Betty Larson
Merck & Co.About Betty Larson
Betty Larson is Executive Vice President and Chief Human Resources Officer at Merck & Co., Inc., appointed effective April 1, 2024; she is 49 years old with 1 year of tenure as of the 2025 proxy . Her compensation is tied to Merck’s pay-for-performance framework: 2024 revenue grew 10% with strength in oncology (KEYTRUDA +22% to >$29B), and the Company’s annual scorecard paid at 114% based on Revenue, Pre-Tax Income, Pipeline, and Sustainability metrics; relative TSR for the 2022–2024 PSU cycle yielded a 169% payout from EPS and R-TSR goals . Merck’s TSR context at year-end 2024: 1-year -6.2%, 3-year 12.2%, 5-year 6.0% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Merck & Co., Inc. | EVP & Chief Human Resources Officer | 2024–present | Oversees global human capital and talent strategy supporting execution of R&D and commercial priorities |
Fixed Compensation
| Metric | FY 2024 |
|---|---|
| Base Salary ($) | $800,000 |
| Target Annual Incentive (% of Salary) | 100% (prorated for 2024 start) |
| Actual Annual Incentive Paid ($) | $685,246 (Company Scorecard result 114%) |
| Sign-on Cash Bonus ($) | $725,000 (paid within 30 days of start) |
2024 Perquisites and Other Compensation
| Item | Amount ($) |
|---|---|
| Financial/Tax Counseling Allowance | $10,000 |
| Personal Car/Driver | $2,146 |
| Relocation Benefits | $243,254 |
| Savings Plan Match/Credits | $24,923 |
| Total “All Other Compensation” | $280,323 |
Performance Compensation
Annual Incentive Plan – Company Scorecard (FY 2024)
| Metric | Target | Actual | Weighting | Score |
|---|---|---|---|---|
| Revenue ($B) | $64.00 | $64.41 | 35% | 109% |
| Pre-Tax Income ($B, non-GAAP) | $25.70 | $26.15 | 35% | 115% |
| Pipeline | — | — | 20% | 128% |
| Sustainability | — | — | 10% | 100% |
| Total Payout | — | — | — | 114% |
| Betty Larson – EIP Detail | FY 2024 |
|---|---|
| Target Award ($) | $601,093 (prorated) |
| Company Scorecard Result (%) | 114% |
| Final Award ($) | $685,246 |
2024 PSU Grant (Performance Shares)
| Attribute | Details |
|---|---|
| Target # of PSUs | 14,161 |
| Metrics & Weighting | 3-year EPS (50%); 3-year Relative TSR vs primary pharma peers (50%) |
| Performance Period | 2024–2026 (vest based on program results) |
| Max (200% of target) | 28,322 units (payout cap) |
| Plan Design Notes | R-TSR modifier +/-5% per point vs median; cap at 100% if annualized TSR negative; no discretion used in final awards |
2024 Stock Options (Time-based)
| Attribute | Details |
|---|---|
| Options Granted (#) | 89,649 |
| Exercise Price ($/share) | $129.22 |
| Vesting | Equal installments on 1st, 2nd, 3rd anniversaries of 4/30/2024 (first vest 4/30/2025) |
| Expiration | 4/29/2034 |
| Grant Timing Policy | Granted 3rd business day after Q1 earnings; fair market value pricing; no re-pricing without shareholder approval |
2024 Sign-on RSUs (Time-based)
| Attribute | Details |
|---|---|
| RSUs Granted (#) | 34,050 |
| Vesting | 11,350 RSUs each on 4/30/2025, 4/30/2026, 4/30/2027 |
| Market Value at 12/31/2024 | $3,387,294 (computed at $99.48/share) |
| Purpose | Majority replaced forfeited equity at prior employer; balance to incentivize acceptance of role |
Equity Ownership & Alignment
| Ownership Detail | Amount |
|---|---|
| Beneficially Owned Common Shares | 41,232 |
| Options Exercisable within 60 days (as of Mar 3, 2025) | 29,882 |
| RSUs Vesting within 60 days (as of Mar 3, 2025) | 11,350 |
| Unvested RSUs Outstanding | 34,050 (MV $3,387,294 at 12/31/24) |
| Unearned PSUs (Max 200% of target) | 28,322 (MV $2,817,473 at 12/31/24) |
| Shares Pledged as Collateral | Prohibited by policy (hedging and pledging banned) |
| Ownership as % of Outstanding | Each NEO <1% of shares outstanding; MRK shares outstanding 2,521,758,443 |
- Stock ownership policy: executives must hold Company stock at a designated multiple of salary; until met, must retain 75% of after-tax net shares from option exercises and PSU/RSU settlements (100% for CEO) .
