tm242614-1_nonfiling - none - 15.6508241s
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.    )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a-12
LivaNova PLC
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee paid previously with preliminary materials

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 
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NOTICE OF 2024 ANNUAL GENERAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 2024 Annual General Meeting (the “AGM”) of Shareholders of LivaNova PLC, a public limited company having its registered office at 20 Eastbourne Terrace, London W2 6LG, United Kingdom and incorporated in England and Wales with company number 09451374 (“LivaNova” or the “Company”), will be held as follows:
Date and Time:
Tuesday, June 11, 2024
3:00 pm British Summer Time/10:00 am Eastern Time
Virtual Meeting Site:
www.meetnow.global/MS6WDW6
Shareholders Eligible to Attend:
Shareholders of record at the close of The Nasdaq Stock Market LLC exchange on April 15, 2024 (the “Record Date”) may attend the meeting. If you plan to attend the meeting, please follow the registration instructions as outlined in this proxy statement. The meeting is a virtual meeting; no physical meeting will be held.
   
Members who are entitled to attend and vote are also entitled to appoint another person as a proxy to exercise all or any of his/her rights to attend, speak and vote at the meeting on his/her behalf in respect of the ordinary shares with nominal value £1 per share (each, an “Ordinary Share”) held by him/her.
   
For information on attending and voting at the meeting and appointing a proxy, see LivaNova’s “Frequently Asked Questions about the Annual General Meeting”.
Number of Votes Outstanding:
The Company only has one class of voting share, being the Ordinary Shares. On April 15, 2024, there were 54,151,062 Ordinary Shares in issue and entitled to vote, each carrying one vote per share.
 
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ITEMS OF BUSINESS AND BOARD VOTING RECOMMENDATIONS
No.
Proposed Resolution
Board Voting
Recommendations
1
Ordinary Resolution: To elect, by separate resolutions, each of the following nine (9) directors for a term expiring at the AGM to be held in 2025 (“2025 AGM”):
a.
J. Christopher Barry
b.
Francesco Bianchi
c.
Stacy Enxing Seng
d.
William Kozy
e.
Vladimir Makatsaria
f.
Dr. Sharon O’Kane
g.
Todd Schermerhorn
h.
Brooke Story
i.
Peter Wilver
For (in respect of each nominee)
2
Ordinary Resolution: To approve, on an advisory basis, the Company’s compensation of its named executive officers (“US Say on Pay”).
For
3
Ordinary Resolution: To ratify the appointment of PricewaterhouseCoopers LLP, a Delaware limited liability partnership (“PwC-US”), as the Company’s independent registered public accounting firm for 2024.
For
4
Ordinary Resolution: To approve Amendment No. 1 to the Amended and Restated LivaNova PLC 2022 Incentive Award Plan.
For
5
Ordinary Resolution: To approve Amendment No. 2 to the LivaNova PLC 2015 Incentive Award Plan.
For
6
Ordinary Resolution: To generally and unconditionally authorize the directors, for the purposes of section 551 of the Companies Act 2006 (the “Companies Act”) to exercise all powers of the Company to allot shares in the Company and to grant rights to subscribe for, or to convert any security into, shares in the Company up to an aggregate nominal amount of £10,830,212, provided that:
(A)
(unless previously revoked, varied or renewed by the Company) this authority will expire at the end of the next annual general meeting of the Company or, if earlier, the close of business on the date that is fifteen (15) months after the date on which this resolution is passed, save that the directors may, before this authority expires, make offers or agreements which would or might require shares in the Company to be allotted, or rights to subscribe for, or convert securities into, shares to be granted, after its expiry and the directors may allot shares or grant rights to subscribe for, or convert securities into, shares pursuant to such offers or agreements as if this authority had not expired; and
(B)
this authority replaces all subsisting authorities previously granted to the directors for the purposes of section 551 of the Companies Act which, to the extent unused at the date of this resolution, are revoked with immediate effect without prejudice to any allotment of shares or grant of rights already made, offered or agreed to be made under such authorities.
For
 
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No.
Proposed Resolution
Board Voting
Recommendations
7
Special Resolution: Subject to the passing of resolution 6 and in accordance with sections 570 and 573 of the Companies Act, to empower the directors generally to allot equity securities (as defined in section 560 of the Companies Act) for cash pursuant to the authority conferred by resolution 6, and/or to sell Ordinary Shares (as defined in section 560 of the Companies Act) held by the Company as treasury shares for cash, in each case as if section 561 of the Companies Act (existing shareholders’ pre-emption rights) did not apply to any such allotment or sale, provided that this power is limited to the allotment of equity securities or sale of treasury shares for cash up to an aggregate nominal amount of £10,830,212, provided that:
(A)
(unless previously revoked, varied or renewed by the Company) this power will expire at the end of the next annual general meeting of the Company or, if earlier, the close of business on the date that is fifteen (15) months after the date on which this resolution is passed, save that the directors may, before this power expires, make offers or agreements which would or might require equity securities to be allotted and/or treasury shares to be sold after its expiry and the directors may allot equity securities and/or sell treasury shares pursuant to such offers or agreement as if this power had not expired; and
(B)
this power replaces (except for any power conferred by resolution 6) all subsisting powers previously granted to the directors for the purposes of section 570 of the Companies Act which, to the extent unused at the date of this resolution, are revoked with immediate effect, without prejudice to any allotment of equity securities already made, offered or agreed to be made under such powers.
For
8
Ordinary Resolution: To approve, on an advisory basis, the United Kingdom (“UK”) directors’ remuneration report in the form set out in the Company’s UK annual report (the “UK Annual Report”) for the period ended December 31, 2023.
For
9
Ordinary Resolution: To receive and adopt the Company’s audited UK statutory accounts for the year ended December 31, 2023, together with the reports of the directors and auditors thereon.
For
10
Ordinary Resolution: To re-appoint PricewaterhouseCoopers LLP, a limited liability partnership organized under the laws of England (“PwC-UK”), as the Company’s UK statutory auditor for 2024.
For
11
Ordinary Resolution: To authorize the directors and/or the Audit and Compliance Committee to determine the remuneration of the Company’s UK statutory auditor.
For
Section 527 Notice — Website Materials
Under section 527 of the Companies Act, shareholders meeting the threshold requirements set out in that section have the right to require the Company to publish on a website a statement setting out any matter relating to: (i) the audit of the Company’s accounts (including the auditor’s report and the conduct of the audit) that are to be laid before the meeting; or (ii) any circumstance connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance with section 437 of the Companies Act. The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with section 527 or section 528 of the Companies Act. Where the Company is required to place a statement on a website under section 527 of the Companies Act, it must forward the statement to the Company’s auditor not later than the time when it makes the
 
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statement available on the website. The business which may be dealt with at the meeting includes any statement that the Company has been required under section 527 of the Companies Act to publish on a website.
This notice and proxy statement is being mailed or made available to shareholders on April 26, 2024.
By order of the Board of Directors,
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Michael Hutchinson
Senior Vice President,
Chief Legal Officer and Company Secretary
London, United Kingdom
April 26, 2024
Important Notice Regarding the Availability of Proxy Materials for the AGM to be held on June 11, 2024. The Notice of Meeting, Proxy Statement, Annual Report on Form 10-K and UK Annual Report are available free of charge at www.livanova.com. All website addresses given in this document and proxy statement are for informational purposes only and are not intended to be an active link or to incorporate any website information into this document or the proxy statement.
PLEASE VOTE. YOUR VOTE IS IMPORTANT TO US.
 
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Attending the AGM
The AGM will be a virtual meeting conducted exclusively by webcast.
You may attend the AGM if you were a shareholder of the Company as of the close of business on April 15, 2024, or if you hold a valid proxy for the AGM. To attend, vote and submit questions during the AGM, please go to www.meetnow.global/MS6WDW6. You will also need the control number included with your proxy materials.
Voting
Please note that you will need the control number included with your proxy materials to vote in advance of or at the AGM.
In advance of the AGM, please vote in one of the following ways:
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Internet
www.envisionreports.com/LIVN and use the 15 Digit Control Number in the shaded area of your proxy Card or Notice Card or as directed by your broker, as the case may be
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Telephone
Call the number on your proxy card
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By mail
Sign, date and return your proxy card in the enclosed envelope
At the meeting, please vote by:
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Attending virtually at www.meetnow.global/MS6WDW6. and using your control number to record your vote.
Additional information regarding attending the AGM and voting is included in this proxy statement starting on page 87.
Resolutions and Voting
Voting on a Poll
In accordance with LivaNova’s Articles of Association, all voting at the Company’s AGM is done on a poll.
Ordinary and Special Resolutions
The Companies Act specifies a number of matters that must be effected by special resolution of a company’s shareholders. A resolution passed on a poll taken at a meeting is passed as a special resolution if it is passed by the affirmative vote of a majority of 75% (or more) of the total votes cast by members who, being entitled to vote, do so virtually at the meeting, by proxy or in advance of the meeting. At the AGM, there is one special resolution to be voted upon (Proposal 7).
All other resolutions at the AGM are ordinary resolutions. These resolutions will pass on a poll at the AGM if they are passed by the affirmative vote of a simple majority of the total votes cast by members who, being entitled to vote, do so virtually at the meeting or by proxy or in advance of the meeting.
Abstentions
Under English law, an abstention is not a vote in law and will not be counted in the calculation of the proportion of votes “for” or “against” the resolution.
Broker Non-Votes
If you are a beneficial owner and hold shares through an account with a bank or broker, your shares may be voted by the bank or broker if you do not provide voting instructions. Brokerage firms have the authority
 
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under the New York Stock Exchange rules to vote shares for which their customers do not provide voting instructions on routine matters. When a matter is not routine and the brokerage firm has not received voting instructions from the beneficial owner, the brokerage firm cannot vote the shares on that matter. This is called a broker non-vote. The resolutions that are considered routine are the ratification of the selection of the independent registered public accounting firm for both the US and the UK, the authorization to grant authority to allot shares, the authorization to grant power to disapply pre-emption rights and the authorization of the remuneration of the UK auditor. All of the other resolutions proposed at the AGM are non-routine matters and broker non-votes will not be counted as “for” or “against” such non-routine matters.
Possible Selections on the Ballot
You can vote “for” or “against” a resolution. Each of these votes will have legal effect under English law in that they count as votes cast. An abstention, indicated by electing “abstain” is not a vote under English law as indicated above.
Cautionary Note Regarding Forward-Looking Statements
This proxy statement contains forward-looking statements within the meaning of the United States (“US”) federal securities laws. Forward-looking statements may be identified by words like “may,” “could,” “seek,” “guidance,” “predict,” “potential,” “likely,” “believe,” “will,” “should,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “forecast,” “foresee” or variations of these terms and similar expressions, or the negative of these terms or similar expressions. Forward-looking statements in this proxy statement include, but are not limited to, statements regarding individual and Company performance objectives and targets.
These and other forward-looking statements are based on LivaNova’s beliefs, assumptions and estimates using information available to the Company at the time and are not intended to be guarantees of future events or performance. Factors that may cause actual results to differ materially from those contemplated by the statements in this proxy statement can be found in the Company’s periodic reports on file with the US Securities and Exchange Commission (“SEC”). The forward-looking statements speak only as of the date of this proxy statement and undue reliance should not be placed on these statements. LivaNova disclaims any intention or obligation to publicly update or revise any forward-looking statements, unless required by applicable securities laws. This cautionary statement is applicable to all forward-looking statements contained in this document.
 
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Table of Contents
Page
1
5
5
6
6
14
14
17
17
18
22
24
26
26
43
44
57
61
61
62
62
65
72
80
80
82
82
83
83
84
87
A-1
B-1
 
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Proxy Summary
This summary highlights information described in greater detail later in this proxy statement. Please read the proxy statement in its entirety and do not rely on this summary to give you the information you need to make an informed decision on the proposals presented for your consideration.
Governance Highlights
LivaNova is committed to good corporate governance, which promotes the long-term interests of the Company’s shareholders and strengthens the Board and management accountability. Many of LivaNova’s enhanced corporate governance practices reflect feedback from the Company’s shareholders and other stakeholders. Highlights of LivaNova’s corporate governance practices include the following:

Annual Board and Committee Self-Evaluations.    The Board, along with each of its committees, conducts a self-evaluation of its performance on an annual basis.

Regular Review of Key Governance Documents.   Review of committee charters and Corporate Governance Guidelines at least annually or on a more frequent basis, as needed.

Regular Executive Sessions.   All regularly scheduled Board and committee meetings include an opportunity for the non-executive directors to meet without management present.

Robust Code of Ethics and Business Conduct. Provides the foundation for how directors and employees represent the Company.

Annual Election of Directors.   All directors stand for election on an annual basis.

Majority Voting in Uncontested Director Elections.   All director nominees must receive an affirmative vote of the majority of votes cast in an uncontested election.

Separate CEO and Board Chair.   Separate CEO and Chair positions to better serve the needs of the Board and the Company by allowing the CEO to focus their attention on driving business performance rather than Board governance.

Financial Literacy for Audit and Compliance Committee.   All director nominees that are Audit and Compliance Committee (“AC Committee”) members are “audit committee financial experts” under the rules of the SEC.
Board Composition and Diversity
The members of LivaNova’s Board of Directors represent a broad range of expertise, experience, viewpoints and backgrounds, as well as a mix of tenure and service on the Board, as reflected in the following Board composition snapshot for the nine Board members that are being nominated for re-election at LivaNova’s AGM.
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LivaNova’s Board and the Company are focused on ensuring a diverse Board and accordingly highlight diversity as a key criterion for consideration in the selection of new directors. In addition to this focus, pursuant to its charter, the Nominating and Corporate Governance Committee (“NCG Committee”) must include at least one woman and at least one member of an underrepresented minority in every pool of potential
 
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nominees. The below graphs and board diversity matrix reflect LivaNova’s self-identified diversity for its current Board members, as of April 26, 2024.
Board Diversity Matrix (as of April 26, 2024)
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Female
Male
Non-Binary
Did Not
Disclose
Gender
Part I: Gender Identity
Directors
3 7 0 0
Part II: Demographic Background
African American or Black
1* 0 0
White
2 6 0
Hispanic or Latinx
0 1** 0
*
Brooke Story
**
Francesco Bianchi
The following individuals are nominated for election at the AGM.
Name
Occupation
Independent
Age
Director
Since
Audit and
Compliance
Committee
Compensation
and Human
Capital
Management
Committee
Nominating
and
Corporate
Governance
Committee
William Kozy
(Chair of the Board)
Former EVP and COO, Becton, Dickinson and Company
Yes
72
2018
J. Christopher Barry
Executive Vice
President and
Group President of
the Medical
Solutions Division,
3M Company
Yes
52
2023
X
Francesco Bianchi
Chair, Seven Capital Partners S.r.l.
Yes
67
2015
X
X
Stacy Enxing Seng
Operating Partner,
Lightstone
Ventures
Yes
59
2019
Chair
Vladimir Makatsaria
CEO, LivaNova
No
51
2024
 
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Name
Occupation
Independent
Age
Director
Since
Audit and
Compliance
Committee
Compensation
and Human
Capital
Management
Committee
Nominating
and
Corporate
Governance
Committee
Dr. Sharon O’Kane
Non-Executive
Director of the
Health Products
Regulatory
Authority Board in
Ireland;
Entrepreneur in
Residence,
University College
Dublin
Yes
56
2015
Chair
Todd Schermerhorn
Former SVP and
Chief Financial
Officer, C.R. Bard,
Inc.
Yes
63
2020
Chair
Brooke Story
Former Worldwide
President, Surgery,
Becton, Dickinson
and Company
Yes
52
2022
X
Peter Wilver
Former EVP and Chief Administrative Officer, Thermo Fisher Scientific Inc.
Yes
64
2022
X
X
Approach to Executive Compensation
LivaNova’s market-competitive executive compensation program acts as an incentive for the Company’s named executive officers (“NEOs”) to perform at their highest level, take appropriate risks and drive shareholder return in the short and long term. LivaNova’s executive compensation program aims to ensure that the Company recruits and retains key executive officers who are responsible for the Company’s success and can align the interests of LivaNova’s executive officers, including the Company’s NEOs, with shareholders.
With input from the Company’s independent compensation consultant, Pearl Meyer, the Compensation and Human Capital Management Committee (“CHCM Committee”) routinely assesses the Company’s executive compensation practices to determine whether any enhancements are advisable. On February 15, 2023, for example, the CHCM Committee of the Board approved a change in the conditions for accelerated vesting upon certain terminations of employment in connection with an acquisition of the Company from single to double trigger vesting. As a result, awards granted after February 15, 2023, vest following a change in control of the Company only in the event of a participant’s termination of service by the Company without “cause” or due to a resignation for “good reason” within twenty-four (24) months.
 
