Catherine T. Doherty
QUEST DIAGNOSTICSAbout Catherine T. Doherty
Executive Vice President, Regional Businesses at Quest Diagnostics (DGX). 2024 base salary rate set at $625,000, with an 80% target annual incentive and actual payout of 96.6% of target ($477,789; 77.3% of salary) . Company performance context: 2024 one-year TSR 11.8%, three-year TSR (2022–24) -7.3%, five-year TSR (2020–24) 56.3%; performance share payout for 2022–24 was 157% and for 2021–23 was 186% of target, evidencing strong pay-for-performance linkage . Age and education are not disclosed in the latest proxy.
Fixed Compensation
Salary and Cash Components (Reported)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $594,231 | $600,000 | $618,269 |
| Non-Equity Incentive Plan Compensation ($) | $580,500 | $370,800 | $477,798 |
| All Other Compensation ($) | $39,154 | $34,105 | $46,420 |
| Total ($) | $2,873,309 | $3,158,844 | $3,286,080 |
2024 Base Salary Rate and Target Bonus
| Item | Value |
|---|---|
| 2024 Base Salary Rate ($) | $625,000 |
| Target Incentive (% of Salary) | 80% |
| Actual Payment (% of Target) | 96.6% |
| Actual Payment (% of Salary) | 77.3% |
| Actual Payment ($) | $477,789 |
2024 Perquisites and Company Contributions
| Perquisite/Contribution | Amount ($) |
|---|---|
| 401(k) Matching | $17,231 |
| SDCP Matching Credits | $25,144 |
| Executive Physical | $4,045 |
Performance Compensation
Annual Incentive (SMIP) – 2024 Structure and Adjustments
| Component | Weight (%) | Notes |
|---|---|---|
| Adjusted Diluted EPS | 40 | Adjustments approved per policy |
| Revenue (base + COVID-19 + acquired) | 40 | Combined into single goal |
| Non-financial (patient experience, employee experience, community impact) | 20 | Quantitative and qualitative goals |
| Adjusted Metrics Used for 2024 Incentives | Value |
|---|---|
| Diluted EPS, as reported ($) | 7.69 |
| Adjustments (net) ($) | 1.24 |
| Adjusted diluted EPS for external reporting ($) | 8.93 |
| LifeLabs impact ($) | (0.09) |
| Adjusted diluted EPS for incentive purposes ($) | 8.84 |
| Revenues, as reported ($M) | 9,872 |
| LifeLabs impact ($M) | (241) |
| Revenues for incentive purposes ($M) | 9,631 |
| Doherty – 2024 SMIP Outcome | Value |
|---|---|
| Target Incentive (% of Salary) | 80% |
| Actual Payment (% of Target) | 96.6% |
| Actual Payment (% of Salary) | 77.3% |
| Actual Payment ($) | $477,789 |
Absent LifeLabs exclusion, payouts would have been 122.6% of target; absent all EPS/Revenue adjustments, Doherty’s payout would have been 89.4% of target ($442,186) .
Long-Term Incentives (Equity Mix and 2024 Grants)
| Equity Component | Program Weight | Vesting |
|---|---|---|
| Performance Shares (2024–2026 cycle) | 50% | 3-year cliff |
| Stock Options | 25% | 3-year ratable; 10-year term |
| RSUs | 25% | 3-year ratable (1/3 per year) |
| Doherty – 2024 Grants (2/14/2024) | Shares/Units | Price/Notes | Grant-Date Fair Value ($) |
|---|---|---|---|
| Performance Shares – Target (#) | 8,576 | 2024–2026 cycle | $1,043,699 |
| RSUs (#) | 4,304 | Vests 1/3 annually | $550,073 |
| Stock Options (#) | 17,939 | Exercise $127.81; vests 1/3 annually | $549,821 |
Outstanding Equity Holdings (12/31/2024)
| Grant Date | Options Exercisable (#) | Options Unexercisable (#) | Exercise Price ($) | RSUs Unvested (#) | PSUs Unearned (#) | Market/Payout Values ($) |
|---|---|---|---|---|---|---|
| 2/18/2020 | 26,165 | — | 112.17 | — | — | — |
| 2/17/2021 | 22,105 | — | 121.81 | — | — | — |
| 2/24/2022 | 10,770 | 5,385 | 127.73 | 11,490 | — | RSU MV $1,733,381 |
| 2/23/2023 | 5,055 | 10,112 | 143.33 | 2,559 | 14,768 | RSU MV $386,051; PSU payout value $2,227,900 |
| 2/14/2024 | — | 17,939 | 127.81 | 4,304 | 17,152 | RSU MV $649,301; PSU payout value $2,587,551 |
Equity Vesting/Exercise Activity
| Metric | 2023 | 2024 |
|---|---|---|
| Option Shares Exercised (#) | N/A | 33,103 |
| Value Realized on Option Exercise ($) | N/A | $1,967,007 |
| RSUs Vested (#) | 3,761 | 3,702 |
| RSUs – Value Realized ($) | $548,150 | $466,024 |
| PSUs Earned/Vested (#) | 9,917 | 9,314 |
| PSUs – Value Realized ($) | $1,466,328 | $1,164,436 |
| Total Shares Vested (#) | 13,678 | 13,016 |
| Total Value Realized ($) | $2,014,478 | $1,630,460 |
2021 PSUs paid in 2024: Doherty earned 9,314 shares; company-level weighted factors drove 186% of target for the 2021–2023 cycle .
