Stanley Bergman

About Stanley Bergman

Chairman and CEO of Henry Schein since 1989 and a director since 1980; age 75. A CPA and South African Chartered Accountant, Bergman is a graduate of the University of the Witwatersrand and has received multiple honorary doctorates; his biography highlights nearly three decades as Chair/CEO and extensive healthcare industry relationships . Pay-for-performance signals in 2024: CEO total pay is 82% at-risk; HSIP payout to Bergman was $1,813,756 based on mixed performance with EPS under target, while 2022 PSUs vested at a 0% payout in March 2025; 2024 non-GAAP EPS used for incentives was $4.74 and the 5-year TSR measure shows $100 → $106, underscoring muted shareholder returns over the period .

Past Roles

External Roles

Fixed Compensation

• Design: Four components — base salary, annual incentive (HSIP), long-term equity (PSUs/RSUs), benefits/perquisites; CEO pay heavily at-risk (82% in 2024) .
• 2024 CEO cash compensation detail:
  • Salary earned: $1,690,575 .
  • HSIP bonus: $1,813,756 (reflects 70% weighted EPS component and 30% strategic scorecard) .
  • Perquisites and other: $371,141 in 2024, including $157,457 administrative services, $73,925 commuting car service, $23,000 401(k) match, $95,252 SERP contribution, life and travel insurance; certain items included in W-2 .

Performance Compensation

Annual Incentive (HSIP) – 2024 Structure and Outcomes

• CEO weighting: 70% Company Financial/EPS; 30% Strategic Scorecard (financial goals and e-commerce launch objective) .
• EPS goal (for plan purposes): Target $5.04 approved; adjusted to $5.17 for FX, M&A, capital transactions; actual non-GAAP diluted EPS used was $4.74; payout achievement 91.8% translating to 58.9% payout for EPS component .
• Strategic Scorecard: Payout certified at 98.3% for 2024 .

• CEO HSIP result: $1,813,756 paid for 2024 performance .

Long-Term Incentives (LTIP)

• Award mix: 65% PSUs and 35% RSUs for CEO; PSUs: 75% 3‑yr cumulative EPS, 25% 3‑yr average ROIC; PSUs have 3‑year cliff vest; RSUs 4‑year cliff vest (double-trigger vesting on change-in-control; no single trigger) .
• 2024 CEO LTIP grant: 65,726 PSUs and 35,391 RSUs; aggregate grant-date fair value $7,764,800; grant date March 4, 2024 .
• 2022 PSU cycle payout: 0% in March 2025 (achievement 82.1% of adjusted EPS goal; committee made no positive adjustments), citing macro pressure, slower post‑cyber incident recovery, lower PPE pricing, impairments and higher amortization .

Equity Ownership & Alignment

• Beneficial ownership (3/24/2025): 616,877 shares (0.50% of shares outstanding), including direct, spousal/trust holdings, foundation, 401(k), and options exercisable within 60 days (119,089 shares) .
• Unvested awards at FY2024 year-end: 114,071 RSUs (market value $8,032,880 at $70.42) and 56,302 PSUs at target (market value $3,964,787) .
• Options outstanding at FY2024 year-end include tranches at $62.71 and $86.27 with expirations in 2031/2032; portions are fully vested or continue vesting .
• Stock ownership guidelines: CEO must hold at least 6x salary; all executive officers are in compliance .
• Hedging/pledging: Prohibited for executive officers (anti‑hedging and anti‑pledging policy) .

Trading pressure considerations: RSUs are cliff-vested (4 years) and PSUs are 3-year cliff and performance-based, creating concentrated vesting dates; however, hedging/pledging is prohibited, and executive officers must maintain ownership minimums, which can mitigate near-term selling .

Employment Terms

• Term: Amended and restated agreement effective Nov 28, 2022; runs through Dec 31, 2025 with successive one-year extensions unless notice is given .
• Base salary policy: $1,707,000 effective April 1, 2024; salary subject to increases; annual equity intended to place target LTI at or above peer median and total direct comp at or above 50th percentile; no specific inducement grant .
• Annual incentive: Percentage of salary determined by Compensation Committee and tied to performance goals .
• Severance (no CIC): If terminated without cause, good reason, death/disability — salary owed, prior-year incentive if unpaid, pro‑rata current-year incentive (actual), accrued vacation/benefits; plus for without cause/good reason or disability, lump sum 200% of salary and 200% of 3‑year average incentive, retirement plan “make‑up” credit; continued office/admin support and car service for set periods; lifetime medical for Bergman and spouse unless eligible elsewhere (subject to conditions) .
• Change-in-control (CIC): If terminated without cause or resigns for good reason within 2 years post‑CIC (or 90 days pre‑CIC/after first public announcement), lump sum 300% of salary and 300% of higher of prior two years’ incentive; full acceleration of unvested equity (PSUs at target); office/admin support and car service for specified periods; cutback to avoid 280G excise tax unless better after-tax if not cut back .
• Equity treatment: Post‑2022 grants continue vesting or accelerate based on termination scenario; double‑trigger CIC acceleration; PSUs continue based on actual performance in certain cases .
• Restrictive covenants: Non‑compete, non‑solicit, confidentiality; non‑compete generally 1 year post‑termination (eligible cases), extendable to 2 years at company option with salary for extension period; longer if termination for cause or voluntary resignation with 180 days’ notice .