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To achieve the objectives of the Company’s executive compensation program as described above, the CHCM Committee structures the executive compensation program to:

Target NEO pay around the market median to attract, motivate and retain talented executive officers with the skills and experience to ensure LivaNova’s long-term success;

Use multiple pay and award vehicles that work together to reward performance and retain talent, while maintaining alignment with shareholder interests;

Reward individual performance with a base salary and a cash-based short-term bonus ensuring a meaningful link to the Company’s operational performance and shareholder interests;

Pay a substantial portion of each NEO’s compensation as variable pay contingent upon the achievement of the Company’s business objectives and individual performance;

Balance the components of compensation so that short-term (annual) and long-term performance objectives are recognized because
the Company’s success depends on the Company’s executive officers being focused on critical strategic and tactical objectives, both short-term and long-term;

Employ stock ownership requirements that require NEOs to maintain a meaningful ownership interest in the Company;

Vest equity awards over time to promote retention;

Provide for a double trigger vesting for equity awards granted after February 15, 2023;

Consider the LivaNova Compensation Recoupment Policy and the Incentive Clawback Policy, which provide for the clawback of awards in specified situations, in the Company’s award agreements; and

Work with an independent compensation consultant to ensure the Company’s program is meeting its goals.
 
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CORPORATE GOVERNANCE
Overview
LivaNova is committed to effective corporate governance and high ethical standards. The following highlights the Company’s governance practices which are covered in greater detail in the following pages.
Board Independence

Nine of LivaNova’s ten current directors are independent

LivaNova’s CEO is the only management director

The Company holds regular executive sessions of independent directors
Board Composition

Three of the Company’s current directors are female and seven are male

Recent Board refreshment with the addition of a new independent director in 2023 and a new CEO in 2024
Board Committees

LivaNova has three committees:

Audit and Compliance

Compensation and Human Capital Management

Nominating and Corporate Governance

All of the members of the Company’s committees are independent

The Company conducts annual Board and committee evaluations and an annual review of committee charters
Leadership Structure

LivaNova’s Chair and CEO are separate roles

The Chair of the Board, who is independent, presides over all executive sessions of the Board and engages frequently with members of the Company’s Board and management
Risk Oversight

LivaNova’s Board is responsible for risk oversight and has designated committees to have particular oversight of certain key risks including cybersecurity, compensation, succession planning and environmental, social and governance (“ESG”) matters
Director Stock Ownership

Directors are required to hold meaningful equity ownership positions in the Company

A meaningful portion of director compensation is in the form of Company equity

Directors are prohibited from hedging, pledging or using Company stock as collateral
Accountability to Shareholders

LivaNova uses majority voting in director elections

All of the Company’s directors are elected each year

The Company does not have a shareholder rights (“poison pill”) plan

Since the past proxy season, LivaNova has engaged with the majority of the Company’s top 30 shareholders, who represented approximately 80% of the Company’s register as of December 31, 2023

LivaNova conducts an annual advisory say-on-pay vote

The Company retains the ability to clawback awards in specified situations through the LivaNova Compensation Recoupment Policy and Incentive Clawback Policy
 
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Role of the Board of Directors
The Board oversees management as it operates the business and ensures the interests of shareholders are served. The Board provides leadership and guidance over the Company’s regular and nonrecurring business transactions and is also responsible for assessing the effectiveness of the Company’s organizational structure and systems and for evaluating its overall performance.
Board Meetings and Attendance
The Board held ten meetings during the year ended December 31, 2023. Each of the directors attended at least 75% of the total number of Board meetings and meetings of the committees on which he/she served. While the Company does not have a formal policy on director attendance at LivaNova’s AGM, all of LivaNova’s directors serving at the time of the Company’s 2023 AGM attended the Company’s 2023 AGM.
Board Leadership Structure
The directors may at any time elect and remove a director as Chair of the Board. The director appointed as Chair presides at all meetings of the Board at which they are present. LivaNova’s Board of Directors is currently led by a non-executive and independent Chair, Mr. Kozy. Currently, LivaNova does not have a policy requiring that the positions of Chair of the Board and CEO be held by different persons. The Board believes that it is in the best interest of the Company and its shareholders for the Board to make a determination on whether to separate or combine the roles of Chair and CEO based upon the Company’s circumstances at any particular point in time. The Company’s Corporate Governance Guidelines state that whenever the Chair is also the CEO or is a director who does not otherwise qualify as an independent director, the independent directors will elect from among themselves a Lead Director of the Board.
At this present time, the positions of Chair of the Board and CEO have been separated and are expected to remain so because the Board currently believes that this structure better serves the needs of the Board and the Company by allowing the CEO to focus their attention on driving business performance rather than Board governance.
The Chair establishes the agenda for each Board meeting in consultation with the CEO and with the assistance of the Company Secretary. Each Board member is free to suggest the inclusion of items on the agenda and is also free to raise any subject that is not on the agenda for that meeting.
The non-executive, independent directors have an opportunity to meet in private sessions at least quarterly and hold at least two executive sessions during the year. The Chair, or the Lead Director as the case may be, is responsible for conducting any such executive sessions.
Board Committees
LivaNova’s Board of Directors has three standing committees: Audit and Compliance; Compensation and Human Capital Management; and Nominating and Corporate Governance. Each committee is comprised entirely of independent directors, and each committee is governed by a written charter approved by the Board. These charters, which are reviewed at least annually, form an integral part of the Company’s corporate governance policies, and a copy of each charter is available on LivaNova’s website at www.livanova.com.
 
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Audit and Compliance Committee
Under its charter, the AC Committee’s key responsibilities include:

Reviewing the Company’s accounting, financial reporting and disclosure processes and the audit of the Company’s consolidated financial statements;

Reviewing the Company’s internal controls over financial reporting and disclosure controls and procedures (including reporting structures) with management and the independent auditors;

Reviewing the actions LivaNova takes to comply with the Company’s internal accounting and control policies, as well as external financial, legal and regulatory requirements;

Reviewing the Company’s internal audit functions;

Reviewing the process by which cybersecurity risks are managed;

Producing the AC Committee Report for inclusion in the Company’s annual proxy statement or annual report on Form 10-K;

Reviewing the qualifications and independence of the Company’s independent auditors engaged for the purpose of auditing its consolidated financial statements and issuing an audit report for inclusion in the Company’s annual report on Form 10-K; and

Selecting, subject to required shareholder approvals, LivaNova’s independent auditors and evaluating their performance.
The AC Committee meets at least quarterly with management, including the Head of Internal Audit, the Chief Legal Officer (“CLO”), the Chief Accounting Officer (“CAO”), the Chief Financial Officer, the Chief Ethics and Integrity Officer and the independent auditors and has the option to continue those discussions in separate executive sessions to discuss any matter that any of these groups believe should be discussed privately.
Members:
Todd Schermerhorn (Chair)
J. Christopher Barry
Francesco Bianchi
Peter Wilver
Eight scheduled meetings in 2023
The AC Committee Report is on pages 63-65 of this proxy statement.
 
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Compensation and Human Capital Management Committee
Under its charter, the CHCM Committee is responsible for, among other things, the following:

Determining and approving the goals and objectives applicable to the compensation of the CEO; evaluating the CEO in light of those goals and objectives at least annually; and determining and approving the CEO’s compensation based on this evaluation;

Determining and approving the compensation of all other executive officers;

Reviewing, verifying and certifying the achievement of any performance goals for long-term and short-term incentive plans;

Reviewing and approving incentive compensation plans and equity-based plans and, where appropriate or required, recommending such plans for shareholder approval;

Administering (including adopting, amending and terminating) incentive compensation and equity-based plans;

Reviewing and discussing with management and overseeing the preparation of the Compensation Discussion and Analysis to be included in appropriate regulatory filings and determining whether to recommend to the Board that the Compensation Discussion and Analysis be included in such filings;

Submitting to the Board and shareholders for their approval a directors’ remuneration policy every three years, in any year in which there is a change relative to the prior year, or if shareholder approval was not achieved when last submitted;

Reviewing director compensation and benefits at least annually;

Producing the CHCM Committee Report for inclusion in the Company’s annual proxy statement or annual report on Form 10-K, as well as the Remuneration Report in the UK Annual Report;

Approving employment agreements and severance arrangements or plans for executive officers;

Reviewing and approving the adoption of, or revision to, and administering any recoupment policy that allows the Company to “clawback” compensation received by executive officers of the Company and to monitor compliance therewith;

Determining stock ownership guidelines / requirements for directors and executive officers and monitoring compliance with such guidelines / requirements;

Reviewing the Company’s incentive compensation arrangements to determine whether they encourage excessive risk-taking; and

Overseeing the Company’s policies and strategies, and periodically reviewing risks, trends and key metrics related to human capital management.
Members:
Stacy Enxing Seng (Chair)
Francesco Bianchi
Peter Wilver
Nine scheduled meetings in 2023, separate and apart from several ad hoc meetings held throughout 2023 in connection with CEO succession planning.
The CHCM Committee Report is on page 43 of this proxy statement.
 
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Nominating and Corporate Governance Committee
Under the terms of its charter, the NCG Committee is responsible for, among other things:

Determining the qualifications, qualities, skills and other expertise required to be a director;

Administering the process for identifying candidates for membership on the Board, including the inclusion of at least one woman and at least one member of an underrepresented minority in every slate of potential nominees, developing criteria for Board and committee memberships and recommending and recruiting director nominees;

Evaluating the independence and other standards applicable to service on the Board and its committees, including whether each AC Committee member is financially literate and whether the AC Committee has at least one “audit committee financial expert;”

Evaluating and recommending changes, as appropriate, to Board and committee size, composition and chair and committee structure; and administering the process for regular Board and committee self-evaluations;

Developing and recommending corporate governance principles and policies to LivaNova’s Board;

Overseeing the Company’s corporate governance practices and procedures and reviewing such procedures at least annually;

Reviewing annually and recommending, for Board approval, a succession plan in respect of the CEO and reviewing periodically, succession planning for the Company’s executive leadership team; and

Reviewing and overseeing the Company’s material ESG disclosures.
Members:
Dr. Sharon O’Kane (Chair)
Daniel Moore
Brooke Story
Four scheduled meetings in 2023, separate and apart from several ad hoc meetings held throughout 2023 in connection with CEO succession planning and director onboarding.
Pursuant to their charters, each committee has the authority, at the Company’s expense, to retain professional advisors, including legal, accounting, or other consultants, to advise it in connection with the exercise of its duties and responsibilities.
Board Evaluation Process
Pursuant to the Company’s Corporate Governance Guidelines and committee charters, the Board conducts an annual self-evaluation to determine whether the Board and its committees are functioning effectively, a process which is overseen by the NCG Committee. At the end of 2023, each member of the Board completed a comprehensive questionnaire to assess the overall performance and effectiveness of the Board, its respective committees, and its chairs and to identify any key themes and potential opportunities for continuous improvement. Each Director completed a questionnaire pertaining to their respective committee, as well as a general Board questionnaire. The results of the questionnaire were aggregated and shared with the Directors at a committee level and at a Board level, and results were discussed within each committee and during a meeting of the full Board. The self-evaluation process provides the Board and its committees with actionable feedback to enhance their respective performance and effectiveness. For example, in response to previous questionnaire results, the Board actioned “talent” to be included as a regularly scheduled topic to be discussed at future Board meetings.
 
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Board Oversight
Board Role in Risk Management
The Board has determined that the Board as a whole, and not a separate committee, will oversee the Company’s risk management process. Each of LivaNova’s Board committees has historically focused, and continues to focus, on specific risks within their respective areas of responsibility.
The Board uses its committees to assist in its risk oversight responsibility as follows:

Audit and Compliance Committee oversees the integrity of the financial reporting of the Company and its compliance with applicable legal and regulatory requirements. It also oversees LivaNova’s internal controls and compliance activities. The AC committee regularly discusses the Company’s major financial and business risk exposures and certain contingent liabilities, and the steps management has undertaken to monitor and control such exposures. The AC committee also has responsibility for the oversight of the management of cybersecurity risks and is briefed on a quarterly basis by the Company’s Chief Information Security Officer (“CISO”) regarding such risks, as discussed further below. In relation to the cybersecurity incident disclosed in November 2023, the full Board was and continues to be regularly updated by the CEO, CLO, CISO, Chief Information Officer (“CIO”) and outside cybersecurity counsel.

Compensation and Human Capital Management Committee oversees risks relating to LivaNova’s compensation policies and practices and other human capital management policies and strategies.

Nominating and Corporate Governance Committee oversees risks relating to succession planning and governance structures in addition to ESG issues. The NCG committee as well as the full Board, receives quarterly updates on the Company’s ESG efforts in addition to related industry trends.
The Company’s Chief Risk Officer (“CRO”), who reports to the CLO, assesses, monitors, and mitigates risks that arise in the course of LivaNova’s business. In addition to LivaNova’s CRO, the Chief Financial Officer (“CFO”), CLO, CAO, Chief Ethics and Integrity Officer, Internal Audit team and CISO are key personnel responsible to the Board and/or the AC Committee for the planning, assessment, and reporting of risks.
As mentioned above, the CRO continuously monitors the highest and emerging risks faced by the Company. These risks are compiled into a risk report that includes an assessment of, and report on the Company’s risk profile and which the Board reviews on a quarterly basis. This risk report examines short and intermediate term risks, with higher risk ratings for more immediate, severe risks, applying countermeasures with more frequent deadlines and assessments of efficacy. The CRO regularly interacts with other risk professionals and, when necessary, engages with outside subject matter experts to assist in their risk assessment and formulation of countermeasures.
Compensation Risk Management
LivaNova’s executive compensation program is designed to motivate and reward the Company’s executive officers for their performance during the fiscal year and over the long term, and for taking appropriate risks toward achieving LivaNova’s long-term financial and strategic growth objectives. The following characteristics of LivaNova’s executive compensation program are designed to reduce the possibility of the Company’s executive officers, either individually or as a group, making excessively risky business decisions that could maximize short-term results at the expense of long-term value:

Balanced Mix of Pay Components.   The target compensation mix is not overly weighted toward annual incentive awards and represents a balance of base salary, annual short-term incentive compensation in the form of a cash bonus, and long-term equity-based compensation vesting over four (4) years or based on long-term performance objectives;

Bracketed Incentive Awards.   Annual cash bonuses for LivaNova’s CEO can be as little as 0%, but no more than 200% of base salary, per the Company’s Remuneration Policy;

Stock Ownership Requirement.   LivaNova’s executive officers and directors are subject to stock ownership requirements which set a minimum amount of equity ownership; and
 
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Performance Assessments.   Compliance and ethical behaviors are integral factors considered in all performance assessments.
The Company also closely examines its broader compensation policies and actual compensation practices for all employees, to assess whether those compensation policies or practices create unreasonable risks. Management conducts the initial risk assessment before presenting potential plans to the CHCM Committee for its review, and, in the case of executive officers, its approval. The CHCM Committee believes that the mix and design of the elements of the Company’s compensation program are appropriate and incentivize executive officers and key employees to establish and achieve goals that benefit the Company and its shareholders over the long term.
Cybersecurity Risk Management
LivaNova’s enterprise risk management process consists of risk identification, evaluation, control and monitoring, and documentation. The LivaNova Board oversees risk management within the Company, and the CRO provides the framework to identify and reduce risks that may materially impact the Company’s business. As part of the CRO’s enterprise risk management process and as noted above, discussions are held with the CISO, CIO, Chief Privacy Officer, and their respective teams to review the cybersecurity risk landscape.
As part of LivaNova’s cyber resiliency strategy and in an effort to mitigate potential cybersecurity risks, the Company employs various measures, including employee training, systems monitoring, testing and maintenance of protective systems, and contingency plans. In addition, the CISO manages a structured cyber incident response program where periodic simulation exercises are performed to prepare and train the Company’s cybersecurity incident responders. The Company deploys security tools to help bolster its defense detection capabilities, such as endpoint detection and response tools, security information and event management tools, and 24/7 monitoring. LivaNova regularly evaluates its business continuity and disaster recovery planning processes, with test scenarios that include simulations and penetration tests.
In November 2023, the Company executed its cyber incident plan in response to a cybersecurity incident that resulted in a disruption to portions of its information technology systems. Promptly after detecting the issue, the Company began an investigation with assistance from external cybersecurity consultants and coordinated with law enforcement. The Company implemented remediation measures to mitigate the impact of the incident. The Company continues to assess the nature and scope of the affected data and analyze its legal notification obligations, and the Company is notifying affected individuals and regulators as required by applicable law. The Company has taken and will continue to take actions to enhance its information security framework.
As codified in its charter, the AC Committee is responsible for reviewing the processes by which cybersecurity risks are managed and reporting any issues that arise out of such reviews to the Board. The CISO provides key security metrics to the AC Committee on a quarterly basis, and directly to the chair of the AC Committee on a case-by-case basis, as needed, at any time during the quarter. The AC Committee reviews these reports, which include, among other things, external events impacting the Company, security incidents, user training statistics, and evaluation of user readiness to address cyber incidents. Notwithstanding the Company’s approach to cybersecurity, the Company may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on the Company. While LivaNova maintains cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured. For more information regarding the Company’s Cybersecurity Risk Management, Strategy and Cyber Governance please see “Item 1C. Cybersecurity” in LivaNova’s US Annual Report on Form 10-K for the year ended December 31, 2023.
Sustainability
Through the NCG Committee, the Board oversees the Company’s sustainability efforts, which are led by the Senior Director of Sustainability. The Company’s sustainability governance structure includes regular executive team engagement with a Steering Committee body (sponsored by the CFO) and the cross-functional Environmental, Social, and Governance (ESG) Task Force. The ESG Task Force is comprised of vice presidents and key stakeholders who lead ESG focus areas or whose work is informed by ESG. This global
 
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stakeholder team also monitors relevant regulations in global markets to enable LivaNova to meet or surpass ESG and Sustainability performance expectations and requirements.
LivaNova has established a sustainability strategy delivery program with global coordination to respond to regulatory requirements and commercial needs. LivaNova’s sustainability commitment and associated actions to support the Company’s focus areas — People, Products, and Planet — is integrated into the Company’s strategic plans for business continuity and are foundations upon which to grow its climate risk resilience to create long-term stakeholder value.
In April 2023, LivaNova published the Company’s Board-approved Carbon Reduction Plan, which includes the Company’s 2050 net zero commitment. An updated Carbon Reduction Plan was approved by the Board in April 2024, and LivaNova plans to continue exploring initiatives throughout 2024 in furtherance of that plan. The Carbon Reduction Plan is currently published on LivaNova’s sustainability website under “Planet” (www.livanova.com/en-us/sustainability/planet) for full visibility.
Most recently, and among other Company-wide initiatives, the ESG Task Force has been working with an outside third-party on its Climate-related Financial Disclosures, which is incorporated into LivaNova’s 2023 UK Annual Report, published in April 2024. Utilizing climate scenario modeling, the Company assessed its exposure to climate-related risks and opportunities, including likelihood and impacts, to evaluate the resilience of LivaNova’s business model and strategy to these risks. For additional information, please refer to the Company’s 2023 UK Annual Report which is available on the Company’s Investor Relations page on the Company’s website.
Human Capital Management
LivaNova has approximately 2,900 employees worldwide, representing 75 nationalities and located in 32 countries. These employees are crucial in achieving the Company’s mission to provide hope to its patients and their families. LivaNova encourages its employees to live by LivaNova’s five core values: patients first, meaningful innovation, act with agility, commitment to quality and integrity, and collaborative culture. LivaNova evaluates itself against these values and, ultimately, achieves success through them as an organization.
Maintaining a culture that embodies LivaNova’s values and mission is of the utmost importance. The Company aims to foster a culture where learning is continuous, and open and direct employee communication is valued. LivaNova’s Board’s committees oversee elements of the Company’s culture associated with their area of responsibility:

The NCG Committee oversees the Company’s material environmental, social and governance disclosures efforts. Additionally, the NCG Committee annually reviews the CEO succession plan and periodically reviews succession planning for the Company’s executive leadership team.

