Aaron Falcione
Organon &About Aaron Falcione
Executive Vice President and Chief Human Resources Officer at Organon since 2021; age 54 as disclosed in the 2025 proxy. He holds a master’s in industrial psychology from Kent State University and a bachelor’s from the University of Maryland . Prior roles include senior HR leadership at Merck (global commercial, emerging markets, ex‑US) and VP HR at Siemens AG, plus earlier experience in PwC’s M&A services practice . Company performance context relevant to incentive alignment during his tenure: 2024 revenue grew 3% YoY on a constant-currency basis and adjusted EBITDA margin was 30.6%, driving a 134% AIP payout; 2021/2022 PSU awards across the company paid at 50.87% and 58.75% of target, respectively .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Merck & Co., Inc. | VP, Human Resources – Global Commercial Organization | 2018–2021 | Led global commercial HR; diversity, engagement, compensation & benefits leadership |
| Merck & Co., Inc. | HR Lead – Emerging Markets | 2014–2017 | Built HR operating model across emerging markets |
| Merck & Co., Inc. | HR Lead – All Markets ex‑US | 2017–2018 | Oversaw HR across all non‑US markets |
| Siemens AG | Vice President, Human Resources | Not disclosed | Senior HR leadership; talent and operations |
| PricewaterhouseCoopers | Roles in M&A services practice | Not disclosed | HR/people diligence across transactions |
External Roles
None disclosed in Organon’s proxy or filings for Aaron Falcione .
Fixed Compensation
| Element | Aaron Falcione (Disclosed?) | Company Program Notes |
|---|---|---|
| Base salary | Not disclosed in proxy tables (not an NEO) | Base salary set by role, market, proficiency, performance |
| Target bonus (%) | Not disclosed in proxy tables (not an NEO) | AIP metrics: Constant Currency Revenue (40%), Adjusted EBITDA (40%), Organizational Health (20%) |
| Pension/SERP | Not disclosed for Falcione | Company does not highlight SERP for executives; AIP used for annual incentives |
Performance Compensation
| Metric | Weighting | Target Definition | Actual (2024) | Payout/Outcome | Vesting/Timing |
|---|---|---|---|---|---|
| AIP – Constant Currency Revenue | 40% | Annual Board‑approved plan | +3% YoY (company) | Contributed to 134% company scorecard payout | Annual cash award |
| AIP – Adjusted EBITDA | 40% | Annual target aligned to plan | $2.109B (adjusted vs $1.958B reported basis as defined) | Contributed to 134% company scorecard payout | Annual cash award |
| AIP – Organizational Health Priorities | 20% | Engagement, ERP launch, TSA exits | 190% overall OH performance; ERP ahead of schedule; 90 TSA exits vs target 80 | Contributed to 134% company scorecard payout | Annual cash award |
| LTI – PSUs: Free Cash Flow | 50% | 3‑year cumulative FCF; goals set annually | Not disclosed | Pays on 3‑year results; 2021 PSU payout 50.87% of target; 2022 PSU payout 58.75% | Vest at 3 years (e.g., 2024–2026 cycle) |
| LTI – PSUs: Constant Currency Revenue | 25% | 3‑year cumulative revenue; goals set annually | Not disclosed | Circuit breaker: 2‑year Adjusted EBITDA threshold required for any payout on financial components | Vest at 3 years |
| LTI – PSUs: Relative TSR | 25% | 3‑year relative TSR vs peer index | Not disclosed | Monte Carlo valuation for grant; performance determines payout | Vest at 3 years |
| LTI – RSUs | 25% of LTI mix | Time‑based | N/A | Value depends on stock price | 3 equal annual installments over 3 years |
| LTI – NQSOs | 25% of LTI mix | Options (only valuable if stock rises) | N/A | Performance‑linked via price appreciation | 3 equal annual installments over 3 years |
Equity Ownership & Alignment
| Policy/Item | Requirement/Status | Notes |
|---|---|---|
| Executive stock ownership guideline | 3× base salary for executive officers other than CEO | CEO 6×; other Section 16 officers 1.5× |
| Retention requirement | Retain 50% of after‑tax shares until guideline met (CEO 75%) | RSUs count toward guideline; options and unearned PSUs do not |
| Compliance status | As of Dec 2024, 2 NEOs met/exceeded; others on pace | Falcione’s specific status not disclosed |
| Hedging/pledging | Prohibited for directors and specified key employees, including officers | Short sales and publicly traded options also prohibited |
| Clawbacks | Dodd‑Frank compliant clawback; company recoupment for egregious conduct | Plan also subjects all incentives to clawback/recoupment |
| Double‑trigger vesting | Required for equity awards in change in control | PSUs convert to time‑based RSUs at target upon change in control; vest on qualifying termination |
Employment Terms
| Plan/Agreement | Trigger | Cash Multiple | Pro‑rata AIP | Benefits Continuation | Tax Gross‑Up | Notes |
|---|---|---|---|---|---|---|
