UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

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Horizon Therapeutics Public Limited Company

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HORIZON THERAPEUTICS PUBLIC LIMITED COMPANY

ANNUAL GENERAL MEETING OF SHAREHOLDERS

April 30, 2020

NOTICE AND PROXY STATEMENT

March 18, 2020

Dear Fellow Shareholder: 

2019 was another exceptional year for Horizon and one of significant progress.  Our focus on commercial execution resulted in record financial results, with net sales of $1.3 billion, up 8 percent over 2018, and adjusted EBITDA of $483 million¹, up 7 percent.  The primary driver of our net sales performance was KRYSTEXXA^® and we continue to see strong promise for this important biologic medicine for uncontrolled gout.  KRYSTEXXA generated net sales of $342 million, up 32 percent on strong volume growth – an excellent growth trajectory for a nine-year-old medicine.  Our strong focus on execution has generated substantial value for our shareholders, with one-, three- and five-year total shareholder returns of 85 percent, 124 percent and 181 percent, respectively – all considerably exceeding our peer group and the Nasdaq Biotechnology Index (NBI). 

We also made significant advancements with our pipeline, capped off by the approval of TEPEZZA^™ by the U.S. Food and Drug Administration (FDA) for the treatment of thyroid eye disease (TED) on January 21, 2020.  TEPEZZA, our fully human monoclonal antibody insulin-like growth factor 1-receptor (IGF-1R), is the first and only medicine approved for the treatment of this debilitating, vision-threatening rare disease.  The approval came nearly two months ahead of schedule, resulting from the tireless efforts of our clinical, regulatory and manufacturing teams.  Supporting this tremendous achievement was the highly significant TEPEZZA Phase 3 clinical data:  82.9 percent of TEPEZZA patients achieved the primary endpoint of proptosis (eye-bulging) reduction of 2 millimeters or greater, compared to 9.5 percent of placebo patients, with a p-value of less than 0.001, and all secondary endpoints were met with statistical significance as well.  These data, which we announced in February 2019, were recently highlighted in The New England Journal of Medicine – a mark of TEPEZZA’s impressive data, considering that the results of both the Phase 2 and Phase 3 clinical trials were published in the esteemed medical journal. 

The approval of TEPEZZA is a milestone advancement for the many people living with TED in the United States.  Before now, there was no standard of care or well-defined treatment path for the disease.  As a result, TED patients often had to suffer from its horrendous effects for several years.  We aim to simplify the patient journey with rapid and accurate diagnosis as well as establish a clear path to treatment.  We worked tirelessly in 2019, establishing the required commercial infrastructure and engaging in pre-launch outreach and education efforts with physicians and key stakeholders.  Our outreach efforts deepened our understanding of the market and the opportunities for TEPEZZA.  That is why, along with the impressive clinical data, we recently increased our expectations for TEPEZZA peak U.S. annual net sales to more than $1 billion, up from our previous expectation of $750 million or greater. 

In addition to TEPEZZA, we also advanced several of our KRYSTEXXA clinical development programs, which are designed to maximize the benefit this medicine offers patients with uncontrolled gout.  We are working to increase the KRYSTEXXA complete response rate through the co-administration of methotrexate, the immunomodulator most used by rheumatologists, through our two MIRROR trials.  We recently announced dramatic topline data from our MIRROR open-label trial.  A larger 135-patient placebo-controlled MIRROR registrational clinical trial is underway, designed to update the prescribing information if successful.  In the meantime, we are hearing positive anecdotal response from rheumatologists and believe that, supported by the positive growing body of evidence, adoption of the use of KRYSTEXXA with methotrexate will accelerate.  In addition to the MIRROR trials, in 2019 we initiated PROTECT, a KRYSTEXXA trial in kidney transplant patients with uncontrolled gout, to support our strategy to expand the use of KRYSTEXXA among nephrologists by providing additional data about the medicine’s effectiveness with its kidney-friendly mechanism. 

The progress on our pipeline speaks to the strong research and development organization we have built over the past couple of years.  The organization remains highly focused both supporting our strategy of maximizing our growth drivers TEPEZZA and KRYSTEXXA and expanding our pipeline, as evidenced by two new pipeline programs we expect to begin this year, one for TEPEZZA and one for KRYSTEXXA.  We believe the mechanism of action for TEPEZZA – blocking IGF-1R – could benefit other populations and are evaluating additional indications for the medicine, including an exploratory TEPEZZA trial in diffuse cutaneous scleroderma, a rare autoimmune disease.  The new KRYSTEXXA program is an open-label proof-of-concept trial to evaluate a shorter-infusion duration, which could result in improved patient convenience and compliance of therapy.

KRYSTEXXA is an example of the value of our industry-leading comprehensive approach, which combines commercial and clinical strategies to maximize the value of our medicines.  Since acquiring KRYSTEXXA in 2016, we have more than quintupled its annual net sales.  Even so, only approximately 4 percent of the 100,000 addressable patient population used KRYSTEXXA in 2019,

meaning there is still substantial opportunity for continued growth.  We see three areas of growth for KRYSTEXXA:  continued expansion of existing and new accounts; the increasing use of KRYSTEXXA with immunomodulators such as methotrexate; and accelerating adoption of KRYSTEXXA in nephrology, in part due to the efforts of the dedicated nephrology sales force we put in place in 2019.  Given these areas of opportunity, along with KRYSTEXXA’s continued strong performance, we now project its peak U.S. net sales to exceed $1 billion, up from our previous $750 million-plus expectation.  KRYSTEXXA is a tremendous growth engine for Horizon, along with TEPEZZA, and we are excited about the prospects for both of these medicines. 

Our progress in 2019 included significantly improving our capital structure.  Our objective was to be more aligned to profitable biopharma peers, which generally have lower leverage levels.  We succeeded, reducing our gross debt by $575 million, extending the majority of our debt maturities to 2026 and 2027 from the previous 2023/2024 timeframe and reducing our year-over-year annualized interest expense by more than 40 percent.  Our actions resulted in a significantly lower net leverage of 0.7 times at the end of 2019, well below our target ratio of 2 times. 

The tremendous progress we made in 2019 underscores our focus and strength in executing our strategy.  It also speaks to the tremendous dedication of the people who make up Horizon.  It’s personal for us; making a difference matters to us – whether to patients, their caregivers and treating physicians or the communities we serve and live in.  That commitment translates to engaged employees.  An assessment we conducted against benchmarks of a leading consulting firm showed that the average level of Horizon employees’ engagement and loyalty considerably exceeds that of the average pharmaceutical company – and companies overall.  We continue to receive multiple workplace awards, including placing on several FORTUNE and Great Place to Work^® 2019 lists:  Best Workplaces in Health Care and BioPharma, Best Small & Medium Workplaces, Best Workplaces for Parents and Best Workplaces in Chicago.  Crain’s Chicago Business recognized us as one of the Best Places to Work in Chicago and as one of the Most Innovative Companies.  In addition, The Great Place to Work^® Institute of Ireland recently certified us as one of the Great Places to Work in Ireland. 

Furthermore, a 2019 Aon study confirmed gender and ethnicity pay equity throughout Horizon – and we ranked in the top five of all companies evaluated, testifying to the value we place on diversity and equality.  Given the intensely competitive nature of the biopharma industry, these results speak to our ability to attract and retain the best talent. 

In summary, our significant progress and achievements in 2019 further fueled the momentum we’ve generated over the past several years.  Today we are a leading, high-growth profitable biopharma company delivering innovative therapies to patients and generating high returns to our shareholders.  We continue to deliver on our comprehensive approach and core principles – strong patient-focused commercial execution, clinical development of innovative medicines, a disciplined business development strategy and expanding patient access – all aimed at making a difference and creating value for our patients, for our employees and for you, our shareholders. 

You are cordially invited to attend our Annual General Meeting of Shareholders on Thursday, April 30, 2020, at 3:00 p.m. local time at our corporate headquarters located at Connaught House, 1st Floor, 1 Burlington Road, Dublin 4, D04 C5Y6, Ireland.  Whether or not you plan to attend the Annual General Meeting, it is important that your shares be represented and voted.  Please take a moment now to vote your shares using the instructions found in the Notice of Internet Availability of Proxy Materials and in this Proxy Statement.  Your vote is important. 

We are pleased this year to be making the Proxy Statement and our Annual Report available to you electronically.  This not only provides a more convenient way to access the materials, but it also allows us to conserve natural resources and reduce the environmental impact – as well as reducing costs.  We welcome and value your feedback and appreciate your continued support. 

Sincerely,

Timothy Walbert

Chairman, President and Chief Executive Officer

Horizon Therapeutics plc

Connaught House, 1st Floor, 1 Burlington Road, Dublin 4, D04 C5Y6, Ireland

NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 30, 2020

Dear Shareholder: 

We will be holding the Annual General Meeting of Shareholders of Horizon Therapeutics plc on Thursday, April 30, 2020, at 3:00 p.m. local time at our corporate headquarters located at Connaught House, 1st Floor, 1 Burlington Road, Dublin 4, D04 C5Y6, Ireland for the following purposes: 

These items of business are more fully described in the Proxy Statement accompanying this Notice.

The Board recommends that you vote FOR each of the nominees for director named herein and FOR Proposals 2, 3, 4, 5 and 6.  The accompanying Proxy Statement contains additional information and should be carefully reviewed by shareholders. 

Our Irish statutory financial statements for the fiscal year ended December 31, 2019, including the reports of the directors and statutory auditors thereon, will be presented at the Annual General Meeting.  There is no requirement under Irish law that such statements be approved by the shareholders and no such approval will be sought at the Annual General Meeting. 