In 2023, the CHCM Committee modified its name to include human capital management and updated its charter to reference the CHCM committee’s oversight of human capital management within the Company, specifically overseeing the Company’s policies and strategies for, and periodically reviewing risks, trends and key metrics relating to human capital management. The CHCM Committee also reviews and approves equity-based plans and compensation arrangements, including performance goals, for the Company’s executive officers. Furthermore, the CHCM reviews and recommends for approval any changes to the Company’s director compensation program.

The AC Committee reviews LivaNova’s ethics and compliance program, including reviewing the Company’s related policies, procedures, and programs designed to promote and monitor legal, ethical, and regulatory compliance. In addition, the AC Committee regularly receives updates on the Company’s culture of integrity and the tone set by LivaNova’s leadership.
In addition to the Board committees’ oversight over the Company’s culture, the full Board also oversees the elements of culture at LivaNova. For example, LivaNova regularly conducts employee engagement surveys, called LivaNova4You, to measure overall employment engagement and satisfaction and to provide the Company with actionable data for potential opportunities for improvement. The data is reviewed by the Board and the executive leadership team who are both committed to improving employee satisfaction in relation to
 
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the working culture of the Company. Furthermore, the Board regularly receives “talent” updates from the Chief Human Resources Officer at its quarterly meetings.
Diversity, Equity and Inclusion
LivaNova recognizes the value in fostering a diverse, equitable and inclusive work environment and strives to provide a workplace free of harassment or discrimination. Accordingly, the Company closely monitors its gender metrics at the Board, Executive and senior leadership level on a regular basis. Currently, LivaNova has ten Directors on its Board, of whom 30% are female and 70% are male. The executive leadership team consists of twelve individuals, of whom 17% are female and 83% are male. Of the Company’s senior leadership team, which includes the executive team, vice presidents and directors, as of the end of 2023, 30% were female and 70% were male. Finally, as of December 31, 2023, of LivaNova’s approximately 2,900 employees, 51% were female and 49% were male.
LivaNova’s strategy for accelerating diversity begins with creating new ways to find extraordinary talent. Examples of the Company’s efforts include networking with historically black colleges and universities, posting job listings on diverse sites, ensuring diversity-focused interview panels, and training interviewers on how to conduct a fair, unbiased interview process.
LivaNova supports internal diversity affinity initiatives, including the Global Women’s Network, which consists of female employees across the globe that convene to discuss topics that unite and celebrate the strength of the diversity in the workplace. In addition, the LivaNova Women’s Network, a mentorship program created by women and for women, facilitates pairings between mentors and mentees across all regions. Topics range from career and financial advice to performance management and connection to the Company’s strategy. These programs provide members with new perspectives, more personalized development, and an opportunity to network with other women across the organization.
The Company’s senior leadership team monitors and reviews information regarding LivaNova’s gender and ethnic diversity profile periodically over the course of the year. The CHCM Committee receives similar reports periodically, and the entire Board of Directors is updated on an annual basis. In relation to director onboarding, LivaNova’s Corporate Governance Guidelines require that Board candidates bring diversified attributes to the Board, which encompass gender, race, ethnicity, geography, professional experience, national origin, sexual orientation, life experience, skills and tenure, among others. In addition to having diversity highlighted generally as a key criterion for consideration in the selection of new directors, pursuant to its charter, the NCG Committee must include at least one woman and at least one member of an underrepresented minority in every slate of potential nominees.
Shareholder Engagement
LivaNova is committed to engagement with the Company’s shareholders on executive compensation and corporate governance matters. Since the past proxy season, LivaNova has engaged with the majority of the Company’s top 30 shareholders, representing approximately 80% of the Company’s register as of December 31, 2023. Management, and at times with certain directors, also met with other shareholders and potential shareholders during the year. Key topics discussed included performance, existing and future products, clinical data and milestones, strategic pipeline initiatives, executive compensation, and ESG matters. Management also attended eight healthcare conferences, which included fireside chats, as well as participation in one-on-one and group investor meetings.
LivaNova’s Board and management value the perspectives of the Company’s shareholders and work to provide its shareholders with continuous and meaningful engagement. LivaNova values the insights gained from the Company’s discussion with the Company’s investors and find them to be helpful even when points of view vary.
Succession Planning
Succession planning is a top priority for the Board and LivaNova’s management team. The Board and management proactively address succession planning with the objective of maintaining a pipeline of qualified leaders for the immediate future and long term. The Board has delegated the responsibility for CEO and
 
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senior management succession planning to the NCG Committee. The NCG Committee’s succession planning process is conducted in the context of the challenges and opportunities facing LivaNova, the skills and expertise likely to be required by the Company in the future and the goal of achieving the benefits of diversity in its widest sense. This process enables the Board to address both longer-term, planned transitions, such as retirements or role changes, as well as short-term, unexpected openings. Similar processes, led by the relevant management team, occur within each of LivaNova’s business units and functions.
Board Independence
The NCG Committee of the Board is empowered by its charter to make recommendations regarding all determinations of independence required under Nasdaq rules or other applicable laws and regulations, including but not limited to determinations as to which directors qualify as independent directors, non-employee directors and “audit committee financial experts” as defined by US securities laws.
Under the Nasdaq listing rules, a majority of the members of LivaNova’s Board must qualify as “independent directors.” An “independent director” for Nasdaq purposes is a person other than an executive officer or employee of the Company or any other individual having a relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
The NCG Committee evaluated all relevant transactions and relationships between each director, or any of their family members, and the Company, management, and the Company’s independent registered public accounting firm. Based on this evaluation, the NCG Committee determined that all of the directors, other than Mr. Makatsaria, LivaNova’s CEO, are “independent” as that term is defined in the Nasdaq listing standards and under the US securities laws.
The Board has also determined that all members of the AC Committee meet additional, heightened independence criteria applicable to audit committee members under the Nasdaq listing rules and the applicable rules of the SEC. The Board has further determined that all members of the AC Committee are financially literate and qualify as “audit committee financial experts.”
The NCG Committee has also determined that all members of the CHCM Committee meet heightened independence criteria applicable to CHCM committee members under the Nasdaq listing rules and qualify as “non-employee directors” under Rule 16b-3 of the Exchange Act.
Compensation and Human Capital Management Committee Interlocks
No member of the CHCM Committee is now, or at any time has been, employed by or served as an executive officer of the Company or any of its subsidiaries, or has had any substantial business dealings with the Company or any of its subsidiaries. None of LivaNova’s executive officers currently serves or served in the year ended December 31, 2023, on the board of directors or compensation committee of another company at any time during which an executive officer of such other company served on LivaNova’s Board or CHCM Committee.
Governance Policies and Practices
Communication with Directors
Any shareholder or other party interested in communicating with members of the Board, any of its committees, the independent directors as a group or any of the independent directors individually, may send written communications to LivaNova Plc, 20 Eastbourne Terrace, London, England W2 6LG, Attention: Company Secretary or to company.secretariat@livanova.com. Any communications received in writing are forwarded to the Board, committee or to any individual director or directors to whom the communication is directed, unless the communication is unduly hostile, threatening, illegal, does not reasonably relate to the Company or its business or is inappropriate. The Company Secretary has the authority to discard or disregard any inappropriate communications or to take other appropriate actions with respect to any such inappropriate communications. The Board will endeavor to promptly respond to all appropriate communications and encourages all shareholders and interested persons to use the aforementioned email or mailing address to send communications relating to the Company’s business to the Board and its members.
 
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Code of Business Conduct and Ethics
The Board-approved Code of Business Conduct and Ethics (the “Code”) applies to all directors, officers, and employees of the Company. The Code is intended to enhance understanding of the Company’s standards of ethical business practices and values, provide clarity as to how to address ethical issues that may arise, guide interactions with patients and healthcare professionals, and provide information surrounding LivaNova’s marketing and promotional practices. The Code is designed to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts, full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submit to, the US Securities and Exchange Commission (“SEC”) and in other public communications made by the Company; compliance with applicable governmental laws, rules and regulations; the prompt internal reporting of violations of the Code; and accountability for adherence to the Code, while deterring wrongdoing. A copy of the Code is available on LivaNova’s website at www.livanova.com. Any change to, or waiver from, the Code will be disclosed as required by applicable securities laws, which disclosure may occur on the Company’s website or by filing a Form 8-K.
The Company also has an Ethics and Integrity Program, which is a corporate compliance program that includes written policies and procedures, training/education, and ongoing monitoring to ensure effective implementation and maintenance of the program across the Company. In addition, the Company has a Third-Party Code of Ethics and Business Conduct that embraces the key principles of the International Labour Organization’s fundamental conventions, because the Company believes that its business can only succeed where the rights of all workers in the value chain of the business are protected and respected. The Company also has a Global Employee Privacy Notice with respect to the rights of an individual to protect their personal information and Global Anti-Discrimination and Anti-Harassment Policy to ensure that all LivaNova colleagues can thrive in an inclusive workplace free from all forms of harassment.
Prohibitions on Hedging and Pledging
The Company’s Insider Trading Policy provides that the Company’s employees and directors, and the family members of those individuals may not engage in hedging transactions of any type concerning Company securities, including without limitation puts, calls, equity swaps, collars, exchange funds, prepaid variable forwards or other financial instruments or derivative securities. The Company’s Insider Trading Policy also prohibits the pledging of any Company securities by the Company’s employees, directors, and their family members. Pledging is an activity in which the borrower of funds uses securities as a form of collateral to secure the funds it borrows or takes from the lender.
Related Party Transactions
LivaNova recognizes that related party transactions involving the Company present a heightened risk of conflicts of interest or the perception of such a conflict. Under the Company’s written Related Party Transaction Policy, related party transactions, including those covered by Item 404(a) of Regulation S-K, may be consummated, or may continue only if the AC Committee approves or ratifies the transaction in accordance with the guidelines set forth in the aforementioned policy.
Pursuant to the Company’s Related Party Transaction Policy, the Chief Legal Officer and Company Secretary or their designee(s) (each, a “Responsible Officer”) is expected to report each qualifying related party transaction, together with a summary of the material facts, to the AC Committee for consideration at its next regularly scheduled meeting. The AC Committee is then expected to conduct, to the extent reasonably practicable, prior review of the relevant facts and circumstances and either approve or disapprove the entry into the transaction.
In determining whether to approve or, if necessary, ratify a qualifying related party transaction, the AC Committee takes into account, among other factors it deems appropriate: (i) whether the transaction was undertaken in the ordinary course of business of the Company, (ii) whether the transaction was initiated by the Company, a subsidiary or the related party, (iii) whether the transaction with the related party is proposed to be, or was, entered into on terms no less favorable to the Company than terms that could have been reached with an unrelated third party, (iv) the purpose of, and the potential benefits to the Company of, the related party transaction, (v) the approximate dollar value of the transaction, particularly as it relates to the related
 
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party, (vi) the related party’s interest in the transaction and (vii) any other information regarding the transaction or the related party that would be material to investors in light of the circumstances of the particular transaction.
In addition, in connection with any approval or ratification of a qualifying related party transaction involving a non-employee director or nominee for director, the AC Committee should consider whether such transaction would compromise such director’s status as: (1) an independent director under the rules of the NASDAQ Stock Market LLC, (2) a “non-employee director” under Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), if such non-employee director serves on the CHCM Committee of the Board of Directors or (3) an independent director under Rule 10A-3 of the Exchange Act, if such non-employee director serves on the AC Committee. The AC Committee may approve or ratify the transaction only if it determines in good faith that, under all the circumstances, the transaction is in the best interests of the Company and its shareholders.
If the Responsible Officer determines that it is impractical or undesirable to wait until the next AC Committee meeting to evaluate the related party transaction, the chair of the AC Committee may review and approve the transaction in accordance with the procedures set forth in the policy. In such cases, any such approval (and the rationale for such approval) must be reported to the AC Committee at its next regularly scheduled meeting.
If the Company becomes aware of a related party transaction that has not been approved under the policy, the AC Committee must review the transaction and, if the AC Committee determines it is appropriate, ratify it at its next regularly scheduled meeting. In any case where the AC Committee determines not to ratify the transaction that has been commenced without approval, it may direct additional actions including, but not limited to, immediate discontinuation or rescission of the transaction, or modification of the transaction to make it acceptable for ratification.
In the fiscal year ended December 31, 2023, there were no related party transactions required to be disclosed pursuant to Item 404(a) of Regulation S-K, and no such transactions are currently proposed.
Availability of Governance Documents
LivaNova’s Corporate Governance Guidelines, charters of the committees of the Board and Code of Business Conduct and Ethics are available on LivaNova’s website and in print to any shareholder who requests any of these. To access these documents from the Company’s website, go to www.livanova.com, select the “Investors Kit” link under the tab “Investors”, and then click on the “Corporate Governance” menu located in a horizontal list in the middle of the screen. Requests for a printed copy should be addressed to LivaNova Plc, 20 Eastbourne Terrace, London, England W2 6LG, Attention: Company Secretary.
 
