ResMed (RMD) DEF 14ADefinitive proxy

By adopting a global operating model that is product-led, customer-centric, and brand-enhanced, we seek to accelerate profitable growth, while driving greater value and improved software solutions to support care outside the hospital care continuum. We believe these traits enabled us in fiscal 2024 to respond quickly to provide solutions to help patients and healthcare providers respond to continuing demand for our flow generators caused by a competitor’s recall of flow generators, and the potential impact of weight loss drugs that may eventually be used by patients with obstructive sleep apnea.

The following table illustrates our financial performance for fiscal 2024 as compared to fiscal 2023, with applicable non-GAAP amounts in lighter shades.

Because our primary listing is on the NYSE, the TSR performance of our CHESS Units of Foreign Securities trading on the ASX is also impacted by currency fluctuations between the US and Australian dollars.

This summary highlights select information contained elsewhere in this proxy statement. This summary does not contain all the information that you should consider, and you should read the entire proxy statement carefully before submitting your proxy and voting instructions.

The nominees have diverse backgrounds and perspectives that enable them to provide valuable guidance on strategy and operations. They have extensive leadership experience, as well as corporate governance expertise arising from service in executive management positions as well as other public company board experience. Many have global business experience, including through service as chief executive officer or in other senior corporate leadership positions involving management of complex operations, business challenges, risks, and growth. One director currently resides and works in Singapore, and several others have served outside the United States in the past, providing valuable perspectives on our global business environment. All have experience with medical device, technology or product innovation and development, entrepreneurship, and the dynamics of our industry. Mr. DelOrefice, our most recently elected director, has substantial experience in medical technology companies, having served in various roles in accounting, finance, strategy, operations, and investor relations and is currently chief financial officer of a publicly traded medical technology company. All of our directors have demonstrated involvement in their communities, having contributed to social causes through nonprofit organizations or philanthropy. ͏Our board of directors benefits from these qualifications, as well as the perspectives of directors with in-depth knowledge of ResMed through their service as directors or executive officers.

The nominating and governance committee reviews and regularly updates a matrix of directors’ skill sets, based on factors the board deems important to oversee management and our strategic goals. It most recently updated the matrix during fiscal year 2024. Evaluation of our directors’ collective experience against the fiscal year 2024 skills matrix, with the addition of Mr. DelOrefice, is reflected in the following broad categories of expertise:

Included below is certain information as of September 24, 2024, regarding our director nominees, including key business experience, director positions with other public companies, and the experience, qualifications, attributes and skills that led the nominating and governance committee and the board to determine that such person should be nominated for election at our 2024 annual meeting to serve as a director of the company.

Information about the eleven nominees for director is set forth below:

The following biographical information is furnished with regard to our directors as of September 24, 2024.

The nominating and governance committee regularly reviews with the board the appropriate characteristics, skills, and experience required for the board as a whole and its individual members. The board values diversity and a heterogeneous board, and views diversity expansively, to include differences of viewpoint, professional experience, education, skill and other individual qualities. To assist in promoting a diversity of backgrounds and experience on the board, the nominating and governance committee identifies and considers board candidates who are drawn from a wide talent pool, representing diversity of thought, culture, gender, ethnicity, race, background, and other qualities, consistent with the company's corporate governance guidelines. For example, the nominating and governance committee and the board chairman shared these values with the third-party executive search firm that identified Mr. DelOrefice as a new board member.

ResMed currently complies with California Senate Bill 826, which requires publicly held corporations with principal executive offices in California to have a board of directors that satisfies certain gender diversity requirements. We also comply with California Assembly Bill 979, which requires publicly held corporations with principal executive offices in California to meet certain requirements to include directors from underrepresented communities on their board of directors.

The nominating and governance committee believes board composition and an appropriate balance of board refreshment and experience is important to effective governance, and follows a process of regularly reviewing board composition and board refreshment, with a long-term perspective.

