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endo | 100 Endo Boulevard | Chadds Ford, Pennsylvania 19317 15
The Compensation Committee regularly reviews industry practices related to executive compensation to better align the
Company’s compensation philosophy with the Company’s business strategy, while reflecting an understanding of the ex-
ternal environment. Recent examples of Compensation Committee actions taken in an effort to best achieve pay for per-
formance in NEO compensation are:
• Revised our “Data Point Companies” (as defined below under the section entitled “COMPENSATION DISCUSSION
AND ANALYSIS”) in order to appropriately compare each NEO’s total compensation to executives in similar posi-
tions and with similar responsibilities at similar companies of comparable size.
• For the annual cash Incentive Compensation (IC) program:
Expanded annual performance management process setting clear financial, strategic, portfolio and orga-
nizational goals utilizing well-defined scorecards across the Company’s various business segments that
closely links pay and performance;
Approved the Company’s annual scorecard of objectives and metrics to reflect business conditions and
the Company’s strategy;
Increased the level of performance required to reach minimum, target, and maximum payout levels; and
Introduced profitability-based program funding criteria in addition to the financial metrics already includ-
ed in the Company and business-level annual scorecards.
• For the equity-based long-term incentives (LTI) program:
Revised the peer group used to measure relative total stockholder return performance for our perfor-
mance share unit (PSU) awards, since the Standard and Poor’s (S&P) 1500 Healthcare Index is more
broadly representative of the overall healthcare environment in which the Company operates; and
Increased the level of performance required to achieve minimum, target and maximum payout levels as-
sociated with the Company’s PSU cumulative target net sales objectives.
• Conducted an assessment of the potential risks associated with compensation arrangements, policies and prac-
tices, confirming that the potential risks associated with our compensation policies and practices are not reason-
ably likely to have a material adverse effect on Endo.
In addition to the actions noted above, the Company has affirmatively determined not to offer new employees gross-up
payments related to excise tax liabilities resulting from a change in control of the Company, as demonstrated by the em-
ployment agreements entered into with Mr. Holveck, Mr. Levin, Ms. McHugh and Dr. Gergel, which do not include an excise
tax gross-up. Mr. Holveck and Dr. Gergel’s employment agreements were amended further to exclude automatic renewal
provisions.
As illustrated by these actions, the Compensation Committee has and will continue to take action to structure our execu-
tive compensation practices in a manner that is performance-based with a view towards maximizing long-term stockholder
value. The Board believes that the executive compensation as disclosed in the CD&A, tabular disclosures, and other narra-
tive executive compensation disclosures in this Proxy Statement aligns with our Data Point Companies’ pay practices and
coincides with our compensation philosophy.
Effect of Proposal
The above say-on-pay resolution is non-binding. The ap-
proval or disapproval of this proposal by stockholders will
not require the Board or the Compensation Committee to
take any action regarding the Company’s executive com-
pensation practices.
The Board values the opinions of the Company’s stockhold-
ers as expressed through their votes and other communi-
cations. Although the resolution is non-binding, the Board
will consider the outcome of the advisory vote on executive
compensation when making future compensation decisions.
The Board recommends that you vote FOR
the approval, on an advisory basis, of the
compensation to be paid to Endo’s named
executive officers as described in the CD&A,
tabular disclosures, and other narrative
executive compensation disclosures in
this Proxy Statement as required by the
Securities and Exchange Commission.