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BOARD OF DIRECTORS
Board Qualifications and Refreshment
The selection process for directors is set out in LivaNova’s Corporate Governance Guidelines and in the charter of the NCG Committee. These documents are available at https://www.livanova.com/en-us/about-us/board-of-directors. The charter authorizes the NCG Committee to determine the qualifications, qualities, skills and other expertise required to be a director but also sets out certain minimum qualification requirements:

high ethical behavior;

accomplishments within their respective fields;

relevant business and financial expertise and experience;

sound business judgment; and

diversity, including with respect to gender, race/ethnicity, geography, professional experience, skills and tenure, with the charter of the NCG Committee requiring that every slate of directors to be considered include at least one woman and at least one underrepresented minority.
The NCG Committee is responsible for recommending director nominees to the Board, including re-nomination of persons who are already directors. In forming their recommendations, the NCG Committee places particular emphasis on the necessary skills for the Board. To that end, the NCG Committee conducts an annual skills analysis and considers that exercise, as well as the results of the Board and its committees’ annual self-assessments, in the context of the Company’s strategic plan, in order to identify the skills and expertise required to lead the Company now and in the future. The combined skills analysis and self-assessments ultimately help to inform the NCG Committee of (1) the qualifications, qualities, skills and other expertise (in addition to the minimum requirements set out above) desired at this juncture in the Company’s development and (2) the relevant considerations associated with Board succession planning, all of which help to drive the NCG Committee’s recommendations for director nominees.
The Board does not have formal term or age limits. While term limits may foster fresh ideas and viewpoints, the Board believes that term limits fail to acknowledge the contribution of directors who have been able to develop, over a period of time, increased insight into the Company and its operations and, therefore, provide significant contributions to the Board as a whole. As an alternative to term limits, the NCG Committee reviews each director’s continued tenure on the Board annually. The Company’s Corporate Governance Guidelines provide that the Board will consider rotation of the Chair of the Board and Committee Chairs periodically and when it determines appropriate. As part of its evaluation, the Board reviews all relevant circumstances, including expertise required for the role, qualifications of a successor, and applicable laws and listing standards, to balance the benefits of rotation against the benefits of continuity.
The NCG Committee may consider candidates for LivaNova’s Board from any reasonable source, including from a search firm engaged by the NCG Committee and shareholder recommendations subject to the procedures set forth below and the full procedures identified in the Company’s Corporate Governance Guidelines. Any invitation to join the Company’s Board is extended by the Board and by the Chair of the NCG Committee.
Mr. Barry, appointed to the Board in October 2023, was recommended to the NCG Committee by a third-party search firm, which was engaged by the NCG Committee to assist in the identification and recruitment of a new Board member. After reviewing Mr. Barry’s qualifications and skills, discussing his potential nomination at several meetings, and meeting with him, the NCG Committee voted unanimously to recommend Mr. Barry as a director of the Board based on his robust experience in commercial and executive leadership roles.
Mr. Makatsaria, appointed as CEO and to the Board effective March 2024, was recommended to the NCG Committee by a third-party search firm, which was engaged by the NCG Committee to assist in the identification and recruitment of a new CEO. After reviewing Mr. Makatsaria’s qualifications and discussing his potential appointment at several meetings, the NCG Committee voted unanimously to recommend
 
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Mr. Makatsaria for the position of CEO and as a director of the Board based on his extensive global leadership experience and his considerable background in building and driving innovation within the medical technology space.
Although LivaNova does not have a formal policy with regard to the consideration of any director nominees recommended by shareholders, a shareholder or group of shareholders may recommend potential candidates for consideration. The Company does not have such a policy because the NCG Committee believes that it can adequately evaluate any such nominees on a case-by-case basis.
Nominees for consideration by the NCG Committee may be sent in writing to the Office of the Company Secretary, by mail at 20 Eastbourne Terrace, London W2 6LG, United Kingdom, not less than ninety (90) nor more than one hundred twenty (120) days prior to the first anniversary of the AGM in the previous year. The written nomination must include all information relating to such director nominee that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors, or otherwise required, pursuant to Regulation 14A under the US Securities Exchange Act of 1934, as amended (the “Exchange Act”), including such person’s written consent to be named in the proxy statement as a nominee and to serve as a director if elected. In addition, the nomination must include:

the nominating shareholder’s or shareholders’ name(s) and address(es) as they appear on the Company’s books;

the class and number of shares beneficially owned by the nominating shareholder(s);

a description of all agreements, arrangements and understandings between such shareholder(s), each proposed director nominee and any other person or persons (including their names) in connection with the nomination;

any other information relating to such shareholder(s) that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies pursuant to Regulation 14A under the Exchange Act; and

to the extent known by the shareholder(s) giving notice, the name and address of any other shareholder(s) supporting the election of the nominee.
From time to time, the NCG Committee may request additional information from the nominee or the nominating shareholder(s). Potential nominees suggested by shareholders are evaluated by the NCG Committee in the same manner as other potential candidates.
Director Nominees
LivaNova’s Articles of Association provide that the number of directors shall be ten unless otherwise decided by the Board. Upon the recommendation of the Company’s NCG Committee, the Board has nominated the nine persons named below to serve as directors until the 2025 AGM or their earlier resignation or removal. All directors are elected annually. Mr. Moore, a current director who has served on LivaNova’s Board since 2015, was not renominated for election to the Board, and his term will expire at the conclusion of the 2024 AGM.
 
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J. CHRISTOPHER BARRY
[MISSING IMAGE: ph_christopherbarry-4c.jpg]
INDEPENDENT
Age 52
Less than one year of service
(since
2023)
Chris Barry currently serves as Executive Vice President and Group President of the Medical Solutions Division at 3M Company, a position he assumed in March 2024. He previously served as CEO and a member of the board of NuVasive, Inc., a medical technology company focused on spine technology innovation, from 2018 to 2023, at which point, NuVasive Inc. was acquired by Globus Medical. From 2015 to 2018, Mr. Barry served as Senior Vice President and President of Surgical Innovations at Medtronic after Medtronic acquired Covidien, and, prior to Covidien’s acquisition, Mr. Barry spent more than 15 years in increasing commercial and executive leadership roles at Covidien, rising to vice president of sales for energy-based devices. Mr. Barry has a Bachelor of Science degree in Environmental Science from Texas Tech University.
Committees:

Audit and Compliance
Former Public Company Directorships During the Past Five Years:

NuVasive, Inc.
Director Skills and Qualifications:

Mr. Barry is an audit committee financial expert and an analytical leader with robust general management experience. He has proven to be a highly capable executive both in a large strategic environment and as a first-time CEO of NuVasive in a complex and competitive medical technology category at NuVasive. At NuVasive, Mr. Barry is credited with setting evidence-based expectations and identifying the need for partnership to drive long-term growth for the company and aligning the organization accordingly.
FRANCESCO BIANCHI
[MISSING IMAGE: ph_francescobianchi-4c.jpg]
INDEPENDENT
Age 67
Nine years of service
(since
2015)
Francesco Bianchi has served as Chair of Seven Capital Partners S.r.l., a financial consulting firm, since June 2018. He previously served as the Chief Executive Officer of Seven Capital Partners and has been with the firm since 2013. Mr. Bianchi has 30 years of mergers and acquisitions and strategic advisory experience working for well-recognized international financial institutions including JPMorgan Chase (Paris), Morgan Grenfell (London), Citi (Milan) and Bankers Trust (Milan), where he served in various roles including general manager and head of the mergers and acquisitions and corporate finance division. He also headed the strategic planning division of Banca-Intesa S.p.A. in Italy and abroad. Mr. Bianchi earned a degree in economic sciences with honors from the University of Florence and is a chartered accountant.
Committees:

Audit and Compliance; Compensation and Human Capital Management
Director Skills and Qualifications:

Mr. Bianchi is an audit committee financial expert and has an extensive professional background working in strategy and mergers and acquisitions.
STACY ENXING SENG
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INDEPENDENT
Age 59
Five years of
service
(since
2019)
Stacy Enxing Seng has served as an Operating Partner with Lightstone Ventures, a venture capital group focused on medical technology and biotechnology-related investments, since 2016. Prior to joining Lightstone Ventures, Ms. Enxing Seng was with Covidien, a global health care products company, as its President, Vascular Therapies (2011 to 2014) and President of Peripheral Vascular (2010 to 2011). Ms. Enxing Seng joined Covidien in 2010 through the $2.6 billion acquisition of ev3 Incorporated, where she was a founding member and executive officer responsible for leading its Peripheral Vascular division (2001 to 2010). Prior to ev3, Ms. Enxing Seng held positions of increasing responsibility with Boston Scientific, SCIMED, Baxter and American Hospital Supply. She holds a B.A. in Public Policy from Michigan State University and an M.B.A. from Harvard University.
Committees:

Compensation and Human Capital Management (Chair)
Other Current Public Company Directorships:

Sonova Holding AG
Former Public Company Directorships During the Past Five Years:

Hill-Rom Holdings, Inc.
Director Skills and Qualifications:

Ms. Enxing Seng has broad experience as a former senior executive responsible for a worldwide business unit of a major medical device company. In addition, she has significant experience as a co-founder of a successful medical device start-up. Her operational experience at both large and small medical device companies, combined with her first-hand experience gained from building ev3 from the ground up, provide the Board with valuable insights into strategy, marketing, sales, innovation, mergers and acquisitions and a variety of other medical device-related areas.
 
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WILLIAM KOZY
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CHAIR
Age 72
Six years of
service
(since
2018)
William Kozy is the Chair of the Board of Directors of LivaNova. Mr. Kozy served as Interim Chief Executive Officer of the Company from April 2023 to February 2024. Prior to that, Mr. Kozy retired from Becton, Dickinson and Company, a global medical technology company, in 2016 where Mr. Kozy served as Executive Vice President and Chief Operating Officer from 2011 to 2016. At Becton Dickinson, he also served as a member of the corporate Leadership Team and in various executive roles since 1988, including head of BD Medical (2009 to 2011), President of the BD Biosciences segment (2006 to 2009), President of BD Diagnostics (2002 to 2006) and Senior Vice President of Company Operations (1998 to 2002). Mr. Kozy holds a B.A. from Kenyon College.
Committees:

None, as Chair of the Board
Other Current Public Company Directorships:

Cooper Companies, Inc.
Director Skills and Qualifications:

Mr. Kozy has more than 40 years of experience with global medical device companies. Prior to serving as COO for Becton Dickinson, Mr. Kozy’s key business worldwide leadership roles included responsibility for the Biosciences, Diagnostic and Medical segments of Becton Dickinson. During his time at Becton Dickinson, he was responsible for all worldwide businesses of the company with leadership emphasis on profitable revenue growth and talent development. He also brings a depth of corporate leadership experience in the areas of innovation systems, operations, manufacturing and ERP implementation as well as his broad and relevant experience in global strategy, mergers and acquisitions, technology and product development.
VLADIMIR A. MAKATSARIA
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CHIEF EXECUTIVE OFFICER
Age 51
(since 2024)
Vladimir Makatsaria is Chief Executive Officer and Board Member of LivaNova. Building great teams and driving innovation and growth in the healthcare field has been Mr. Makatsaria’s focus throughout his entire career. Prior to LivaNova, he worked for 27 years at Johnson & Johnson (J&J), a multinational pharmaceutical and medical technologies corporation, in executive leadership roles, spanning various technologies and geographies. He most recently served as Company Group Chairman at J&J MedTech where he led Ethicon, a global leader in the surgical technologies market. Other executive positions throughout his J&J tenure include leading J&J China, J&J MedTech APAC, Ethicon EMEA, among others. He also served on Ethicon, DePuy and total MedTech global leadership teams. He served as Chairman of the Board of the Asia Pacific Medical Technology Association (APACMed) and as an Advisory Board Member to Singapore Management University. Mr. Makatsaria holds three degrees from the University of Minnesota: a bachelor’s degree in physiology, an MBA and a master’s in healthcare administration.
Committees:

None, as Chief Executive Officer
Director Skills and Qualifications:

Mr. Makatsaria has extensive experience in executive leadership roles within global medical device companies. He is an inquisitive leader with a variety of leadership experience, ranging from startups to managing a global 10-billion-dollar business. Mr. Makatsaria has considerable international experience and is credited as being a key component in establishing culture, talent and innovation expectations in his previous positions.
 
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DR. SHARON O’KANE
[MISSING IMAGE: ph_sharonokane-4c.jpg]
INDEPENDENT
Age 56
Nine years of service
(since
2015)
Dr. Sharon O’Kane serves as a non-executive director and member of the Audit and Risk Committee of Health Products Regulatory Authority Board in Ireland and has a Visiting Professorship at Ulster University where she advises the Faculty of Life and Health Sciences. She has also served as an Entrepreneur in Residence at University College Dublin since 2015. She was an expert advisor to the Stevenage Bioscience Catalyst Facility at GlaxoSmithKline, a global healthcare company (2012 to 2019) and a Commercial Mentor to Queen’s University, Belfast (2016 to 2019). Previously, Dr. O’Kane served as Entrepreneur in Residence at the University of Manchester Intellectual Property Company UMIP (2009 to 2014). Dr. O’Kane co-founded and, from 1998 to 2010, was the Chief Scientific Officer, and a Director of Renovo Group Plc, a UK biotech company. Dr. O’Kane earned a Bachelor of Science(Honours) First Class in Biomedical Sciences from the University of Ulster from which she also earned a Ph.D. in Biomedical Sciences. She also earned a Diploma in Company Direction from the Institute of Directors.
Committees:

Nominating and Corporate Governance (Chair)
Director Skills and Qualifications:

Dr. O’Kane has extensive experience in healthcare, both in the academic and government realms and in research and development (R&D) capacities. She has served on the board of directors of several biotech and healthcare companies and organizations and has held numerous positions advising healthcare and biotech companies, governmental bodies and universities. Dr. O’Kane was also a co-founder, Chief Scientific Officer and executive director of Renovo Group Plc and was responsible for growing the university spin-out to a public company, and a non-executive director of Iomet Pharma Ltd. Dr. O’Kane received corporate director governance training at the Institute of Directors and Harvard Business School.
TODD SCHERMERHORN
[MISSING IMAGE: ph_toddschermerhorn-4c.jpg]
INDEPENDENT
Age 63
Four years of service
(since
2020)
Todd Schermerhorn served as the Senior Vice President and Chief Financial Officer of C. R. Bard, Inc., a multinational developer, manufacturer and marketer of life-enhancing medical technologies, from 2003 until his retirement in 2012. Prior to that, he had been Vice President and Treasurer of C. R. Bard (1998 - 2003). From 1985 to 1998, Mr. Schermerhorn held various other management positions with C. R. Bard. Mr. Schermerhorn received a BS from the University of Lowell and an MBA from Babson College.
Committees:

Audit and Compliance (Chair)
Other Current Public Company Directorships:

The Travelers Companies, Inc.
Former Public Company Directorships During the Past Five Years:

The Spectranetics Corporation.
Director Skills and Qualifications:

Mr. Schermerhorn served as the Chief Financial Officer of a publicly traded company and has significant experience and expertise in management, accounting and business operations. Mr. Schermerhorn is also an audit committee financial expert.
BROOKE STORY
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INDEPENDENT
Age 52
Two years of service
(since
2022)
Brooke Story served as the Worldwide President, Surgery at Becton, Dickinson and Company from July 2023 to March 2024 and Worldwide President, Integrated Diagnostics Solutions at Becton, Dickinson and Company from April 2021 to July 2023. Prior to that, Ms. Story spent 15 years at Medtronic, where she held a variety of roles in finance, sales and business unit leadership, culminating in her tenure as President, Pelvic Health and Gastric Therapies. Ms. Story began her career in sales at Johnson & Johnson and as a consultant for Accenture. Ms. Story holds a BS in industrial engineering from the University of Tennessee and an MBA from the University of Michigan.
Committees:

Nominating and Corporate Governance
Former Public Company Directorships During the Past Five Years:

Sigilon Therapeutics
Director Skills and Qualifications:

Ms. Story has over 20 years of experience in the global medical technology industry. Throughout her career, she has excelled in helping large medical device corporations inspire teams, mentor and development talent and deliver economic value.
 
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PETER WILVER
[MISSING IMAGE: ph_peterwilver-4c.jpg]
INDEPENDENT
Age 64
Two years of service
(since
2022)
Peter Wilver served as Senior Vice President and Chief Financial Officer of Thermo Fisher Scientific Inc., a leading provider of laboratory products and services, from November 2006 to July 2015 and as Executive Vice President and Chief Administrative Officer from August 2015 until his retirement in March 2017. He served as Vice President and Chief Financial Officer of Thermo Electron from 2004 to 2006 and as Thermo Electron’s Vice President, Financial Operations from 2000 to 2004. Before joining Thermo Electron, Mr. Wilver held financial leadership roles at Honeywell International, Grimes Aerospace Company and General Electric Company. Mr. Wilver holds a BS in Business Administration in Accounting from The Ohio State University and is a certified public accountant.
Committees:

Audit and Compliance; Compensation and Human Capital Management
Other Current Public Company Directorships:

Baxter International Inc. and Shoals Technologies Group, Inc.
Former Public Company Directorships During the Past Five Years:

CIRCOR International, Inc. and Evoqua Water Technologies Corp.
Director Skills and Qualifications:

Mr. Wilver served as the Chief Financial Officer of a publicly traded company and has significant experience and expertise in strategic planning and business development, as well as in leading the financial, accounting and investor functions of large, multinational manufacturing companies. Mr. Wilver is also an audit committee financial expert.
Director Compensation
Overview.   The CHCM Committee reviews the total compensation paid to the Company’s non-employee directors on an annual basis. The purpose of the review is to ensure that the level of compensation is appropriate to attract and retain a diverse group of directors with the breadth of experience necessary to perform the Board’s duties and to compensate LivaNova’s directors fairly for their services. The review includes the consideration of qualitative and comparative factors. To ensure directors are compensated relative to the scope of their responsibilities, the CHCM Committee considers the factors set out in the Company’s remuneration policy which govern payments to all directors, including non-executive directors. Some of the factors considered include: the time and effort involved in preparing for Board and committee meetings and the additional duties assumed by committee Chairs, the Chair of the Board (if a non-executive director) and the Lead Director (if the Chair of the Board is an executive director); the level of continuing education required to remain informed of broad corporate governance trends and material developments relevant to strategic initiatives within the Company; and the compensation paid to directors at a peer group of companies as determined by the CHCM Committee with advice from its independent compensation consultant.
2023 Director Compensation.
Non-employee directors who served on the Company’s Board received the following fees paid in cash for their service on the Board in 2023:

annual Board retainer fee of $110,000 ($185,000 for the Board Chair)

annual committee Chair fees:

$20,000 (NCG Committee)

$20,000 (CHCM Committee)

$30,000 (AC Committee)

annual committee member fees (for members other than the committee Chairs):

$8,000 (NCG Committee)

$8,000 (CHCM Committee)

$15,000 (AC Committee)
In 2023, each of the Company’s non-executive directors was also granted RSUs with a grant date fair market value of $130,000. These are service-based awards that vest after one year, subject to prorated vesting in the event of separation prior to the end of a director’s term.
 
