Mark Mlotek
HENRY SCHEINAbout Mark Mlotek
Mark E. Mlotek (age 69) is Executive Vice President and Chief Strategic Officer of Henry Schein, Inc. and has served as a director since 1995; his directorship ends May 22, 2025. He joined the company in 1994, previously serving as VP, General Counsel & Secretary (1994–1999) and leading Corporate Business Development (2000–2012). He oversees global strategic planning and Henry Schein’s M&A/business development, with deep legal/M&A expertise from his prior partnership at Proskauer Rose LLP . Company performance indicators used for pay-for-performance include non-GAAP EPS of $4.74 in 2024 and TSR value of $106 vs Dow Jones U.S. Health Care Index peers at $144 (base $100 in 2019), reflecting a challenging period impacted by a 2023 cyber incident and macro headwinds .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Henry Schein, Inc. | EVP & Chief Strategic Officer | 2012–present | Leads global strategic planning and corporate development; key to growth via acquisitions and innovation |
| Henry Schein, Inc. | SVP/EVP, Corporate Business Development Group | 2000–2012 | Drove M&A and business development across segments |
| Henry Schein, Inc. | VP, General Counsel & Secretary | 1994–1999 | Built legal function; supported early corporate growth |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Proskauer Rose LLP | Partner (M&A, reorganizations, tax) | 1989–1994 | Brought large-firm deal experience; HSIC’s principal law firm |
Fixed Compensation
- 2024 base salary: $736,250; HSIP target bonus: $775,000 (105.3% of base); actual HSIP bonus paid: $768,489; “All Other Compensation”: $70,671 (401(k) match, insurance, SERP contribution, 30-year service award) .
- Program changes in 2024: base salary up 7.9%; HSIP target up 4%; LTIP grant value up 7% (market benchmarking) .
Multi-year compensation (Summary Compensation Table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $658,819 | $688,242 | $736,250 |
| Stock Awards ($) | $1,480,007 | $1,870,000 | $2,000,000 |
| Option Awards ($) | $369,993 | $0 | $0 |
| Non-Equity Incentive Plan Compensation ($) | $692,150 | $597,065 | $768,489 |
| All Other Compensation ($) | $65,798 | $61,917 | $70,671 |
| Total ($) | $3,266,767 | $3,217,224 | $3,575,410 |
Performance Compensation
HSIP (Annual Incentive) – 2024 Design and Outcomes
| Component | Weighting | Target | Actual | Payout | Notes |
|---|---|---|---|---|---|
| Company Financial (EPS) | 30% (NEOs) | $5.04 EPS | $4.74 EPS | 58.9% of component | Max 200%; pre-set adjustments permitted |
| Business Financial/Individual | 40% (NEOs) | Varies by role (operating income, expense budgets, initiatives) | Not disclosed | Not disclosed | Max 115–200% depending category |
| Strategic Scorecard | 30% (NEOs) | Financial goals incl. high-growth businesses; global e-commerce launch; corporate brands/One Schein | Achieved | 98.3% of component | Max 115%; <70% (financial) or <50% (non-financial) = 0% |
Mlotek’s HSIP-specific business goals included expense budgets for M&A and Corporate Business Development, post-acquisition operating income, JV integration leadership, and strategic planning initiatives .
LTIP (Equity Incentives)
- Grant mix: 50% PSUs / 50% RSUs for NEOs in 2024; CEO at 65%/35% .
- 2024 PSU performance metrics: three-year cumulative EPS (75%) and three-year average ROIC (25%); payout 0–200%; goals adjusted for FX, capital transactions, acquisitions/dispositions per pre-set rules .
- Vesting schedules: PSUs vest 100% on 3rd anniversary subject to performance; RSUs vest 100% on 4th anniversary; pro-rata or accelerated vesting for qualifying terminations/change-in-control .
- 2022 PSU cohort: paid 0% at March 2025 vest (82.1% of cumulative EPS goal achieved; cyber incident and macro/PPE pricing impacted results); Compensation Committee made no adjustments .
2024 equity grants:
| Item | Grant Date | Shares/Units | Vesting | Grant-Date FV |
|---|---|---|---|---|
| PSUs (target) | 03/09/2024 | 13,376 | 100% at 3 years, perf-based | $2,000,000 (aggregate PSU+RSU) |
| RSUs | 03/09/2024 | 13,376 | 100% at 4 years, time-based | Included above |
Option awards:
- No options granted in 2024; company does not issue performance-based options; standard option term is 10 years .
- Outstanding (year-end 2024): 35,798 and 9,186 options exercisable (two grants), strikes $62.71 and $86.27, expiring 03/03/2031 and 03/16/2032; no options unexercisable for Mlotek .