For the purposes of our Articles of Association, Proposals 1 and 2 and the receipt and consideration of the Irish statutory financial statements by us at the Annual General Meeting are deemed to be ordinary business and Proposals 3, 4, 5 and 6 are deemed to be special business.  The Annual General Meeting will also include a review of the Company’s affairs.  Shareholders of record as of February 25, 2020, the record date for the Annual General Meeting, are entitled to notice of the Annual General Meeting and to vote at the Annual General Meeting or any adjournment or postponement thereof. 

As permitted by the U.S. Securities and Exchange Commission, we are making this Proxy Statement and Horizon’s Annual Report to shareholders available to our shareholders electronically through the internet, accessible at www.proxyvote.com/G46188 and also on the Annual Reports/Proxy Statements page of our website at www.horizontherapeutics.com.  We believe this electronic distribution model, known as Notice and Access, provides our shareholders with a convenient and expedited method to access the proxy materials and vote, while allowing us to conserve natural resources and reduce the environmental impact of our Annual General Meeting.  In addition, it reduces the costs of printing and distributing the proxy materials. 

By Order of the Board of Directors

Jennifer T. Lee

Company Secretary

Dublin 4, Ireland

March 18, 2020

If you are a shareholder of record on February 25, 2020, you are cordially invited to attend the Annual General Meeting in person.  Whether or not you expect to attend the meeting, please complete, date, sign and return the proxy mailed to you, or vote over the telephone or the internet as instructed in these materials, as promptly as possible in order to ensure your representation at the meeting.  Even if you have voted by proxy, you may still vote in person if you attend the meeting.  Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.

We are closely monitoring developments related to COVID-19.  It could become necessary to change the date, time, location and/or means of holding the Annual General Meeting (including by means of remote communication).  If such a change is made, we will announce the change in advance, and details on how to participate will be issued by press release, posted on our website and filed as additional proxy materials. 

TABLE OF CONTENTS

PROXY STATEMENT SUMMARY

This summary highlights certain information contained elsewhere in this Proxy Statement and does not contain all of the information that you should consider.  You should read the entire Proxy Statement carefully before voting.  For more complete information regarding our business and 2019 performance, please review our Annual Report on Form 10-K for the year ended December 31, 2019 and our subsequent filings with the Securities and Exchange Commission (SEC). 

Voting Items and Board Recommendations

Horizon  |  Proxy Statement 1

2019—Year At A Glance

Strong Performance:  Record Net Sales and Strong Shareholder Returns

Except for 1-, 3- and 5-year total shareholder return, growth percentages represent comparison to full-year 2018. 

TSR:  Total shareholder return through December 31, 2019.  NBI:  Nasdaq Biotechnology Index. 

 A Year of Milestones and Significant Progress

Our Strategy: Maximizing key growth drivers KRYSTEXXA and TEPEZZA while expanding our pipeline for sustainable growth         Our Purpose: To help build healthier communities, urgently and responsibly						•  Announced highly significant TEPEZZA Phase 3 topline data:  82.9% of TEPEZZA patients met the primary endpoint versus 9.5% of placebo (p<0.001); obtained FDA Priority Review from FDA; after an accelerated review obtained U.S. FDA approval of TEPEZZA for thyroid eye disease on January 21, 2020, almost two months before the target action date, making TEPEZZA the first and only approved treatment for the vision-threatening and debilitating disease   •  Completed KRYSTEXXA plus methotrexate MIRROR immunomodulation open-label trial; topline data demonstrated significant response rate improvement:  79% of patients achieved complete response rate vs 42% for KRYSTEXXA Phase 3 clinical program   •  Initiated KRYSTEXXA plus methotrexate MIRROR immunomodulation placebo-controlled randomized clinical trial with aim of optimizing treatment outcomes; trial designed to expand the prescribing information for KRYSTEXXA   •  Initiated PROTECT trial evaluating KRYSTEXXA to improve management of uncontrolled gout for adult kidney transplant patients   •  Opened new South San Francisco R&D and manufacturing facility   •  Significantly improved Horizon’s capital structure   •  Demonstrated strong employee engagement with multiple best-workplace recognitions, as well as gender and ethnicity pay equity   •  Changed our company name to Horizon Therapeutics plc and rebranded to better reflect who we are today and our vision for the future

Horizon  |  Proxy Statement 2

Business Overview

Horizon at a Glance

		We are a leading, high-growth profitable biopharma company •  Differentiated commercial model; generating annual net sales of $1.3 billion only 8 years after our IPO •  Focused on rare diseases, rheumatology, nephrology, ophthalmology and endocrinology •  Two high-growth drivers with more than $2 billion in combined peak U.S. annual net sales potential(1)
		Delivering innovative therapies to patients •  Deep development expertise with proven track record •  Building a pipeline through M&A to support sustainable long-term growth
		Generating high returns for shareholders •  Outperformed our peers and Nasdaq Biotechnology Index for 1, 3 and 5 years(2) •  Our prospects position us with a top-tier growth profile

2019:  A Year of Tremendous Progress and Strong Execution on Our Strategy

2019 was a year of tremendous progress and performance at Horizon, marked by the achievement of several important milestones and a testament to the strong execution of our strategy to maximize our key growth drivers and expand our pipeline for sustainable growth.  We generated record net sales of $1.3 billion, an increase of 8 percent over 2018, and adjusted EBITDA of $483 million, an increase of 7 percent despite significant investments made in the development and U.S. launch preparations for TEPEZZA.  We achieved one-year total shareholder return of 85 percent, far outpacing the 25 percent return of the NBI.  In addition to heavily investing in TEPEZZA, we invested in several new R&D programs for our growth driver KRYSTEXXA to maximize the benefit it offers patients and to enhance its leadership in uncontrolled gout.  During 2019 we considerably improved our capital structure to align more closely to profitable biopharma companies, reducing our gross debt by $575 million and extending our debt maturities with lower interest rates.  With the recent accelerated approval of TEPEZZA in January 2020 as well as the continued strong growth prospects for KRYSTEXXA, we believe we are in our strongest position ever as a company, building on our momentum to deliver long-term value to our shareholders. 

Our Unique Approach

We have taken a different approach to become a leading profitable biopharma company. 

Our Unique Biopharma Model is Delivering on Our Third Phase of Growth and Evolution

Horizon  |  Proxy Statement 3

Driving Our Successful Growth:  Our Comprehensive Approach

Behind our successful growth is the comprehensive approach we use to maximize the value of our medicines, with three integral components. 

We Employ a Comprehensive Approach to Maximize the Value of Our Medicines for Patients – and Shareholders

Our experience with KRYSTEXXA exemplifies the success of this approach.  An underperforming and undervalued medicine with stagnant growth when we acquired it in 2016, we have transformed its growth trajectory in a few short years, more than quintupling the annual net sales – almost entirely driven by volume growth.  And we see significant room for further expansion of KRYSTEXXA, with three areas of growth:  continued expansion of existing and new accounts; the increasing use of KRYSTEXXA with immunomodulators such as methotrexate; and accelerating adoption of KRYSTEXXA by nephrologists.  We believe that together these three growth drivers can generate peak KRYSTEXXA U.S. net sales of more than $1 billion.  Our comprehensive approach is effective. 

TEPEZZA:  A Milestone Advancement for a Pressing Unmet Need

The efforts of a great many people at Horizon in 2019 culminated in the recent FDA approval of TEPEZZA for the treatment of TED.  TED is a rare, autoimmune vision-threatening and disfiguring disease in which local inflammation and tissue expansion behind the eye can lead to proptosis (eye bulging).  Proptosis can result in double vision, misalignment of the eyes and an inability to close the eyelids, making tasks of daily living extremely difficult. 

TEPEZZA:  A Milestone Advancement in the Treatment of Thyroid Eye Disease (TED)

TEPEZZA is a fully human monoclonal antibody (mAb) and a targeted inhibitor of the insulin-like growth factor-1 receptor (IGF-1R).  The early FDA approval of TEPEZZA in January 2020 is a major milestone for many patients living with TED.  Until now, with no approved medicine for TED, the treatment path was not well defined, adding to the tremendous challenges TED patients already faced.  With a goal to be ready to launch upon FDA approval, we invested significantly in 2019 in preparing the market.  We established the commercial infrastructure necessary to support our patient-centric approach, hiring approximately 100 people.  We engaged with the treating physician community and other key stakeholders – educating them about the disease and the urgency to diagnose and treat.  We established a referral network for infusion sites of care for treating physicians.  We also worked to facilitate access to the medicine.  Our goal is to facilitate a streamlined patient journey, with a quick, accurate diagnosis and clear path to treatment – and to support TED patients through every step of the journey.  We are leveraging our comprehensive approach in bringing TEPEZZA to market – as well as our learnings from KRYSTEXXA.  TEPEZZA embodies our vision in action – making the world a better place through innovative medicines for patients with unmet needs.  It also represents a significant opportunity for growth:  we project peak TEPEZZA U.S. annual net sales of more than $1 billion. 

Horizon  |  Proxy Statement 4

We Are Expanding Our Pipeline to Drive Long-Term Growth

Our pipeline is a top priority and a cornerstone of our strategy to maximize the value of our medicines and drive long-term growth.  Our experienced R&D leadership team has championed multiple achievements, including the accelerated development, submission and approval of TEPEZZA and the optimization of KRYSTEXXA’s profile through several R&D programs and post-clinical data analyses.  Most recently, we opened a new R&D and manufacturing facility in South San Francisco to support further pipeline growth.  Our expanding pipeline attests to our diligent focus on maximizing and expanding our pipeline, which we aim to do in part by adding pipeline assets through the combined efforts of our R&D and business development organizations. 