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Additionally, in 2023, upon the recommendation of the NCG Committee, the Board established the Lead Director role in light of Mr. Kozy’s assumption of the additional role of Interim CEO. Based on the increased responsibilities and time commitment assumed by the Lead Director, and on the advice of Pearl Meyer, the CHCM Committee recommended, and the Board approved, an annual retainer for the Lead Director role of $30,000. The CHCM Committee did not recommend any additional changes to the compensation of the non-executive directors in 2023. During the period of his employment as Interim CEO, Mr. Kozy was deemed to waive any entitlement to director fees and awards that he would otherwise have received in his capacity as a non-executive director and Chair of the Board.
The following table sets forth a summary of the compensation due to the non-employee directors in the year ended December 31, 2023:
Name(1)
Fees Earned
in Cash ($)
Stock
Awards ($)
(2)
Total ($)
J. Christopher Barry
29,552 88,329 117,881
Francesco Bianchi
133,000 130,000 263,000
Stacy Enxing Seng
130,000 130,000 260,000
Daniel Moore
118,000 130,000 248,000
Dr. Sharon O’Kane(3)
151,429 130,000 281,429
Andrea Saia(4)
133,000 130,000 263,000
Todd Schermerhorn
140,000 130,000 270,000
Brooke Story
118,000 130,000 248,000
Peter Wilver
133,000 130,000 263,000
(1)
Mr. Kozy is not included in this table as he was an employee of the company for a portion of fiscal 2023. See “Compensation Discussion & Analysis — Compensation Tables — Summary Compensation Table” for information about the compensation earned by Mr. Kozy in fiscal 2023 in his capacity as both a non-employee director and Interim Chief Executive Officer of the Company.
(2)
Amounts reflect the full grant date fair value of RSUs granted in 2023 computed in accordance with FASB ASC Topic 718, rather than the amounts paid to or realized by the named individual. The Company provides information regarding the assumptions used to calculate the value of all stock awards and option awards made to its directors in “Note 15. Stock-Based Incentive Plans” in the Company’s US Annual Report on Form 10-K for the year ended December 31, 2023. The RSUs shown in the table will generally vest on the earlier of (i) the anniversary of the grant date and (ii) the date of a Change in Control (as defined in the relevant RSU agreement). As of December 31, 2023, all RSU awards reflected in the column were unvested. The stock award values shown above correspond to 2,680 RSUs, except for Mr. Barry, who received a pro-rated grant award of 1,709 RSUs in connection with his appointment to the Board on October 6, 2023.
(3)
Dr. O’Kane served for a portion of fiscal 2023 as Lead Director.
(4)
Ms. Saia retired from the Board, effective December 31, 2023.
2024 Director Compensation.   In February 2024, based on benchmarking data and upon the advice of its independent compensation consultant, Pearl Meyer, the CHCM Committee recommended to the Board an increase of $50,000 to the grant value of the annual service-based share awards for non-employee directors (to $180,000 for non-employee directors other than the Chair of the Board, and to $255,000 for the Chair) and a corresponding $50,000 decrease in the non-employee director cash retainer (to $60,000 for non-employee directors other than the Chair of the Board, and to $135,000 for the Chair of the Board). In February 2024, the Board approved these changes, to take effect at the 2024 AGM. No other changes were made to director compensation in 2024.
 
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EXECUTIVE OFFICERS
Name
Age
Position
Vladimir Makatsaria 51 Chief Executive Officer
Alex Shvartsburg 54 Chief Financial Officer
Michael Hutchinson 53
Senior Vice President, Chief Legal Officer and Corporate Secretary
Trui Hebbelinck 52 Chief Human Resources Officer
Stephanie Bolton 42 President, Global Epilepsy
Vladimir Makatsaria’s biographical information is set forth under “Director Nominees.”
Alex Shvartsburg joined LivaNova in September 2017 as Vice President, Finance, Strategy & Innovation (September 2017 to January 2020) and then became Vice President, Corporate Finance & Chief Financial Officer, International Markets (January 2020 to November 2020). He assumed the role of Interim Chief Financial Officer in November 2020 and became CFO in July 2021. Prior to joining the Company, Mr. Shvartsburg was Chief Financial Officer/Chief Operating Officer of Caligor Coghlan Pharma Services (f/k/a CaligorRx), a global provider of clinical supply services (June 2016 to September 2017); Vice President, Finance Genetic Science Division at Thermo Fisher Scientific (January 2014 to June 2016); and Sr. Finance Director, Mergers & Acquisitions with Life Technologies (June 2012 to January 2014). Over the course of twenty years, Mr. Shvartsburg held positions of increasing responsibility in finance with Johnson & Johnson. Mr. Shvartsburg holds a BS in Accounting from Drexel University — College of Business and Administration and an MBA from La Salle University.
Michael Hutchinson joined LivaNova in November 2022 as Senior Vice President, Chief Legal Officer and Company Secretary. He is responsible for the global legal, compliance and corporate governance functions of the Company. Mr. Hutchinson has more than 20 years of experience as an attorney, advisor, and business leader, including more than a decade of leadership and management experience with life science companies such as Stryker Corporation and Varian Medical Solutions. He has successfully and efficiently managed a broad range of legal and business issues, including complex litigation, ESG matters, and government investigations. Mr. Hutchinson’s experience also includes leading and advising on more than 80 acquisitions and integrations. Prior to his role at LivaNova, from March 2022 to November 2022, Mr. Hutchinson served as Senior Vice President, Chief Legal Officer and Corporate Secretary at ByHeart, Inc., a clinical research based infant nutrition company. Mr. Hutchinson served as Senior Vice President, General Counsel at Varian Medical Systems, a Siemens Healthineers Company, from April 2021 to March 2022 and from June 2020 to April 2021, Senior Vice President, Chief Legal Officer and Corporate Secretary, at Varian Medical Systems, a publicly traded medical technology company that was acquired by Siemens Healthineers in April 2021. Prior to joining Varian Medical Systems, Inc., Mr. Hutchinson spent 12 years with Stryker Corporation, a multinational medical technologies company, where he served as Vice President and Advisor to the Chairman and CEO from March 2019 to May 2020 and Vice President, Chief Legal Officer, Corporate Secretary and General Counsel, from September 2013 to March 2019 and other roles of increasing responsibility, including Deputy General Counsel and Chief Legal Counsel at Orthopaedics Group between 2008 and 2013. Mr. Hutchinson holds a J.D. degree from The George Washington University Law School and a B.A. degree from Clark University.
Trui Hebbelinck joined LivaNova in March 2019 as the Company’s Chief Human Resources Officer and oversees global human resources. Prior to joining LivaNova, Ms. Hebbelinck had progressive HR Business Partner and Talent specialist roles during her 15-year tenure at General Electric, including ten years at GE Healthcare. Her experience also includes five years of VP HR Operational and VP HR Trading & Supply experience at Shell and for four years she was an HR Director in a private hospital. During that time she was a member of the advisory board of the minister of Health. Ms. Hebbelinck earned a Master of Science in Psychology from Ghent University and a post-graduate degree in Business Management & Administration from the University of Leuven.
Stephanie Bolton is the President, Global Epilepsy at LivaNova, a position she assumed in May 2023. She joined Cyberonics, Inc., one of LivaNova’s two legacy companies, in April 2011 as a Senior Territory Manager, Epilepsy (March 2011 to April 2014) and, over her tenure at LivaNova, assumed several senior, sales leadership positions. After serving as a Senior Territory Manager, she took on the role of Country Manager, UK and
 
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Ireland (April 2014 to September 2016), UKI Vice President (September 2016 to February 2018) and North Europe Vice President (February 2018 to October 2019). In October 2019, Ms. Bolton was appointed President, Europe (October 2019 to February 2021) and later became the President of LivaNova’s International Region (February 2021 to May 2023) before she assumed her current role as President, Global Epilepsy, pursuant to which she is responsible for creating, communicating, and implementing the organizations vision, mission and overall direction.by leading all business operational functions as it relates to the global epilepsy business. Prior to joining LivaNova, Ms. Bolton spent over a decade working at various pharmaceutical companies including Sankyo Pharma, Otsuka Pharmaceuticals, and UCB Pharma, holding positions of increasing responsibility in the sales and product space. Ms. Bolton currently serves as the Vice Chair for the Association of British HealthTech Industries. Ms. Bolton graduated with Honors from Coventry University with a Bachelor of Science degree in physiology.
 
25

 
Executive Compensation
Compensation Discussion & Analysis
This Compensation Discussion and Analysis (“CD&A”) describes LivaNova’s executive compensation programs for the Company’s Named Executive Officers (“NEOs”) and the oversight exercised by the CHCM Committee in setting executive compensation for the year ended December 31, 2023. This CD&A supplements and should be read together with the compensation tables and related disclosure following this CD&A.
Named Executive Officers
LivaNova’s NEOs for the year ended December 31, 2023 are:

William Kozy, Former Interim Chief Executive Officer(1);

Damien McDonald, Former Chief Executive Officer(2);

Alex Shvartsburg, Chief Financial Officer;

Marco Dolci, Former President, Cardiopulmonary Business Unit(3);

Michael Hutchinson, Senior Vice President, Chief Legal Officer and Company Secretary; and

Trui Hebbelinck, Chief Human Resources Officer.
(1)
Mr. Kozy served as Interim Chief Executive Officer from April 14, 2023, until March 1, 2024.
(2)
Mr. McDonald served as Chief Executive Officer until April 14, 2023.
(3)
Mr. Dolci served as President, Cardiopulmonary Business Unit in 2023 and retired from the Company on December 31, 2023.
CD&A Executive Summary
Review of 2023 Performance
In 2023, worldwide revenue was $1.15 billion, an increase of 13% on both a reported and constant-currency basis, as compared to the prior year.
For the full year, Cardiopulmonary revenue increased 18% on both a reported and constant-currency basis versus 2022, with growth across all regions, driven by increased heart-lung machine sales, including Essenz installations and strong oxygenator demand.
For the full year, Neuromodulation revenue increased 9% on both a reported and constant-currency basis versus 2022, with growth across all regions, including new and replacement implants in the US region. For the full year, global Epilepsy revenue increased 10% on a constant currency basis. Notably, US Epilepsy achieved 3,300 new patient implants in the full year, representing 7% growth versus the prior year. Replacement implants reached 7,608 for the full year, also a 7% increase. Epilepsy revenue in Europe and the Rest of World grew 10% versus the prior year on a constant currency basis.
For the full year, ACS revenue increased 3% on both a reported and constant-currency basis versus 2022, driven by an increase in case volumes. As previously announced, the ACS standalone cannulae business moved to the CP portfolio in the first quarter of 2024, and the wind down of the ACS segment is anticipated to be substantially complete by the end of 2024.
LivaNova delivered strong performance despite the previously disclosed cybersecurity incident that occurred in November 2023. Importantly, the Company was pleased with its ability to bring its manufacturing operations and critical support functions fully back online in a relatively short amount of time.

In addition to the above 2023 financial results, management achieved a number of strategic milestones over the past year:

In February 2023, having received approval for its PMA supplement from the FDA, the Company launched SenTiva DUO™, an implantable pulse generator with a dual-pin header to provide VNS Therapy for the treatment of drug-resistant epilepsy.
 
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Also, in February 2023, the Company announced the start of a limited commercial release for the Essenz Perfusion System in select centers throughout Europe.

In March 2023, the Company received FDA 510(k) clearance for its Essenz HLM, and with FDA clearance, LivaNova initiated the commercial launch of Essenz in the US. Additionally, the Company initiated a broad commercial release in Europe, following a successful limited commercial release.

In June 2023, the Company announced the 150th bipolar depression patient had been randomized in the RECOVER clinical study. The trial, if successful, will be used to support a peer-reviewed article and reconsideration of reimbursement for VNS Therapy by CMS for the treatment of depression that is difficult to treat.

In August 2023, the Company received FDA 510(k) clearance and CE Mark for its Essenz ILBM, which provides accurate and continuous measurement of essential blood parameters to perfusionists throughout CPB procedures. The ILBM is integrated into LivaNova’s next-generation CPB platform, the Essenz Perfusion System.
Organizational Changes
Resignation of Former CEO
On April 14, 2023, the Company announced that Damien McDonald resigned as Chief Executive Officer of the Company and as a member of the Company’s Board. Pursuant to a settlement agreement dated April 14, 2023, the Company elected to bring Mr. McDonald’s 12-month notice period to an end such that his employment with the Company ceased on May 31, 2023. Mr. McDonald received a notice payment of £1,062,138.55 in accordance with the terms of his previously disclosed service agreement, representing the 12-month value of Mr. McDonald’s salary and certain cash benefits during what would have been his notice period. On May 31, 2023, all unvested equity awards held by Mr. McDonald were forfeited.
Interim CEO Employment Agreement
On April 14, 2023, the Company announced that William Kozy, Chair of the Company’s Board, had been appointed Interim Chief Executive Officer. On April 19, 2023, the Company entered into an offer letter with Mr. Kozy which set forth the terms and conditions of his employment as Interim Chief Executive Officer and which was reviewed and approved by the CHCM Committee, as advised by its independent compensation consultant, Pearl Meyer.
Mr. Kozy’s offer letter provided for an annual base salary of $975,000 and eligibility for an annual performance bonus, with each year’s annual bonus having a target of 110% of Mr. Kozy’s base salary, pro-rated and payable based on the number of days Mr. Kozy was employed during 2023 and 2024 based on the Company’s actual full year performance and relative to the established metrics as described below.
Additionally, in connection with his appointment as Interim Chief Executive Officer, Mr. Kozy was granted a one-time award of time-based restricted stock units with a grant date fair value of $500,000 on June 15, 2023, which award vested on October 14, 2023, the six-month anniversary of his start date. In connection with the extension of his term as Interim Chief Executive Officer and consistent with the provisions of his offer letter, on October 19, 2023, the CHCM Committee determined to grant Mr. Kozy an additional one-time award of time-based restricted stock units with a grant date fair value of $750,000, effective as of December 15, 2023, in accordance with the Company’s next predetermined equity grant date, which vested upon the commencement of Mr. Makatsaria’s employment as Chief Executive Officer on March 1, 2024.
Appointment of New CEO/Compensation Package
Following an extensive candidate search and interview process, LivaNova’s Board appointed Mr. Makatsaria as the Company’s Chief Executive Officer effective March 1, 2024.
On February 2, 2024, the Company entered into an employment letter agreement (the “Employment Agreement”) with Mr. Makatsaria. The Employment Agreement, which was reviewed and approved by the CHCM Committee, as advised by Pearl Meyer, provides for an initial annualized base salary of $930,000 with
 
27

 
a target annual bonus equal to 110% of base salary (pro-rated for 2024). In addition, Mr. Makatsaria is entitled to receive (i) long-term equity incentive awards for the Company’s regular 2024 annual grant cycle with a target grant-date value of $5,350,000, in the form of PSUs for 50% of the total value with a three-year cliff vesting, and RSUs for 25%, and SARs for 25%, both vesting in equal installments over a four year period, (ii) special inducement equity grants with an aggregate grant-date value of $1,500,000, vesting in equal annual installments over four years, (iii) a sign-on cash bonus of $200,000 and (iv) certain relocation benefits to assist with his relocation from New York City to Houston, Texas. The Employment Agreement also provides for certain severance benefits in the event of Mr. Makatsaria’s involuntary termination without cause or termination for good reason.
Other Changes
On December 31, 2023, Mr. Dolci who served as President, Cardiopulmonary Business Unit retired from the Company.
2023 — Compensation at Risk
The Company’s focus on pay for performance is embedded in its compensation programs described more fully in this CD&A. A majority of the compensation paid to the Company’s NEOs is at risk as reflected in the following graph, which shows the relative weighting of target pay for the Company’s NEOs as a group for 2023. The target pay mix does not include compensation for the former CEO or Interim CEO in 2023.
[MISSING IMAGE: pc_compensationrisk-4c.jpg]
Given the expected temporary nature of Mr. Kozy’s role as Interim CEO, the CHCM Committee determined to structure his compensation to include base salary, a Short-Term Incentive bonus and two six-month time-vested RSU grants — see Interim CEO Employment Agreement.
2023 Short-Term and Long-Term Incentive Payouts
2023 Short-Term Incentive Plan
2021-2023
rTSR PSUs
(1)
137.5% of target
Reflects performance against a set of
financial and non-financial objectives
115% of target
Reflects 59th percentile
(1)
In 2021, in addition to the PSUs awarded based on relative Total Shareholder Return (“rTSR”), LivaNova granted PSUs based on Adjusted Free Cash Flow and Return on Invested Capital (“ROIC”). Given the uncertainty due to the pandemic, these PSUs had a one-year performance period and required two additional years of service in order to vest.
 
