Michael Mahoney
BOSTON SCIENTIFICAbout Michael Mahoney
Michael F. Mahoney, age 60, is Chairman, President and CEO of Boston Scientific. He joined as President in October 2011, became CEO and Director in November 2012, and was appointed Chairman in May 2016. He holds an MBA from Wake Forest University and a BA in finance from the University of Iowa. Under his leadership, BSX delivered Adjusted Net Sales of $16.741B (+16.4% ONSG vs 2023), Adjusted EPS of $2.51, Adjusted Operating Income Margin of 27.0%, and a four-year cumulative TSR that grew a fixed $100 investment to $197.52 (vs $148.31 for the S&P 500 Health Care Index) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Johnson & Johnson | Worldwide Chairman, Medical Devices & Diagnostics | Jan 2011–Sep 2011 | Oversaw 50,000 employees across seven franchises |
| Johnson & Johnson (DePuy) | Worldwide Group Chairman (Orthopedics & Neurosciences) | Apr 2007–Jan 2011 | Led orthopedic and neuroscience businesses globally |
| Global Healthcare Exchange (GHX) | President & CEO | Jan 2001–Mar 2007 | Built supply-chain solutions connecting hospitals and suppliers |
| GE Medical Systems | Various; GM, Healthcare IT | ~1989–2001 (12 years) | Led healthcare IT; broad operational grounding in medtech |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| CVS Health Corporation | Director | Current | Public company board |
| Baxter International Inc. | Director | 2015–2023 | Prior public company board |
| Boys & Girls Club of Boston | Board member | Current | Non-profit governance |
| Boston College CEO Club | Chair, Board of Governors | Current | Business leadership network |
| American Heart Association | CEO Roundtable member | Current | Industry health policy/advocacy |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,395,178 | 1,400,000 | 1,400,000 |
| Other Compensation ($) | 92,530 | 190,181 | 193,394 |
| Change in Pension Value ($) | 376,667 | 291,667 | 291,666 |
| Total Reported Compensation ($) | 16,941,961 | 18,723,735 | 21,420,801 |
Notes: CEO’s total direct compensation increased in 2024 driven by higher equity grants and higher annual bonus payout .
Performance Compensation
Annual Bonus Plan (ABP) – 2024 Design and Outcomes
| Metric | Weighting | Target | Actual | Achievement | Unweighted Funding Range |
|---|---|---|---|---|---|
| Adjusted Net Sales | 50% | $15.610B | $16.741B | Above Target (107% of Plan) | 135–155% |
| Adjusted EPS | 40% | $2.25 | $2.51 | Above Target (112% of Plan) | 135–155% |
| Adjusted Operating Income Margin | 10% | 26.7% | 27.0% | Above Target (101% of Plan) | 115–135% |
| Company-wide Applicable Distribution Percentage | — | — | — | — | 150% (no ESG or quality modifications) |
CEO bonus mechanics: Target bonus 155% of base; CEO Individual Performance Modifier 115%; 2024 payout $3,743,000 (173% of target) .
Long-Term Incentives (granted Feb 12, 2024)
| Vehicle | Grant Date | Quantity | Exercise Price | Grant Date Fair Value ($) | Vesting |
|---|---|---|---|---|---|
| ONSG Performance-Based RSUs | 2/12/2024 | 54,816 | — | 5,105,014 | 3-year performance (2024–2026) + service |
| rTSR Performance-Based RSUs | 2/12/2024 | 54,816 | — | 3,562,492 | 3-year rTSR vs S&P 500 Health Care; performance + service |
| Service-Based RSUs | 2/12/2024 | 54,816 | — | 3,562,492 | 4 equal annual installments |
| Non-Qualified Stock Options | 2/12/2024 | 144,516 | $64.99 | 3,562,493 | 4 equal annual installments; 10-year term |
Program design: 50% service-vesting (RSUs/options), 50% performance-based RSUs (ONSG and rTSR); no dividends on unvested awards; options only have value if stock price appreciates . 2022 rTSR PSP earned at 200% of target based on 93rd percentile rTSR; settled Feb 2025 .