MIRROR:  Trials evaluating the use of KRYSTEXXA in combination with immunomodulator methotrexate to increase the patient response rate. 

PROTECT:  Clinical trial evaluating the effect of KRYSTEXXA on serum uric acid levels in kidney transplant patients with uncontrolled gout. 

OPTIC-X:  Open-label extension trial of the Phase 3 trial evaluating TEPEZZA for the treatment of TED. 

Total Shareholder Return

Our disciplined approach, clear strategy, business development acumen and strong commercial execution has driven rapid, transformational growth.  As a result, we have outperformed both our peer group and the NBI over the one-, three- and five-year periods ended December 31, 2019.  With our key growth driver medicines KRYSTEXXA and TEPEZZA, our durable base of rare disease medicines, the pipeline we are expanding for future growth and our strengthened capital structure, we believe Horizon is well positioned for sustainable long-term growth. 

Our Total Shareholder Return Significantly Surpassed Our Peers and NBI

1, 3- and 5-year periods

Note:  The peer group used for the TSR calculations for the 1-, 3- and 5-year periods ended December 31, 2019 is our peer group shown on page 42. 

Horizon  |  Proxy Statement 5

Fostering Sustainability for Horizon and Beyond:  Key ESG Factors

We go to incredible lengths at Horizon to impact lives and make the world a better place.  We know that everything we do benefits the patients who use our medicines, their caregivers and treating physicians.  It also benefits all of us who work at Horizon.  For us it’s personal – we want to make a difference.  And that difference contributes to our long-term success and sustainability as well.  The key areas we believe strongly support Horizon’s long-term sustainability include: 

Consistently Recognized as One of the Best Places to Work

Horizon  |  Proxy Statement 6

Director Nominees and Continuing Directors

Board Highlights

The Nominating and Corporate Governance Committee of our Board examines multiple factors when evaluating directors, including their knowledge, skills and experience, including experience in our industry and with respect to clinical development, business, finance, management and public service.  The Committee believes in an expansive definition of diversity that includes differences of experience, education, talents, gender and race, among other things.  The table below highlights the extensive experience of our directors as well as a balance of skills on our Board: 

Horizon  |  Proxy Statement 7

Our Board, which is predominantly independent, includes a range of expertise, experience, diversity, as well as newer and longer-tenured directors.  The Board values diversity, believing that maintaining a diverse membership enhances the Board’s deliberations and enables the Board to better represent all of the Company’s constituents.  In this respect, the goal of the Nominating and Corporate Governance Committee is to ensure that the Board has diversity of experience and perspectives, as well as race, gender, geography and areas of expertise – as is set forth in the Board’s diversity policy, which is available on our website at www.horizontherapeutics.com.

Corporate Governance Highlights

Horizon  |  Proxy Statement 8

Executive Compensation Overview

Our executive compensation program emphasizes three major pay considerations; this is how we currently achieve them: 

With a strategic focus on growing the business over the long term, it is imperative that our executive compensation program motivates our talented management team in such a manner as to encourage – and reward – successful execution of this business strategy.  We utilize the following compensation elements to achieve this: 

Horizon  |  Proxy Statement 9

Shareholder Engagement

We value the views of our shareholders.  During the outreach we conduct each year, we have had significant and meaningful dialogue with our shareholders regarding our compensation and governance.  Feedback from our outreach informs the Compensation Committee’s thinking when evaluating our current compensation program and considering potential modifications going forward. 

Changes to our compensation program and corporate governance over the past several years that were heavily influenced by shareholder feedback include: 

In 2019, during our shareholder engagement cycle before the Annual General Meeting, we offered engagement opportunities to shareholders who represented 85 percent of our shares outstanding; shareholders who represented 68 percent of our outstanding shares accepted and we conducted calls or meetings with these holders.  Our shareholders appreciated the outreach, and the feedback from this engagement was very positive.  At our 2019 Annual General Meeting of Shareholders, our say-on-pay proposal received the support of 86 percent of the shares voted.  We believe this high level of support is a result of our comprehensive shareholder outreach and engagement program to solicit feedback, understand investor viewpoints and incorporate their feedback into further discussions of our compensation programs and corporate governance. 

In the summer and fall of 2019, we again engaged with shareholders who represented approximately 30 percent of our shares outstanding.  Discussions focused primarily on environmental, social and governance (ESG) disclosure, in particular what our shareholders deem appropriate and effective ESG disclosure for Horizon as we work to enhance our disclosure initiatives. 

In early 2020 during our shareholder engagement cycle before the Annual General Meeting, we offered engagement opportunities to shareholders who represented 75 percent of our shares outstanding and are in the process of conducting calls with those shareholders who expressed interest. 

We greatly value the dialogue we have with our shareholders and remain committed to continued engagement going forward. 

Please see our Compensation Discussion and Analysis on page 36 for additional information on our compensation philosophy. 

Horizon  |  Proxy Statement 10

Summary of Voting Items and Board Recommendations

Horizon  |  Proxy Statement 11

Horizon  |  Proxy Statement 12

QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING

This Proxy Statement contains important information regarding the Annual General Meeting of Shareholders, the proposals on which you are being asked to vote, information you may find useful in determining how to vote, and voting procedures.  You are invited to attend the Annual General Meeting to vote on the proposals described in this Proxy Statement.  However, you do not need to attend the meeting to vote your shares. 

Why did I receive a notice regarding the availability of proxy materials on the internet?

We have sent you a Notice of Internet Availability of Proxy Materials (the Notice) because our Board is soliciting your proxy to vote at the Annual General Meeting, including at any adjournments or postponements of the meeting.  As permitted by the U.S. Securities and Exchange Commission, we are making this Proxy Statement, Horizon’s Annual Report to shareholders, and our Irish statutory financial statements available to our shareholders electronically via the internet.  We believe that using this form of distribution provides a convenient and expedited method for our shareholders to access the proxy materials and vote, while allowing us to conserve natural resources and reduce the environmental impact of our Annual General Meeting.  In addition, it reduces the costs of printing and distributing the proxy materials.  Accordingly, we have sent a Notice to our shareholders of record.  All shareholders can access the proxy materials on the website referred to in the Notice or may request a printed set of the proxy materials.  Instructions on how to access the proxy materials over the internet or to request a print or email copy may be found in the Notice.  We intend to mail the Notice on or about March 18, 2020 to all shareholders of record as of February 25, 2020, who are entitled to vote at the Annual General Meeting. 

How do I attend the Annual General Meeting?

The meeting will be held on Thursday, April 30, 2020, at 3:00 p.m. local time at our corporate headquarters located at Connaught House, 1st Floor, 1 Burlington Road, Dublin 4, D04 C5Y6, Ireland.  Directions to the Annual General Meeting may be found at https://www.google.com/maps/place/Connaught+House,+Burlington+Rd,+Dublin+4,+Ireland.  Information on how to vote in person at the Annual General Meeting is provided below.  However, you do not need to attend the Annual General Meeting to vote your ordinary shares. 

We are closely monitoring developments related to COVID-19.  It could become necessary to change the date, time, location and/or means of holding the Annual General Meeting (including by means of remote communication).  If such a change is made, we will announce the change in advance, and details on how to participate will be issued by press release, posted on our website and filed as additional proxy materials. 

Who can vote at the Annual General Meeting?

Only shareholders of record at the close of business on February 25, 2020, will be entitled to vote at the Annual General Meeting.  On this record date, there were 190,155,863 of our ordinary shares outstanding and entitled to vote. 

Shareholder of Record (shares registered in your name).  If on February 25, 2020, your shares were registered in your name in our Register of Members, which is maintained by our transfer agent, Computershare Shareowner Services LLC, then you are a shareholder of record.  As a shareholder of record, you may vote in person at the meeting or vote by proxy.  Whether or not you plan to attend the meeting, we urge you to vote by proxy over the telephone or on the internet as instructed in the Notice or as discussed below to ensure your vote is counted, or if you request a printed copy, vote by completing and returning the proxy card. 

Beneficial Owner (shares registered in the name of a broker or bank).  If on February 25, 2020, your shares were not registered in your name in our Register of Members, but rather held in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and the Notice is being forwarded to you by that organization.  The organization holding your account is considered to be the shareholder of record for purposes of voting at the Annual General Meeting.  As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account.  You are also invited to attend the Annual General Meeting.  However, since you are not the shareholder of record, you may not vote your shares in person at the meeting unless you request and obtain a valid proxy from your broker or other agent. 

What am I voting on?

There are six matters scheduled for a vote: 

Horizon  |  Proxy Statement 13

What if another matter is properly brought before the meeting?

The Board knows of no other matters that will be presented for consideration at the Annual General Meeting.  If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on those matters in accordance with their best judgment. 

How do I vote?

You may vote “For” or “Against” each Class III director nominee or you may abstain from voting for all or any of the nominees.  For each of the other matters to be voted on, you may vote “For” or “Against” or abstain from voting. 

The procedures for voting are fairly simple: 

Shareholder of Record.  If you are a shareholder of record, you may vote in person at the Annual General Meeting, by electronic proxy over the telephone or the internet as instructed below, or by proxy using the proxy card you receive if you request a set of printed materials.  Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted.  You may still attend the meeting and vote in person even if you have already voted by proxy. 

We provide internet proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions.  However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies. 