- Insider trading policy prohibits hedging, pledging, or short sales by directors and officers .
Upcoming Vesting/Selling Pressure Calendar (time-based awards)
| Date | Instrument | Shares |
|---|---|---|
| 4/30/2025 | RSUs (sign-on) | 11,350 |
| 4/30/2025 | Stock Options (first tranche) | Portion of 89,649; schedules show tranches of 31,055 and 58,594 begin vesting 4/30/2025 |
| 4/30/2026 | RSUs (sign-on) | 11,350 |
| 4/30/2027 | RSUs (sign-on) | 11,350 |
Employment Terms
| Term | Key Provisions |
|---|---|
| Offer Letter (1/16/2024) | Base salary $800,000; EIP target 100%; annual LTI target $2,650,000; sign-on cash $725,000; sign-on equity $5,900,000 ($4.4M RSUs; $1.5M options); continued vesting of sign-on equity if terminated without cause or for good reason before fully vested; relocation benefits; participation in Company’s Change in Control Plan |
| Separation Plan (non-CIC) | Lump-sum severance based on service; continued benefits 26–78 weeks; outplacement; release and covenant compliance required |
| Change-in-Control Plan (CIC) | Double trigger; Cash severance equals 2× (for NEOs) salary + lesser of target bonus or 3-year average actual bonus; pro rata target annual bonus; continued medical/dental/life; pension/retiree medical enhancements if near eligibility; outplacement; continued tax-planning allowance; no tax gross-ups for 280G excise tax |
| Equity in CIC | Double-trigger vesting policy; options may have extended post-termination exercise; RSUs/PSUs accelerated per plan terms |
Potential Payments (Illustrative, assuming termination on 12/31/2024)
| Scenario | Severance Pay | Welfare Benefits Continuation | RSU Acceleration | PSU Acceleration | Total |
|---|---|---|---|---|---|
| Involuntary Termination Before CIC | $400,000 | $13,832 | $3,387,294 | — | $3,815,776 |
| Involuntary Termination After CIC | $3,200,000 | $55,327 | $3,387,294 | $1,408,736 | $8,099,007 |
Compensation Structure Analysis
- Equity-heavy mix: 2024 LTI includes PSUs and options; sign-on RSUs and options front-load time-based equity, creating scheduled vesting through 2027 and potential selling windows each April .
- Strong pay-for-performance linkage: Annual incentive tied to revenue and non-GAAP pre-tax income plus pipeline/sustainability; PSUs linked to 3-year EPS and R-TSR versus peer group .
- Governance safeguards: Robust clawback beyond NYSE 10D-1; double-trigger CIC vesting; hedging/pledging prohibition; independent compensation consultant (FW Cook) and periodic risk assessment (Pay Governance) .
- Shareholder support: Say-on-pay approval ~94% in 2024, indicating broad investor acceptance of program design .
Related Party Transactions and Red Flags
- Related party transactions: Governance Committee reported no transactions requiring Item 404(a) disclosure for 2024 .
- Hedging/pledging: Prohibited for officers/directors (reduces alignment risk) .
- Option repricing: Not permitted without shareholder approval .
- Tax gross-ups: No CIC excise tax gross-ups (shareholder-friendly) .
Compensation Peer Group (Benchmarking context)
Primary pharmaceutical peers used for market comparison include AbbVie, Amgen, AstraZeneca, Bristol-Myers Squibb, Eli Lilly, Gilead Sciences, GSK, Johnson & Johnson, Novartis, Pfizer, Roche, and Sanofi; supplemental benchmarking references the Dow Jones Industrial Average (ex-financials) including 3M, Apple, Boeing, etc. .
Investment Implications
- Alignment: Larson’s incentives are tightly linked to multi-year EPS and relative TSR and annual top/bottom-line delivery, suggesting high sensitivity to execution on pipeline commercialization and margin discipline .
- Selling pressure: Time-based RSU and option tranches vest each April 30 through 2027; monitor Form 4 filings around these dates for potential sales, though ownership policy requires retaining 75% of after-tax shares until guideline compliance, and hedging/pledging are banned, tempering near-term supply risk .
- Retention/CIC economics: Continued vesting of sign-on equity for qualifying terminations reduces forfeiture risk, while double-trigger CIC severance (illustratively ~$8.1M total) indicates standard market protection rather than outsized parachutes; governance guardrails (no tax gross-ups, robust clawback) mitigate shareholder risk .
- Program stability: Strong say-on-pay support (~94%) and independent oversight/consulting reduce the likelihood of adverse comp surprises; company-level momentum (10% revenue growth in 2024; oncology strength) supports meeting future PSU hurdles, but 1-year TSR (-6.2%) underscores market sensitivity to execution and valuation .