Company: ISRG
Filing Date: 2025-03-14
Form Type: DEF 14A
Source: 0001035267-25-000098
Chunk: 101

Company: INTUITIVE SURGICAL INC
Filing Date: 2025-03-14
Form: DEF 14A
Chunk 101
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 including our NEOs, having a continuing stake in our long-term success. It is widespread market practice, particularly for highly sought-after executives, that employment or severance pay agreements provide for at least partial vesting of equity awards upon certain types of termination events, such as in connection with a change in control. Consistent with market practices, we believe some reassurance of accelerated vesting of these equity awards in certain, limited termination circumstances is critical in attracting and retaining senior executives over the long term. As described in the “Potential Payments Upon Termination or Change in Control” section, equity awards for our NEOs are generally accelerated in the event of a change-in-control-related termination, and, therefore, these awards may violate the arbitrary limitation in the policy requested by the proposal, as the proposal applies to a termination of an NEO for any reason. Further, the proposal could limit our executives’ ability to realize the full value of their awards by imposing an arbitrary limit on all severance benefits, particularly in a change-in-control context, which is the only situation in which we currently provide severance benefits, thereby discouraging the use of such equity incentive awards. This would be detrimental to the Company and its stockholders, because we believe that these awards best meet our overall goals of alignment with long-term performance, stockholder value creation, and retention of our executive officers.

The proposed policy’s application to “named executive officers” results in inconsistent application and would significantly hinder our efforts to retain key leaders, which could be detrimental to the execution of our strategy.

The policy proposed by this stockholder proposal would apply to NEOs only. However, an employee new to the Company, such as, for example, an externally recruited Chief Executive Officer, does not qualify as an NEO when initially hired. Thus, the proposed policy would not apply to key executives recruited externally, but it would apply to current NEOs who receive new contracts as a result of a promotion or renewed contracts due to the passage of time. This inconsistency in application would result in the Company having the ability to offer more lucrative contracts to external candidates, which it could not offer to certain current employees without stockholder approval. In addition, because the NEOs may change year-over-year based on compensation, as calculated pursuant to the SEC’s executive compensation disclosure rules, the policy proposed could have inconsistent application based on an executive officer’s compensation in a particular year.

The proposal could create a misalignment between our executives and our stockholders during a change-in-control transaction, which could present increased risk to our stockholders