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Further details regarding these plans, the bonuses paid to LivaNova’s NEOs, and the elements of the Company’s pay-for-performance compensation program are described more fully later in this CD&A.
Executive Compensation Pay Practices
LivaNova’s market-competitive executive compensation program is designed to attract and retain executives who perform at a high level and contribute to the success of the Company. It also provides strong financial incentives for the NEOs to increase shareholder value. To accomplish these objectives, the Company typically pays its NEOs: a base salary in cash; a bonus in cash based on relevant achievement of the Short-Term Incentive Plan (“STIP”) metrics; equity grants in the form of service-based awards and performance-based awards; and other employment benefits. All of these items are more fully described in this CD&A and in the narrative and tables below.
The following table sets out what LivaNova does and what LivaNova does not do in its executive compensation program to drive results for its shareholders:
What LivaNova DOES:
What LivaNova DOES NOT DO:
Target NEO pay within a competitive range of the market median to attract, motivate, and retain talented executive officers with the skills and experience to ensure its long-term success Pay excise tax gross-ups
Use multiple pay elements that work together to reward performance and retain talent, while maintaining alignment with shareholder interests Reprice stock options or award discounted stock option grants
Use multiple, balanced performance measures to determine compensation awards Allow its officers or directors to pledge Company securities
Balance the components of compensation so that short-term (annual) and long-term (multi-year) performance objectives are recognized because its success depends on its executive officers being focused on critical strategic and operational objectives, both in the short-term and long-term Allow hedging transactions for any type of Company security, including without limitation puts, calls, equity swaps, collars, exchange funds, prepaid variable forwards or other financial instruments or derivative securities
Pay a substantial portion of each NEO’s compensation as variable pay contingent upon the achievement of its business objectives
Require NEOs to have a meaningful ownership interest in the Company with stock ownership requirements
Vest equity awards over time to promote retention and mitigate risk
Retain the ability to recoup awards in specified situations through its LivaNova Compensation Recoupment Policy and Incentive Clawback Policy
Engage an independent Compensation Consultant to advise the CHCM Committee
Include maximum payout caps on LivaNova’s Short-Term Incentive and Performance Stock Units (“PSUs”) payouts
Grant equity awards with a double trigger acceleration feature upon a Change in Control for awards starting in 2023
 
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Role of the Compensation and Human Capital Management Committee
The CHCM Committee determines LivaNova’s compensation philosophy and program design and is the decision-making body on all matters relating to the compensation paid to the Company’s NEOs. The CHCM Committee has the sole authority to retain and terminate a compensation consultant to assist with its responsibilities as well as the sole authority to approve the compensation consultant’s fees, which the Company pays. For more information about the CHCM Committee, its members and its duties as set forth in its charter, please refer to the section entitled “Corporate Governance” beginning on page 5 of this proxy statement.
Consideration of Prior Year’s Say on Pay Vote
At the 2023 AGM, LivaNova’s “Say on Pay” proposal regarding NEO compensation garnered shareholder support of 96% of the votes cast. As a UK Public Limited Company, LivaNova includes in the Company’s UK Annual Report a directors’ remuneration report, which is subject to a shareholders’ advisory vote. In 2023, the advisory vote on the UK directors’ remuneration report regarding executive and non-executive director remuneration also showed strong support with 96% approval of the votes cast. Each of these proposals is voted on annually. As a result of the positive say-on-pay vote and support for the UK directors’ remuneration report, the CHCM Committee concluded that the Company’s executive compensation programs are performing as intended and therefore determined not to make any significant changes to the core structure of the programs.
In addition, LivaNova has a remuneration policy that, as required by the Companies Act, is approved by the company shareholders. LivaNova’s CHCM Committee considers its remuneration policy annually to ensure that it remains aligned with business needs and is appropriately positioned relative to the market. In the absence of exceptional unexpected circumstances requiring a change to that policy, however, there is no intention to change the policy, and LivaNova has not revised the policy more frequently than every three years as required by the Companies Act. The remuneration policy applies to LivaNova’s directors, including the Company’s CEO, who is also the Company’s sole executive director. The remuneration policy received the support of 98% of the votes cast in 2022.
Role of the Compensation Consultant
For 2023, the CHCM Committee directly engaged an independent compensation consultant, Pearl Meyer, to advise on competitive pay practices, recommend a peer group for compensation purposes, provide market data, and assist the CHCM Committee in the analysis of that data and attend all regular meetings of the CHCM Committee. During 2023, Pearl Meyer did not perform any services for the Company or any of its executive officers or other employees. Based on these factors, the CHCM Committee’s evaluation of Pearl Meyer’s independence pursuant to the requirements approved and adopted by the SEC and Nasdaq, and information provided by Pearl Meyer, the CHCM Committee determined that the work performed by Pearl Meyer did not raise any conflicts of interest.
Role of the CEO
LivaNova’s CHCM Committee works with the Company’s executive management, including its CEO, to oversee its executive compensation program. LivaNova’s CEO plays a key role in the process as it relates to executive officers other than himself. For the NEOs other than himself, the Company’s CEO:

Recommends performance objectives for LivaNova’s annual STIP;

Recommends adjustments to annual base salaries and target amounts under LivaNova’s STIP;

Recommends equity incentive awards under LivaNova’s long-term incentive plan (“LTIP”);

Prepares an evaluation of each executive officer; and

Prepares an analysis of performance objective achievements and recommends annual bonus amounts.
Executive Compensation Philosophy
The CHCM Committee has structured the Company’s executive compensation program to incentivize the Company’s NEOs to perform at the highest level, take appropriate risks and drive shareholder return in the
 
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short- and long-term. LivaNova determines the compensation strategy for its NEOs and oversee its operation to ensure its goals of shareholder alignment, rewarding appropriate performance and competitive pay are achieved.
LivaNova’s executive compensation program aims to (1) ensure that the Company recruits and retains the key executive officers responsible for its success and (2) align the interests of its executive officers, including the Company’s NEOs, with shareholders. To achieve these ends, the CHCM Committee’s executive compensation decisions are based on the following principal objectives:

Providing a competitive compensation package that attracts, motivates and retains talented executive officers with the skills and experience to ensure the Company’s long-term success and enhance shareholder value.   LivaNova utilizes multiple pay and reward vehicles that work together to achieve the Company’s overall compensation objectives. These vehicles are intended to deliver a competitive package to each of LivaNova’s executive officers that is focused on rewarding performance and retaining talent, while maintaining alignment with shareholder interests.

Ensuring a meaningful link between LivaNova’s operational performance, shareholder interests, and corporate governance and the total compensation received by the Company’s executive officers.   A substantial portion of each executive officer’s compensation is based on the collective performance of LivaNova’s management team, as measured by the achievement of specific, key company objectives. The emphasis on overall performance is designed to focus its executive officers, working as a team, on a common purpose, using shared performance standards aligned with shareholder interests and the highest levels of integrity, teamwork, and ethical standards within the Company.

Balancing the components of compensation so that both short-term (annual) and long-term (multi-year) performance objectives are recognized.   LivaNova’s success depends on the Company’s executive officers being focused on the critical strategic and tactical objectives, both short-term and long-term, that lead to the Company’s success. The components of LivaNova’s compensation package, coupled with the performance objectives, align the Company’s executive compensation with its business objectives. The design of the program, the selected performance objectives, and the timing of awards and payouts are all intended to drive business performance and increase shareholder returns.

Considering the US pay level and structure as the core reference for LivaNova’s compensation programs.   Given the talent market in which LivaNova’s compete and consistent with the Company’s compensation peer group, LivaNova uses US pay levels and structures as its core reference to establish competitive compensation levels for the Company’s executive officers. As a result of the multinational nature of the Company and its operations, LivaNova also considers compensation and benefit trends and practices of the countries where the Company hires its executive officers.
How LivaNova Establishes Executive Compensation Levels
In making executive compensation determinations, the CHCM Committee relies on several factors to set compensation elements and compensation targets consistent with LivaNova’s executive compensation program objectives. These factors include:

Assessment of Company Performance.   The CHCM Committee establishes specific, objectively measurable company financial and non-financial performance goals that the Board, the CHCM Committee and management believe will drive shareholder value. The relative achievement of the performance objectives determines substantially all of the pay-outs under the STIP and the performance-based equity incentive awards portion under the LTIP.

Assessment of Individual Performance.   Individual performance is a key consideration in LivaNova’s compensation decisions.

CEO.   The CHCM Committee meets with the Company’s CEO at the end of each fiscal year to agree on the CEO’s performance objectives for the next year. Thereafter, the CHCM Committee and the Chair of the Board or the Lead Director (if the Chair of the Board is an executive director) meet in executive session to assess the CEO’s performance against their objectives, their degree of contribution to LivaNova’s performance, their ethics and integrity, and other leadership attributes.
 
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Other NEOs.   For all other NEOs, the CHCM Committee receives performance assessments and compensation recommendations from the CEO and also exercises its judgment based on the Board’s interactions with the individuals. As with the CEO, an executive officer’s performance assessment is based on individual achievements and contributions, contribution to Company performance, ethics and integrity, and other leadership accomplishments.

Benchmarking Analysis.   The CHCM Committee reviews peer group data based on benchmark analysis provided by its independent compensation consultant, Pearl Meyer, who compares individual pay to comparable roles among LivaNova’s peer group. To perform the benchmark analysis, Pearl Meyer uses data from a pre-established peer group selected by the CHCM Committee, as well as compensation survey data that reflects companies of comparable size and industry where available, collectively referred to as “market data”. Companies included in the peer group are in the healthcare industry and have revenues between $350 million and $2 billion, market capitalization between $750 million and $12 billion and number of employees between 900 and 9,000 people.
The peer group used to benchmark executive compensation for the year ended December 31, 2023 remained unchanged compared to the prior year and consisted of the following companies selected by the CHCM Committee based upon the recommendation of its independent compensation consultant, Pearl Meyer:

Abiomed, Inc.(1)

Integra LifeSciences Holdings Corporation

Avanos Medical, Inc.

Masimo Corporation

CONMED Corporation

Merit Medical Systems, Inc.

Globus Medical, Inc.

Nevro Corp.

Haemonetics Corporation

NuVasive, Inc.

ICU Medical, Inc.

Penumbra, Inc.

Integer Holdings, Corporation

Tandem Diabetics Care, Inc.
In addition, in setting NEO pay, the CHCM Committee considers individual and Company performance, as well as internal pay equity.

Overall Competitiveness.   The CHCM Committee uses aggregated market data as a reference point to ensure that executive compensation falls within the broad middle range of comparable pay at peer companies with which the Company competes for talent.

UK Remuneration Policy.   For LivaNova’s CEO, Mr. Makatsaria who is also a director, the CHCM Committee must also ensure that any compensation plan it approves for him is consistent with the Company’s shareholder-approved UK remuneration policy. Under English company law, LivaNova is obliged to adopt a remuneration policy for the Company’s directors, including its CEO, who is also a director. Under LivaNova’s shareholder-approved remuneration policy, the Company’s CEO’s maximum short-term incentive opportunity cannot exceed 200% of his base salary. In the case of a calculated payment higher than 200%, the CHCM Committee would affirmatively act to reduce the award to not exceed 200% of his base salary in compliance with the UK remuneration policy.
Elements of Compensation
Base Salary
Purpose:   Attract and retain NEOs; compensate for individual performance
Key Features:

In general, fixed annually following the CHCM Committee’s compensation review in the first fiscal quarter;

Measured against market data;
(1)
While Abiomed was acquired by Johnson & Johnson in 2022, the CHCM Committee considered such compensation data to still be relevant; accordingly, such data was included in the benchmark exercise for 2023.
 
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Serves as the baseline from which short-term incentives are calculated; and

Each of LivaNova’s currently employed NEOs is party to an employment agreement that provides for a specified base salary.
The annual base salaries of LivaNova’s NEOs are an important part of their total compensation package and are intended to reflect their respective positions, duties, and responsibilities. Base salaries assist in attracting and retaining the NEOs, as well as helping balance the incentive portions of the compensation program to provide stability and reduce the incentive for excessive risk-taking.
In establishing base salaries, the CHCM Committee considers the following factors:

Responsibilities, including any recent changes in those responsibilities;

Marketing data;

Individual performance during the recently completed financial year and potential future contribution;

Level of expertise and experience of the NEO;

Strategic importance of the NEO’s position; and

Internal pay equity among positions.
With respect to Mr. Kozy, the CHCM Committee approved his base salary as Interim CEO upon the recommendation of Pearl Meyer.
With respect to Mr. Shvartsburg, on December 14, 2022, the CHCM Committee determined to increase his base salary from £360,000 to £430,000, effective January 1, 2023. This salary increase encompassed both a 2023 merit increase as well as a market calibration adjustment as Chief Financial Officer. On July 19, 2023, the CHCM Committee approved Mr. Shvartsburg’ s relocation to the United States and made an administrative adjustment to his salary, targeting the US market median of $553,000, which became effective upon his relocation on November 1, 2023.
On February 20, 2023, the CHCM Committee approved the base salaries of LivaNova’s then employed NEOs effective as of April 1, 2023. For Mr. McDonald, the CHCM Committee decided not to provide any increase, while for all the NEOs employed at that time, other than Mr. Shvartsburg, who received his adjustment in December as mentioned previously, the CHCM Committee granted merit increases between 3.50% and 4.25% in line with market merit percentages.
The Company pays its NEOs in local currency. The change in base salary shown in US dollars in the table below reflects both the base salary increases referenced above, as well as the change in the exchange rate used for 2023 relative to the exchange rate used for 2022.
Currency
Base Salary
as of
Dec 31, 2023
(local currency)
Currency
Base Salary
as of
Dec 31, 2022
(local currency)
Change
Base Salary
as of
Dec 31, 2023
(USD)
(1)
Base Salary
as of
Dec 31, 2022
(USD)
(1)
William Kozy
USD 975,000 USD
NA 975,000 NA
Damien McDonald
GBP 791,117 GBP 791,117
983,398 974,545
Alex Shvartsburg
USD 553,000 GBP 360,000 NA 553,000 443,470
Marco Dolci
EUR 533,025 EUR 515,000 +3.5% 576,328 541,255
Michael Hutchinson
USD 509,600 USD 490,000 +4.0% 509,600 490,000
Trui Hebbelinck
GBP 322,132 GBP 309,000 +4.25% 400,426 380,645
(1)
For non-USD salary amounts in 2023, LivaNova used an exchange rate of $1.24305 per British Pound and an exchange rate of $1.08124 per Euro. For non-USD salary amounts in 2022, LivaNova used an exchange rate of $1.23186 per British Pound and an exchange rate of $1.05098 per Euro, consistent with the rates used in the proxy material for the 2022 AGM. These exchange rates reflect the applicable period average published rate from the Company’s BOPC Accounting System between January 1 and December 31 of the respective calendar year. The BOPC Accounting System uses Bloomberg as a source to obtain exchange rates.
 
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Short-Term Incentives: 2023 Short-Term Incentive Plan (the “2023 STIP”)
Purpose:   LivaNova’s STIP provides incentives that compensate the Company’s executive officers for achieving certain short-term objectives intended to enhance shareholder value. In addition, the STIP is designed to aid in attracting highly qualified executive officers, and to promote their retention.
In particular, the STIP provides formulaic incentives to achieve or exceed a predetermined set of financial objectives, with the final payout for LivaNova’s NEOs modified on the basis of the achievement of non-financial goals.
In establishing the target STIP percentages, the CHCM Committee considers the following factors:

Responsibilities, including any recent changes in those responsibilities;

Market data;

Level of expertise and experience of the NEO;

Strategic importance of the NEO’s position; and

Internal pay equity among positions.
The financial objectives established by the CHCM Committee for the 2023 STIP were Net Sales and Adjusted Net Income. For purposes of the 2023 STIP:

Net Sales” is defined as LivaNova’s net sales for 2023 at budgeted currency exchange rates adjusting for the effects of from any acquisitions and divestitures in 2023.

Adjusted Net Income” is defined as net income at reported currency exchange rates, after adjustments for the effects of acquisitions, divestitures, restructuring, integration, product remediation, purchase price allocation and intangible amortization, significant litigation, equity compensation, significant non-cash adjustments and other infrequent, unusual, or non-recurring items not incurred in the ordinary course of business.
The CHCM Committee established the STIP financial targets after an analysis of market conditions, financial projections, and strategic goals.

After considering the achievement of the financial objectives under the STIP, final payouts for LivaNova’s NEOs eligible to participate in the plan are subject to a modifier (±25%) based on non-financial objectives. For the 2023 STIP, the following non-financial objectives were combined to create a payout modifier:

Difficult-to-Treat Depression (DTD) and Obstructive Sleep Apnea (OSA): Clinical Study project milestones;

Epilepsy: Product Development and Regulatory objectives related to key milestones for new product development as well as a commercial objective related to key milestone for new patient implants;

ACS and CP: Product Development and Regulatory objectives related to key milestones for new product development; and

Capability objectives related to the implementation of a new financial system.
In 2023, the CHCM Committee set a number of non-financial goals with respect to the 2023 STIP that were deemed to be challenging yet individually achievable, with the maximum scoring for each independent goal set at 100%. Given its determination that achievement of all of the non-financial goals in the year would be especially difficult and the maximum 100% scoring for each goal, the CHCM Committee set up the modifier to allow for positive modification in the event most but not all non-financial goals were achieved, up to positive modification of 25% in the event all goals were achieved. Similarly, if most non-financial goals were not achieved, the CHCM Committee designed the 2023 STIP to allow for a downward adjustment with respect to the non-financial goals, capped at 25%. Further, the Non-Financial Goals Modifier can be capped at 100% if the Adjusted Net Income target is not achieved.
 
