Hubert Allen
ABBOTT LABORATORIESAbout Hubert Allen
Hubert L. Allen (age 59) has served as Executive Vice President, General Counsel and Secretary of Abbott Laboratories since 2013 (elected corporate officer in 2012) . Under his tenure, Abbott’s total shareholder return (TSR) ranked at the 58th percentile versus peers over 1 year and 68th percentile over 5 years, reflecting sustained performance; his 2024 annual incentive included a strategic goal to resolve key litigation and investigations, which was achieved . Abbott announced on May 1, 2025 that Mr. Allen plans to retire after a transition period (8‑K) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Abbott Laboratories | EVP, General Counsel and Secretary | 2013–present | Resolved key litigation and investigations as a 2024 strategic objective (Achieved) |
Fixed Compensation
| Year | Base Salary as of March ($) | Reported Salary ($) |
|---|---|---|
| 2022 | — | 817,615 |
| 2023 | — | 830,000 |
| 2024 | 930,000 | 911,154 |
Notes:
- Base salary increased to $930,000 effective March 2024 .
Performance Compensation
Annual Incentive (2024)
| Component | Weight | Targets | 2024 Result | Goal Score Contribution |
|---|---|---|---|---|
| Adjusted Sales ($B) | 10% | T: $42.288; Th: $41.988; Max: $42.588 | $42.294 | 10.1% |
| Adjusted Diluted EPS ($) | 20% | T: $4.60; Th: $4.50; Max: $4.70 | $4.67 | 27.0% |
| Free Cash Flow ($B) | 10% | T: $5.3; Th: $5.1; Max: $5.5 | $6.4 | 15.0% |
| Gross Margin Profile | 10% | T: 56.2%; Th: 55.6%; Max: 56.8% | 56.2% | 10.0% |
| Other Financial Returns | 10% | Target | Achieved | 10.0% |
| Strategic: resolve key litigation/investigations | 25% | Target | Achieved | 25.0% |
| Human Capital: talent & succession targets | 15% | Target | Achieved | 15.0% |
| Total Goal Score | — | — | — | 112.1% |
| Target Bonus % | — | — | — | 105% |
| Bonus Payout ($) | — | — | — | 1,094,700 |
Footnotes: Adjusted measures and definitions as disclosed; targets not disclosed for certain strategic/returns metrics .
Long‑Term Incentive (LTI)
| Grant date | LTI Adjustment vs Guideline | Options (#) | Exercise Price ($/sh) | PRS/RSUs (#) | Closing Price on Grant Date ($) | Total Grant Value ($) | Vesting/Performance |
|---|---|---|---|---|---|---|---|
| 2/21/2024 | 125% (guideline $3,353,000) | 67,318 | 116.98 | 17,914 | 117.87 | 4,191,250 | Performance‑restricted shares vest only if Adjusted ROE target is met; no partial vesting; in 2024, the ROE target was met and scheduled tranches vested as disclosed . |
Individual LTI performance assessment (2021–2023): Sales/Share Growth +2; Margin +2; Strategic 0; Total +4 → 125% LTI adjustment .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficially owned common shares | 184,806 |
| Ownership as % of shares outstanding | ≈0.011% (184,806 / 1,734,323,411 outstanding as of Jan 31, 2025) |
| Options exercisable within 60 days (1/31/2025) | 949,613 |
| Unvested options outstanding (12/31/2024) | 147,488 |
| Unvested restricted shares (12/31/2024) | 37,007 |
| 2024 option exercises and stock vested | Exercised 157,421 options ($11,026,223 value realized); 18,630 shares vested ($2,236,532) |
| Stock ownership guideline (EVP) | 3x base salary; all named officers with ≥5 years in role meet/exceed |
| Hedging/pledging | Prohibited for directors and officers |
Upcoming vesting indicators (potential selling pressure):
- Options shown to vest per schedule: 31,667 (2/18 tranche) in 2025; 24,251 (2/17 tranche) in 2025 and 24,252 in 2026; 22,439 (2/21 tranche) in 2025 and 22,439 in 2026; 22,440 in 2027 .
