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We are pleased to invite you to attend the 2021 Annual Meeting of Shareholders of Becton, Dickinson and Company (“BD”) to be held on Tuesday, January 26, 2021 at 1:00 p.m. Eastern Time (the “2021 Annual Meeting”). Due to ongoing public health concerns regarding the COVID-19 pandemic and for the health and well-being of our shareholders, directors, management and associates, the BD Board of Directors has directed that the 2021 Annual Meeting be held as a “virtual meeting” via the Internet. You will be able to attend the 2021 Annual Meeting virtually and vote and submit questions by visiting www.virtualshareholdermeeting.com/BDX2021.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

The Annual Meeting of Shareholders of Becton, Dickinson and Company, a New Jersey corporation (“BD”), will be held on Tuesday, January 26, 2021, at 1:00 p.m. Eastern Time (the “2021 Annual Meeting”). The 2021 Annual Meeting will be held virtually via the Internet, and shareholders can access the 2021 Annual Meeting and vote and submit questions by visiting www.virtualshareholdermeeting.com/BDX2021 and entering the control number provided in these proxy materials. In the event that on the date fixed for the 2021 Annual Meeting, it is not legally permissible to hold a virtual annual meeting under New Jersey law because a state of emergency is not then in effect in New Jersey, we will announce alternative arrangements for the 2021 Annual Meeting as promptly as practicable. Any such change will be announced via press release and website posting, as well as the filing of additional proxy materials with the Securities and Exchange Commission.

1.The election as directors of the thirteen nominees named in the attached proxy statement for a one-year term;

2.The ratification of the selection of the independent registered public accounting firm;

3.An advisory vote to approve named executive officer compensation;

4.A shareholder proposal seeking to lower the ownership threshold required to call a special shareholders meeting, if properly presented at the meeting; and

5.Such other business as may properly come before the meeting, or any adjournment or postponement thereof.

Important Notice Regarding the Availability of Proxy Materials for the 2021 Annual Meeting of Shareholders to be held on January 26, 2021. BD’s proxy statement and 2020 Annual Report of Shareholders, which includes BD’s consolidated financial statements, are available at www.proxyvote.com.

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Important Notice Regarding the Availability of Proxy Materials for the 2021 Annual Meeting of Shareholders to be held on January 26, 2021. This proxy statement and BD’s 2020 Annual Report to Shareholders are also available at www.proxyvote.com.

Shareholders may attend the 2021 Annual Meeting by logging in at www.virtualshareholdermeeting.com/BDX2021. To log in, you will need the control number that is printed on your proxy/voting instruction card (referred to as the "proxy card"), the Notice Regarding the Availability of Proxy Materials or the email sending you the link to the proxy materials, as applicable. If your shares are held in the name of a bank, brokerage firm or other nominee, you should follow the instructions provided by them in order to participate in the virtual meeting.

The virtual meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones) running the most updated version of applicable software and plugins. If you encounter any technical difficulties logging onto www.virtualshareholdermeeting.com/BDX2021 or during the meeting, there will be a 1-800 number and international number available on the website to assist you. Technical support will be available 15 minutes prior to the start time of the meeting and through the conclusion of the meeting.

The 2021 Annual Meeting will include a question and answer session, during which we will answer questions submitted in accordance with the meeting rules posted on the meeting website (www.virtualshareholdermeeting.com/BDX2021) and that are relevant to the company and meeting matters. Shareholders will have an opportunity to submit written questions via the Internet at any time during the meeting by following the instructions that will be available on the meeting website. Shareholders may also submit written questions in advance of the 2021 Annual Meeting at www.proxyvote.com. In both cases, shareholders must have available their control number.

There is no limit on the number of questions a shareholder can ask. The question and answer session will include both questions submitted in advance of and during the meeting. Substantially similar questions will be answered once to avoid repetition and allow more time for other questions. If time does not permit us to address each question received either before or during the 2021 Annual Meeting, the company’s answers will be posted to the "Investors" page of our corporate website, www.bd.com, as soon as possible after the meeting.