The suitability of individual director candidates depends on many factors. Those factors include:

The nominating and governance committee also reviews and regularly updates a matrix of directors’ skill sets, based on factors the board deems important to oversee management and our strategic goals. It most recently updated the matrix during fiscal year 2024. We believe the annual consideration of new skills that benefit the company, and examination of our directors’ collective experience across those identified attributes, keeps our board across the evolving profile of our global business.

͏The board evaluates each individual director in the context of the board as a whole, to assemble a group that can best perpetuate the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas.

In determining whether to recommend a director for re-election, the nominating and governance committee also considers the director’s past attendance at meetings and participation in and contributions to the board’s activities. In fiscal year 2024 our board members achieved 100% attendance at our board and committee meetings. After review and deliberation of all feedback and data, the nominating and governance committee makes its recommendation to our board.

Recommendations we receive from stockholders are subject to the same criteria as are candidates nominated by the nominating and governance committee. The committee will consider stockholder suggestions for nominees for directorship and has a policy to consider any candidate recommended by stockholders who have held a minimum of 1% of our outstanding voting securities for at least one year. Our bylaws also permit a stockholder, or a group of up to 20 stockholders, owning 3% or more of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials directors constituting up to 20% of the board or two individuals, whichever is greater, provided that each stockholder and nominee satisfy the other requirements specified in our bylaws.

A recommending stockholder must submit a detailed resume of the candidate and an explanation of the reasons why the stockholder believes the candidate is qualified for service on our board. The stockholder must also provide any other information about the candidate that would be required by SEC rules to be included in a proxy statement. In addition, the stockholder must include the consent of the candidate (including the consent to a background check) and describe any relationships, arrangements or undertakings between the stockholder and the candidate regarding the nomination or otherwise. The stockholder or nominee must submit certain background information and representations regarding disclosure of voting or compensation arrangements, compliance with our policies and guidelines, and intent to serve the entire term. The stockholder must submit proof of ownership of our stock.

All communications should be submitted in writing to the chair of the nominating and governance committee, care of Secretary, ResMed Inc., 9001 Spectrum Center Boulevard, San Diego, California 92123 USA. Recommendations received after seventy days before the anniversary of the prior year’s annual meeting will likely not be considered timely for consideration at that year’s annual meeting.

The nominating and governance committee believes board composition and an appropriate balance of board refreshment and experience is important to effective governance.

While refreshment is an important consideration in assessing board composition, the board does not make determinations based solely on tenure; instead choosing to consider an appropriate mix of skill set and institutional knowledge as the key foundations of our board composition. Over the course of the last ten years we have achieved a balanced blend of long-tenured board members and new board members. Our founder, Peter Farrell, is our longest serving board member. Our lead director, Ron Taylor and the chair of our nominating and governance committee, Rich Sulpizio, each have almost twenty years’ experience on our board. Ms. Burt, the chair of our audit and compliance oversight committees, has just over ten years’ experience on our board and leads both the audit and compliance oversight committee. These four board members have served on many public company boards and bring experience in corporate governance that is very valuable to ResMed. We have three additional board members--Ms. Drexler, Ms. Gill, and Mr. De Witte--with more than five but less than ten years of service to our board, bringing entrepreneurial expertise, consumer goods and marketing experience, and additional executive leadership experience to our board. Two recent members, Dr. Hernandez and Dr. Tan, have experience in the use of real world evidence and artificial intelligence in healthcare, key skill sets as ResMed continues to expand its digital health offerings to provide patient and customer benefits from the seven billion nights of sleep we have collected since launching AirSense 10 and AirSense 11 connected devices.