Equity Ownership & Alignment
| Category | Detail |
|---|---|
| Beneficial Ownership | 3,628,432 shares; less than 1% of outstanding. Includes 1,701,933 options exercisable within 60 days; 71,667 shares held by a charitable foundation (shared power) and 201,478 shares in a revocable trust (joint trustee) . |
| Options – Key Expirations | 168,635 options @ $17.26 expiring 2/22/2026; additional tranches in 2027–2034 with varying strikes (24.55, 27.09, 40.12, 42.16, 37.50, 44.19, 47.28, 64.99) . |
| Unvested RSUs (service-based) | 18,334 (2021 grant); 32,530 (2022); 49,572 (2023); 54,816 (2024); market values reflect $89.32 closing price at 2024 year-end . |
| Performance RSUs (unearned) | rTSR and ONSG tranches outstanding from 2023 and 2024 grants (e.g., 132,190 and 109,632 units) with market value indications at $89.32 . |
| Ownership Guidelines | CEO must hold ≥6x annual base salary; company states CEO and NEOs are in compliance . |
| Hedging/Pledging | Prohibited for executives/directors; none engaged in hedging or pledging arrangements . |
Implications: 2016 options’ 2026 expiry may prompt exercise decisions; prohibitions on pledging reduce forced-sale risk .
Employment Terms
| Term | Provision |
|---|---|
| Employment Agreement | None; executives do not have employment agreements; benefits delivered via plans/policies . |
| Severance Plan | Applies generally to director-level+ for certain involuntary terminations; executives eligible under ERP or CiC are not eligible for additional severance payments under this plan . |
| Executive Retirement Plan (ERP) Eligibility | CEO eligible; illustrative ERP amount $3,850,000 across multiple termination scenarios (e.g., death/disability/retirement) . |
| Change-in-Control (CiC) | Double-trigger for cash and equity vesting where awards are substituted/assumed; CEO cash severance = 3x (base + target bonus or prior year’s bonus if higher), pro-rata target bonus, up to 3 years benefits; legal fee reimbursement up to $100,000; “best-net” cut to avoid excise tax penalties; non-solicit obligation 2 years . |
| CiC Value Illustration (12/31/2024) | Total value following termination in connection with CiC: $85,210,626 (includes cash severance $16,102,450; accelerated equity $69,046,374; benefits $61,802) using $89.32 share price . |
| Clawbacks | Dodd-Frank mandatory recoupment policy adopted Nov 17, 2023; additional discretionary clawback policies for misconduct causing significant harm . |
| Perquisites | Personal use of corporate aircraft permitted up to $150,000/year for CEO; other executives permitted limited personal use with tax imputation (no gross-ups) . |
| Deferred Compensation | Eligible to defer up to 75% of ABP award under Deferred Bonus Plan . |
| Tax Gross-Ups | No excise tax gross-ups (CiC) and no general income tax gross-ups; relocation benefits include gross-up given broad employee applicability . |
Board Governance
- Board service history: Director since Nov 2012; Chairman since May 2016 .
- Independence: Board determined all directors are independent except Mr. Mahoney (CEO) .
- Dual-role implications: Combined CEO/Chairman structure mitigated by Lead Independent Director (Edward J. Ludwig, re-appointed Feb 2025) who presides over executive sessions, sets agendas with Chair, and can call special meetings; Board is ~90% independent; independent directors held five executive sessions in 2024 .
- Committees: Audit, Compensation, Nominating & Governance, and Risk are comprised of independent directors; employee directors do not receive director fees or equity and do not serve on these committees .
- Board meetings/attendance: Board met seven times in 2024; each incumbent director attended at least 75% of aggregate Board and committee meetings; all directors attended the 2024 Annual Meeting .
Director Compensation (for context; Mahoney receives none as an employee-director)
| Element | Amount |
|---|---|
| Annual cash retainer | $125,000 |
| Annual equity grant value | $215,000 |
| Committee Chair fee (Audit) | $25,000 |
| Committee Chair fee (others) | $20,000 |
| Lead Independent Director fee | $40,000 |
| Director ownership guideline | ≥5x annual cash retainer within 5 years |
Note: Employee directors receive no compensation for Board service; Mahoney’s compensation is covered under Executive sections .
Compensation Structure Analysis
- Pay-for-performance emphasis: ~92.2% of CEO’s 2024 target TDC is at-risk (ABP + LTI), aligning with shareholder value creation .
- Annual bonus: Company-wide ABP funded at 150% (no ESG or quality adjustments) based on above-target performance on Adjusted Net Sales, EPS, and OIM; CEO’s payout at 173% of target (Individual Performance Modifier 115%) .