Voting at the meeting. Shareholders may cast their votes at the meeting by following the instructions at www.virtualshareholdermeeting.com/BDX2021.

Voting by proxy. You may cast your vote by proxy through the Internet by going to www.proxyvote.com and entering your control number. Shareholders of record and BD plan participants that receive paper copies of the proxy materials may also cast their votes by proxy and submit their voting instructions by:

Votes and voting instructions provided through the Internet and by telephone are authenticated by use of your control number. This procedure allows shareholders to appoint a proxy, and the various plan participants to provide voting instructions, and to confirm that their actions have been properly recorded. If you vote through the Internet or by telephone, you do not need to return your proxy card. In order to be timely processed, voting instructions submitted by participants in a BD plan must be received by 11:59 p.m. Eastern Time on January 21, 2021. All proxies submitted by record holders through the Internet or by telephone must be received by 11:59 p.m. Eastern Time on January 25, 2021 in order to be timely processed.

Participants in BD plans

*    Represents less than 1% of the outstanding BD common stock.

Directors’ Deferral Plan. The Directors’ Deferral Plan allows non-management directors to defer receipt, in an unfunded cash account or a BD common stock account, of all or part of their annual retainer and other cash fees. Directors may also defer receipt of the shares underlying their restricted stock unit awards. The number of shares credited to the BD common stock accounts of participants is adjusted periodically to reflect the payment and reinvestment of dividends on the BD common stock. Participants may also elect to have amounts held in a cash account converted into a BD common stock account. Amounts credited to the BD stock fund are paid out in BD shares at the time of distribution. The Directors’ Deferral Plan is not qualified, and participants have an unsecured contractual commitment of BD to pay the amounts due under the Directors’ Deferral Plan.

Restoration Plan. Information regarding the deferral features of the Restoration Plan can be found on page 50 of this proxy statement. The number of shares credited to the BD common stock accounts of participants is adjusted periodically to reflect the payment and reinvestment of dividends on the BD common stock. Amounts credited to the BD common stock accounts of the Restoration Plan are paid out in BD shares at the time of distribution. The Restoration Plan is not qualified, and participants have an unsecured contractual commitment of BD to pay the amounts due under the plan.

GSIP. BD maintains the GSIP for its non-U.S. associates in certain jurisdictions outside of the United States. The purpose of the GSIP is to provide non-U.S. associates with a way to save on a regular and long-term basis and acquire a beneficial interest in

The Board has adopted written charters for each of the Committees that are posted on BD’s website at www.bd.com/investors/corporate_governance/. Printed copies of these charters, BD’s 2020 Annual Report on Form 10-K, and BD’s reports and statements filed with or furnished to the SEC may be obtained, without charge, by contacting the Corporate Secretary, Becton, Dickinson and Company, 1 Becton Drive, Franklin Lakes, New Jersey 07417-1880; telephone 201-847-6800.

Role of management

Role of the independent consultant

•Reviewed materials prepared for the Compensation Committee by management,

•Provided market comparison data and other materials requested by the Compensation Committee,

•Assisted the Compensation Committee in the design and implementation of BD’s compensation program, including the selection of the key elements of the program, setting of targeted payments for each element, and establishment of performance targets,

•Made recommendations regarding the compensation of BD’s CEO,

•Assisted with compensation matters related to our CEO succession,

•Assisted the Compensation Committee regarding the impact of the COVID-19 pandemic on BD's performance-based compensation programs, as described later in this proxy statement,

•Conducted an annual review of the compensation practices of select peer companies, and advised the Compensation Committee with respect to the competitiveness of BD’s compensation program in comparison to industry practices, and identified any trends in executive compensation, and

•Attended Compensation Committee meetings.

Setting compensation

Cash retainer

Equity award

Committee chair/Lead Director fees

Other arrangements

(1)Reflects cash retainer and Committee chair fees, and the Lead Director fee for Mr. Larsen. Reflects the temporary reduction in the cash retainer noted above.