Equity Ownership & Alignment
| Beneficial Ownership (as of March 7, 2025) | Shares |
|---|---|
| Shares Owned | 64,865 |
| Options Exercisable within 60 Days | 80,515 |
| Total Beneficial Ownership | 145,380 |
| RSUs Underlying (not counted as beneficial under SEC rules) | 7,629 |
| Ownership as % of Shares Outstanding | Less than 1% |
- Stock ownership guidelines: 4x base salary for other executive officers; executives must retain 50% of net shares from vesting/exercise until meeting the minimum; all current NEOs, including Doherty, are compliant as of April 1, 2025 .
- Hedging and pledging by directors/executives are prohibited .
Deferred Compensation (SDCP)
| Item | 2024 Amount ($) |
|---|---|
| Executive Contributions | $100,577 |
| Company Matching Credits | $25,144 |
| Aggregate Earnings | $359,937 |
| Aggregate Balance (12/31/2024) | $4,272,644 |
Employment Terms
- No employment agreements for executive officers .
- Severance Plan: Doherty is a Schedule B participant; non-CoC severance equals 1x base salary plus 1x target annual incentive, with benefits (medical/life coverage up to 12 months; outplacement; lump sum of prior-year Company matches). CoC severance on “qualifying termination” equals 2x base salary and 2x target incentive, plus prorated target bonus, with double-trigger equity vesting .
- Cutback provision applies to avoid 280G/4999 excise taxes; no excise tax gross-ups .
Potential Payments (Assuming 12/31/2024 Termination; Stock $150.86)
| Scenario | Cash Compensation ($) | Accel. Options ($) | Accel. PSUs ($) | Accel. RSUs ($) | Other Benefits ($) | Total ($) |
|---|---|---|---|---|---|---|
| Involuntary Not for Cause (No CoC) | $1,125,000 | — | $2,519,211 | — | Included ($110,000) | $3,754,211 |
| Good Reason/Involuntary in Connection with CoC | $2,250,000 | $614,309 | $5,136,195 | $1,202,807 | Included ($110,000) | $9,313,311 |
Compensation Program Design, Peer Group, and Governance
- Equity mix for NEOs: 50% PSUs, 25% options, 25% RSUs; majority of pay at risk (avg. 80% for non-CEO NEOs in 2024) .
- Compensation peer group (14 companies): Agilent, Baxter, BD, Boston Scientific, DaVita, Henry Schein, Hologic, Illumina, LabCorp, Owens & Minor, Revvity, Stryker, Tenet, Zimmer Biomet .
- Say-on-Pay approval: ~89% FOR at 2024 annual meeting .
- Best practices: double-trigger CoC vesting; clawback policies (discretionary and Dodd-Frank compliant); no hedging/pledging; no excise tax gross-ups; minimum one-year vesting; independent consultant (Pearl Meyer) confirmed independent (Feb 2025) .
Performance Context
| Company TSR vs Benchmarks | 1-Year (2024) | 3-Year (2022–24) | 5-Year (2020–24) |
|---|---|---|---|
| Quest Diagnostics | 11.8% | (7.3)% | 56.3% |
| Compensation Peer Group Median | (2.0)% | (8.3)% | 50.5% |
| S&P 500 Index | 25.0% | 29.3% | 97.0% |
| S&P 500 Health Care Industry Index | 2.6% | 2.6% | 46.9% |
| Performance Share Payouts (Aggregate NEOs) | Payout vs Target (%) |
|---|---|
| 2018–20 (paid 2021) | 195 |
| 2019–21 (paid 2022) | 200 |
| 2020–22 (paid 2023) | 196 |
| 2021–23 (paid 2024) | 186 |
| 2022–24 (paid 2025) | 157 |
Investment Implications
- Alignment: Doherty’s pay is heavily performance-based, with 80% at-risk on average for non-CEO NEOs, PSU metrics tied to revenue growth (50%), ROIC (30%), and relative TSR (20%)—supporting shareholder alignment and value creation focus .
- Retention risk: Schedule B severance (1x non-CoC; 2x CoC) plus double-trigger equity vesting provide retention but with moderate protections versus CEOs; compliance with 4x salary ownership guidelines and retention requirements reduces flight risk .
- Insider selling pressure: 2024 option exercise of 33,103 shares ($1.97M realized) indicates potential liquidity/selling events; recurring February vesting of RSUs/options (2022–2024 grants vesting ratably over three years) can create periodic supply around mid-February; PSUs from the 2024–2026 cycle cliff-vest after 12/31/2026 subject to performance .
- Governance quality: No employment agreement, robust clawbacks, prohibition on hedging/pledging, and no excise tax gross-ups with 280G cutback are positive signals for compensation discipline and shareholder protection .
- Performance sensitivity: Consistent above-target PSU payouts historically (157% in 2025, 186% in 2024) and SMIP adjustments reflect a structured framework balancing operating performance with events like the LifeLabs acquisition exclusion—suggests payouts are calibrated to underlying performance drivers rather than headline GAAP outcomes .