Richard R. DeLuca, Jr.
Merck & Co.About Richard R. DeLuca, Jr.
Executive Vice President and President, Merck Animal Health; age 62; 13 years of tenure at Merck. As an NEO, his pay is tied to Merck’s 2024 operating performance, which delivered 10% revenue growth, with Animal Health up 8%, and company scorecard payout at 114% on Revenue, Pre-Tax Income, Pipeline and Sustainability metrics; 2022–2024 PSUs paid at 169% on EPS and relative TSR outcomes . Merck’s TSR at year-end 2024 was -6.2% (1-yr), 12.2% (3-yr), and 6.0% (5-yr), indicating mixed recent stock performance backdrop for incentive realizations . In May 2025, he announced an $895 million expansion of Merck Animal Health’s De Soto, KS biologics site to meet growing vaccines demand, underscoring strategic execution in his segment .
Past Roles
| Organization | Role | Years (disclosed) | Strategic Impact |
|---|---|---|---|
| Merck Animal Health | Executive Vice President & President | 2018, 2025 | Led Animal Health strategy; retention award in 2024 signals criticality; announced $895M biologics expansion to scale vaccines capacity |
External Roles
No external public company directorships or committee roles disclosed for Mr. DeLuca in the 2025 proxy .
Fixed Compensation
| Component | 2022 (USD) | 2023 (USD) | 2024 (USD) |
|---|---|---|---|
| Base Salary (actual paid) | $840,522 | $910,027 | $958,747 |
| Target Annual Incentive (% of base) | 100% | 100% | 100% |
| Target LTI (grant value) | $3,200,000 | $3,200,000 | $3,200,000 |
| Pension – Present Value (Qualified Plan) | — | — | $557,840 |
| Pension – Present Value (SRP) | — | — | $2,714,690 |
| Deferred Compensation – Company Credits | — | $94,081 (2023 disclosure) | $88,986 |
| All Other Compensation (perqs, match/credits) | $101,011 | $118,931 | $114,511 |
Notes:
- 2024 base salary as of 12/31/24: $962,000; target annual incentive remains 100% .
- Perquisites include $10,000 financial/tax planning; savings plan match/credits; no personal aircraft/car use reported for Mr. DeLuca in 2024 .
Performance Compensation
Annual Cash Incentive – 2024 Company Scorecard
| Metric | Target | Actual | Weight | Payout Score |
|---|---|---|---|---|
| Revenue | $64.00B | $64.41B (adjusted) | 35% | 109% |
| Pre-Tax Income (non-GAAP) | $25.70B | $26.15B (adjusted) | 35% | 115% |
| Pipeline | — | — | 20% | 128% |
| Sustainability | — | — | 10% | 100% |
| Total | — | — | 100% | 114% |
DeLuca’s 2024 annual incentive:
- Target: $962,000
- Company Scorecard Result: 114%
- Final Award Paid: $1,096,680
Long-Term Incentives
| Element | Design / Metric | 2024 Grants | Vesting / Terms | Realization |
|---|---|---|---|---|
| PSUs | 50% 3-yr non-GAAP EPS; 50% 3-yr Relative TSR vs pharma peers; payout 0–200% | 16,976 target shares (2024 grant) | 3-year performance period (2024–2026); dividend equivalents on earned shares | 2022–2024 PSU payout: 169%; DeLuca target 25,594 → final 47,176 shares incl. accrued dividends |
| Stock Options | Align value only if price > grant; fair market value exercise price | 37,500 options @ $129.22; grant date 4/30/2024 | Vest 1/3 annually over 3 years; 10-year term | 2024 option exercises: none for DeLuca |
| Retention RSUs | One-time retention (100% RSUs) | 23,216 RSUs (granted 4/30/2024) | Cliff vest on 4/30/2027, subject to continued employment | — |
Pay Mix and Outcomes (Summary Compensation)
| Year | Stock Awards (USD) | Option Awards (USD) | Non-Equity Incentive (USD) | Total Compensation (USD) |
|---|---|---|---|---|
| 2022 | $2,264,301 | $899,993 | $1,513,000 | $5,618,828 |
| 2023 | $2,369,846 | $959,999 | $1,369,000 | $6,197,890 |
| 2024 | $5,699,835 | $960,000 | $1,096,680 | $9,098,531 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (3/3/2025) | 467,549 shares; less than 1% of outstanding shares |
| Right to Acquire (within 60 days) | 287,290 shares via vested options |
| Savings Plan Shares | 1,266 shares via Merck U.S. Savings Plan trustee |
| Unvested RSUs | 23,216 RSUs (retention grant as of 12/31/2024) |
| PSUs Outstanding (max potential) | 42,110 (2023 grant, max) and 33,952 (2024 grant, max) unearned PSUs |
| Options Outstanding | Multiple series, incl. 37,500 unexercisable (2024 grant) with standard 3-year vesting |
| Ownership Guidelines | Executives must hold a multiple of base salary; until met, must retain 75% of net shares from exercises/settlements (100% for CEO) |
| Hedging/Pledging | Prohibited for directors and officers (no hedging, pledging, short sales) |
| Insider Selling Pressure | No option exercises by DeLuca in 2024; PSU/RSU vesting occurred consistent with plan |
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Agreement | No individual employment agreement disclosed; covered by company plans |
| Severance (U.S. Separation Plan) | Cash severance based on service (up to 78 weeks), benefits continuation, outplacement; general release required |
| Change-in-Control Plan | Double-trigger; cash severance: 2x salary+bonus for NEOs; pro rata bonus; benefits continuation; vesting/bridging; no tax gross-ups |
| Equity Treatment (Retirement/Separation) | Pro-rata vesting rules for RSUs/PSUs; option exercise windows; specific retirement/involuntary termination provisions |
| Clawback Policy | Dodd-Frank compliant plus broader misconduct/reputation-based recoupment across cash/equity |
Estimated payments if terminated on 12/31/2024:
- Involuntary termination after change-in-control: Total $7,499,396; includes severance $3,848,000, benefits $31,723, accelerated PSUs $1,808,712, accelerated RSUs $1,796,310, and outplacement/financial planning $14,650 .
- Involuntary termination before change-in-control: Total $1,103,512; includes severance $1,073,000, benefits $15,862, outplacement/financial planning $14,650 .
Investment Implications
- Pay-for-performance alignment: Annual incentives are formulaic off core financials (Revenue, Pre-Tax Income) and R&D Pipeline, with PSUs driven 50/50 by three-year non-GAAP EPS and relative TSR; 2024 scorecard at 114% and 2022–2024 PSU payout at 169% reflect strong operating execution, supporting realized equity value for DeLuca and alignment with shareholders .
- Retention risk and signal: A $3 million RSU retention award vesting in 2027 indicates high retention priority for Animal Health leadership amid sector dynamics; vesting cliff and double-trigger change-in-control provisions reduce near-term voluntary exit risk but concentrate 2027 event risk; watch for incremental retention actions as Animal Health scales (e.g., De Soto expansion) .
- Selling pressure: No option exercises in 2024 and prohibited hedging/pledging reduce mechanical selling pressure; PSU and RSU vestings can still create periodic liquidity events—monitor Form 4s around vest dates and Q1 earnings grant cycles .
- Alignment and exposure: Meaningful beneficial ownership and large exercisable option position (287k within 60 days) tie upside to MRK’s stock; change-in-control benefits are standard and without tax gross-ups, limiting governance red flags; ongoing 94% say-on-pay support suggests investor acceptance of program design .