DEF: Henry Schein Seeks Stockholder Approval for Director Elections, Executive Pay, and Auditor Ratification at 2025 Annual Meeting

Henry Schein is holding its 2025 Annual Meeting of Stockholders virtually on May 22, 2025, to vote on director elections, executive compensation, and auditor ratification.

Summary

• Henry Schein, Inc. will hold its 2025 Annual Meeting of Stockholders virtually on May 22, 2025.
• Stockholders of record as of March 24, 2025, are entitled to vote.
• The meeting will address the election of twelve incumbent directors and two new directors (contingent on regulatory approvals), approval of executive compensation, and ratification of BDO USA, P.C. as the independent registered public accounting firm.
• The company is taking advantage of SEC rules allowing proxy materials to be furnished online.
• KKR will make an additional $250 million investment in the Company's common stock at a price of $76.10 per share.
• Following KKRs investment, KKR will own approximately 12% of the Company's common stock.
• KKR will also have the ability to purchase additional shares via open market purchases up to a total stake of 14.9% of the outstanding common stock of the Company.

Sentiment

Score: 6

Explanation: The document presents a mix of positive and negative elements. The strategic investment by KKR and ongoing stock repurchase program are positive signals. However, the cybersecurity incident, the contingent nature of director elections, and the 0% payout of PSUs due to missed performance goals temper the overall sentiment.

Positives

• The company is engaging with stockholders to align programs with their priorities.
• The Board of Directors has added six new independent directors since 2021.
• The company continues to return capital to stockholders through stock repurchases, with $380 million authorized and available as of December 28, 2024, and an additional $500 million authorized on January 27, 2025.
• The company hired a new Chief Information Security Officer in September 2024.
• KKR's strategic investment demonstrates confidence in the company's future.

Negatives

• The election of Max Lin and William K. Dan Daniel as directors is contingent on receiving certain regulatory approvals, and their nominations may be withdrawn if these approvals are not received by the date of the Annual Meeting.
• The company experienced a cybersecurity incident in October 2023, which primarily affected the operations of its North American and European dental and medical distribution businesses.

Risks

• Failure to obtain required regulatory approvals could delay the appointment of new directors.
• Cybersecurity incidents pose an ongoing risk to the company's operations and financial reporting.
• Macro-economic conditions and slower recovery from the October 2023 cyber incident could impact financial performance.

Future Outlook

The company looks forward to advancing the opportunities contained in its updated 2025-2027 BOLD+1 Strategic Plan and to continue to tie a significant portion of its annual cash bonus compensation to directly reflect those strategic priorities.

Management Comments

• Stanley M. Bergman, Chairman and Chief Executive Officer, looks forward to discussing the company's plans for the future at the Annual Meeting.

Industry Context

The document highlights Henry Schein's position as the world's largest provider of health care products and services to office-based dental and medical practitioners, operating in a competitive global environment.

Comparison to Industry Standards

• The Compensation Committee benchmarks executive compensation against a peer group of companies engaged in the distribution and/or manufacturing of healthcare products or industrial equipment and supplies, including Cencora, Inc., Avantor, Inc., Baxter International Inc., Cardinal Health, Inc., DaVita Inc., Dentsply Sirona Inc., Encompass Health Corporation, Genuine Parts Company, Insight Enterprises, Inc., Laboratory Corporation of America Holdings, Owens & Minor, Inc., Patterson Companies, Inc., Quest Diagnostics Incorporated, Select Medical Holdings Corporation, Steris PLC, Tenet Healthcare Corporation, Universal Health Services, Inc., US Foods Holding Corp., WESCO International, Inc. and W.W. Grainger, Inc.
• The company targets compensation at the median of the market and calibrates both annual and long-term incentive opportunities to generate less-than-median awards when goals are not fully achieved and greater-than-median awards when goals are exceeded.

Management Changes

Corporate Governance

Related Party Transactions

• The company entered into a Strategic Partnership Agreement with KKR, which became a greater than 5% shareholder in March 2025.
• Mr. Connett has one family member and Mr. Breslawski has two family members who are non-executive employees of the Company or its subsidiaries and where such employees aggregate compensation for fiscal 2024 was in excess of $120,000.

Stakeholder Impact

• The company's actions aim to create shared value for its business and the communities it serves, while engaging key stakeholders including Team Schein Members (TSMs), customers, suppliers, stockholders, and society.
• The company is focused on building environmental, social, and economic value for sustained growth and continued success as a trusted partner and leader in health care.

Next Steps

• Stockholders are urged to cast their vote on the proposals outlined in the proxy statement.
• The company will continue dialogues with stockholders to ensure programs reflect their priorities.
• The Board of Directors will consider the outcome of the advisory vote on executive compensation when making future compensation decisions.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Board of Directors, Director Election, Executive Compensation, BDO USA, KKR, Stock Repurchase, Cybersecurity, Corporate Governance