(2)Amounts reflect the grant date fair value under FASB ASC Topic 718 of restricted stock units awarded to non-management directors elected at the 2020 Annual Meeting of Shareholders. Since the average BD closing stock price for the 30 trading days prior to grant is used to value the award and determine the number of units granted, rather than the grant date stock price, the amounts reflected for the grant are higher than the $209,000 target award value. For a discussion of the assumptions made in arriving at the grant date fair value of these awards, see Note 8 to the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020.

(3) Amounts shown represent matching gifts under BD’s Matching Gift Program.

Directors’ Deferral Plan

BD’s commitment to good corporate governance is embodied in our Corporate Governance Principles (the "Governance Principles"). The Governance Principles set forth the Board’s views and practices regarding a number of governance topics, and the Governance Committee assesses the Governance Principles on an ongoing basis in light of current practices. The Governance Principles are available on BD’s website at www.bd.com/investors/corporate_governance/. Printed copies of the Governance Principles may be obtained, without charge, by contacting the Corporate Secretary, Becton, Dickinson and Company, 1 Becton Drive, Franklin Lakes, New Jersey 07417-1880; telephone 201-847-6800.

Role of the Board and Committees. BD’s management engages in an enterprise risk management (“ERM”) process to identify, assess, manage and mitigate a broad range of risks across BD’s businesses, regions and functions, and to ensure alignment of our risk assessment and mitigation efforts with BD’s corporate strategy. The Audit Committee, through the authority delegated to it by the Board, is primarily responsible for overseeing BD’s ERM activities. At least twice a year, senior management reviews the results of its ERM activities with the Audit Committee, including the process used within the organization to identify risks, management’s assessment of the significant categories of risk faced by BD (including any changes in such assessment since the last review), and management’s plans to mitigate potential exposures. The significant risks identified through BD’s ERM activities and the related mitigation plans are also reviewed with the full Board at least once a year. In addition, particular risks (such as cyber security) are often reviewed in-depth with the Audit Committee or the full Board.

Risk assessment of compensation programs. With respect to our compensation policies and practices, BD’s management has reviewed our policies and practices to determine whether they create risks that are reasonably likely to have a material adverse effect on BD. In connection with this risk assessment, management reviewed the design of BD’s compensation and benefits programs (in particular, our performance-based compensation programs) and related policies, potential risks that could be created by the programs, and features of our programs that help mitigate risk. Among the factors considered were the mix of cash and equity compensation, and of fixed and variable compensation, paid to our associates; the balance between short- and long-term objectives in our incentive compensation; the performance targets, mix of performance metrics, vesting periods, threshold performance requirements and funding formulas related to our incentive compensation; the degree to which programs are formulaic or provide discretion to determine payout amounts; caps on payouts; our clawback and share retention and ownership policies; and our general governance structure. Based on this review, we believe that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on BD.

Our relationship with our shareholders and their views about BD are important to us, and the Board recognizes the value of director engagement with BD’s shareholders. To that end, the Board has established a process by which shareholders can request direct engagement with our non-management directors regarding executive compensation, corporate governance, board and CEO succession, risk management oversight and other matters within the purview of the Board. This process can be found on our website at www.bd.com/investors/corporate_governance/. The Board may also initiate direct communications with BD shareholders at any time, in its discretion.

In furtherance of BD’s commitment to good governance and transparent disclosure practices, BD charitable contributions or pledges in an aggregate amount of $50,000 or more in any fiscal year (excluding contributions under BD’s Matching Gift Program) to entities with which BD’s directors and executive officers, or their families, are affiliated must be approved by the Governance Committee. In addition, BD posts on its website, at www.bd.com/investors/corporate_governance/, an Annual Report of Charitable Contributions (the “Contributions Report”) listing all contributions and pledges made by BD during the preceding fiscal year in an amount of $10,000 or more to such affiliated organizations. The Contributions Report includes a discussion of BD’s contributions philosophy.