Beneficial Owner.  If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a Notice containing voting instructions from that organization.  Simply follow the voting instructions in the Notice to ensure that your vote is counted.  Alternatively, you may vote by telephone or through the internet as instructed by your broker, bank or other agent.  To vote in person at the Annual General Meeting, you must obtain a valid proxy from your broker, bank or other agent.  Follow the instructions in the Notice you receive from your broker, bank or other agent, or contact that organization to request a proxy form. 

Joint Holders.  In the case of joint holders of record, any one of such holders may vote either in person or by proxy in respect thereof as if he or she were the sole holder thereof, but the vote of the senior holder who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in our Register of Members. 

How many votes do I have?

On each matter to be voted upon, you have one vote for each ordinary share you own as of February 25, 2020. 

What happens if I do not vote?

Shareholder of Record.  If you are a shareholder of record and do not vote by completing your proxy card, by telephone, through the internet or in person at the Annual General Meeting, your shares will not be voted. 

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Beneficial Owner.  If you are a beneficial owner and do not instruct your broker, bank, or other agent how to vote your shares, the question of whether your broker or nominee will still be able to vote your shares depends on whether the New York Stock Exchange (NYSE) deems the particular proposal to be a “routine” matter.  Brokers and nominees can use their discretion to vote “uninstructed” shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters.  Under the rules and interpretations of the NYSE, “non-routine” matters are matters that may substantially affect the rights or privileges of shareholders, such as mergers, shareholder proposals, elections of directors (even if not contested), executive compensation (including any advisory shareholder votes on executive compensation) and certain corporate governance proposals, even if management-supported.  We have been advised by the NYSE that your broker or nominee may not vote your shares on Proposals 1, 3, 5 or 6 without your instructions, but may vote your shares on Proposals 2 and 4. 

What if I return a proxy card or otherwise vote but do not make specific choices?

If you return a signed and dated proxy card or otherwise vote without marking voting selections, then our designated proxy holders (one of the individuals named on your proxy card) will vote your shares in the manner recommended by our Board on all matters presented in this Proxy Statement and as the proxy holders may determine in their discretion regarding any other matters properly presented for a vote at the meeting.  If any other matter is properly presented at the meeting, your proxy holder will vote your shares using his or her best judgment. 

Who is paying for this proxy solicitation?

We have retained Alliance Advisors, a proxy solicitation firm, to solicit proxies in connection with the Annual General Meeting at a cost of approximately $22,500 plus expenses.  The cost of soliciting proxies incurred by us and Alliance Advisors, including the preparation, assembly and mailing of the proxies and soliciting material, as well as the cost of forwarding such material to beneficial owners of our ordinary shares, will be borne by us.  Our directors, officers and other employees may, without compensation other than their regular remuneration, solicit proxies personally or by telephone. 

What does it mean if I receive more than one Notice?

If you receive more than one Notice, your shares may be registered in more than one name or in different accounts.  Please follow the voting instructions on the Notices to ensure that all of your shares are voted. 

Can I change my vote after submitting my proxy?

Shareholder of Record.  Yes, you may revoke your proxy at any time before the final vote at the meeting.  If you are the record holder of your shares, you may revoke your proxy in any one of the following ways: 

Your most current proxy card or telephone or internet proxy is the one that is counted. 

Beneficial Owner.  If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank. 

Do I need a ticket to attend the Annual General Meeting?

Yes, you will need an admission ticket or proof of ownership of ordinary shares to enter the Annual General Meeting.  If you are a shareholder of record, your admission ticket is the Notice that was sent to you.  Please bring your Notice and valid photo identification with you to the Annual General Meeting.  If your shares are held in the name of a bank, broker or other holder of record, your admission ticket is your Notice, or if you are a beneficial owner, the ticket is on your voting instruction form.  If you do not bring your admission ticket, you will need proof of ownership of ordinary shares to be admitted to the Annual General Meeting.  A recent brokerage statement or letter from a bank or broker is an example of proof of ownership.  If you arrive at the Annual General Meeting without an admission ticket or proof of ownership of ordinary shares, we will admit you only if we are able to verify that you are one of our shareholders. 

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How are votes counted?

Votes will be counted by the inspector of election appointed for the meeting, who will separately count, with respect to the proposal to elect directors, votes “For,” “Against,” abstentions and broker non-votes; and, with respect to other proposals, votes “For” and “Against,” abstentions and, as applicable, broker non-votes.  Abstentions and broker non-votes will be treated as shares present for the purpose of determining the presence of a quorum for the transaction of business at the Annual General Meeting.  Abstentions and broker non-votes will not, however, be considered votes cast at the Annual General Meeting.  Because the approval of all of the proposals is based on the votes cast at the Annual General Meeting, abstentions and broker non-votes will not have any effect on the outcome of voting on the proposals. 

What are “broker non-votes”?

As discussed above, when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed by the NYSE to be “non-routine,” the broker or nominee cannot vote the shares.  These un-voted shares are counted as “broker non-votes.” 

What is the quorum requirement?

A quorum of shareholders is necessary to hold a valid meeting.  A quorum will be present if shareholders holding a majority of the issued and outstanding ordinary shares entitled to vote are present at the meeting in person or represented by proxy.  On the record date, there were 190,155,863 ordinary shares outstanding and entitled to vote.  Thus, the holders of 95,077,932 ordinary shares must be present in person or represented by proxy at the meeting to have a quorum. 

Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or, provided that you are a shareholder of record, if you vote in person at the meeting.  Abstentions and broker non-votes will be counted towards the quorum requirement.  If there is no quorum, within one hour of the time appointed for the Annual General Meeting, the Annual General Meeting will stand adjourned to May 7, 2020, at 3:00 p.m. local time at the same location, or such other time or place as the Board may determine. 

Assuming there is a quorum of shares present at the Annual General Meeting, how many votes are needed to approve each proposal?

How can I find out the results of the voting at the Annual General Meeting?

Preliminary voting results will be announced at the Annual General Meeting.  In addition, final voting results will be published in a current report on Form 8-K that we expect to file within four business days after the Annual General Meeting.  If final voting results are not available to us in time to file a Form 8-K within four business days after the meeting, we intend to file a Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to publish the final results. 

What are the Irish statutory financial statements?

We are presenting our Irish statutory financial statements, including the reports of the directors and the statutory auditors thereon, at the Annual General Meeting and are making a copy available for download on the Annual Reports / Proxy Statements page in the Investors section of our website (www.horizontherapeutics.com) on or before April 8, 2020.  As an Irish company, we are required to prepare Irish statutory financial statements under applicable Irish company law and to deliver those accounts to shareholders of record in connection with our Annual General Meetings.  The Irish statutory financial statements cover the results of our operations and financial position for the year ended December 31, 2019. 

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Irish law requires the directors to prepare financial statements for each financial year giving a true and fair view of the state of the group’s and parent company’s affairs at the end of the financial year and of the group’s profit or loss for the financial year.  Under that law, the directors have prepared the group’s consolidated financial statements in accordance with U.S. accounting standards, as defined in Section 279 of the Irish Companies Act 2014, to the extent that the use of those accounting standards in the preparation of the consolidated financial statements does not contravene any provision of the Irish Companies Act 2014 or of any regulations made thereunder and have prepared Horizon’s parent company’s Irish statutory financial statements in accordance with accounting standards issued by the Financial Reporting Council and promulgated by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland). 

What proxy materials are available on the internet?

The Proxy Statement and the Annual Report are available at https://materials.proxyvote.com/G46188. The Irish financial statements will be available in the Investors section of our website (www.horizontherapeutics.com) on or before April 8, 2020.  We will mail without charge, upon written request, a copy of these materials to shareholders of record or beneficial owners of our ordinary shares.  Requests should be sent to:  Horizon Therapeutics plc, Attention:  Company Secretary, Connaught House, 1st Floor, 1 Burlington Road, Dublin 4, D04 C5Y6, Ireland. 

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PROPOSAL 1

ELECTION OF DIRECTORS

The Board is divided into three classes.  Each class consists, as nearly as possible, of one-third of the total number of directors and each class has a three-year term.  The Board currently consists of nine members, as follows: 

The authorized number of directors may be changed only by resolution of the Board.  Any additional directorships resulting from an increase in the number of directors will be distributed between the three classes so that, as nearly as possible, each class will consist of one-third of the directors.  This classification of the Board may have the effect of delaying or preventing changes in our control or management.  Our directors may be removed by ordinary resolution with majority vote of our shareholders at a general meeting provided that notice of such resolution has been given in accordance with Section 146 of the Irish Companies Act 2014.  Vacancies on the Board may be filled only by persons elected by a majority of the directors then in office, provided that a quorum is present.  A director elected by the Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. 

There are currently three directors in Class III whose term of office expires in 2020.  Each of the nominees listed below in Class III is currently a director who was nominated for election by the Board, upon the recommendation of the Nominating and Corporate Governance Committee.  In order to be elected as a director, each nominee must receive the affirmative vote of a majority of the votes cast by the holders of ordinary shares represented at the Annual General Meeting in person or by proxy.  If elected, each of these nominees would serve until the 2023 Annual General Meeting of Shareholders and until his or her successor has been duly elected and qualified, or, if sooner, until the director’s death, resignation, disqualification or removal. 

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THE BOARD RECOMMENDS

A VOTE IN FAVOR OF EACH NAMED NOMINEE ABOVE

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The above biographical information for our directors is as of March 1, 2020. 