| Executive Severance Program (Severance Plan) | Termination without cause | 1× base salary + target bonus for executive officers (CEO 2×) | Yes, if termination between June 30–Dec 31; paid at target for year of termination | Up to 12 months (CEO medical/dental 24 months; basic life 18 months; legacy service rules may extend) | No excise tax gross‑ups; payments reduced to avoid excise if net after‑tax higher | Applies to executive officers; release required; forfeiture for breach |
| Executive CIC Severance Program (CIC Severance Plan) | Double trigger: change in control + termination without cause or resignation for good reason within 2 years | 2× base salary + target bonus | Yes (pro‑rata at target) | Lump‑sum to offset up to 24 months of medical/dental continuation | No excise tax gross‑ups; reduction clause applies | Equity awards fully vest upon qualifying termination; PSUs convert to RSUs at target on change in control |
Vesting Schedules and Potential Insider Selling Pressure
| Award Type | Standard Vesting | Additional Notes |
|---|---|---|
| RSUs | 3 equal annual installments over 3 years, subject to continued employment | RSUs count toward ownership guidelines; retention of 50% after‑tax shares until guideline met |
| NQSOs | 3 equal annual installments over 3 years, subject to continued employment; exercise price set at grant | Options are only valuable if stock price increases; unexercised options do not count toward ownership guidelines |
| PSUs | 3‑year performance period; vest at end of cycle based on FCF, revenue, and relative TSR, with EBITDA circuit breaker | Upon change in control, PSUs convert to time‑based RSUs at target; vest on qualifying termination |
Retention and selling pressure mitigants:
- Ownership retention requirements (50% of after‑tax shares) until guideline met meaningfully constrain discretionary selling .
- Hedging and pledging prohibitions reduce alignment risk and leverage‑related forced selling .
Performance & Track Record
- 2024 operating outcomes: +3% constant-currency revenue growth; 30.6% adjusted EBITDA margin; AIP payout at 134% based on financial and organizational health goals .
- Organizational execution: employee engagement above median benchmark; ERP launch ahead of schedule; exits of 90 TSAs vs target 80, yielding 190% OH performance score .
- Long-term incentives signal balanced pay-for-performance: PSUs incorporate FCF, revenue, and relative TSR; 2021 and 2022 PSU payouts at 50.87% and 58.75% suggest disciplined calibration of goals and realized outcomes .
Compensation Committee & Governance
- Talent Committee members: Carrie S. Cox (Chairman), Philip Ozuah, M.D., Ph.D., Grace Puma .
- Independent compensation consultant, median peer group calibration, caps on payouts, double‑trigger equity vesting, robust clawbacks; no repricing of underwater options without shareholder approval; no change-in-control tax gross‑ups .
Compensation Structure Analysis
- Mix emphasizes performance: more than 60% of target compensation for NEOs is performance‑based (AIP, PSUs, NQSOs), aligning management incentives with shareholders; LTI mix 50% PSUs, 25% RSUs, 25% NQSOs .
- Metrics strengthened in 2024 PSUs: added cumulative constant‑currency revenue (25%) and EBITDA circuit breaker for financial components, tightening payout gates .
- Governance guardrails: clawbacks exceeding minimum legal requirements, strict hedging/pledging prohibitions, and formal ownership requirements support alignment and risk control .
Equity Ownership Details (Falcione)
Not explicitly disclosed in the 2025 proxy’s beneficial ownership tables (which summarize NEOs and directors) . Executive ownership guideline of 3× salary and retention obligations apply, with annual compliance reviews by the Talent Committee .
Employment Terms (Falcione-Specific Notes)
Falcione’s employment was established via Merck letter agreements effective at spinoff; no fixed term; terms governed by performance and company plans/policies, including Severance and CIC Severance Programs . Non‑compete, non‑solicit, or garden leave specifics are not disclosed; severance and CIC provisions above would apply given executive officer status .
Investment Implications
- Alignment and retention: Ownership guidelines, retention rules, and prohibitions on hedging/pledging reduce misalignment and forced selling risk; clawbacks add accountability .
- Pay‑for‑performance: Strong linkage through AIP (revenue/EBITDA/OH) and PSUs (FCF/revenue/relative TSR with EBITDA threshold) encourages value creation and cash discipline; recent company payouts reflect rigorous calibration .
- Change‑of‑control economics: Double‑trigger severance (2× under CIC plan) and equity acceleration mechanics are competitive yet bounded (no excise tax gross‑ups), limiting excessive parachute risks while supporting retention through uncertainty .
- Disclosure gaps: As a non‑NEO, Falcione’s exact salary, bonus targets, and personal holdings are not disclosed; monitoring future proxies and any Form 4 filings would be necessary to assess individual selling pressure and compliance status .