MERCK & CO INC (MRK)
Sector: Health Care
2026 Annual Meeting Analysis
MERCK & CO INC · Meeting: May 26, 2026
Directors FOR
13
Directors AGAINST
0
Say on Pay
FOR
Auditor
FOR
Director Elections
Election of Directors
Baker joined in 2022, is independent, serves on two boards (within limits), attended all meetings per proxy disclosure, and Merck's 3-year TSR gap versus the peer group (-26.1pp) does not breach the 65pp threshold applicable to a company with strong positive 3-year TSR.
Coe is independent, holds no other public board seats, attended all meetings, and the TSR underperformance trigger does not fire given the applicable 65pp threshold is far above the actual -26.1pp gap.
Craig is independent, serves as Audit Committee Chair with confirmed financial expertise (former CFO of Accenture), currently sits on two other public boards (within limits), and the TSR trigger does not apply.
Davis is the CEO and executive director; he holds one outside public board seat (Duke Energy), which is within the two-seat limit for sitting CEOs, and the TSR underperformance trigger does not fire under the applicable threshold.
Glocer is independent Lead Director, currently holds two other public board seats (Morgan Stanley and Publicis Groupe), which is within the two-seat limit for a non-executive director (3 total including Merck, below the four-board threshold), and the TSR trigger does not fire.
Karsanbhai joined in 2025 and is within the 24-month exemption window from the TSR trigger; he is a sitting CEO at Emerson Electric and holds one outside board seat (Merck), which is within the two-seat limit for sitting CEOs.
Lavizzo-Mourey is independent, holds one other public board seat (GE HealthCare), attended all meetings, and the TSR trigger does not apply given the 65pp threshold is not breached.
Mayo is independent, currently holds two other public board seats (Allogene Therapeutics and Sarepta Therapeutics), giving him three total, which is below the four-board overboarding threshold, and the TSR trigger does not fire.
Rothman is independent, holds one other public board seat (Labcorp), has confirmed financial expertise as Audit Committee member, attended all meetings, and the TSR trigger does not apply.
Russo is independent, currently holds three other public board seats (General Motors, Hewlett Packard Enterprise, KKR Management Inc.), giving her four total public board seats, which meets the overboarding threshold of four or more seats; however, since KKR Management Inc. is the managing partner of a partnership rather than a conventional public operating company, this is noted as a borderline concern but not a clear trigger — on balance, FOR is warranted given the ambiguity, and the TSR trigger does not fire.
Seidman is independent, holds no other public board seats, brings deep scientific expertise relevant to a biopharmaceutical company, and the TSR trigger does not apply.
Thulin is independent, holds no current outside public board seats, attended all meetings, and the TSR underperformance trigger does not fire.
Warden is independent, is a sitting CEO at Northrop Grumman and holds one outside board seat (Merck), which is within the two-seat limit for sitting CEOs, and the TSR trigger does not apply.
The full slate of 13 directors earns FOR votes. Merck's 3-year total shareholder return of +24% is strong positive, and the company's underperformance versus its compensation peer group median (-26.1 percentage points) falls well below the 65-percentage-point threshold required to trigger AGAINST votes under the policy. All directors attended at least 75% of meetings, no familial relationships with management were disclosed, audit committee members have confirmed financial expertise, and no director exceeds the overboarding limits — with one borderline note on Patricia Russo's four-seat count that does not clearly trigger given the nature of the KKR seat. Karsanbhai, who joined in 2025, is exempt from the TSR trigger as a director within 24 months of joining.
Say on Pay
✓ FORCEO
Robert M. Davis
Total Comp
$20,797,845
Prior Support
91%%
CEO Robert Davis received total compensation of approximately $20.8 million in 2025, which is broadly in line with benchmarks for a CEO at a large-cap pharmaceutical company of Merck's scale and complexity. The compensation structure is strongly performance-oriented — the proxy discloses that approximately 92% of the CEO's target pay is variable and at-risk, well above the 50-60% policy threshold, with long-term equity awards tied to three-year earnings-per-share and relative total shareholder return metrics. While Merck's relative total shareholder return scored at 0% payout in the 2023-2025 performance stock award cycle (reflecting the company's 0.3% three-year TSR versus the peer median of 12%), the EPS component scored at 187% of target, resulting in an overall performance stock award payout of 94% of target — demonstrating that the incentive structure is functioning as intended by differentiating pay based on measured outcomes. Prior-year shareholder support was 91%, well above the 70% threshold that would require a negative response, and the company maintains robust clawback policies that exceed NYSE requirements.
Auditor Ratification
✓ FORAuditor
PricewaterhouseCoopers LLP
Tenure
N/A
Audit Fees
$42,800,000
Non-Audit Fees
$7,200,000
PwC's non-audit fees (audit-related fees of $4.6M plus tax fees of $2.6M, totaling $7.2M) represent approximately 17% of audit fees ($42.8M), well below the 50% threshold that would raise independence concerns. The proxy does not explicitly state PwC's tenure in years so the tenure trigger cannot be confirmed and therefore does not fire per policy. PwC is a Big 4 firm fully appropriate for a $300+ billion market cap company, and no material financial restatements were disclosed.
Stockholder Proposals
3 proposals submitted by shareholders
Proposal 4
Shareholder Proposal Regarding a Report on DEI Risks in Federal Contracting
The Bahnsen Family Trust is a conservative-ideologically motivated filer whose proposals are designed to advance a political agenda around diversity, equity, and inclusion programs rather than to serve neutral fiduciary interests. Under the policy's symmetry rule, proposals from ideologically motivated filers — whether conservative or progressive — are voted AGAINST regardless of how they are framed, because the motivation is political rather than shareholder-value-focused. No prior-year vote history is available to provide additional signal, and the board also recommends against this proposal.
Proposal 5
Shareholder Proposal Regarding a Report on Healthcare Coverage Gaps
The full text of Proposal 5 and the filer's identity were not captured in the provided filing excerpt, making a complete merits-based evaluation impossible. In the absence of confirmed filer identity and proposal text, and given the board's recommendation against the proposal, the policy default when information is insufficient is to defer to the board on operational and disclosure proposals where no strong prior-year shareholder signal exists. No prior-year vote history is available to override this default.
Proposal 6
Shareholder Proposal Regarding a Report on Political Contributions
The full text of Proposal 6 and the filer's identity were not captured in the provided filing excerpt; however, the proxy's corporate governance section describes extensive existing disclosure of political contributions and lobbying expenditures on Merck's public website, including state-by-state PAC contributions, trade association dues, and lobbying activity breakdowns. The company's opposition argument that it already provides robust disclosure appears credible based on the governance section, and no prior-year vote data is available to signal unresolved shareholder concern. On balance, without a confirmed credible filer identity or strong prior-year support signal, and given the company's demonstrated existing disclosure practices, AGAINST is the appropriate determination.
Overall Assessment
Merck's 2026 annual meeting ballot presents a clean governance picture: all 13 director nominees earn FOR votes as Merck's strong positive 3-year total shareholder return of 24% keeps the peer-group underperformance gap far below the policy trigger threshold, and no overboarding, attendance, or independence concerns require AGAINST votes. The Say on Pay and auditor ratification proposals both pass cleanly, while all three stockholder proposals are voted AGAINST — one due to a conservative ideological filer identity and two due to insufficient information combined with credible existing company disclosures and no prior-year vote pressure.
Compensation Peer Group
35 companies disclosed in 2026 proxy filing