Code of Conduct

The Code of Conduct is available on BD’s website at www.bd.com/investors/corporate_governance/. Printed copies of the Code of Conduct may be obtained, without charge, by contacting the Corporate Secretary, Becton, Dickinson and Company, 1 Becton Drive, Franklin Lakes, New Jersey 07417-1880; telephone 201-847-6800.

During 2020, BD did not engage in any related person transactions involving members of the Board or BD's executive officers. The Board has established a written policy (the “Policy”) requiring approval or ratification of transactions involving more than $120,000 per year in which a director, executive officer or shareholder owning more than 5% of BD’s outstanding common stock (excluding passive investors that own less than 20%) or their immediate family members has, or will have, a material interest. The Policy is available on BD’s website at www.bd.com/investors/corporate_governance/. The Policy excludes certain specified transactions, including transactions available to BD associates generally. The Governance Committee is responsible for the review and approval or ratification of transactions subject to the Policy. The Governance Committee will approve or ratify only those transactions that it determines in its business judgment are fair and reasonable to BD and in (or not inconsistent with) the best interests of BD and its shareholders, and that do not impact the director’s independence.

We view sustainability as a portfolio of complementary initiatives and actions that help us achieve our purpose of advancing the world of health. We see the modern social and environmental challenges our world faces as opportunities to make a difference while strengthening our company.

•Innovation

◦Innovate key healthcare processes such as medication management and lab automation.

◦Develop innovations and informatics to enable disease management across the care continuum.

◦Enable the transition from research into clinical practice.

◦Provide solutions that improve healthcare worker and patient safety.

•Access

◦Develop low-cost innovations to address leading causes of mortality and morbidity.

◦Collaborate on health system strengthening with leading agencies and nongovernmental organizations.

◦Further expand BD manufacturing, product array and employment in emerging countries.

•Efficiency

◦Reduce greenhouse gas emissions and increase climate resilience throughout our operations and value chain.

◦Minimize our environmental footprint and conserve natural resources.

◦Establish a supplier responsibility evaluation methodology.

◦Eliminate priority materials of concern in specified product categories.

◦Improve life cycle impacts of current and future products.

•Empowerment

◦Increase the diversity of our workforce, particularly in leadership roles.

◦Achieve best-in-class associate safety performance.

◦Partner with nonprofits to address unmet needs locally and globally.

◦Drive social impact and associate engagement through volunteer programs.

We report annually on ESG matters and our progress against our Sustainability Goals in our Sustainability Report. In addition, further information about our climate change strategy and programs to reduce greenhouse gas emissions can be found in our Climate Change Management Report, as well as in our responses to the CDP (formerly the Carbon Disclosure Project). Recognizing the increased interest from our stakeholders about our climate change management program, our disclosures are in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). These reports are available at www.bd.com/en-us/company/sustainability-at-bd.

•    by email to ethics_office@bd.com.

     •    Aligning the interests of executives and shareholders

◦Through equity compensation and equity retention guidelines for executives, we seek to align the interests of executives with those of BD’s shareholders. Equity compensation represents the largest portion of our compensation structure in terms of target value.

      •    Linking rewards to performance

◦We maintain a pay-for-performance philosophy based on actual performance against clear, measurable company performance targets, particularly those metrics that support the creation of long-term shareholder value.

     •    Delivering superior business and financial results

◦Performance targets are set to reward executives for achieving short- and long-term results in line with our objective of enhancing long-term shareholder value. In setting short-term goals and in rewarding performance, we will take care to ensure that we do not create incentives to take inappropriate risks.

      •    Offering a competitive compensation structure

◦We have established and intend to maintain a competitive structure that supports the recruitment and retention of high-performing executives essential to driving the business results required to execute our strategy and create long-term value for shareholders. This structure is determined, in part, by evaluating peer group data provided and analyzed by the Compensation Committee’s independent consultant, Pay Governance.

      •    Maintaining a transparent compensation structure

◦The Compensation Committee strives to provide absolute transparency to executives, employees and shareholders of all aspects of BD’s compensation and benefits structure. This includes disclosure of performance targets, payout formulas, details of other earned benefits and the Compensation Committee’s use of discretion in determining award payouts.