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THE BOARD OF DIRECTORS AND ITS COMMITTEES

In 2019, the Board held seven meetings and did not act by unanimous written consent without a meeting.  With the exception of Dr. Mahony, who was appointed to the Board in August 2019, each current Board member attended 94% or more of the aggregate number of meetings of the Board and of the committees on which he or she served.  It is our policy to encourage directors and nominees for director to attend annual general meetings of shareholders.  With the exception of Dr. Mahony, who was appointed to the Board in August 2019, and Mr. Daniel, all other current directors attended our 2019 Annual General Meeting of Shareholders. 

The Board is committed to exercising good corporate governance practices.  As part of this commitment, the Board regularly monitors developments in corporate governance and reviews processes, policies and procedures in light of such developments.  Key information regarding our corporate governance initiatives can be found on our website, www.horizontherapeutics.com, including our Memorandum and Articles of Association, Code of Business Conduct and Ethics, and the charters for the Audit, Compensation, Nominating and Corporate Governance and Transaction Committees.  The Board believes that its strong corporate governance policies and practices, including the substantial percentage of independent directors on the Board and the robust duties of its lead independent director, empower the Board to effectively oversee our Chief Executive Officer and provide an effective and appropriately balanced Board governance structure. 

Other than Mr. Walbert, our Chairman, President and Chief Executive Officer, all members of the Board are independent, and all members of committees of the Board are independent.  The Board has affirmatively determined that the following eight directors are independent directors within the meaning of the applicable Nasdaq Stock Market (Nasdaq) listing standards:  Mr. Daniel, Mr. Grey, Dr. Himawan, Dr. Mahony, Mr. Santini, Dr. Shannon, Mr. Watkins and Ms. Witz.  In addition, the Board has affirmatively determined that Ronald Pauli, who served on the Board until May 2019, was an independent director within the meaning of the applicable Nasdaq listing standards.  In making these determinations, the Board found that none of these directors or nominees for director had a material or other disqualifying relationship with us.  Mr. Walbert is not an independent director by virtue of his current employment with us.  To determine independence, the Board reviewed all relevant identified transactions or relationships between each director, or any of his or her family members, and us, our senior management and our independent registered public accounting firm. 

As required under applicable Nasdaq listing standards, our independent directors met four times in regularly scheduled executive sessions in 2019, at which only independent directors were present. 

We have adopted a Code of Business Conduct and Ethics (the Code) that applies to all officers, directors and employees, including our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions.  The Code is available on our website at www.horizontherapeutics.com.  If we make any substantive amendments to the Code or grant any waiver from a provision of the Code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website or in a current report on Form 8-K. 

The Board has determined that the current leadership structure, in which the offices of Chairman and Chief Executive Officer are held by one individual and an independent director acts as lead independent director, ensures that the appropriate level of oversight, independence and responsibility is applied to all Board decisions, including risk oversight, and is in our best interests and those of our shareholders. 

Chairman/Chief Executive Officer

The Board is currently chaired by our President and Chief Executive Officer, Mr. Walbert.  We believe that combining the positions of Chief Executive Officer and Chairman of the Board helps to ensure that the Board and management act with a common purpose for the following reasons: 

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Lead Independent Director

We require the election, by the independent directors of the Board, of a lead independent director to serve during any period when there is no independent Chairman of the Board.  Because Mr. Walbert is currently serving as Chief Executive Officer and Chairman of the Board, the independent directors of the Board elected Mr. Grey as the lead independent director.  The lead independent director serves as the liaison between the Chairman of the Board and the independent directors and his responsibilities include: 

One of the Board’s key functions is informed oversight of our risk management process.  The Board does not have a standing risk management committee, but rather administers this oversight function directly through the Board as a whole, as well as through various Board standing committees that address risks inherent in their respective areas of oversight.  In particular, the Board is responsible for monitoring and assessing strategic risk exposure, including a determination of the nature and level of risk appropriate for the Company. 

Our Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken and provides oversight of the performance of our internal audit function and external auditors.  The Audit Committee also reviews and receives regular briefings concerning information security and technology risks (including cybersecurity), including discussions of our information security and risk management programs. 

Our Nominating and Corporate Governance Committee monitors the effectiveness of our corporate governance guidelines, including whether they are successful in preventing illegal or improper liability-creating conduct, and monitors compliance with legal, regulatory and ethical requirements. 

Our Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.  Our Transaction Committee evaluates potential strategic transactions and financing opportunities, including the risks that such transactions could pose to Horizon. 

The Nominating and Corporate Governance Committee will consider candidates for the Board who are recommended by shareholders, directors, third-party search firms engaged by the Board and other sources.  When selecting candidates for recommendation to the Board, the Nominating and Corporate Governance Committee will consider the attributes of the candidates and the needs of the Board and will review all candidates in the same manner, regardless of the source of the recommendation.  In evaluating director nominees, a candidate should have certain minimum qualifications, including being able to read and understand basic financial statements, having familiarity with our business and industry, having high moral character and mature judgment and being able to work collegially with others.  In addition, factors such as the following may be considered: 

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During 2019, we paid a fee to one third-party search firm that was retained by the Board to identify potential nominees and assist our Nominating and Corporate Governance Committee in evaluating such potential nominees. 

Diversity Policy

The Board believes that maintaining a diverse membership enhances the Board’s deliberations and enables the Board to better represent all of Horizon’s constituents, and as such has a formal diversity policy.  As part of the policy, the Nominating and Corporate Governance Committee annually reviews the tenure, performance, and contributions of existing Board members to the extent they are candidates for re-election and considers all aspects of each candidate’s qualifications and skills with the goal of ensuring the Board has diversity of experience and perspectives as well as race, gender, geography, and areas of expertise. 

To further this goal, the Board is committed to including in each director search highly qualified candidates who reflect diverse experiences and backgrounds, including diversity of gender and race.  The diversity policy is available on our website at www.horizontherapeutics.com. 

Shareholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board at an Annual General Meeting of Shareholders must do so by delivering a written recommendation to the Nominating and Corporate Governance Committee.  See “Other Information – Shareholder Proposals” in this Proxy Statement for additional information. 

The Board has four standing committees: 

All committees comprise independent directors within the meaning of the applicable Nasdaq listing standards.  A description of each committee of the Board is described below. 

The following table provides membership and meeting information for fiscal year 2019 for each of the Board committees: 

Audit

Compensation

Nominating and   Corporate Governance

Transaction

Timothy Walbert

William F. Daniel

Michael Grey

Jeff Himawan, Ph.D.

Susan Mahony, Ph.D.(1)

Ronald Pauli(2)

Gino Santini

James Shannon, M.D.

H. Thomas Watkins

Pascale Witz

Total meetings in fiscal year 2019

5

6

4

6

= Chair		= Member		= Lead Independent Director

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Audit Committee

The Audit Committee assists the Board in fulfilling its oversight responsibility with respect to, among other things: 

The independent registered public accounting firm, internal audit and management each periodically meet privately with the Audit Committee. 

The Board has determined that each of Mr. Daniel, Dr. Mahony, Mr. Watkins and Ms. Witz qualify as “audit committee financial experts” within the meaning of applicable SEC rules.  In making this determination, the Board has considered their formal education, the nature and scope of their previous experience and their financial and corporate governance expertise. 

Report of the Audit Committee of the Board of Directors

The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any of our filings under the Securities Act of 1933, as amended (the Securities Act), or the Securities Exchange Act of 1934, as amended (Exchange Act), whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. 

The Audit Committee has reviewed and discussed the audited financial statements for the year ended December 31, 2019, with Horizon management.  The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (PCAOB).  The Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm the accounting firm’s independence.  Based on the foregoing, the Audit Committee has recommended to the Board that the audited financial statements be included in Horizon’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019. 

Audit Committee

William F. Daniel, Chair

Susan Mahony, Ph.D.

H. Thomas Watkins

Pascale Witz

Compensation Committee

The Compensation Committee: 

In making its compensation decisions and recommendations, the Compensation Committee may take into account the recommendations of the Chief Executive Officer and other senior management.  Other than giving such recommendations, however, the Chief Executive Officer and other senior management have no formal role and no authority to determine the amount or form of executive and director compensation.  The processes and procedures used by the Compensation Committee for the consideration and determination of executive compensation are described in the section of this Proxy Statement captioned, “Compensation Discussion and Analysis – Compensation Determination Process.” 

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The Compensation Committee may, at our expense, retain legal counsel (which may, but need not be, our regular corporate counsel) and other consultants and advisors, other than in-house legal counsel and certain other types of advisors, to assist it with its functions only after taking into consideration six factors, prescribed by the SEC and Nasdaq, that bear upon the advisor’s independence; however, there is no requirement that any advisor be independent.  The Compensation Committee has authority to approve such advisors’ fees and other retention terms and to terminate its relationship with any advisor that it retains.  In addition, the Compensation Committee has authority to delegate its responsibilities to subcommittees or individual committee members. 

The Compensation Committee has engaged Radford, which is part of the Rewards Solutions practice at Aon plc, as its independent consultant since 2016.  For additional information regarding our processes and procedures for the consideration and determination of executive and director compensation, including the role of Radford in determining and recommending executive and director compensation and the aggregate cost of Radford’s executive and director compensation consulting services during 2019, see the sections of this Proxy Statement entitled “Compensation Discussion and Analysis – Compensation Determination Process” and “Non-Employee Director Compensation.”  With respect to non-employee director compensation matters, our Compensation Committee recommends to our Board and our Board determines and sets non-employee director compensation.  Our compensation arrangements for our non-employee directors are described under the section of this Proxy Statement entitled “Non-Employee Director Compensation.” 