- LTI shifts: 2024 increased CEO target LTI value to $14.25M to recognize performance and align with peer market levels; mix includes service RSUs, options, and performance RSUs (ONSG and rTSR) with multi-year horizons .
- Repricing/underwater options: Not permitted without stockholder approval .
Say-on-Pay & Shareholder Feedback
| Year | Approval % |
|---|---|
| 2024 | 92.7% |
| 2023 | 92.6% |
| 2022 | 89.7% |
Strong support indicates investor alignment with program design and outcomes .
Performance & Track Record
- Portfolio/category leadership: Major acquisitions and expansions (Axonics, Silk Road Medical, Cortex; agreements for Intera Oncology and Bolt Medical) supporting growth in urology, stroke prevention (TCAR), electrophysiology/mapping, and oncology .
- AFib leadership: WATCHMAN FLX Pro device expansion and TruSteer access system; FARAPULSE PFA system approvals and global adoption; CMS payment enabling concomitant ablation and LAAC, improving patient pathways and hospital efficiency .
- 2024 financial highlights: Adjusted Net Sales $16.741B, Adjusted EPS $2.51, Adjusted OIM 27.0%; GAAP net sales $16.747B, GAAP OIM 15.5%, GAAP EPS $1.25; ONSG +16.4% .
- rTSR performance: 3-year rTSR ranked 93rd percentile for the 2022 PSP; 200% payout .
Risk Indicators & Red Flags
- Hedging/pledging prohibited for executives/directors; none engaged in such arrangements .
- Clawbacks: Mandatory Dodd-Frank policy plus discretionary policies for misconduct .
- Related parties: Noted transactions reviewed and pre-approved (Fitzgerald family members as employees); no related party transactions disclosed for Mahoney .
Compensation Peer Group
- rTSR PSP peer: S&P 500 Health Care Index used for rTSR benchmarking (61–64 companies over 2020–2024 period) .
- Consultant: Semler Brossy serves as independent compensation consultant; peer group review and program oversight .
Equity Grants and Vesting Detail (Outstanding at FY-end 2024)
| Instrument | Grant Date | Exercisable (#) | Unexercisable (#) | Strike | Expiration |
|---|---|---|---|---|---|
| Options | 2/22/2016 | 168,635 | — | 17.26 | 2/22/2026 |
| Options | 2/28/2017 | 296,442 | — | 24.55 | 2/28/2027 |
| Options | 2/15/2018 | 278,086 | — | 27.09 | 2/15/2028 |
| Options | 2/21/2019 | 217,917 | — | 40.12 | 2/21/2029 |
| Options | 2/18/2020 | 243,362 | — | 42.16 | 2/18/2030 |
| Options | 2/17/2021 | 176,886 | 58,963 | 37.50 | 2/17/2031 |
| Options | 2/16/2022 | 93,014 | 93,015 | 44.19 | 2/16/2032 |
| Options | 2/14/2023 | 42,996 | 128,988 | 47.28 | 2/14/2033 |
| Options | 2/12/2024 | — | 144,516 | 64.99 | 2/12/2034 |
Service-based RSUs vest in four equal annual installments; performance RSUs vest upon achievement of program criteria plus service .
Investment Implications
- Incentive alignment: High at-risk pay (92.2%) tied to multi-year ONSG and rTSR drivers and short-term ABP metrics should sustain focus on profitable growth and TSR; strong say-on-pay suggests investor confidence .
- Near-term selling pressure: 2016 options expiring in Feb 2026 (168,635 shares at $17.26) may prompt exercises; monitor potential 10b5-1 plan filings and Form 4 activity for liquidity events. Hedging/pledging bans limit leverage-related selling .
- Retention security: Robust CiC protection (3x cash for CEO, double-trigger equity) and ERP eligibility reduce departure risk during strategic transactions; strong pipeline and acquisitions under Mahoney continue to support growth narrative .
- Governance balance: Combined CEO/Chair structure is counterweighted by empowered Lead Independent Director and independent committees with frequent executive sessions, mitigating independence concerns .
- Performance delivery: Above-target execution on Adjusted Net Sales/EPS/OIM and 93rd percentile rTSR performance validate pay-for-performance calibration; continued ONSG targets through 2026 keep multi-year incentives challenging .