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Key Features:

Annual cash-based bonus plan expressed as a target percentage of the NEO’s weighted average base salary conditioned on achievement of certain financials and non-financial metrics, per the following formulas.
For all of LivaNova’s eligible NEOs, the calculation is based on the following formula:
[MISSING IMAGE: eq_stip-4c.jpg]
Where BPF stands for Business Performance Factor (“BPF”), a formulaic calculation based on financial and non-financial objectives. The BPF is calculated as follows:
[MISSING IMAGE: eq_livnbpf-4c.jpg]
Where FPF stands for Financial Performance Factor (“FPF”) and is calculated based on the above-described financial metrics per the following formula, and NFG Modifier stands for Non-Financial Goals Modifier and is the above-described modifier based on Non-Financial Objectives.
[MISSING IMAGE: eq_livnfinan-4c.jpg]
[MISSING IMAGE: tb_netsale-bw.jpg]
*
The Non-Financial Goals Modifier is subject to a forecast accuracy assessment mechanism and can be capped at 100% if the Adjusted Net Income target is not achieved.
**
Linear interpolation is used to calculate payouts for achievements between the levels indicated in the above table.
As a result of their departures from the Company, Messrs. McDonald and Dolci were not eligible to receive a payout under the 2023 STIP. The table below shows the minimum, target, and maximum short-term incentive payment under the 2023 STIP for each of the remaining NEOs:
Name
2023 STIP
Minimum
(Percentage of
Base Salary)
2023 STIP
Target
(Percentage of
Base Salary)
2023 STIP
Maximum
(Percentage of
Base Salary)
(1)
William Kozy
0% 110% 200.0%
Alex Shvartsburg
0% 65% 121.9%
Michael Hutchinson
0% 65% 121.9%
Trui Hebbelinck
0% 65% 121.9%
(1)
These percentages represent 181.82% of the target bonus opportunity for Mr. Kozy and 187.5% of the target bonus opportunity for the other NEOs.
 
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2023 Short-Term Incentive Plan Pay-out
Bonuses are based on performance over the calendar year, which is also LivaNova’s financial year, and are generally paid in April of the following year after completion of the audit of the Company’s annual financial statements. The Company’s performance in 2023, as defined by the 2023 STIP, was as follows:
Financial Objectives:
Weight (%)
Target ($M)
Achievement ($M)
Achievement (%)
Financial Payout (%)
Net Sales
60 1,113.7 1,215.4 109.1 145.65%
Adjusted Net Income
40 138.1 152.0 110.1 125.16%
FPF
137.5%
Non-Financial Objectives:
Performance against LivaNova’s 2023 non-financial goals is summarized in the table below and yielded 70% achievement. Due to the “stretch” nature of these goals, this resulted in a preliminary +10% modification to financial funding for the Company’s STIP payout.
Business Area
Description
Achievement
Achievement
description
Weight (%)
Achievement
(%)
(1)
DTD
500th Unipolar (UP) patient randomized into the study by target date, completing recruitment for UP cohort Achieved
500th Unipolar patient randomized into the study by target date
15%
15%
First interim analysis initiated for Bipolar cohort in the RECOVER study upon randomizing target number of bipolar patients by target date Achieved Target number of bipolar Patients achieved on June 13, 2023.
10%
10%
OSA
Target number of randomized patients by target date and program assessment completion by target date Not Achieved Target number of patients not achieved by the target date and program assessment completed
10%
0%
Epilepsy
Target% of New Patient Implants (“NPIs”) growth year over year Not Achieved Achieved high single digit NPI year-over-year growth, slightly behind target%
20%
0%
Two key milestones in Regulatory and R&D to be completed by target date, each weighted 5%. Achieved
All milestones achieved by the target date
10%
10%
CP
Software release for Europe commercialization by target date
Achieved
Software release completed by target date
15%
15%
ACS
One key milestone in Regulatory and target number of critical product development projects to be completed by target date, each weighted 5%. Achieved Both regulatory and product development goal achieved
10%
10%
Capability
Financial system deployed by target date
Achieved
Financial system went live by the target date
10%
10%
Total
100%
70%
(1)
Achievement for each goal is capped at 100% of its assigned weight.
 
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STIP Payout:
Based on the scoring of the 2023 non-financial objectives as well as an overall assessment of Company performance, the CHCM Committee determined to utilize negative discretion to cap the Non-Financial Goals Modifier at 100%. Consequently, as a result of achieving LivaNova’s 2023 STIP financial and non-financial objectives, the STIP produced a payout of 137.5% of target for all of the eligible NEOs.
The following table shows the target bonus amount, the payout % (BPF), and amount paid to each eligible NEO under the 2023 STIP:
2023 STIP
Target ($)
(1)
STIP
Payout %
2023 STIP
Payout ($)
(1)
William Kozy(2)
769,849 137.5% 1,058,542
Alex Shvartsburg(3)
349,442 137.5% 480,483
Michael Hutchinson
328,308 137.5% 451,424
Trui Hebbelinck
257,661 137.5% 354,284
(1)
For payout amounts, LivaNova used an exchange rate of $1.24305 per British Pound reflecting the applicable period average published rate from the Company’s BOPC Accounting System between January 1, 2023 and December 31, 2023.
(2)
The 2023 STIP Target and Payout for Mr. Kozy is calculated on a prorated basis using his starting date of April 14, 2023.
(3)
The 2023 STIP Target Payout for Mr. Shvartsburg is calculated as the sum of two portions: a prorated amount from January 1, 2023 until October 31, 2023, equal to £232,789 ($289,369) and a prorated amount from November 1, 2023 until December 31, 2023, equal to $60,072.
Long-Term Incentives: 2023 Long-Term Incentive Plan (the “2023 LTIP”)
Purpose:   Promote LivaNova’s long-term success and enhance the Company’s value by providing employees with an incentive for outstanding performance that generates superior returns for its shareholders. The plan also provides flexibility as LivaNova seeks to motivate, attract and retain the Company’s NEOs, upon whom LivaNova’s success is largely dependent.
Key Features:

Service-Based Awards:

Restricted Stock Units generally vest in substantially equal amounts on each of the first four anniversaries of the grant date

Stock Appreciation Rights vest in substantially equal amounts on each of the first four anniversaries of the grant date and expire ten (10) years from the grant date.

Performance-Based Awards:

Relative Total Shareholder Return (rTSR) Performance Stock Units are subject to a three-year relative total shareholder return market condition (weighted 50% of the total PSU value)

Adjusted Free Cash Flow (FCF) Performance Stock Units are subject to achievement of a three-year cumulative adjusted free cash flow target (weighted 25% of the total PSU value)

Return on Invested Capital (ROIC) Performance Stock Units are subject to achievement of a three-year cumulative Return on Invested Capital target (weighted 25% of the total PSU value)
LivaNova typically grants equity awards to executive officers under the 2023 LTIP on the same date the Company grants annual equity awards for other employees, or, in the event of an executive who joins after approval of the annual awards, at the first predetermined equity award grant date following the commencement of their employment with the Company. The predetermined quarterly grant dates are March 30, June 15, September 15, and December 15. There is no formal policy providing any affirmative right to an LTIP award.
 
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2023 LTIP Design
On March 27, 2023, the CHCM Committee approved LivaNova’s 2023 LTIP in which all NEOs other than Mr. Kozy participated. Pursuant to the 2023 LTIP, the CHCM Committee approved an equity award value for each of the five award vehicles for each participant.
In establishing the grant date fair value of equity awards made to the NEOs under the 2023 LTIP, the CHCM Committee considered the following factors:

Responsibilities, including any recent changes in those responsibilities;

Market data;

Level of expertise and experience of the NEO;

Strategic importance of the NEO’s position; and

Internal pay equity among positions.
The grant date fair value of equity awards made to the NEOs under the 2023 LTIP were as follows:
RSUs ($)
SARs ($)
rTSR PSUs ($)
FCF PSUs ($)
ROIC PSUs ($)
Total Award
Value ($)
Damien McDonald(1)
1,625,000 1,625,000 1,625,000 812,500 812,500 6,500,000
Alex Shvartsburg
400,000 400,000 400,000 200,000 200,000 1,600,000
Marco Dolci
250,000 250,000 250,000 125,000 125,000 1,000,000
Michael Hutchinson
250,000 250,000 250,000 125,000 125,000 1,000,000
Trui Hebbelinck
225,000 225,000 225,000 112,500 112,500 900,000
(1)
As a result of his resignation from the Company on April 14, 2023, Mr. McDonald forfeited all of his awards under the 2023 LTIP.
Service-Based Elements:
Restricted Stock Units (“RSUs”)
Each NEO other than Mr. Kozy received an award of service-based RSUs vesting in substantially equal amounts on each of the first four anniversaries of the grant date. The CHCM Committee determined the number of RSUs awarded to each participant by dividing the award value by the most recent closing price of an Ordinary Share of LivaNova’s stock on Nasdaq as of the grant date and rounding down to the nearest whole unit. The first vesting occurred on March 30, 2024.
Stock Appreciation Rights (“SARs”)
Each NEO other than Mr. Kozy received an award of SARs vesting in substantially equal amounts on each of the first four anniversaries of the grant date. The CHCM Committee determined the number of SARs awarded to each participant by dividing the award value by the Black-Scholes value of a SAR based on the closing price of an Ordinary Share of LivaNova’s stock on Nasdaq as of the grant date and rounding down to the nearest whole unit. The first vesting occurred on March 30, 2024.
Performance-Based Elements:
Relative Total Shareholder Return Performance Stock Units (“2023 rTSR PSUs”)
Each NEO other than Mr. Kozy received an award of PSUs subject to a three-year rTSR market condition. At the end of calendar year 2025, LivaNova’s total shareholder return for the three-year period from 2023 through 2025 will be compared to the total shareholder return for the same period for a group of companies (the “2023 rTSR Comparator Group”) selected by the CHCM Committee in consultation with its independent compensation consultant, Pearl Meyer. The number of shares of the Company’s stock actually delivered to the participants will be determined by the following chart, with linear interpolation applied between specified levels.
 
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TSR Performance
Percentile Rank
Percent of Target PSUs
Earned
≥90th
200%
80th
150%
50th
100%
30th
40%
<30th
0%
The following companies comprise the 2023 rTSR Comparator Group:
Avanos Medical, Inc. iRhythm Technologies, Inc
Boston Scientific Corporation Masimo Corporation
CONMED Corporation Medtronic plc
DexCom, Inc. Merit Medical Systems, Inc.
Edwards Lifesciences Corporation Nevro Corp.
Globus Medical, Inc. NuVasive, Inc.
Haemonetics Corporation Orthofix Medical Inc.
Hologic, Inc. Penumbra Inc.
ICU Medical, Inc ResMed Inc.
Insulet Corporation Smith & Nephew plc
Integer Holdings Corporation Tandem Diabetes Care, Inc
Integra LifeSciences Holdings Corp. Teleflex Incorporated
Intuitive Surgical, Inc. Zimmer Biomet Holdings, Inc.
Invacare Corporation
The 2023 rTSR Comparator Group was the same as the 2022 rTSR Comparator Group, with the exception of the removal of Abiomed and Natus Medical Incorporated, which were acquired in 2022 respectively by Johnson & Johnson and Archimed. Companies included in the 2023 rTSR Comparator Group are in the healthcare industry and have revenue in excess of $500 million, with the exception of iRhythm Technologies, Nevro Corp. and Orthofix. These companies were chosen because they are comparable in size and are generally in the same sector as the Company, which supports the purpose of the rTSR metric, which is to measure LivaNova’s performance against peers in the Company’s area of business.
Adjusted Free Cash Flow PSUs (“FCF PSUs”)
Each NEO other than Mr. Kozy received an award of PSUs subject to achievement of a three-year cumulative adjusted free cash flow target. The FCF PSUs are subject to three-year service-based cliff vesting, with performance-based vesting contingent on the Company achieving threshold and target levels of FCF.
The CHCM Committee determined the number of FCF PSUs awarded to each participant by dividing the award value by the most recent closing price of an Ordinary Share of LivaNova’s stock on Nasdaq as of the grant date and rounding down to the nearest whole unit. The FCF PSUs are scheduled to vest or lapse on March 30, 2026, based on how the Company’s cumulative adjusted FCF for the three-year performance period ended December 31, 2025 compares to target, the number of shares of the Company’s stock actually delivered to the participants will be determined by the following chart, with linear interpolation applied between specified levels:
 
39

 
FCF Achievement
Relative to FCF Target
(1)
Percent of PSUs
Earned
≥150%
200%
125%
150%
100%
100%
60%
20%
<60%
0%
(1)
Adjusted free cash flow is defined as net cash provided by operating activities less cash used for the purchase of property, plant and equipment excluding the impact of 3T litigation settlement payments, net costs related to financing and cash held as collateral for the SNIA Litigation Guarantee, CARES Act tax stimulus benefits, and gains related to dividends received from investments, and further adjusted as needed for other one-time, nonrecurring, unusual or infrequent charges, expenses or gains, including associated expenses, that may not be indicative of the Company’s core business. In the event there are items that differ from the Company’s non-GAAP reported results, management will seek approval from the CHCM Committee of such potential adjustments in the regularly scheduled quarterly meeting after such adjustment is identified.
Return on Invested Capital PSUs (“ROIC PSUs”)
Each NEO other than Mr. Kozy received an award of PSUs subject to achievement of a three-year average minimum threshold return on invested capital target (“ROIC Target”). The ROIC measure is designed to estimate core operating performance, excluding the impact of financing and capital structure decisions, and encourages effective financial stewardship.
The ROIC PSUs are subject to a three-year cliff vesting period, with performance-based vesting contingent on the Company achieving threshold and target ROIC.
The CHCM Committee determined the number of ROIC PSUs awarded to each participant by dividing the award value by the most recent closing price of an Ordinary Share of LivaNova stock on Nasdaq as of the grant date and rounding down to the nearest whole unit. The ROIC PSUs are scheduled to vest or lapse on March 30, 2026, based on how the Company’s average ROIC calculated for the three-year performance period ended December 31, 2025 compares to a target ROIC level. The number of shares of the Company’s stock actually delivered to the participants will be determined by the following chart, with linear interpolation applied between specified levels:
ROIC Achievement
Relative to ROIC Target
(1)
Percent of Target
PSUs Earned
Target ≥ +250 bps
200%
Target +125 bps
150%
Target
100%
Target – 125 bps
50%
Target ≤ 250 bps
0%
(1)
ROIC is defined as net operating profits divided by invested capital. The numerator, net operating profits, is defined as the Company’s adjusted operating income less share-based compensation expense and is tax affected by LivaNova’s adjusted tax rate. Adjusted operating income and adjusted tax rate are non-GAAP measures, provided in conjunction with the issuance of the Company’s quarterly earnings press release, while the denominator, invested capital, is defined as operating working capital plus other net operating assets. It excludes restricted cash, derivative assets and liabilities, long-term debt and accrued legal settlements related to LivaNova’s 3T matter.
Special RSU Grants for Interim CEO
As discussed above, under the terms of his offer letter, in connection with his appointment as Interim CEO, Mr. Kozy was granted a one-time award of time-based restricted stock units with a grant date fair value of $500,000 on June 15, 2023, which award vested on October 14, 2023, the six-month anniversary of his start date, in line with his initial term.
 