Consistent with its usual practice, in fiscal year 2024 the nominating and governance committee considered whether it would be useful to add an additional board member to reflect the company's evolving mission. On the recommendation of the chairman of the board, as well as the chairs of the nominating and governance committee and the audit committee and the lead director, the company engaged a search firm to identify potential board candidates. The company provided guidance on the expertise and qualities that the board believed were appropriate, particularly considering the company's published corporate governance guidelines. The search firm presented a slate of potential candidates for consideration. Interviews were conducted and the nominating and governance committee recommended the nomination and election of Christopher DelOrefice to the board. On August 15, 2024, the board expanded the size of the board to eleven, appointed Mr. DelOrefice to the board and the audit committee, and nominated him to stand for election at the 2024 annual meeting of stockholders with the rest of our directors.

The board specifically considered the tenure of our directors when considering the decision to expand the size of the board to include Mr. DelOrefice. The board believes the independent directors represent an excellent balance of tenure. Six of our nine independent directors have been on the board for ten years or less. Three of our nine independent directors and nominees have served for more than ten years. Our more tenured members of the board serve as mentors for our new board members. The board has determined that the tenure of our longer serving members has not compromised their independence; in fact, in the board’s view, the depth of their knowledge and insight with the company has strengthened their independence and contributions to our board as they have witnessed the evolution of the company through our strategic vision and adoption of various operating models, and can provide valuable historical connections to both our senior leadership and employees. The tenure and experience of our longer serving directors brings balance to the relatively lower tenure and experience of the other independent directors and is important to the education of our newest board members. Of course, the vast experience of our founder, Peter Farrell, with over thirty-five years of history with ResMed, is extremely valuable to our company.

Our board has determined that nine of our eleven current directors are independent, including: Carol Burt, Christopher DelOrefice, Jan De Witte, Karen Drexler, Harjit Gill, John Hernandez, Richard Sulpizio, Desney Tan, and Ronald Taylor, as defined under the listing standards of the NYSE, and they and their respective family members have no material relationship with us, commercial or otherwise, that would impair the director’s independence.

The board determined that every member of the audit, compliance oversight, nominating and governance, and compensation committees is independent under the NYSE’s listing standards, and that each member of the audit committee and compensation committee meets the additional standards for independence for audit committee and compensation committee members, as applicable, imposed by the SEC’s regulations and the NYSE's listing standards. The board determined that based on their employment with the company, Peter Farrell and Michael Farrell are not deemed independent: Michael Farrell is an executive officer; while Peter Farrell, our founder and chairman emeritus, is a current non-executive employee and the father of Michael Farrell.

In making its decision, the board concluded that having Michael Farrell serve as chairman of the board and chief executive officer is the most appropriate leadership structure for us and in the best interests of our stockholders at this time. Combining the two roles is more efficient, creates clear lines of authority, and is consistent with the prevailing practice among medical equipment companies in the S&P 500.

The board believes the advantages described above outweigh any theoretical risks or disadvantages arising from Michael Farrell’s current role as chief executive officer. The board has had the opportunity to observe Michael Farrell's leadership in the boardroom during his 12 years of service as a director, and found him to be an effective leader in setting the board's agenda, encouraging directors to share diverse viewpoints and raise questions, and facilitating a positive board culture. And the connection between the two roles is particularly important when the company faces competitive and operational challenges, including for example the overwhelming demand for our products when a competitor announced a global recall. Michael Farrell is also assisted in board leadership by Ronald Taylor, our lead director, and Richard Sulpizio, the chair of our nominating and governance committee.

The board believes our overall board structure ensures independent oversight from the board. Nine of our eleven directors are independent, which provides a counterbalance to a combined chief executive officer and chairman. Our independent directors meet in executive session, alone, at each board meeting, and our board’s committees are filled entirely by independent directors, enabling the board to fulfill its independent oversight responsibilities. Since July 1, 2013, Ronald Taylor has served as our lead director. The role of our lead director provides additional governance structure supporting an effective independent board. The primary responsibilities of the lead director are to:

As lead director, Mr. Taylor keeps Mr. Farrell apprised of issues discussed during the independent sessions of the board and consults with Mr. Farrell on other matters pertinent to the company and the board. Mr. Taylor discusses with the independent directors any concerns they may have and, as appropriate, relays those concerns to the full board, the chairman or members of senior management. As chair of the nominating and governance committee since May 2024, Mr. Sulpizio has joined the discussion with Mr. Taylor and Mr. Farrell on the board’s independence, performance and leadership structure. Mr. Taylor's extensive experience and skills as a medical technology founder and chief executive officer, public company board director, and his venture capital experience, combined with Mr. Sulpizio's extensive history as a director of our company and experience as president and chief operating officer of a global technology company, make them well qualified to serve as the voice of the independent members of the board when engaging with Mr. Farrell as board chairman and chief executive officer.