Vesting and realized value in 2024:
- Shares vested (RSUs from 2020 grant): 7,947 shares; value realized $610,965 at $76.88 close (vest date adjusted to prior business day) .
Equity Ownership & Alignment
- Beneficial ownership: 68,534 shares (<0.50% of class); breakdown: 8,952 direct, 5,916 indirect (trustee), 49,578 options exercisable within 60 days, 4,088 in 401(k); anti-hedging and anti-pledging policy prohibits pledging; all executives comply with ownership guidelines .
- Executive ownership guidelines: direct CEO reports must hold ≥3x salary and at least 20% of salary in common stock; may sell ≤75% of equity value above the requirement; compliance confirmed .
Outstanding equity at FY2024 year-end:
| Item | Quantity | Value |
|---|---|---|
| RSUs – not vested | 50,595 | $3,562,900 |
| PSUs – unearned (target) | 11,322 | $797,295 |
| Options – exercisable | 35,798; 9,186 | N/A (strike $62.71; $86.27) |
Employment Terms
- Change-in-control agreements (NEOs other than CEO): double-trigger benefits if terminated without cause or for good reason within 2 years of a change-in-control (or within 90 days prior/after first public announcement), including cash severance, pro-rata annual incentive based on actual achievement, immediate vesting of stock options/RSUs/PSUs (PSUs at target), and 24 months health/welfare continuation; excise-tax cutback to safe harbor applies; non-solicit of employees for 24 months .
- Mlotek estimated CIC termination benefits (as of Dec 27, 2024): cash severance $4,729,390; 2024 annual incentive $768,489; benefits $48,292; equity acceleration $5,804,650; total $11,350,821; no tax gross-ups .
- Death/disability equity acceleration (year-end 2024 values): $4,751,607 (RSUs, PSUs at target, options fully vest) .
- Clawbacks: HSIP bonuses subject to recoupment if competitive activity or restrictive covenant violations within one year of payment; Feb 2024 amendments added clawback triggers for conduct reasonably expected to constitute “Cause” and aligned HSIP with Dodd-Frank and company recoupment policies .
Performance & Track Record
Pay-versus-performance and non-GAAP EPS (consistent methodology):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Non-GAAP diluted EPS (consistent basis) | $5.38 | $4.50 | $4.74 |
| TSR value of $100 (Company) | $120 | $114 | $106 |
| TSR value of $100 (Peer Index) | $136 | $139 | $144 |
Company financials (context for incentive metrics):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenues ($ USD) | $12,647,000,000 | $12,339,000,000 | $12,673,000,000 |
| EBITDA ($ USD) | $1,081,000,000* | $950,000,000* | $1,014,000,000* |
| EBITDA Margin (%) | 8.55%* | 7.70%* | 8.00%* |
| Net Income ($ USD) | $538,000,000 | $416,000,000 | $390,000,000 |
*Values retrieved from S&P Global.
Key observations:
- 2024 HSIP EPS component paid at 58.9% given $4.74 non-GAAP EPS versus an adjusted goal; Strategic Scorecard paid 98.3% .
- 2022 PSU cohort paid 0% (82.1% EPS achievement vs threshold), indicating a strict pay-for-performance framework amid cyber/macro pressures .
Investment Implications
- Alignment: High share of at-risk pay (HSIP + PSUs/RSUs) and strict PSU outcomes (0% payout for 2022 cohort) reinforce pay-for-performance discipline; expanded clawbacks heighten accountability and reduce windfall risk .
- Retention vs cost: Mlotek’s CIC package (3x multiple applied for certain calculations per footnote; total $11.35M at 2024 year-end) suggests stronger protection than some peers, potentially increasing change-in-control costs while helping retain key deal talent .
- Insider supply: Unvested RSUs (50,595 units) and PSUs (11,322 target) represent future potential supply; RSUs cliff vesting creates lumpy settlement dates (2024 grant vests in 2028), while no option exercises in 2024 and a 0% PSU payout temper near-term selling pressure; 7,947 shares vested in 2024 at $76.88 .
- Governance/ownership: Anti-hedging/pledging and robust ownership guidelines (≥3x salary for CEO reports; compliance affirmed) mitigate misalignment risk and pledging red flags .
- Execution risk: HSIP EPS underperformance and TSR trailing peers in 2024 reflect operational/market headwinds (recovery from 2023 cyber incident, PPE pricing normalization), emphasizing the importance of strategic execution under M&A and digital initiatives overseen by Mlotek .
Say-on-pay support remained solid at 87.8% (2024), and the Compensation Committee’s 2024 design refinements (more financial metrics, ≥50% PSUs) align with shareholder feedback .