- Performance‑restricted share tranches from 2022–2024 awards scheduled to vest annually contingent on Adjusted ROE; 2024 target met and one‑third of 2024 grant vested on 2/28/2025 .
Employment Terms
| Topic | Details |
|---|---|
| Employment agreement | None (no employment contracts for named officers) |
| Change‑in‑control (CIC) structure | Double‑trigger; cash lump sum equal to 3x annual salary + bonus (target or 3‑yr avg, whichever higher), plus unpaid/pro‑rata bonuses and up to 3 years of benefits and pension accruals; reduced to avoid excise tax if beneficial |
| CIC estimated payouts (if CIC on 12/31/2024 and termination under covered circumstances) | Cash termination: $6,814,200; Additional Supplemental Pension Plan benefits: $1,655,355; Welfare/fringe benefits: $59,120 |
| CIC equity treatment | If awards aren’t assumed/converted, unvested options (147,488; $333,216 value) and restricted shares (37,007; $4,185,862 value) would vest; if assumed, vest upon qualifying termination 6 months prior to–2 years after CIC |
| Clawback/recoupment | Dodd‑Frank–compliant clawback adopted in 2023; committee may recover/reduce incentive comp for misconduct or supervisory failure causing material harm (look‑back up to 3 years) |
| Ownership/retention | Robust ownership and share retention requirements; hedging and pledging prohibited |
| Other termination‑related amounts (non‑CIC) | Average annual payments from grantor trusts over 10 years if terminated 12/31/2024: $633,423 for H.L. Allen; one‑time Supplemental Pension Plan deposit: $249,483 |
Pension and Deferred Compensation
| Plan | Years of Credited Service | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) |
|---|---|---|---|
| Abbott Annuity Retirement Plan | 19 | 711,874 | 0 |
| Abbott Supplemental Pension Plan | 19 | 6,478,950 | 442,506 (deposited to individual grantor trust) |
Performance & Program Governance Context
- Company TSR above peer median on 1‑ and 5‑year bases (58th and 68th percentiles, respectively) .
- Say‑on‑pay averaged 91% approval over the last five years, reflecting sustained shareholder support .
- Pay design uses market‑based benchmarks and performance‑based annual and long‑term incentives; LTI mix 50% options/50% performance‑based restricted shares with vesting tied to Adjusted ROE; no option repricing or discounting; capped incentives; no tax gross‑ups .
- Compensation Committee engages an independent consultant (Meridian) that performs no other work for Abbott .
- Peer group spans diversified medtech, diagnostics, pharma and consumer leaders (e.g., J&J, Medtronic, Thermo Fisher, Stryker, Danaher, Becton Dickinson, Boston Scientific, 3M, P&G), with peer median sales $46.1B and market cap $146.9B (Abbott: $42.0B sales; $196.2B market cap at 12/31/2024) .
Employment & Transition Note
- Abbott disclosed that Mr. Allen plans to retire following a transition period (Item 5.02 8‑K dated May 1, 2025) .
Investment Implications
- Alignment and performance: High at‑risk mix (bonus tied to financial/strategic/human capital metrics; LTI tied to multi‑year ROE and individual performance) with robust governance guardrails (clawback, no hedging/pledging, ownership guidelines), and strong company TSR relative to peers support pay‑for‑performance and alignment .
- Near‑term supply/demand from equity vesting: Option tranches and performance shares scheduled to vest through 2027, with one‑third of 2024 PRS already vested in Feb 2025 after meeting the ROE target; 2024 option exercises ($11.0M realized) indicate willingness to monetize, suggesting periodic liquidity events around vesting dates .
- Change‑in‑control economics: Double‑trigger protects shareholders from single‑trigger windfalls; indicative CIC payout for Allen as of 12/31/2024 was $6.8M cash plus pension and benefits, with equity vesting subject to assumption rules—balanced but meaningful .
- Retirement/transition risk: The announced retirement introduces leadership transition in the legal function; however, strong governance processes and succession practices may mitigate disruption .