For the reasons discussed above, our board believes the current leadership structure is in our best interests at this time. However, our corporate governance guidelines give the board the flexibility to change its leadership over time, as needed. The board will continue to evaluate whether its leadership structure is appropriate as our business evolves.

Assuming stockholders elect the director candidates nominated by the board, we do not anticipate any changes to our committee assignments after the annual meeting.

During fiscal year 2024, each director attended 100% of the meetings of our board and of the committees on which the director served. Our board and standing committees met, as follows:

During each regular board meeting, our independent directors met without Mr. Michael Farrell and Mr. Peter Farrell, and our lead director chaired those sessions and thereafter provided feedback from the board to Michael Farrell as our chairman and chief executive officer. Our board members also connect with senior management outside the context of board meetings. For example, board members participated in question and answer sessions with senior employees responsible for shaping our 2030 strategic plan. In addition to meetings, the members of our board and its committees sometimes act by written consent in lieu of a meeting, as permitted under Delaware corporate law, or discuss company business without calling a formal meeting. All our directors were present for our 2023 annual stockholders meeting. We encourage directors to attend our annual meetings and we generally schedule board meetings to coincide with the annual meeting to facilitate directors’ attendance.

After each fiscal year, the nominating and governance committee oversees an annual assessment by the board of the board's performance individually and as a whole. The nominating and governance committee establishes and refreshes the evaluation criteria and implements the evaluation process. The assessment includes annual individual director assessments--including an evaluation of the performance of each director--committee assessments, and board assessments. The process includes a review of areas that the board or management believes the board can better contribute to the company's governance as well as a review of committee structure, membership, leadership, and succession. The nominating and governance committee uses the results of the board evaluation process to assess and determine the characteristics and skills required of existing and prospective board members.

We have a strong track record of innovation in sleep and respiratory care. In 1989, we introduced our first continuous positive air pressure device. Since then, we have been committed to an ongoing program of product advancement and development. Currently, our product development and clinical trial efforts are focused on not only improving our current product offerings and usability, but also expanding into new digital product applications based on billions of nights of de-identified sleep data collected from over twenty six million connected sleep devices.

Our core mission is to improve people’s health and wellbeing by providing innovative and high-quality products and services for sleep apnea, COPD, and other chronic respiratory conditions, as well as to help streamline the process of aiding and managing consumers of out-of-hospital care services with software used to provide care for patients outside the hospital, and preferably in the home.

This focus on product innovation is reflected not only in the high regard our customers have for our products and services but in our vigilance in meeting our safety and marketing obligations. We have a strong track record of quality, innovation and continuous improvement and our quality management system guides our employees and suppliers’ operations to ensure our products are designed, manufactured, and distributed to meet patient needs and performance requirements.

We operate our business efficiently and responsibly consistent with our role as a medical device manufacturer, while always striving to reduce our environmental footprint throughout our business operations and supply chain. We are committed to working with our employees, suppliers, and customers to eliminate unnecessary waste in all our systems and processes, minimize pollution, decarbonize our operations, design and develop innovative products with reduced impact on the environment throughout their lifecycle, monitor our environmental performance, continually make improvements, and fulfill our compliance obligations. Specifically, we are focused on energy efficiency, managing our electricity consumption, greenhouse gas emissions, sustainable design and packing, improving waste and recycling, water stewardship and the use of paper.