Compensation Committee Interlocks and Insider Participation

No member of our Compensation Committee has ever been an executive officer or employee of Horizon.  None of our executive officers currently serves, or has served during the last completed year, on the compensation committee or board of directors of any other entity that has one or more officers serving as a member of our Board or Compensation Committee. 

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee oversees all aspects of our corporate governance functions on behalf of the Board, including, but not limited to: 

The process used by the Nominating and Corporate Governance Committee to identify a nominee to serve as a member of the Board depends on the qualities being sought.  From time to time, the Board engages an executive search firm to assist the Nominating and Corporate Governance Committee in identifying individuals qualified to be Board members.  The process used by the Nominating and Corporate Governance Committee to identify nominees is described in the section of this Proxy Statement captioned, ‘‘Director Selection.’’ 

Transaction Committee

The functions of the Transaction Committee include, but are not limited to: 

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In February 2019, we entered into a short-term shareholder rights agreement, commonly referred to as a poison pill, in response to the takeover environment in general at the time and the Board’s belief that at the time we faced a heightened risk of receiving takeover proposals at inadequate prices, given several factors, including the highly positive Phase 3 teprotumumab clinical trial results announced on February 28, 2019.  The agreement was not intended to prevent an acquisition of Horizon on terms that the Board considered favorable and in the best interests of all shareholders.  Rather, the aim of the shareholder rights agreement was to provide the Board adequate time to fully assess any takeover proposal in full compliance with the Board’s fiduciary duties and to encourage anyone seeking to acquire Horizon to negotiate with the Board prior to attempting a takeover. 

The shareholder rights agreement had a limited 12-month term that expired in February 2020 and was not renewed upon that expiration.

Shareholders who wish to communicate with the Board may do so by sending written communications addressed to the Company Secretary of Horizon Therapeutics at Connaught House, 1st Floor, 1 Burlington Road, Dublin 4, D04 C5Y6, Ireland or by communicating online to the Board as a group.  This information and an online communications form are available on our website at www.horizontherapeutics.com.  Each communication will be reviewed by our Company Secretary to determine whether it is appropriate for presentation to the Board or such director on a periodic basis.  Examples of inappropriate communications include advertisements, solicitations or hostile communications.

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NON-EMPLOYEE DIRECTOR COMPENSATION

Our directors perform a critical role in guiding Horizon’s strategic direction and overseeing management.  Being a director entails many responsibilities and a substantial time commitment.  Our compensation program for our non-employee directors reflects the critical function they perform and enables us to attract and retain highly qualified directors. 

All current non-employee members of the Board are independent.  Non-employee directors receive a combination of annual cash retainers and restricted stock unit (RSU) grants in amounts that correlate to their responsibilities and levels of Board participation, including service on Board committees.  Our only employee director, Mr. Walbert, receives no separate compensation for his service as a director or chair. 

Highlights

As an Irish-domiciled company traded in the United States, we consider our non-employee director compensation, both in amount and structure, against two peer groups:  the 15 U.S.-traded, biopharma companies we use for executive compensation comparative purposes (please see “Compensation Discussion and Analysis – Peer Group”) and eight Irish-domiciled, U.S.-listed pharmaceutical and biopharma companies:  Alkermes plc, Allergan plc, Amarin Corporation plc, Endo International plc, Jazz Pharmaceuticals plc, Mallinckrodt plc, Perrigo Company and Prothena Corporation plc. 

The Compensation Committee reviews the compensation for our non-employee directors annually.  To assist with the review, Radford, an independent compensation consultant, prepares a comprehensive assessment of our non-employee director compensation program, which includes: 

The most recent review, conducted in October 2019, determined that: 

Cash Compensation

Our compensation policy for non-employee directors who are not affiliated with any holder of more than 5% of our ordinary shares provides for annual cash compensation as set forth in the following table.  The cash compensation is generally payable in equal quarterly installments at the end of each quarter in which the services are provided.  For any independent director who joins after the beginning of the quarter, the cash compensation is pro-rated based on days served in that first partial quarter.

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Under our compensation policy, we reimburse our directors for their travel-related expenses, including lodging and other reasonable expenses incurred in attending meetings of the Board and committees of the Board. 

We will also reimburse eligible non-employee directors up to $15,000 annually for financial planning and tax services. 

Equity Compensation

On the date of each Annual General Meeting of Shareholders that coincides with or follows the non-employee director’s initial appointment or election to the Board, eligible non-employee directors will automatically be granted RSUs with an aggregate value of $400,000, which will vest in full upon the earlier of the (i) first anniversary of the date of grant and (ii) date of the next Annual General Meeting of Shareholders. 

Any eligible non-employee director who is first elected or appointed to the Board on any date other than an Annual General Meeting of Shareholders will automatically be granted RSUs on the date that they are first elected or appointed to the Board with a value equal to the annual RSU grant, prorated based on the number of days between such non-employee director’s start date and the one-year anniversary of the date of the Annual General Meeting of Shareholders that most recently preceded such start date, which will vest in full upon the earlier of (i) the first anniversary of the date of the Annual General Meeting of Shareholders that most recently preceded such director’s start date and (ii) the date of the next Annual General Meeting of Shareholders. 

Recent Changes to the Non-Employee Director Compensation

In October 2018, the Compensation Committee, based on a comprehensive review of our director compensation with the assistance of Radford and proxy advisory firm feedback, approved a change to our non-employee director compensation, reducing the value of the annual equity grant from $450,000 to $400,000 and replacing an automatic $600,000 equity grant upon a non-employee director’s first election or appointment to the Board with a pro-rata annual equity grant. 

Non-Employee Director Compensation Summary

The following table sets forth compensation information for our non-employee directors who earned or received compensation under our compensation policy for non-employee directors or otherwise in 2019: 

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EXECUTIVE OFFICERS

The following table sets forth information regarding executive officers as of March 1, 2020: 

The following biographical information for our executive officers other than Mr. Walbert, whose biographical information is included in Proposal 1, is as of March 1, 2020. 

Brian K. Beeler.  Mr. Beeler has served as our executive vice president, general counsel since May 2015.  Mr. Beeler previously served as our senior vice president, legal and chief compliance officer from January 2015 until May 2015 and as our associate general counsel and chief compliance officer from January 2013 until January 2015.  Prior to joining Horizon, Mr. Beeler served as associate general counsel for Fenwal, Inc., a global blood technology company, from December 2008 until December 2012.  Before that, Mr. Beeler was senior counsel, business development, commercial and research and development at TAP Pharmaceuticals and Takeda Pharmaceuticals North America and also previously served as chief compliance officer at Schwartz Pharma.  Mr. Beeler received a bachelor’s degree in history from Purdue University, a master of business administration degree from the Kellogg School of Management at Northwestern University and a juris doctorate degree from the Indiana University School of Law. 

Geoffrey M. Curtis.  Mr. Curtis has served as our executive vice president, corporate affairs and chief communications officer since August 2018.  Prior to that, from May 2017 he served as our senior vice president of corporate affairs and chief communications officer, and as group vice president of corporate communications from December 2015, when he joined Horizon.  From May 2012 until April 2015, Mr. Curtis served as senior vice president at Edelman Public Relations and, as part of its National Health Media Team, he led media strategy and execution for a large portfolio of pharmaceutical, biotech and medical device clients.  Prior to that, Mr. Curtis was group director of the media practice at WCG, a marketing and communications firm and part of W20 Group, from July 2006 until May 2012 and held a similar role at GCI Group from March 2004 until July 2006.  Prior to joining GCI, Mr. Curtis served as a public affairs manager in the Pharmaceutical Products Division at Abbott, where he led internal and external communications programs for the immunology, neuroscience and oncology franchises.  Mr. Curtis has a bachelor’s degree in English from Lake Forest College in Lake Forest, Illinois. 

Michael A. DesJardin.  Mr. DesJardin has served as our executive vice president, technical operations and corporate quality since February 2017.  Mr. DesJardin previously served as our senior vice president, technical operations from October 2016 to November 2016 and as our senior vice president, life cycle management from December 2016 to January 2017.  Mr. DesJardin joined Horizon from Raptor in October 2016 as part of the Raptor acquisition.  While at Raptor, Mr. DesJardin was the senior vice president of technical operations from April 2015 to October 2016.  Prior to that, Mr. DesJardin served as senior vice president of product development at Jazz Pharmaceuticals Public Limited Company (formerly Jazz Pharmaceuticals, Inc.) (Jazz) from July 2004 to March 2015.  Mr. DesJardin spent nine years as an executive director and engineering fellow at ALZA Corporation and spent 15 years at the Dow Chemical Company working in pharmaceutical and agricultural chemical development for Marion Merrill Dow.  Mr. DesJardin has over 39 years of experience in pharmaceutical development.  Mr. DesJardin received a bachelor of science degree in chemical engineering from the University of California, Berkeley and is a registered professional engineer in the State of California. 

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Paul W. Hoelscher.  Mr. Hoelscher has served as our executive vice president, chief financial officer since October 2014.  Previously, Mr. Hoelscher was our executive vice president, finance from June 2014 through September 2014.  Prior to joining Horizon, Mr. Hoelscher served as senior vice president, finance-treasury and corporate development of OfficeMax, Inc., from August 2013 to May 2014, and as vice president, finance-treasury and corporate development of OfficeMax from August 2012 to July 2013.  Prior to that, Mr. Hoelscher served in various finance roles at Alberto Culver Company from 1993 to 2012 and in various positions in the audit practice at KPMG LLP from 1986 to 1993.  He currently serves on the board of trustees of the Illinois Chapter of the Leukemia and Lymphoma Society.  Mr. Hoelscher received his bachelor of science degree in accountancy from the University of Illinois at Urbana-Champaign and is a certified public accountant.