Governance and Board Service

• Roles: Chairman and CEO; the board uses a combined role with a robust Lead Independent Director model (Lead Director: Philip A. Laskawy) and fully independent key committees; independent directors meet in regular executive sessions .
• Independence: CEO is the only non‑independent director nominated in 2025; the board has reduced non‑independent directors over time; six new independent directors since 2021 and two additional nominees tied to a KKR partnership .
• Committees: Audit, Compensation, Nominating & Governance, Regulatory/Compliance & Cybersecurity, Strategic Advisory — all independent membership; 2024 board met 9 times; each director attended ≥75% of meetings of the board/committees served .
• Dual-role implications: The board annually evaluates leadership structure and maintains a Lead Director with defined authorities (agenda setting, liaison, executive sessions, stockholder consultation); the company argues the combined Chair/CEO provides unified leadership, complemented by independent oversight .

Compensation Design, Controls, and Shareholder Feedback

• Changes in 2024: Strategic scorecard within HSIP moved to financial metrics (except e‑commerce launch objective), at least 50% PSUs for executive LTIP (65% for CEO), and added ROIC (25%) to PSU design; maximum HSIP EPS component payout increased to 200% .
• Clawbacks: HSIP and LTIP both subject to expanded clawback provisions (including “Cause” conduct and Dodd‑Frank-compliant policy); long-standing Incentive Compensation Recoupment Policy also in place .
• Say‑on‑pay 2024: 87.8% approval; committee cited ongoing shareholder engagement influencing program refinements .
• Peer group and targets: Expanded compensation peer group to 20 companies for 2024 benchmarking; CEO target LTI ≥ peer median and target TDC ≥ 50th percentile per employment agreement; pay setting targets medians with potential variance based on role/performance .

Performance & Track Record

• Strategic execution: Completed 2022–2024 BOLD+1 plan and exceeded the 2024 target of 40% operating income from high-growth, high-margin businesses; 2025–2027 plan continues shift toward specialty brands, technology, and efficiency .
• Risk management: Post‑October 2023 cyber incident reviews and governance adjustments; dedicated Regulatory/Compliance & Cybersecurity Committee oversight .

Director Service and Compensation (as Director)

• Bergman is a management director (Chair/CEO); non‑employee director compensation does not apply. Board meeting attendance policy and stockholder communications protocols are disclosed; independent director executive sessions occur regularly .

Deferred Compensation and Retirement Programs

• SERP (company-funded supplemental plan): CEO 2024 company contribution $91,273; aggregate SERP balance $5,446,994 .
• Deferred Compensation Plan (executive-funded): CEO contributed $744,154 in 2024; aggregate DCP balance $4,470,691 .

Risk Indicators & Red Flags

• Pay alignment: 2022 PSUs paid 0% at vesting, demonstrating downside risk on long-term performance and restraint on adjustments; strong clawbacks and prohibition on hedging/pledging reduce misalignment risk .
• Governance: Combined Chair/CEO continues; mitigated via Lead Director role and independent committees; board refresh ongoing, including KKR‑linked nominees .
• Tax gross-ups: None for NEOs (other than relocation) .
• Related parties: Audit Committee reviews related-party transactions; no CEO-specific related party transactions disclosed; KKR Strategic Partnership reviewed/approved .

Investment Implications

• Pay-for-performance tilt has strengthened (≥50% PSUs for executives; 65% for CEO) and a 0% payout on 2022 PSUs corroborates downside sensitivity — a supportive alignment signal; however, 2024 EPS underperformed HSIP targets, tempering near-term incentive outcomes .
• Retention continuity appears high despite CEO age (75): auto‑renewing employment to 12/31/2025 with robust severance/CIC protection, lifetime medical, and non‑compete provisions; board discloses ongoing CEO succession planning, which should be monitored for transition risk .
• Insider supply dynamics are moderated by ownership guidelines and anti‑hedging/pledging policies, though cliff‑vesting RSUs/PSUs can create episodic windows for liquidity events; 0% PSU payout in 2025 reduced near-term new share delivery for the CEO .
• Governance watchpoints include the combined Chair/CEO role; mitigants are active Lead Director authority, fully independent committees, regular executive sessions, and shareholder engagement history with program changes reflecting investor input .