The ResMed workforce is diverse and is compromised of professional (i.e. engineers and other equivalent qualified specialists positions), managerial, executive, and administrative employees, as well as production, warehouse, logistics and operational employees. ResMed facilitates employee communications through face to face briefings and technology solutions and offers ongoing global surveys to identify and respond to issues within the workplace. We routinely surpass industry benchmarks for both employee participation and satisfaction in our employee surveys.

We are committed to building and fostering an extraordinary culture of belonging, inclusion, and diversity for success, where every ResMedian does their best work to help millions of people live healthier and higher-quality lives. We are committed to diversity and inclusion, people development, recruitment excellence, employee engagement and listening, work-life balance and flexible working, fair, equitable and competitive compensation and benefits, and employee consultation.

Our board of directors regularly meets with ResMed employees in roundtable sessions during our board meetings, providing an additional opportunity for our employees to connect with our board, to share experiences, and to foster an ongoing dialogue about the workplace.

We recognize the benefits of a healthy workforce and adopt a holistic approach to the health and safety of our people. We provide onsite support for employee fitness when possible, for example at our major campuses in Sydney, San Diego, and Singapore. We offer employee health and wellbeing programs that may variously include on-site blood pressure, cholesterol, and heart testing. Programs may include seasonal flu vaccinations, subsidized quit-smoking programs, screening for sleep apnea, confidential third-party counseling and referrals on stress and mental health issues, support for a gym membership, and in some jurisdictions, company- sponsored private health insurance.

Our community contributions reflect our mission to improve millions of lives worldwide through the treatment of chronic diseases like sleep apnea, COPD, and other chronic diseases, plus improved management of consumers benefiting from out-of-hospital care. We work with “healthcare ecosystem” participants to create opportunities that enable access to care, technology, and services needed for all people at the right time in the right settings. This means we conduct relevant research, engage with and support communities as a trusted partner through unwavering commitment. Our contributions to our local communities are made in both monetary contributions and the time and championship of our employees.

ResMed’s management and investor relations team regularly engages with current and prospective investors in ResMed and with other stakeholders such as financial analysts, regulatory bodies, and the media. We use a variety of communication and engagement channels, including quarterly earnings releases and conference calls, phone call and video meetings, in-person and virtual conferences, management presentations, investor roadshows, onsite visits, and other interactions as appropriate. Topics regularly discussed include company financials and operational results, short-term and long-term strategy, headwinds or challenges in the business, and other topics as they come up. The investor relations team reports regularly to management and the Board.

Any interested person, including any stockholder, may communicate with our non-employee board members by written mail addressed to the chair of the nominating and governance committee, care of Secretary, ResMed Inc., 9001 Spectrum Center Boulevard, San Diego, California 92123 USA. We encourage stockholders to include proof of ownership of our stock in their communications. The Secretary will forward all communications to the chair of the nominating and governance committee.

We have a policy prohibiting our directors, officers, and other employees from hedging or pledging their ResMed stock. This policy prohibits buying or selling puts or calls, short sales, collars, forward sale contracts, equity swaps, and any other financial instrument designed to hedge or offset a decrease in the market price of ResMed stock.

Our code of conduct requires directors, executive officers, and employees to disclose any situation that would reasonably be expected to give rise to a conflict of interest. Conflicts involving executive officers may be waived only by our board or the appropriate board committee.

Australia and the US generally have different pay philosophies for compensating non-executive directors. ResMed’s Australian peers generally pay non-executive directors higher cash, award little or no equity, and have overall lower compensation than ResMed’s US peers. The grant of equity awards to directors is routine in the US. All but one of our US peers grant equity to their non-executive directors, and as of May 2023 approximately 95% of those granting equity used full value shares, while approximately 40% of US peers also granted stock options. The board and compensation committee believe that director equity grants, coupled with our equity ownership guidelines, promote long-term ownership and align our directors with stockholders. While the board considers Australian director pay practices, the board believes US peers are most relevant for ResMed director compensation. ResMed’s primary listing is on the NYSE, we are primarily subject to US corporate governance requirements and risks, and eight of our nine independent directors reside in the US. In addition, this US perspective is consistent with our executive compensation philosophy which gives more weight to ResMed’s US peers’ pay practices, and more directly aligns the interests of our board members with those of our stockholders through equity ownership. Finally, we do not wish to create internal or cultural divisions by using different pay models for directors based in the US and other countries.