Vikram Karnani.  Mr. Karnani has served as our executive vice president, chief commercial officer since March 2018.  Prior to that, he served as our senior vice president, rheumatology business unit from February 2017 to March 2018, and before that, from July 2014 until February 2017, he served as our general manager, specialty business unit.  Prior to joining Horizon, Mr. Karnani was with Fresenius Kabi, a global health care company, where he served as vice president of the therapeutics and cell therapy business, from October 2011 to July 2014.  Mr. Karnani also held various positions in business development, corporate strategy and strategic marketing within Fenwal Inc., a global blood technology company that was acquired by Fresenius Kabi, from November 2008 to October 2011.  Mr. Karnani brings nearly 17 years of cross-functional expertise across a multitude of industries, including medical devices, management consulting, semiconductors and cellular telecommunications.  Mr. Karnani has a master’s degree from the Kellogg School of Management at Northwestern University, a master’s degree in electrical engineering from Case Western Reserve University and a bachelor of science degree in electrical engineering from University of Bombay, India.

Jeffrey D. Kent, M.D., FACP, FACG.  Dr. Kent has served as our senior vice president, medical affairs and outcomes research since joining Horizon in May 2012.  Before that Dr. Kent was executive director, medical affairs at Astellas Pharmaceuticals, a public Japanese biopharma company, from 2011 to 2012.  Prior to Astellas, he spent more than eight years as global project head for medical affairs in immunology at Abbott Laboratories, then a public health care and pharmaceutical company.  Dr. Kent also worked at G.D. Searle & Company (now Pfizer) from 1999 to 2003, and served in various capacities in research and development, including global director for valdecoxib (Bextra) development.  A Fellow of the American College of Physicians (FACP) and a Fellow of the American College of Gastroenterology (FACG), Dr. Kent received his M.D. from the Jefferson Medical College in Philadelphia, Pennsylvania.  He completed a residency in Internal Medicine at Thomas Jefferson University Hospital and a fellowship in gastroenterology and hepatology at Rush Presbyterian St. Luke’s Hospital in Chicago.

Irina P. Konstantinovsky.  Ms. Konstantinovsky has served as our executive vice president, chief human resources officer since September 2017.  Prior to Horizon, from August 2012 to September 2017, she was vice president of global talent at Baxter International Inc., a healthcare products company, where she led a team of talent professionals worldwide and oversaw organizational effectiveness, leadership development, inclusion and diversity and talent acquisition.  She and her team were responsible for talent management strategies, programs and systems for more than 50,000 employees worldwide.  Prior to Baxter, Ms. Konstantinovsky spent 15 years in senior partner and director roles at Towers Watson (currently Willis Towers Watson), a global human-resources consulting firm serving Fortune 1000 companies.  Ms. Konstantinovsky has a bachelor of arts in education from the University of Buenos Aires and two master’s degrees, one in higher education and one in industrial and labor relations from Cornell University.  In addition, she serves as vice chair on the board of the Human Resource Management Association of Chicago and on the board of the YWCA of Metropolitan Chicago.

Barry J. Moze.  Mr. Moze has served as our executive vice president, chief administrative officer since February 2017.  Prior to that, Mr. Moze was our executive vice president, chief operating officer from February 2016 to January 2017 and was our executive vice president, corporate development from May 2014 to January 2016.  Prior to joining Horizon, Mr. Moze spent more than 28 years as a partner of Crystal Clear Communications, a consulting firm focused on the development and execution of corporate strategies.  Prior to Crystal Clear, Mr. Moze was a founder and president of Review Services and Asset Management Group, a licensed investment advisory firm.

Andy Pasternak.  Mr. Pasternak has served as our executive vice president, chief business officer since November 2019.  Prior to that, Mr. Pasternak served as a partner of Bain & Company, Inc., a global management consulting firm, from 2008 until October 2019, where he most recently led Bain & Company’s healthcare practice in the Americas and was a member of the mergers and acquisition practice.  Mr. Pasternak earned a master of business administration degree from the University of Chicago and a bachelor of arts degree in economics from Northwestern University.

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Jeffrey W. Sherman, M.D., FACP.  Dr. Sherman has served as our executive vice president, chief medical officer since January 2018.  From September 2014 to January 2018, Dr. Sherman served as our executive vice president, research and development and chief medical officer.  He joined Horizon in 2009 as our executive vice president, development, manufacturing, regulatory affairs and chief medical officer.  Prior to joining Horizon, Dr. Sherman served as president and board member of the Drug Information Association (DIA), a nonprofit professional association of members who work in government regulatory, academia, patient advocacy and the pharmaceutical and medical device industry.  Before that he held other management roles at IDM Pharma, Inc., Takeda Global Research & Development, NeoPharm, Inc. and G.D. Searle, LLC/Pharmacia.  Dr. Sherman serves on the board of directors of Strongbridge Biopharma plc and Xeris Pharmaceuticals Inc, both public biopharma companies, and the Board of Advisors of the Center for Information and Study on Clinical Research Participation (CISCRP).  He is an adjunct assistant professor of Medicine at the Northwestern University Feinberg School of Medicine and a diplomat of the National Board of Medical Examiners and the American Board of Internal Medicine.  Dr. Sherman received his M.D. from the Rosalind Franklin University/Chicago Medical School.

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (CD&A) discusses the compensation philosophy, policies and principles underlying our executive compensation decisions made for 2019 compensation.  This CD&A provides qualitative information on the factors relevant to these decisions and the manner in which compensation is awarded to the following executive officers who have been named in the Summary Compensation Table included in this Proxy Statement and whom we refer to as our named executive officers (NEOs). 

Quick CD&A Reference Guide

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2019—Year At A Glance

Strong Performance:  Record Net Sales and Strong Shareholder Returns

Except for 1, 3- and 5-year total shareholder return, growth percentages represent comparison to full-year 2018. 

TSR:  total shareholder return through December 31, 2019.  NBI:  Nasdaq Biotechnology Index. 

 A Year of Milestones and Significant Progress

Our Strategy: Maximizing key growth drivers KRYSTEXXA and TEPEZZA while expanding our pipeline for sustainable growth         Our Purpose: To help build healthier communities, urgently and responsibly						•  Announced highly significant TEPEZZA Phase 3 topline data:  82.9% of TEPEZZA patients met the primary endpoint versus 9.5% of placebo (p<0.001); obtained FDA Priority Review from FDA; after an accelerated review obtained U.S. FDA approval of TEPEZZA for thyroid eye disease on January 21, 2020, almost two months before the target action date, making TEPEZZA the first and only approved treatment for the vision-threatening and debilitating disease   •  Completed KRYSTEXXA plus methotrexate MIRROR immunomodulation open-label trial; topline data demonstrated significant response rate improvement:  79% of patients achieved complete response rate vs 42% for KRYSTEXXA Phase 3 clinical program   •  Initiated KRYSTEXXA plus methotrexate MIRROR immunomodulation placebo-controlled randomized clinical trial with aim of optimizing treatment outcomes; trial designed to expand the prescribing information for KRYSTEXXA   •  Initiated PROTECT trial evaluating KRYSTEXXA to improve management of uncontrolled gout for adult kidney transplant patients   •  Opened new South San Francisco R&D and manufacturing facility   •  Significantly improved Horizon’s capital structure   •  Demonstrated strong employee engagement with multiple best-workplace recognitions, as well as gender and ethnicity pay equity   •  Changed our company name to Horizon Therapeutics plc and rebranded to better reflect who we are today and our vision for the future

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Business Overview: 

2019:  A Year of Tremendous Progress and Strong Execution on Our Strategy

2019 was a year of tremendous progress and performance at Horizon, marked by the achievement of several important milestones and a testament to the strong execution of our strategy to maximize our key growth drivers and expand our pipeline for sustainable growth. 

With the recent accelerated approval of TEPEZZA in January 2020 as well as the continued strong growth prospects for KRYSTEXXA, we believe we are in our strongest position ever as a company, building on our momentum to deliver long-term value to our shareholders. 

For additional discussion about our strategy, unique approach, our key growth drivers TEPEZZA and KRYSTEXXA, as well as our expanding pipeline, see the “Business Overview” discussion in the Proxy Summary beginning on page 3. 

Total Shareholder Return

Our disciplined approach, clear strategy, business development acumen and strong commercial execution has driven rapid, transformational growth.  As a result, we have outperformed both our peer group and the NBI over the one-, three- and five-year periods ended December 31, 2019.  With our key growth driver medicines KRYSTEXXA and TEPEZZA, our durable base of rare disease medicines, the pipeline we are expanding for future growth and our strengthened capital structure, we believe Horizon is well positioned for sustainable long-term growth. 

Our Total Shareholder Return Significantly Surpassed Our Peers and NBI

1, 3- and 5-year periods

Note:  The peer group used for the TSR calculations for the 1-, 3- and 5-year periods ended December 31, 2019 is our peer group shown on page 42. 

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Our Pay Program

Our compensation program continues to be based on attracting and retaining top talent with experience in building and leading a successful rare disease biopharma company, while providing competitive compensation and benefits packages that create a direct, meaningful link between business results and compensation opportunities.  In thoughtfully doing so, we believe we can align interests of management, employees and shareholders to set priorities and focus on executing our long-term business strategy. 