40

 
In connection with the extension of his term as Interim CEO and consistent with the terms of his offer letter, the CHCM Committee of the Board determined to grant Mr. Kozy an additional one-time award of time-based restricted stock units with a grant date fair value of $750,000, effective as of December 15, 2023, in accordance with the Company’s next predetermined equity grant date (contingent upon Mr. Kozy’s continued employment as Interim Chief Executive Officer through such date), which vested upon the commencement of Mr. Makatsaria’s employment as Chief Executive Officer on March 1, 2024.
Vesting in 2023 of Performance Awards Made in Previous Years
Vesting of rTSR PSUs Granted in 2021
The rTSR PSUs granted in March 2021 (the “2021 rTSR PSUs”) were subject to a three-year cliff vesting period with vesting contingent on the Company achieving a three-year (2021-2023) rTSR threshold level of at least the 30th percentile of the 2021 rTSR comparator group. The Company ranked at the 59th percentile of that group, and accordingly 115% of the 2021 rTSR PSUs vested.
Other Benefits and Perquisites
LivaNova’s NEOs are provided with certain perquisites and other benefits to aid in the performance of their respective duties and to provide compensation competitive with that of executives with similar positions and levels of responsibilities in their respective geographies. These benefits may include immigration assistance, car allowances, supplemental life insurance, supplemental health insurance, supplemental pension contributions, meal vouchers, and flexible benefit payments. Some of these are benefits received by all employees and so are not considered to be “perquisites” or “personal benefits” according to SEC rules, and, accordingly, do not appear in the Summary Compensation Table under All Other Compensation. However, some of the NEOs’ benefits are not offered to all other employees (e.g., car allowances) and accordingly are considered “perquisites” or “personal benefits” that are reflected in the Summary Compensation Table under All Other Compensation and separately identified in footnotes as perquisites and other benefits.
Health/Welfare Plans
All of LivaNova’s full-time US-based employees are eligible to participate in the Company’s health and welfare plans, including:

Medical, dental and vision benefits;

Medical and dependent care flexible spending accounts;

Short-term and long-term disability insurance; and

Group term life insurance.
Mr. Kozy chose to waive his right to participate in the standard employee benefits provided to US employees of LivaNova USA. Under the terms of his offer letter, he was entitled to tax advice and immigration support with respect to his business travel to the United Kingdom.
Outside the US, LivaNova employees are generally covered by a state-run health plan and may be eligible to participate in a supplemental health plan, depending on their geography and position in the Company. LivaNova’s current NEOs based in the UK, Ms. Hebbelinck and, for a portion of 2023, Messrs. Shvartsburg and McDonald, are and/or were eligible to receive Company-paid supplemental private health insurance, group term life insurance, disability insurance, and tax assistance support. Prior to his departure from the Company, Mr. Dolci was based in Italy and received Company-paid supplemental private health insurance, group term life insurance and disability insurance and income tax filing assistance.
Stock Ownership Requirements
The Board believes that meaningful equity ownership in the Company is an essential element in demonstrating the commitment of its directors and executive officers to creating value for its shareholders. As a result, the Company established stock ownership requirements applicable to those individuals. Failure to maintain the
 
41

 
required amount of equity ownership once attained may be a factor considered by the CHCM Committee in recommending and/or approving future awards for LivaNova’s executive officers.
The market value of equity ownership in the Company is required to be at least:

Five times base salary for the CEO;

Three times base salary for all executive officers, other than the CEO; and

Five times the annual cash retainer for all non-executive directors.
The market value of equity ownership for this purpose includes all (i) Ordinary Shares owned by the individual or held individually by or jointly with the individual’s spouse or children and (ii) all unvested, time-based restricted shares and restricted stock units owned by the individual. All shares and units are valued at the closing price of an Ordinary Share of LivaNova’s stock on Nasdaq as of the relevant measurement date. Unearned, unvested PSUs and vested and unvested stock options are not counted towards the achievement of the applicable guidelines.
Until the relevant equity ownership threshold is achieved by each non-executive director and executive officer, such director or officer, as the case may be, should retain a minimum of the value equal to 100% of the net Ordinary Shares received (i.e., following tax withholding) until the relevant equity ownership threshold has been achieved. Following achievement of the relevant equity ownership threshold, Ordinary Shares in excess of such amount may be sold, subject to the Company’s Insider Trading Policy then in effect.
Clawback Policies
The Company maintains two clawback polices — the LivaNova Compensation Recoupment Policy and the Incentive Compensation Clawback Policy.
The LivaNova Compensation Recoupment Policy applies to both incentive cash bonus and service and performance-based equity incentive compensation awarded to executive officers, including all of LivaNova’s NEOs. Under the policy, to the extent permitted by applicable law and subject to the approval of the CHCM Committee, the Company may seek to recoup any incentive-based compensation awarded to any executive subject to the policy based on:
(1)
the achievement of financial results that are subsequently the subject of a restatement due to material noncompliance with any financial reporting requirement under either generally accepted accounting principles (“GAAP”) or the federal securities laws, other than as a result of changes to accounting rules and regulations, and regardless of individual fault; or
(2)
a subsequent finding by the CHCM Committee that financial information or performance metrics used to determine the amount of the incentive compensation are materially inaccurate, regardless of individual fault; or
(3)
significant misconduct by an executive subject to the policy or an employee under the supervision of an executive subject to the policy, resulting in a violation of a significant Company policy, law or regulation that causes material harm to the Company. In addition, the existing equity grant agreements between the Company and its NEOs include recoupment provisions in specific circumstances, even after the awards have vested.
The Incentive Compensation Clawback Policy was adopted by the Company in July 2023 pursuant to Nasdaq Rule 5608, consistent with the requirements of the Exchange Act Rule 10D-1.
Tax and Accounting Considerations
In making its decisions regarding executive compensation, the CHCM Committee considers the tax deductibility of various aspects of the compensation program for LivaNova’s NEOs. However, the CHCM Committee believes that it must maintain flexibility in its approach to executive compensation in order to structure a program that it considers to be the most effective in attracting, motivating and retaining the Company’s key executives, and therefore, the deductibility of compensation is only one of several factors considered when making executive compensation decisions.
 
42

 
The CHCM Committee also considers the effect of certain accounting rules that apply to the various aspects of the compensation program for LivaNova’s NEOs. To that end, the CHCM Committee reviews potential accounting effects in determining whether its compensation actions are in the best interests of the Company and its shareholders.
Compensation and Human Capital Management Committee Report
Set out above is the CD&A, which is a discussion of LivaNova’s executive compensation programs and policies written from the perspective of how the CHCM Committee and management view and use such programs and policies. Given the CHCM Committee’s role in providing oversight of the design of those programs and policies, and in making specific compensation decisions for senior executives using those policies and programs, the CHCM Committee reviewed successive drafts of the Compensation Discussion and Analysis and discussed those with management. The CHCM Committee joins with management in welcoming shareholders to examine LivaNova’s pay practices and in affirming the commitment of these pay practices to the long-term interests of shareholders. The CHCM Committee has reviewed and discussed the disclosure set forth above under the heading “Compensation Discussion and Analysis” with management and, based on the review and discussions, it has recommended to the Board that the “Compensation Discussion and Analysis” be included in LivaNova’s Form 10-K and the Company’s proxy statement for the AGM.
Stacy Enxing Seng (Chair)
Francesco Bianchi
Peter Wilver
 
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Compensation Tables
Summary Compensation Table
The following table contains information about the compensation earned by each of LivaNova’s NEOs during each of the last three financial years unless such individual was an NEO for fewer than three years.
Name and Principal Position
Year
Salary ($)(1)
Bonus ($)(2)
Stock Awards
($)
(3)
Option Awards
($)
(3)
Non-Equity
Incentive Plan
Compensation
($)
(1)(4)
All Other
Compensation
($)
(1)(5)
Total
William Kozy,
Former Interim CEO(6)
2023 697,500 1,249,961 1,058,542 54,722 3,060,725
Damien McDonald,
Former CEO(7)
2023 286,826 4,746,297 1,624,996 1,552,221 8,210,340
2022 967,450 4,883,235 1,249,995 1,105,422 359,443 8,565,545
2021 1,056,456 5,349,239 1,249,971 1,884,453 540,525 10,080,644
Alex Shvartsburg,
CFO
2023 536,885 1,168,289 399,992 480,483 185,531 2,771,180
2022 434,231 976,502 299,966 258,051 159,916 2,128,666
2021 431,476 891,335 249,988 314,453 142,107 2,029,359
Marco Dolci,
Former President,
Cardiopulmonary BU
(8)
2023 571,833 2,094,554 1,046,774 1,089,127 4,802,288
2022 537,617 813,760 249,978 407,944 198,728 2,208,027
2021 591,140 891,335 249,988 506,134 190,807 2,429,404
Michael Hutchinson,
Senior Vice President,
Chief Legal Officer and
Company Secretary
2023 505,077 100,000 730,181 249,983 451,424 35,686 2,072,351
Trui Hebbelinck,
CHRO
2023 396,347 657,120 224,994 354,284 144,415 1,777,160
2022 377,873 732,378 224,966 224,516 129,018 1,688,751
2021 412,638 713,172 199,973 382,742 149,940 1,858,465
(1)
For amounts reported in 2023, LivaNova used an exchange rate of $1.24305 per British Pound and $1.08124 per Euro. These exchange rates reflect the applicable period average published rate between January 1 and December 31 from the Company’s BOPC Accounting System which uses Bloomberg as a source to obtain exchange rates.
(2)
Per his offer letter, dated November 2, 2022, Mr. Hutchinson was eligible to receive a one-time cash bonus in the amount of $200,000 (less applicable withholdings and deductions) to be paid in three installments: 50% on the first payroll date after his start date; 25% on the first payroll date six months after his start date; and 25% on the first payroll date after the first anniversary of his start date, subject to his continued employment through the applicable vesting date. The amount reflected in this column for Mr. Hutchinson represents the portion of his new-hire cash bonus award paid in 2023. If Mr. Hutchinson was to terminate his employment with the Company within one (1) year of his start date, the Company had the right to seek a pro rata repayment of this one-time bonus.
(3)
Amounts reflect the full grant-date fair value of PSUs, RSUs and SARs granted and computed in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718, rather than the amounts paid to or realized by the named individual. LivaNova provides information regarding the assumptions used to calculate the value of all PSUs, RSUs and SARs awards made to executive officers in Notes 2 and 15 to LivaNova audited financial statements in the Company’s US Annual Report on Form 10-K for the year ended December 31, 2023. Under the terms of LivaNova’s PSU awards at grant, between 0% and 200% of the target number of shares subject to the awards can vest based on performance and the other vesting conditions applicable to the awards. For the PSUs awarded to LivaNova’s NEOs in 2023, the table below sets forth (i) the grant-date fair value of the awards determined in accordance with FASB ASC Topic 718, with these values determined based on a Monte Carlo simulation pricing model (included in the “Probable Outcome” column below) for the relative TSR PSUs and based on the last available stock price at grant date for the Adjusted Free Cash Flow and the ROIC PSUs, and (ii) the grant-date fair value of these awards assuming that the maximum level of performance was achieved.
Name
PSUs — Probable Outcome of
Performance Conditions PSUs
Grant-Date Value ($)
PSUs — Maximum Outcome of
Performance Conditions
Grant-Date Fair Value ($)
Damien McDonald
3,121,300 6,500,000
Alex Shvartsburg
768,300 1,600,000
Marco Dolci
480,188 1,000,000
Michael Hutchinson
480,188 1,000,000
Trui Hebbelinck
432,126 900,000
 
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In granting equity awards, the CHCM Committee values PSUs at the most recent closing price of an Ordinary Share of LivaNova stock on Nasdaq as of the grant date with the value of PSUs based at the “target” level of performance. Under applicable accounting rules, however, the grant-date fair value of the rTSR PSUs awarded to LivaNova’s NEOs is calculated using a Monte Carlo simulation pricing model. The rTSR PSUs are included as compensation for LivaNova’s NEOs in the “Summary Compensation Table” based on this valuation methodology.
The following chart shows the values of the rTSR PSU awards approved by the CHCM Committee in 2023 that were used to determine the number of shares subject to the awards at “target” without taking the Monte Carlo simulation pricing model into account, as well as the accounting grant-date fair value of the rTSR PSUs required to be use under applicable SEC rules to report in the “Summary Compensation Table” ​(including the impact of the Monte Carlo simulation pricing model).
Name
rTSR PSUs Value Based on
Grant Date Stock Price ($)
rTSR PSUs — Value included in
Summary Compensation Table ($)
Damien McDonald
1,625,000 1,496,303
Alex Shvartsburg
400,000 368,311
Marco Dolci
250,000 230,195
Michael Hutchinson
250,000 230,195
Trui Hebbelinck
225,000 207,175
(4)
Values in this column reflect payments in respect of the relevant year’s short-term incentive plan.
(5)
The amounts reported in the “All Other Compensation” column represent the aggregate dollar amount for all other benefits and payment received by LivaNova’s NEOs. The following table shows the nature of the benefits and payments and specific amounts for each of the Company’s NEOs in 2023:
Name
Supplemental
Health
Insurance ($)
(a)
Car
Allowance
($)
(b)
Contribution
Plan — 
Registrant
Contributions
($)
(c)
Cash in lieu
of pension
($)
(d)
Other ($)(e)
Total ($)
William Kozy
54,722 54,722
Damien McDonald
61,177 6,435 12,431 37,807 1,434,371 1,552,221
Alex Shvartsburg
27,028 13,674 2,297 113,454 29,078 185,531
Marco Dolci
5,979 15,570 69,134 998,444 1,089,127
Michael Hutchinson
22,486 13,200 35,686
Trui Hebbelinck
14,219 16,408 112,595 1,193 144,415
(a)
Represents the private medical insurance provided for Messrs. McDonald (for 2023 and the amount in cash paid in replacement of health insurance until April 14, 2024), Shvartsburg (including both the UK and US medical and dental insurance premium), Hutchinson and Dolci, and Ms. Hebbelinck.
(b)
Represents the car allowance for each of Messrs. McDonald (prorated until April 14, 2023), Shvartsburg (prorated for his period under a UK service agreement until October 31, 2023) and Dolci and Ms. Hebbelinck; these allowances are customary for UK and Italian executive compensation packages.
(c)
Represents Company-matching contributions to a defined contribution plan equal to the amount of contributions made by the executive officer (see — 2023 Nonqualified Deferred Compensation). For Mr. Dolci, includes the Italian qualified end of service fund (so called TFR) which is equal to 1/13.5 of his recurring compensation item (salary and bonus) and additional supplementary pension per national collective agreement, customary for an executive in Italy. For Mr. McDonald and Ms. Hebbelinck, includes £10,000 ($12,430) and £90,579 ($112,595), respectively, of Company contributions into a personal pension plan sponsored by the Company. For Messrs. Shvartsburg and Hutchinson, includes $2,297 and $13,200, respectively, of Company contributions into the Company sponsored 401K plan.
(d)
Represents cash received in lieu of pension (see — 2023 Nonqualified Deferred Compensation).
(e)
For Mr. Kozy, represents his prorated non-executive prorated director fees paid until April 13, 2023 ($52,857) plus his tax assistance ($1,865). For Mr. McDonald, represents his base salary, pension and car allowance for April (since April 14) and May 2023 plus his notice payment that the company began paying in instalments from June 2023 for a total of £1,062,139 ($1,320,296), in accordance with the terms of his previously disclosed service agreement and release agreement, legal fees associated with the negotiation of his release agreement of £25,000 ($31,076), executive coaching for £20,000 ($24,861), tax preparation and filing assistance for filing in the UK, US and Australia ($20,000) and cash in lieu of untaken annual leave for £30,681 ($38,138). For Mr. Shvartsburg, represents relocation benefits ($17,204), relocation allowance ($6,874), and tax preparation and filing assistance ($5,000). For Mr. Dolci, represents his severance pay earned in 2023 ($929,870) a flexible benefit ($1,892), meal voucher ($559), travel allowance ($3,691), cash in lieu of vacation paid in 2023 ($24,712) and cash in lieu of vacation accrued in 2023 and paid in 2024 ($34,955) and tax preparation and filing assistance ($2,765). For Ms. Hebbelinck, represents tax preparation and filing assistance ($1,193).
 
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(6)
Mr. Kozy served as Board Chair and Non-Executive Director until April 13, 2023 From April 14, 2023, to March 1, 2024 he served as the Company’s Board Chair and Interim Chief Executive Officer.
(7)
Mr. McDonald resigned as Chief Executive Officer of the Company and as a member of the Company’s Board of Directors, effective April 14, 2023, with his employment by the Company ceasing on May 31, 2023. All unvested equity awards held by Mr. McDonald were forfeited on the last day of his employment. See — “Potential Payments Upon Termination or Change in Control — Damien McDonald — Settlement Agreement — Damien McDonald” for more information. Furthermore, per the terms of LivaNova’s equity incentive award agreements, Mr. Dolci’s retirement was deemed an “Approved Retirement” for purposes of the treatment of his outstanding and unvested equity awards upon the termination of his employment. Therefore, any outstanding and unvested equity awards that Mr. Dolci held as of December 31, 2023 will continue to vest pursuant to the terms of their respective award agreements. Under applicable accounting rules, the determination to treat Mr. Dolci’s retirement as an “Approved Retirement” constituted a modification of his outstanding and unvested equity awards. Accordingly, the amounts set forth in the table above for Mr. Dolci include the incremental fair value change of his outstanding stock awards ($1,364,374) and outstanding option awards ($796,791) as a result of such modifications. The modification value does not represent or reflect additional awards granted to Mr. Dolci.
(8)
Mr. Dolci served as the Company’s President, Cardiopulmonary until December 31, 2023.
 
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2023 Grants of Plan-Based Awards Table
Name
Grant Date
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
Estimated Future Payouts
Under Equity Incentive
Plan: Performance Stock
Units (PSUs) (#)
All Other
Stock
Awards:
Number of
Shares of
Service
Based RSUs
(#)
All Other
Option
Awards:
Number of
Securities
Underlying
SARs
(#)
Exercise or
Base Price of
SAR Awards
($/S)
Grant
Date Fair
Value of
Stock and
SAR
Awards
(1)
($)
Threshold
($)
Target
($)
Maximum
($)
Threshold
($)
Target
($)
Maximum
($)
William Kozy
769,849 1,399,739
06/15/2023 14,512 749,981
12/15/2023 10,311 499,980
Damien McDonald
3/30/2023 19,208 38,416
(2),(5)
812,498
3/30/2023 19,208 38,416
(3),(5)
812,498