The compensation committee and board will continue to monitor compensation trends, competitive practices, tax regulations, and other matters related to non-executive director compensation, and adjust as appropriate.

After considering the FW Cook report regarding market competitiveness among US peer companies, the compensation committee recommended, and in May 2023 the board approved, an increase in the lead director retainer and non-executive director equity value for fiscal year 2024, effective as of July 1, 2023, as shown in the table below. The equity component of the director compensation program was last changed in 2010. We do not provide an additional retainer to, or fees for meeting attendance by committee members.

During fiscal year 2024, as in past years, on our annual stockholders meeting date in November 2023 we awarded the annual equity grants to our non-executive directors. Our non-executive directors had the opportunity to elect to receive their equity grant in the form of: (1) 100% options; (2) 100% restricted stock units (RSUs), or (3) 50% options and 50% RSUs. Commencing with this fiscal year 2025, the grant date of annual awards to our employees and directors will not be on the annual meeting date and instead will be on the second day after the results of the annual meeting of stockholders is published on a Form 8-K. Our 2009 Incentive Award Plan sets a $700,000 annual limit on combined cash and equity compensation for service as a non-employee director. During fiscal year 2024, the combined cash and equity compensation paid for service to our non-employee directors ranged from $329,967 to $381,217 per person.

In August 2024, on the recommendation of the compensation committee with input from FW Cook, the compensation committee’s independent compensation advisor, the board adopted a director deferred equity plan to provide our directors with the opportunity to defer receipt of their annual equity awards. This program provides tax and retirement planning benefits to directors and is consistent with peer market practice. The plan allows directors to defer receipt of shares from their annual equity grant for a fixed number of years or until retirement (or the earlier of the two events). The plan provides for accelerated distribution in the event of a change in control. Restricted stock units deferred by a director are credited as director deferred stock units that do not carry voting or other stockholder rights beyond the continued payment of cash dividends on a quarterly basis. Like restricted stock units, director deferred stock units will count toward the director ownership guidelines. The availability of a director deferred stock plan is viewed as an important tool to recruit new directors.

Each non-executive director is expected to hold ResMed stock with a value of at least five times the annual cash retainer (a total value of $350,000 based on the fiscal year 2024 retainer). New directors must meet this guideline within five years after their appointment to the board. At any time the guideline is not met, including during the initial five year period prior to required compliance, the director must retain shares equal to 50% of the after-tax value of shares acquired on any restricted stock vesting or stock option exercise until the director’s ownership guidelines are met. As of June 30, 2024, each of our non-executive directors met the equity ownership guideline.

Our historical practice is to pay pro-rated equity awards and to pay pro-rated cash retainers for new directors appointed before the annual meeting of stockholders, as well as departing directors (for the period between their start date and the next annual meeting, or between the grant date and end of service period, respectively). If we nominate candidates before the annual general meeting, we typically pay pro-rata cash retainers to attend our meetings. Finally we pay pro-rata cash retainers for assuming and ceasing chair positions of our Board committees.

For two years after a qualifying termination in connection with a change of control, Dr. Farrell will be prohibited from inducing any person in our employment to terminate employment or accept employment with anyone other than us or, subject to certain limited exceptions, engage in any business or activity or render any services or provide any advice to any person, activity, business or entity that directly or indirectly competes in any material manner with us or meaningfully support any person, business, entity or activity, or initiate or further that business or activity. The restriction on post-termination employment will not apply to him if he is residing in California, to the extent the restriction is not consistent with California law. In addition, as a condition to payment and providing any benefits under the agreements, he must deliver a general release of claims in favor of us.

The table below summarizes the compensation received by our non-executive directors for the fiscal year ended June 30, 2024. Mr. DelOrefice did not join the board until after fiscal 2024 year end.

In May 2024, after considering market data prepared by FW Cook, the compensation committee recommended to the Board, and the Board approved, no changes to director compensation program for fiscal year 2025.

KPMG has served as the Company’s independent auditor since 1994. In considering the tenure of KPMG as our independent auditor, the audit committee carefully considered the benefits of long tenure in light of the controls in place to safeguard independence. Benefits of long tenure include KPMG’s understanding of our industry, including the evolution of our expansion into digital health and SaaS offerings; onboarding a new auditor would require extensive education and significant time and resources for a new auditor to obtain a comparable level of familiarity with our business and controls potentially leading to management distraction; and the knowledge of our business and control framework allows KPMG to develop and implement efficient audit processes leading to competitive fees. We have a robust collection of key independence controls including regular executive sessions between KPMG, the audit chair, and the audit committee, fresh perspective delivered by changes in the audit team resulting from mandatory audit partner rotation (we have a new audit partner for fiscal year 2025) and routine turn over on the audit team, required pre-approval for any non-audit engagements, annual independence assessment, and regulatory oversight by the PCAOB and the SEC, as well as peer reviews by other members of the so-called “Big 4” accounting firms.

The audit committee pre-approves all audit and permissible non-audit services. Since the 2003 effective date of the SEC rules stating that an auditor is not independent of an audit client if the services it provides to the client are not appropriately approved, each new engagement of KPMG LLP was approved in advance by our audit committee or audit committee delegate, such as the audit committee chair, and none of those engagements made use of the rules’ de minimis exception to pre-approval.

Following is the report of the audit committee with respect to our audited consolidated balance sheet as of June 30, 2024, and 2023, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended June 30, 2024, and the notes to those statements.

The audit committee, acting on behalf of our board, oversees our financial reporting process and systems of internal accounting control, and exercises oversight over management’s assessment of internal controls. Our management has primary responsibility for our financial statements as well as our financial reporting process, accounting principles, and systems of internal accounting controls. The independent registered public accounting firm is responsible for performing an audit of our financial statements and expressing an opinion as to the conformity of the financial statements with US generally accepted accounting principles. The independent registered public accounting firm is also responsible for auditing our internal control over financial reporting and expressing an opinion on the effectiveness of our internal control over financial reporting. In this context, the audit committee has reviewed and discussed with management and its independent registered public accounting firm, KPMG LLP, our audited financial statements as of and for the fiscal year ended June 30, 2024, and the effectiveness of our internal controls as of June 30, 2024. The audit committee has discussed with our independent registered public accounting firm the matters required to be discussed under the applicable requirements of the Public Company Accounting Oversight Board (PCAOB), and the SEC. In addition, the audit committee has received and reviewed the written disclosures and the letter from the independent registered public accounting firm required by the PCAOB regarding the independent registered public accounting firm’s communications with the audit committee concerning the registered public accounting firm’s independence, and it has discussed with the independent registered public accounting firm its independence from ResMed and its management.

The audit committee members are not engaged in the accounting or auditing profession and are not involved in day-to-day operations of ResMed. In the performance of their oversight function, the audit committee’s members necessarily rely on the information, opinion, reports, and statements presented to them by our management and by the independent registered public accounting firm. The audit committee’s oversight and the review and discussions referred to above do not assure that management has maintained adequate financial reporting processes, principles, and systems of internal accounting controls, that our financial statements are accurate, that the audit of the financial statements has been conducted in accordance with standards of the PCAOB or that our independent registered public accounting firm meets the applicable standards for auditor independence.

Based on the reports and discussions described above, the audit committee recommended to our board that the audited financial statements be included in our annual report on Form 10-K for the fiscal year ended June 30, 2024, for filing with the SEC.

As of the record date our executive officers were:

This compensation discussion and analysis section discusses the compensation policies and programs for our named executive officers. Our named executive officers for fiscal year 2024 were:

This section also discusses the role of our compensation committee (which is sometimes referred to as the “committee” in this section) in designing and administering our compensation programs and policies and in making compensation decisions for our executive officers.

The goal of our compensation programs and policies is to align compensation delivery with performance for stockholders, measured both internally against budgets and externally through absolute and relative share price. We believe this alignment was achieved in fiscal year 2024.

We entered fiscal year 2024 operating in an ongoing challenging environment shaped by a competitor's continuing flow generator recall, significantly increasing demand for our flow generators. The demand for our products occurred while we were continuing to work through the impacts of global supply chain constraints that increased our costs. In addition, financial analyst and investor reaction to the heightened awareness of weight loss medications provided a new challenge for our company. Despite these challenges, in fiscal year 2024 we exceeded fiscal year 2023 performance, advanced our strategic objectives, and increased global revenues 11% year over year to $4.7 billion. We did this by increasing supply of our AirSense 10 connected devices, expanding the launch of our AirSense 11 sleep and respiratory care flow generator, and expanding adoption of our masks and accessories with customers and patients around the world as well as continued growth from our Software as a Service business. We also presented data during each of our quarterly earnings calls demonstrating that patients with a prescription for a GLP-1 class of weight loss drug and diagnosed with obstructive sleep apnea led to higher initiation of PAP therapy and had higher PAP resupply rates one- and two- years post set up than patients who did not have a prescription for a CLP-1class weight loss drug.

All primary performance measures for fiscal year 2024 increased year over year on both a GAAP and non- GAAP basis. These metrics are illustrated in the table below, with GAAP and corresponding non-GAAP measures. We believe that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide investors better insight when evaluating our performance from core operations and can provide more consistent financial reporting across periods. We employ and report these non-GAAP measures in our quarterly financial reports.

Our stock price suffered a set-back in early fiscal 2024. Our stock price, which was at $218.50 at June 30, 2023, was $148.90 on the November 23rd annual equity award grant date, recovered to $191.42 at fiscal year end of June 30, 2024 and has improved to $247.15 as of the record date.

Our goal is to attract, motivate, and retain top talent who reflect our values, enabling us to achieve our short- and long-term strategic goals. We operate in a dynamic, complex, high-growth marketplace, where substantial competition exists for executives who can translate strategy to execution. Our compensation packages must support our talent roadmap and incentivize and reward execution of our strategies. Pay-for-performance aligned with stockholder interests and largely at-risk compensation are the cornerstones of our compensation program. Our executive compensation program rewards successful annual performance through our cash incentive program and encourages long-term value creation for our stockholders through our long-term equity incentive program. During fiscal year 2024, approximately 90% of our chief executive officer's total direct compensation and 74%-83% of our other named executive officers’ total direct compensation were at risk in the form of annual cash incentives paid and the grant date value of equity awards made, which are paid or earned based on our financial and stock price performance.

A significant portion of our executives’ compensation is at-risk and tied to the achievement of pre-established short-term corporate financial objectives through our annual cash incentives that our corporate officers earn based on achieving our corporate goals for adjusted net sales and adjusted operating profit, weighted equally. These two measures represent fundamental financial metrics: top-line sales, and bottom-line profit for our chief executive officer and named executive officers. Additionally, Mr. Ghoshal has 50% of his incentive opportunity tied to achieving set goals for the same metrics at the SaaS business unit level and the remaining 50% tied to the corporate goals (a change from fiscal 2023 of 60% business unit performance and 40% corporate performance). All payouts are determined in accordance with these objective performance metrics. For fiscal year 2024, named executive officer payouts ranged from 106.14% (for those tied solely to corporate performance) to 110.56% (for Mr. Ghoshal) of target cash incentive opportunity, with no discretion applied to the amount paid; demonstrating our strong performance.