Say-on-Pay Results and Shareholder Engagement

We value the views of our shareholders and we have had significant and meaningful engagement with our shareholders regarding our compensation and governance.  Feedback from these outreach efforts informs the Compensation Committee’s thinking when evaluating our current compensation program and when considering potential modifications to the program on a go-forward basis.  During the outreach we conduct each year, we have had significant continued and consistent engagement with our shareholders, led by the Chairman of our Compensation Committee, and we plan to continue this practice. 

In 2019, during our shareholder engagement cycle before the Annual General Meeting, we offered engagement opportunities to shareholders who represented 85 percent of our shares outstanding; shareholders who represented 68 percent of our outstanding shares accepted and we conducted calls or meetings with these holders.  Our shareholders appreciated the outreach, and the feedback from this engagement was very positive.  At our 2019 Annual General Meeting of Shareholders, our say-on-pay proposal received the support of 86 percent of the shares voted.  We believe this high level of support is a result of our comprehensive shareholder outreach and engagement program to solicit feedback, understand investor viewpoints and incorporate their feedback into further discussions of our compensation programs. 

Changes to our compensation program over the past several years that were heavily influenced by shareholder feedback include: 

We greatly value the dialogue we have with our shareholders and remain committed to conducting consistent engagement going forward. 

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2019 Pay-for-Performance Overview

A significant portion – a higher percentage than the majority of our peers – of target total compensation for our CEO and other NEOs is structured in the form of “at-risk” compensation, consisting of annual performance-based incentives and PSUs.  In line with our compensation objectives – including linking executive pay with performance – short-term incentives and PSUs are dependent upon Horizon’s performance, aligning our executives’ interests with those of our shareholders for near- and long-term performance.  In addition, the restricted share unit (RSU) portion of the target total compensation has a time-based vesting component so that the total potential value realized from the RSU portion is dependent on our long-term share price performance.  Total target direct compensation for 2019, as shown below, reflects annual base salary, annual bonus, PSUs and RSUs as reported in the Summary Compensation Table.  More than half of total target compensation of our chief executive officer (CEO) is tied to achievement of specific performance goals and an additional 31 percent is time-based equity. 

CEO 2019 Pay Mix at Target		NEO 2019 Pay Mix at Target

Compensation Program and Governance

Our Compensation Committee is responsible for oversight of our compensation program.  A significant part of this oversight is aligning management interests with our business strategies and goals, as well as the interests of our shareholders, while also mitigating excessive risk-taking.  We continually take steps to strengthen and improve our executive compensation policies and practices.  Highlights of our current policies and practices include: 

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We believe in providing a competitive total compensation package to our executive officers through a combination of base salary, annual cash bonuses, long-term incentives, and severance and change-in-control benefits.  Our executive compensation programs are designed to achieve the following objectives: 

Our Compensation Committee believes that our executive compensation programs should include short- and long-term performance incentive components, including cash and equity-based compensation, and should reward consistent performance that meets or exceeds expectations.  The Compensation Committee evaluates both performance and compensation to make sure that the total compensation provided to our executive officers remains competitive relative to compensation paid by companies of similar size and stage of development, operating in the pharmaceutical industry and appropriately reflects our relative performance and our own strategic objectives. 

Role of Compensation Committee

The Compensation Committee seeks to ensure that our executive compensation program is properly rewarding and motivating our executive officers while aligning their goals with our business strategy and the interests of our shareholders.  To do this, our Compensation Committee conducts an annual review of the aggregate level of our executive compensation and the mix of elements used to compensate our executive officers and historic compensation levels, including prior equity awards. 

When setting executive compensation opportunities, the Compensation Committee considers several factors, including: 

Role of Chief Executive Officer in Compensation Decisions

Our CEO typically evaluates the performance of other executive officers and other employees, along with the performance of the Company as a whole, against previously determined objectives, on an annual basis and makes recommendations to the Compensation Committee with respect to annual base salary adjustments, bonuses, cash performance incentives and annual equity awards for the other executives.  The Compensation Committee exercises its own independent discretion in approving compensation for all executive officers and assessing corporate performance against the pre-established objectives.  The CEO is not present during deliberations or voting with respect to his own compensation. 

Risk Analysis

The Compensation Committee has reviewed our compensation policies applicable to our executive officers and other employees and believes that our policies do not encourage excessive and unnecessary risk-taking, and that the level of risk that they do encourage is not reasonably likely to have a material adverse effect on us.  The design of our compensation policies and programs encourages our executive officers and other employees to remain focused on both our short- and long-term goals.  For example, while our short-term cash incentive plan measures performance on an annual basis, our equity LTIP awards, which consist of time-based equity awards (RSUs) and performance-based equity awards (PSUs) vest over a number of years.  Furthermore, a portion of our PSUs

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require that we achieve a specified level of performance over multi-year periods, which we believe encourages our employees to focus on execution of our long-term strategy, thus limiting the potential value of excessive risk-taking. 

Role of Independent Consultant

The Compensation Committee retains the services of third-party, independent executive compensation consultants from time to time, as it sees fit, in connection with the establishment of compensation programs and related policies.  The Compensation Committee has engaged Radford, which is part of the Rewards Solutions practice at Aon plc, as its independent consultant since 2016.  Total fees paid to Radford in 2019 were approximately $394,000.  Radford was engaged to assist and advise on all aspects of compensation program design and pay setting, including, but not limited to, the following services: 

The Compensation Committee has assessed the independence of Radford according to the six factors mandated by SEC and Nasdaq listing standards.  After conducting this assessment and considering any potential conflicts of interest, the Compensation Committee concluded that the continued engagement of Radford did not raise any conflict of interest and did not adversely affect Radford’s independence. 

Peer Group

Although our Compensation Committee has historically used the Radford survey data as a tool in determining executive compensation, it typically has not used a formula or “benchmark” to set our executives’ compensation in relation to this data.  Instead, the Compensation Committee generally references the 50^th percentile of comparable peer companies in combination with multiple other factors, such as the executives’ respective levels of experience and responsibility in determining the total target cash compensation for all executives.  The peer group used for making 2019 compensation decisions and comparative performance analysis was updated by our Compensation Committee in July 2018, with a focus on publicly traded commercial biotechnology and pharmaceutical companies. 

The selection criteria used, as well as Horizon’s position relative to each criterion at the time of the peer review process, were: 

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Our executive compensation program primarily consists of base salary, annual cash incentives and long-term incentives delivered through equity and cash awards.  Employees in more senior roles have an increasing proportion of their total pay package at risk and tied to performance because they are in a position to have greater influence on our performance results. 

2019 Executive Compensation at a Glance

“Variable” compensation is compensation in which the ultimate value received is contingent either 1) on performance, typically measured as financial, operational, or stock price performance, such as for PSUs; or 2) on the stock price value at the vesting date, such as for RSUs. 

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Base Salary

Base salaries for our executive officers are established based on the individual’s scope of responsibilities, experience and market factors.  Base salaries are generally reviewed annually, typically in connection with our annual executive compensation review process.  The Compensation Committee references survey and peer group data to understand the marketplace for individuals in similar positions at the peer group companies.  Based on the survey and peer group data, the Compensation Committee determined that a 3% increase to the base salaries of our NEOs was appropriate as consistent with industry trends. 

The annual base salaries of our NEOs as of March 1, 2019, and the increase from their prior base salary levels, were as follows: 

Short-Term Incentives

Individual Performance-Based Bonus Opportunities

We provide performance-based cash annual bonuses as an incentive for our executives to achieve defined, quantitative corporate goals, as well as certain qualitative corporate objectives.  These bonuses may range in payout from 0% to 200% of targeted payout levels.  The overall structure of this program remains unchanged since 2014. 

The target bonus opportunities for our named executive officers remained unchanged from prior levels. 

Bonus opportunities for 2019 were as follows: 

Our annual incentive plan provides our executives the opportunity to earn annual performance-based cash awards based on the achievement of a combination of quantitative goals (70% weighting) and qualitative goals (30% weighting). 

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Quantitative Goals

The Compensation Committee established the quantitative goals for the 2019 plan year in February 2019, with the goals allocated between specific net sales goals for each of our three business units, operating income by segment and adjusted earnings before interest, tax, depreciation and amortization (adjusted EBITDA) performance targets for the 2019 calendar year, with a total weighting of 70%. 

Net Sales

For the 2019 plan year, the Compensation Committee established the net sales goals for each of our three business units – orphan, rheumatology and inflammation (previously known as primary care) – and weighted the goals as set forth in the table below. 

In setting the net sales goals for the 2019 plan year, the Compensation Committee determined to maintain the greater weighting for the orphan and rheumatology business units, consistent with the weightings for the prior year because they comprise the Company’s strategic growth business, they are the focus of the majority of our business investment and strategy and we believe that our future net sales growth will be mainly driven by the performance of these two business units. 

Segment Operating Income

For the 2019 plan year, the Compensation Committee established performance goals for segment operating income and weighted the goals as set forth in the table below: 

The Compensation Committee established the segment operating income performance metric given the change in reporting structure.  Greater weighting was given to the orphan and rheumatology segment for the operating income metric given that it is our strategic growth business. 

Adjusted EBITDA

Additionally, the Compensation Committee established adjusted EBITDA goals for 2019 and weighted the goals as follows: 

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Qualitative Goals

The Compensation Committee established three qualitative goals (with a total weighting of 30%) for 2019: 

The Compensation Committee chose these qualitative goals because these are the best indicators of the achievement of our operating plan, and they represent the factors most critical to increasing total shareholder value. 

How Did We Do?

Quantitative Goals

Actual results in 2019 for each quantitative goal were as follows: