee, compensation committee, governance and public policy committee, quality committee, and science and technology committee are available in the investor relations section of our website at www.hospirainvestor.com. We will provide a copy of any of these materials to any shareholder free of charge upon written request to:

Corporate Governance Materials Request
C/o General Counsel and Secretary
Hospira, Inc.
275 North Field Drive
Department NLEG, Building H-1
Lake Forest, Illinois 60045

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Compensation Risk Assessment

        Our management and compensation committee, with the input and guidance of Towers Watson, our independent consultant, have evaluated our compensation policies and practices for all of our employees, including our executive and non-executive officers, to determine whether they create risks that are reasonably likely to have a material adverse effect on our company. We believe that our compensation programs do not encourage excessive risk taking for several reasons, including the following:

•

Fixed versus Variable Pay.  The balance between fixed and variable pay varies by job level. Named officers have a larger portion of their compensation in variable vehicles (such as performance-based annual bonuses, performance share units and stock options that vest over a three- or four-year period). These are designed to motivate performance and provide strong shareholder returns over the long-term. Named officers, more than other employees, have a greater opportunity to influence long-term performance. At the general employee level, the greatest portion of compensation is fixed. The fixed component of compensation does not encourage risk taking because it is unaffected by company performance. The variable portion is designed to avoid encouraging excessive risk taking, by basing that portion on multiple indicators of both company and individual performance, thus diversifying the risk associated with any single performance indicator. Overall, the compensation mix for all of our employees is generally consistent with the market and provides a balanced mix between the fixed components and the variable components of annual incentives and equity-based compensation awards.



•

Short-Term versus Long-Term Variable Incentive Pay.  The mix of short-term and long-term incentives is driven by the employee's role in the organization. Greater long-term incentives are provided to those roles that most directly impact the long-term strategy of our company, that is, senior executives and officers. Our short-term incentive pay for all employees is based on an annual goal process, which is administered in a way that motivates the results needed to achieve the approved business plan goal. In this process, the balance between risk and reward, both to participants and shareholders, is considered. Specific financial measures are considered, as well as the necessity of achieving strategic objectives that contribute to the long-term success of our company and to shareholder value creation. In 2014, our company continued to utilize a funding mechanism, under which incentive payouts would not be funded under the program until our company achieved a certain threshold level of adjusted net income.

Also balancing risk and reward are checks and balances within our company's business, including audit, quality and financial approval processes, each of which assists our company in managing business risks. Our long-term incentive pay for our officers and senior executives includes performance share units, which are earned, if at all, based on a total shareholder return (TSR) measure over a three-year performance period relative to a designated peer group. This supports a longer-term orientation. Moreover, since the performance cycles overlap, one year's actions may impact three performance cycles, which further encourages a long-term focus.

•

Retirement Programs.  Our pension plan and supplemental pension plan were frozen, as of December 31, 2004. Our other retirement programs are structured to be competitive with local practice, and provide a reasonable benefit comparable to the benefits provided to all other employees. Thus, we do not believe that our active retirement programs promote risky behaviors or strategies.



•

Recoupment Policy.  Our corporate officers are subject to a claw back/recovery policy, as described in the section captioned "2014 Compensation Discussion and Analysis—Other—Executive Compensation Recovery Policy."

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•

Stock Ownership Guidelines.  In order to further align the interests of management with our shareholders, we have share retention and ownership guidelines for our senior management. These ownership guidelines are described in the section captioned "2014 Compensation Discussion and Analysis—Other—Executive Share Retention and Ownership Guidelines."

        Based on our analysis, we believe our compensation policies enhance our company's business interests by encouraging innovation and appropriate levels of risk taking. This analysis was supported by the compensation committee's independent consultant, Towers Watson. Additional information about our executive officer compensation practices and policies is included in the section captioned "2014 Compensation Discussion and Analysis."

DIRECTOR COMPENSATION

        Director compensation is reviewed and approved annually by the board, on the recommendation of the compensation committee. The compensation committee has engaged an independent consultant, Towers Watson, to assist it in the performance of these duties. During 2014, the committee performed its annual review of our company's director compensation program and concluded that the program generally remained consistent with competitive market practice. The committee aims to provide a compensation program for the directors that is competitive and works to attract and retain high quality directors. Consistent with this desire, the compensation committee, in consultation with its independent consultant, has determined that it is appropriate to generally target total director compensation at the market median of our company's peer group. In 2014, the committee determined not to increase director pay.

Cash Compensation

        Under our company's director compensation program, our non-employee directors receive an annual cash retainer in the amount of $65,000. Employees are not compensated for serving on the board or board committees. The director who served as chair of the board receives an additional annual retainer of $45,000. Each director who serves on a committee created by the board receives an additional annual committee retainer fee of: (1) $5,000 for the science and technology committee, the quality committee, the governance and public policy committee, and any other permanent or temporary committee established by the board; (2) $10,000 for the compensation committee; and (3) $17,500 for the audit committee. And, each director who serves in the role of chair of any committee receives a combined additional annual committee and chair retainer fee of: (1) $12,500 for the science and technology committee, the quality committee, the governance and public policy committee, and any other permanent or temporary committee established by the board; (2) $20,000 for the compensation committee; and (3) $25,000 for the audit committee. The differences in pay for the various committees are based upon the workload and number of meetings generally held by the committees, as well as the peer group compensation data provided by the consultant.

        The board has established a global travel allowance fee, which is paid to compensate a director for international travel to attend a board or committee meeting. This travel allowance fee currently is set at $2,000 for each meeting that requires international travel.

Stock Compensation

        In addition to cash compensation, our company's director compensation program also utilizes equity grants to further align the interests of directors with our company's shareholders. Each year, each non-employee director receives an annual grant of restricted stock on the same date on which such grants are made to executive officers, which is the later of the fifth business day after the release of our financial results for the previous calendar year, or the day of completion of the regularly scheduled February meeting of the compensation committee. This ensures that the pricing of such

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grants is identical for both directors and officers. Each non-employee director received an annual grant of restricted stock, which generally will vest as of the one-year anniversary date of the grant. In 2014, the number of such shares of restricted stock granted to each director was equal in value to $190,000 as of the date of grant, except that, the director who served as chair of the board received an additional grant of restricted stock that was equal in value to $110,000. In accordance with IRS regulations, each director is given the option of converting the restricted shares into restricted stock units. While serving on the board, directors may dispose of stock received from the vesting of restricted stock grants if they have met the minimum holding requirements under our company's share ownership guidelines for directors. The directors' ownership guidelines are included in the section captioned "Corporate Governance—Director Share Ownership Guidelines."

Deferral Program

        In 2014, restricted stock could, based on an election by the director, be deferred and granted as restricted stock units and recorded in the director's stock unit account. At the director's prior election, the stock unit account will be paid out in the form of company common stock in a lump sum on the first business day after the calendar quarter in which the director's service terminates or in up to ten annual installments from and after that date. In 2014, non-employee directors could elect to defer all or a portion of their fees and restricted stock awards. The cash-based fees were deferred into a stock unit account.

2014 Director Compensation

        The following table shows the amount and form of compensation paid to each of our non-employee directors during 2014. Compensation includes annual retainer fees, board chair fees, committee and committee chair retainer fees, and restricted stock awards.

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2014 COMPENSATION DISCUSSION AND ANALYSIS

        This compensation discussion and analysis explains our philosophy underlying, and administration of, our executive compensation program. This section also describes the elements of our executive compensation program, the compensation paid in 2014 to our chief executive officer ("CEO"), chief financial officer and the three other most highly paid executive officers (the "named officers" or "NEOs"), and other aspects of our executive compensation program. Please read this compensation discussion and analysis along with the information contained in the executive compensation tables immediately following this section.

Executive Summary

        The overriding goal of our executive compensation program is to align the interests of our shareholders with our ability to attract, retain and motivate the best people from the industries where we compete for talent. For that reason, we favor variable pay opportunities based on performance over fixed pay. We view total direct compensation as comprising three elements: base salary, annual cash incentives, and long-term equity incentive awards. In 2014, performance-based compensation, in the form of the targeted annual cash incentives and long-term incentive grants, comprised over 86% of our named officers' targeted total direct compensation¹. The long-term equity-based incentive awards included performance share units, stock options, and restricted stock units.

2014 Business Overview

        2014 was a year of significant progress against many of our near-term milestones in our transformative period. We set out in 2014 to accomplish two major goals. Our first goal was to "Fix the Foundation" and focus on quality improvements primarily in our manufacturing operations. Our second goal was to "turbo charge growth," which our executive officers sought to achieve by introducing new

¹

Targeted total direct compensation replaces annual cash incentives with targeted annual cash incentives.

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products, pricing products differently, investing in R&D, and registering our current and new products in countries where opportunities for organic growth existed. Our accomplishments included:

•

Increased Shareholder Value.  We experienced strong stock price performance, with Hospira's shares appreciating by 48.4% in 2014, and 101.7% during 2012 - 2014, outpacing the S&P 500 over both time periods:

•

Progress on Remediation.  Our tremendous progress in our remediation efforts has put the company in a very good quality and competitive position;



•

Service Levels.  Our customer service levels, adjusted for competitors that were off-market, have continued to track at or above 95%, an indicator of the sustained improvement we have made in our manufacturing facilities;



•

Sales Growth.  As a result of select product price increases and improvements to Hospira's supply chain, Hospira's net sales reached $4.5 billion in 2014;



•

Investment in Research & Development.  We increased our R&D spend and entered into a development and marketing agreement with Celltrion to accelerate our internal biosimilar development programs and expand our market reach;



•

One of the First Biosimilar Submissions in the U.S.  We submitted a biosimilar 351(k) application to the U.S. Food and Drug Administration ("FDA") for biosimilar EPO and, in so doing, are one of the first companies to submit such application in the U.S.;



•

Approval of Inflectra Application in the U.S.  Our business partner, Celltrion, submitted a 351(k) application for FDA approval of biosimilar infliximab, which was the first submission in the U.S. for a biosimilar monoclonal antibody;



•

Approval of Dyloject™.  We received approval from the FDA for Dyloject, a proprietary nonsteroidal anti-inflammatory drug or, NSAID. Dyloject is a complementary addition to our existing portfolio of acute-care drugs;



•

Manufacturing and Supply Chain Enhancements.  We are investing heavily in our global manufacturing footprint increasing manufacturing capacity in low-cost areas, and pursuing vertical integration of "active pharmaceutical ingredients" (API), particularly in drugs where the API is a major component of cost. In 2014, we completed the acquisition of an API facility from Orchid Pharmaceuticals. These enhancements will expand margins and drive future growth;



•

Pricing Strategy Execution.  We continue to execute our pricing strategy to better align our pricing with the value of our products and the investments we are making in our operations;



•

Global Product Expansion.  On the globalization front, we have been working to expand products we already make and market—submitting dossiers for these products in other markets

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where we have a presence. We exceeded our goal of over 250 cumulative new-to-country submissions on a worldwide basis since the beginning of this initiative; and

•

Device Strategy Advancement.  For our MMS business, we made significant progress since we announced our strategy in 2013, achieving multiple milestones in 2014, including streamlining and modernizing our fleet of pumps and making improvements to our device quality systems. The FDA lifted an import alert that previously prohibited U.S. importation of our infusion deices manufactured at our Costa Rica plant; and, our next-generation devices, the Plum 360™ and our Sapphire Plus™ have both received FDA clearance.

Performance Impact on Executive Compensation

        We believe that the compensation committee's balance in using short-term incentives and traditional long-term incentives encouraged our executive officers to maintain their focus on advancing quality improvement initiatives, as well as drive growth. The committee recognized the need to continue to motivate our executives during our turnaround, while ensuring that the executive compensation program remained in alignment with shareholders' interests and our longer term growth. Performance determines the annual incentive payout, based on adjusted net income and other factors listed below, and the payout is adjustable based on individual performance. Adjusted net income and corporate performance factors led to a potential payout for 2014 of 176%, which is above target. For 2014, Hospira reported adjusted net income of $333.2 million. (For a description of how adjusted net income is calculated, and the corresponding metric under generally accepted accounting principles, see the table captioned "Hospira Performance Incentive Plan Measures" in this "2014 Compensation Discussion and Analysis.") For named officers, the annual incentive payout was calculated based on company performance and was adjusted based on the achievement of individual performance goals set for each named officer. These individual performance goals were based on each named officer's individual contribution to the various goals and objectives set for him, his ability to manage his functional area, and his contribution to the overall operations of our company. (See "Annual Cash Incentive Award in this "2014 Compensation Discussion and Analysis" for the individual goals for each named officer.) The table, below, lists the target annual cash incentive amount for each named officer, and the actual annual cash incentive paid to each named officer for 2014, based on the combination of company and individual performance:

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Committee Decisions in 2014

Consideration of 2014 Shareholder Advisory Vote.

        Nearly 71% of the votes cast in 2014 supported our company's executive compensation program. These voting results communicated our shareholders' endorsement of the committee's decisions and policies. Even with the affirmative vote, the committee recognizes the nearly 12 percentage point drop in shareholder approval over last year. While the committee believes the 2014 executive compensation program was structured to drive the desired short- and long-term goals of the company, it continuously reviews our executive compensation programs for alignment with performance, responsiveness to our business needs, and promotion of the best interests of our company's shareholders.

        The company expanded its shareholder outreach efforts in 2014 to include a proactive outreach to our top 25 shareholders. We engaged with over two dozen shareholders throughout 2014, and reviewed comments from proxy advisors. Generally, we learned that better communication of the committee's thought process behind our executive compensation program and, in particular, explaining the intent behind the short-term and one-time discretionary compensation awards was helpful to shareholders. We then reviewed, with our external committee consultant, the compensation program to ensure we continue to motivate our management during the company's turnaround, while also taking into consideration shareholder concerns. Because there exists a natural time lag in gaining shareholder feedback and approving future compensation program changes, this proxy statement will discuss primarily the program approved for 2014. However, later in our compensation discussion and analysis, we provide an overview of program modifications approved by the committee for the 2015 executive compensation program. For changes approved for 2015, see, "Adoption of Specific Decisions for 2015 Executive Compensation," at the end of this section.

        To assist shareholders in better understanding the committee's decisions relating to 2014 executive compensation, below is a short review of the company's recent history and the committee's efforts to structure the executive pay program to support the company's initiatives.

        In 2014, the company continued to operate in a transitional or transformative period, focusing on two major goals: first—"Fix the Foundation" with a focus on Quality, primarily in our manufacturing operations; and, second—"turbo charge" our growth. The company planned to do so by introducing new products, pricing new products differently, and bringing new products or registering current products in countries where opportunity for more organic growth existed. To meet these two goals, Mike Ball, who was hired in 2011, recruited a number of new senior executives within our Quality and Manufacturing, Operations and Commercial functions.

        In 2012 through 2014, the committee believed it necessary to tailor the executive compensation program to motivate and retain the new management team in the short-term, while positioning the company for long-term growth. Thus, the committee utilized both our formal annual and long-term incentive programs, and also approved short-term incentives for the completion of specific projects.

        Based on the efforts of management under Mike Ball's leadership, we achieved significant progress against our near-term milestones during 2014. The committee believes its focus on a short-term compensation program was an important factor in achieving the company's goals in 2014 and in the long-term. However, as the company emerges from its turnaround period, the committee intends to revise its short-term incentive plan to focus on financial metrics and then allow for an individual modifier based on achievement against individual goals and return to traditional, long-term executive pay. For changes approved for 2015, see, "Adoption of Specific Decisions for 2015 Executive Compensation," at the end of this section.

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        The discussion and analysis that follows describes the company's 2014 executive compensation program, which is based primarily on changes made to the 2013 compensation program:

•

Annual Incentive Plan.  While the committee aligned the annual cash incentive program incentives with shareholder interests and business goals, in 2014 the committee also limited the potential payouts under our program so that the payout under the Corporate Performance Goal component would not exceed the payout under the Net Income Goal component.



•

Funding Mechanism.  The committee continued to utilize a funding mechanism for annual cash incentives, which ensures that payouts would not be funded under the program until at least a threshold level of adjusted net income was achieved.



•

Individual Performance Modifier.  The company applied an individual performance modifier for director-level employees and above. The modifier serves to further differentiate incentive pay, based on exceptional individual performance. The committee believes that recognizing and rewarding individual contribution to our company's success strengthens our company's pay for performance philosophy, and improves the motivational value of the program. On the other hand, the committee also believes in modifying the short-term incentive downward, as low as zero, based on individual performance.



•

Long-Term Equity Incentive Awards.  To balance the performance incentives of our program with our company's need to maintain stability in our management team, the committee granted awards of performance share units, stock options, and time-vested restricted stock units, each representing one-third of each executive's long-term incentive value. Additionally, the committee put in place a ceiling on performance share unit awards at target in the event of negative total shareholder return.



•

Milestone Incentive Award to Chief Executive Officer.  Our CEO's performance-based intermediate-term cash incentive opportunity was carefully designed to align any pay-out with achievement of our company's top strategic imperatives through December 31, 2014, recognizing the importance of Mr. Ball's role in the transformative agenda of our company.

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Compensation Best Practices

        We believe the design and administration of our executive pay program reflects sound principles and governance practices, as highlighted in the table below.

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        During 2014, the committee continued the following compensation best practices:

•

Risk and Claw back.  The committee believes that the executive compensation program does not encourage executives to take unnecessary or excessive risks that could threaten the value of our company. The committee, in keeping with best practices, continues to review its claw back policy, as described more fully under "Other—Executive Compensation Recovery Policy."



•

Share Ownership Requirements.  The committee has established ownership guidelines for our company's officers and directors. If the officer guideline is not met within the required time frame, the guidelines prohibit officers from selling any shares (except to meet tax withholding obligations or the cost of option exercises) until the required levels are met.



•

No Hedging or Pledging.  Officers and directors are prohibited from engaging in any hedging transactions involving our securities, holding our securities in a margin account, or otherwise pledging our securities as collateral for a loan.



•

Incentive Plan Provisions.  Our company's 2004 Long-Term Stock Incentive Plan prohibits the re-pricing or exchange of equity awards without shareholder approval.



•

Retirement Programs.  Our company's legacy pension plan and supplemental pension plan from its former parent company were frozen, as of December 31, 2004. No NEO has benefits under this legacy program.

Discussion of Compensation Program

General Administration

        The compensation committee of the board oversees our executive compensation program. The committee consists entirely of independent directors and approves compensation programs for all of our corporate officers, including our named officers. However, while the compensation committee makes recommendations, it is the independent members of our full board who review and approve all components of CEO compensation. The committee has engaged an independent consultant, Towers Watson, to assist it in the performance of its duties. The consultant regularly provides the committee with analyses of competitive practices and compensation relevant to our company's executive positions and industry. In addition, the committee routinely requests and receives information from the consultant with regard to executive officer pay, long-term incentive award levels and other executive compensation matters of concern to the committee. The consultant reports directly to the committee. The committee has the sole authority to retain or terminate the consultant.

Role of Management in Compensation Decisions

        Our senior vice president and chief human resources officer ("CHRO"), works with our CEO to develop recommendations on matters of compensation philosophy, plan design and specific awards for executive officers. In conjunction with our CHRO, our CEO assesses performance and makes pay recommendations to the committee for each executive officer other than himself. Towers Watson provides competitive data for our senior officers and makes independent recommendations on competitive pay to the committee. The committee considers these recommendations and makes decisions and recommendations as it deems appropriate. In making these decisions and recommendations, the committee considers multiple factors, including individual performance, achievement of goals, desired versus actual competitive compensation, and the importance of retention. For our CEO, Towers Watson prepares compensation recommendations based on the competitive market data, which are reviewed and discussed by the committee in executive session. The committee approves a compensation recommendation for our CEO that is then taken by the chair of our compensation committee to the independent board members for approval. Our CHRO, our CEO, and

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our general counsel typically attend committee meetings, but are not present for any discussion of their own respective compensation.

Principles

        At Hospira, we have designed our pay programs to help reinforce and reward the successful execution of our key strategies. We intend for our programs to reflect competitive market practices and to provide an appropriate mix of short- and long-term rewards to motivate and reward the achievement of our company's goals and strategies in a way that does not encourage unnecessary or excessive risk-taking.

        In order to attract and retain the quality of talent needed to be successful in Hospira's industry in 2014, the committee targeted total direct compensation (the sum of base salary, an annual cash incentive award, and long-term equity incentive awards that are valued, for these purposes, based on the grant date fair value) at up to the 60^th percentile of the market. The targeted amounts are based on an analysis of the compensation practices of the competitive market.

        For 2014, the pay mix for our CEO and our other named officers was, as follows:

Market Data Used to Benchmark Pay

        With the assistance of its independent compensation consultant, Towers Watson, the committee benchmarks all elements of our executive compensation. Our executives' pay elements are benchmarked against a peer group of public companies selected annually from the health care industry that fall within a reasonable range of comparison factors, such as revenue, assets, and market capitalization. The peer companies also reflect Hospira's product markets and the talent pool from which employees are

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recruited. Based on such criteria, the committee included the following companies in the peer group for the competitive analyses for 2014 compensation:

2014 Peer Group Market Data

        Towers Watson reviews the peer group with our committee each year and makes recommendations regarding changes to the peer group. In August 2014, Towers Watson reviewed the peer group and provided recommendations for peer group changes. Towers Watson recommendations were based on its assessment of the peer group, and took into consideration feedback from our shareholders on the 2014 group. Based on the analysis and recommendations, the committee approved a new peer group for use in evaluating 2015 compensation.

        Towers Watson's competitive analyses also include relevant published survey benchmark data from the pharmaceutical, biotech and health sciences industries, which the committee used as a secondary source of information to supplement the peer group analysis. The peer group and published surveys, together, were used to determine market pay opportunities for salary, annual and long-term incentives, and total direct compensation (the sum of base salary, annual cash incentive award and long-term equity incentive awards).

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        When making executive compensation decisions, the committee also reviews executive tally sheets for each named officer, which reflects the total compensation opportunity, realizable compensation, and the aggregate value of all long-term incentive grants.

Hospira Compensation Elements

        Below is a discussion of the three components of our company's total direct compensation: base salary, annual cash incentive award, and long-term equity incentive awards.

Base Salary

        In 2014, we determined and adjusted an executive's base salary taking into consideration sustained performance against individual job responsibilities, the impact of performance on our business results, current salary in relation to the competitive market for the job, experience, potential for advancement and retention. We administered the same standards for base salary increases for Hospira's executives as for other salaried employees.

        Based on competitive data provided by Towers Watson, the salaries of the named officers were at or below the market median of the competitive market. The committee, therefore, increased the base salaries for 2014. The committee determined that a salary increase was appropriate, as retaining the named officers was important to the transformative agenda and growth initiatives of our company. In light of the foregoing, the annual base salaries for the named officers were increased, as follows:

Annual Cash Incentive Award

        Executives have an opportunity to earn an annual cash incentive award. The goal of our annual cash incentive plan for the named officers is to establish a significant link between the award and our success by rewarding participants when we achieve or exceed established financial goals and business objectives. Target opportunities are set at the market median with actual values determined by individual performance and performance against business goals and objectives.

        Our named officers participate in the 2004 Hospira, Inc. Performance Incentive Plan, as amended. The committee determines the participants in the Performance Incentive Plan each year.

        The Performance Incentive Plan originally approved by our shareholders in 2005, is designed to allow for awards to be tax deductible under the requirements of Section 162(m) of the Internal Revenue Code. The Performance Incentive Plan provides for a base award equal to 2.0% of our earnings before interest, taxes, depreciation and amortization for our chief executive officer and 1.0% for each other named officer. In determining actual awards under the Performance Incentive Plan, the committee has the discretion to reduce, but not increase, actual awards from the base awards. In practice, the committee has exercised its discretion to substantially reduce the actual awards from the base awards each year. In exercising this discretion and determining actual awards, the committee establishes goals at the beginning of each performance period and, at the February meeting after completion of the performance period, measures performance against those goals. The committee

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generally has established the same corporate goals and goal weightings for named officers under the Performance Incentive Plan as those corporate goals and goal weightings used for determining awards cascaded to other levels of management. While the committee consults with management in connection with the establishment of these goals, the committee has the sole discretion to set, and measure performance against, these goals.

        The compensation committee added an individual performance modifier for Performance Incentive Plan participants, as well as for all director and vice-president level employees in 2014. Each executive receives a different individual performance modifier, based on the individualized goals set for each executive. The CEO may adjust a participant's annual cash incentive by applying the individual performance modifier for each participant, except Section 16 officers. The compensation committee applies the individual performance modifier for Section 16 officers. For named officers, the calculated incentive payout based on company performance may be adjusted based on achievement of individual performance goals set for each named officer. No award is earned if an individual fails to meet established minimum level performance. Below are the individual 2014 goals for each named officer, as approved by the committee:

        The committee reviews and approves for each officer a target award determined as a percentage of the officer's base salary, which is earned based on performance against Hospira adjusted net income and corporate performance goals ("CPGs"). Those net income and corporate performance goals are initially recommended by management, who then presents such goals to the full board of directors. The full board approves the final performance measures and weighting. Officers may earn more than the target award (up to a maximum set by the committee of two times the target award) if goals are exceeded, or less than the target award if goals are not achieved at the target level, but achieved above a threshold level set by the committee (payment at the threshold level is up to one-half of the target award).

        In 2014, the committee continued to use a funding mechanism established in 2012, under which no payouts are awarded under the program unless our company achieves a threshold level of adjusted net income. This funding concept ensures that Hospira achieves a threshold level of profitability prior to beginning to fund the annual cash incentive pool, and that the entire program will be self-funded.

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        The 2014 financial goals and CPGs were established by the full board to focus executive attention and action on financial and business performance, which the board believed would deliver shareholder return and long-term growth. In establishing these financial goals, the full board consulted with management, reviewed our company's 2014 business plan and then set the financial goals, based upon the execution of the business plan. Thus, it is the board that sets the financial goals and the following measures on which to assess our company's performance.

        For each measure, the board established a threshold, target and maximum level of performance. Maximum levels and potential payouts were established to encourage above-goal performance and results that exceed expectations. Similarly, we believe that if we do not meet our target goals that are

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established to generate shareholder return and long-term growth, management annual cash incentive payments should be reduced accordingly by plan design. Thus, the committee put in place a design change to remove the need to downward modify the bonus awards in the event that corporate performance goal actual performance exceeded adjusted net income. The following table lists the performance measures, weightings, and related threshold, target, and maximum goals for 2014, as well as actual results:

Hospira Performance Incentive Plan Measures