      •    Maintaining Compensation Committee independence

◦The Compensation Committee is made up exclusively of independent directors and utilizes an independent compensation consultant, Pay Governance, which, by Compensation Committee policy, is prohibited from performing any services for BD or its management without the Compensation Committee’s prior approval.

      •    Retaining prerogative to adjust programs

◦The Compensation Committee retains the prerogative to change or modify BD’s compensation and benefit programs to reflect prevailing economic, market or company financial conditions.

•Thomas E. Polen, Chief Executive Officer and President

•Vincent A. Forlenza, Chairman

•Christopher R. Reidy, Executive Vice President, Chief Financial Officer and Chief Administrative Officer

•Patrick K. Kaltenbach, Executive Vice President and President, Life Sciences Segment

•Samrat S. Khichi, Executive Vice President and General Counsel, Regulatory and Government Affairs

•Alberto Mas, Executive Vice President and President, Medical Segment

All references in this section to years are references to our fiscal year, which ends on September 30, unless otherwise noted. In this section, when discussing our financial performance for the year and awards under our Performance Incentive Plan (the “PIP”), we refer to certain financial measures that do not conform to generally accepted accounting principles (“GAAP”). Appendix A to this proxy statement contains reconciliations of these non-GAAP measures to the comparable GAAP financial measures.

• Balanced mix of pay components and incentives. We target a balanced mix of cash and equity compensation, and of annual and long-term incentives. The key elements of our program are salary, annual cash incentives under the PIP and long-term equity compensation.

• Significant performance-based compensation tied to business strategy. We emphasize pay-for-performance to align executive compensation with the execution of our business strategy and the creation of long-term shareholder value.

◦A significant portion, 92%, of Mr. Polen’s target compensation in 2020 was performance-based.

◦We use performance metrics, listed on page 30, that are aligned with and support BD’s business strategy.

◦While we emphasize “at risk” pay tied to performance, we believe our program does not encourage excessive risk-taking by management.

• Share retention guidelines and policy against pledging/hedging. Our executives are subject to robust share retention and ownership guidelines and are prohibited from pledging BD shares or hedging against the economic risk of their ownership.

• Limited perquisites and no employment agreements. We offer our named executive officers limited perquisites, and none of them have employment agreements.

• Clawback policy. We have a compensation recovery policy that gives the Board the authority to recover incentive compensation paid to senior management in the event of a restatement of our financial statements resulting from misconduct, and to recover equity compensation awarded to a member of management if such executive breaches certain restrictive covenants.

• Change in control arrangements. We have “double-trigger” change in control agreements with our named executive officers to provide continuity of management in the event of an actual or potential change in control of BD. We have adopted a policy of eliminating excise tax "gross-ups" from any new change in control agreements. Equity compensation awards made after January 1, 2015 also have a double-trigger accelerated vesting provision.

• Use of independent consultant. The Compensation Committee uses an independent consultant to assist it in designing our compensation program and making compensation decisions. The independent consultant did not provide any services to BD or BD management in 2020, per the policy of the Compensation Committee.

•Actions were quickly taken to protect our global associates, including travel restrictions, work-from-home requirements and preventative measures at our sites.

•Management ensured BD’s ongoing liquidity and financial flexibility through financing activities, cash preservation initiatives, capital expense reductions and cost control measures.

•We proactively managed our supply chain to ensure that BD could continue to serve our customers, and the company did not experience any significant disruption to its operations or supply chain.

•We suspended BD matching contributions under our savings plans and temporarily reduced executive salaries (with Board members also temporarily reducing their cash compensation).

•Temporary furloughs (with full benefits) were instituted due to lower demand for certain product lines.

•The adverse impact to revenues and earnings resulted in BD’s performance coming in below threshold performance for these performance measures under the PIP, our annual cash incentive plan, resulting in a PIP performance factor that would have been significantly below target.

•Performance Unit awards covering the 2018-2020 fiscal year period vested significantly below target, in part due to the impact of the pandemic, and the value of our outstanding, in-cycle performance-based equity awards are also forecasted to be similarly impacted.

PIP. To address the impact of the pandemic on the PIP, the Compensation Committee considered a number of factors, including the extent to which COVID-19 impacted BD’s financial results and management’s efforts to navigate the company through the disruption caused by the pandemic and contribute to the global response.

•Because of the economic instability brought on by the pandemic, and the inability to predict its impact for the year, the Compensation Committee believed resetting the PIP performance targets was impractical, and decided instead to assess whether to use its discretion to adjust plan funding.

•The Compensation Committee believed any exercise of discretion should be performance-based, and focused on management’s execution in a number of key areas that were critical to enhancing the company’s resilience to the disruption and uncertainty caused by the pandemic, aiding the global pandemic response, and positioning BD to succeed in this new environment.

•The Compensation Committee noted management’s solid execution with respect to these resilience factors, including company performance for the year that exceeded the internal forecast that was set following the outbreak of the pandemic.

•Based on management's considerable contributions during the year, the Compensation Committee established a range of PIP funding it felt was appropriate in light of management’s performance, and after thorough consideration, set funding well below target at 75% (compared to the 18% funding level that would have been achieved under the PIP formula), as discussed beginning on page 34.

Performance Units. The Compensation Committee considered the impact of the pandemic on the 2018 award, which vested at 45% of target, and the projected value of the in-flight 2019 grant. Recognizing the unexpected impact of the pandemic on this key component of long-term compensation and the disproportionate impact of the pandemic on BD’s business and shareholder returns relative to many peer companies, the Compensation Committee considered various alternatives to address this impact. After considering these alternatives, the Compensation Committee decided to make a special, one-time supplemental grant of SARs to associates who had received the 2018 or 2019 grants, which included certain named executive officers, as described beginning on page 37. So that associates would not be fully protected from the impact of the pandemic, the value of this one-time award was limited to 50% of the decline in value of the 2018 and 2019 Performance Unit grants. Even though Mr. Polen received the 2018 and 2019 Performance Unit grants, the Committee agreed with his decision to forego receipt of this additional one-time award.

• Aligning the interests of our executives with our shareholders through equity compensation and share retention guidelines.

• Driving superior business and financial results by setting clear, measurable short- and long-term performance targets that support our business strategy and the creation of long-term shareholder value, while at the same time taking care to ensure that our executives are not incentivized to take inappropriate risks.

• Maintaining a pay-for-performance philosophy by tying a significant portion of pay to performance against performance targets.

• Offering competitive compensation that helps attract and retain high-performing executives who are essential to executing our strategy and creating long-term value for our shareholders.

Our Emphasis on Pay-for-Performance

The compensation of our named executive officers is weighted towards performance-based compensation, where the amount received by an executive varies based on company and individual performance. The chart below shows the performance-based and fixed portions of the 2020 target compensation of Mr. Polen and for Messrs. Reidy, Kaltenbach, Khichi and Mas (excluding the cash payments made to Messrs. Kaltenbach and Khichi under their sign-on arrangements, which are discussed later).

* Actual amounts received (and the percentage of total compensation coming from performance-based compensation) may differ from target amounts based on performance and BD’s stock price.

“Performance-based” compensation includes PIP awards, Performance Units, PTVUs and SARs, while “Fixed” compensation includes salary. We consider SARs performance-based compensation because they require stock price appreciation to deliver value to an executive.

How our performance metrics support BD’s business strategy

BD remains focused on delivering sustainable growth and shareholder value and making appropriate investments for the future. BD management operates the business consistent with the following core strategies:

•Developing and maintaining a strong portfolio of leading products and solutions that address significant unmet clinical needs, improve outcomes, and reduce costs;

•Focusing on our core products, services and solutions that deliver greater benefits to patients, healthcare workers and researchers;

•Investing in research and development that will result in category innovation and a robust product pipeline;

•Leveraging our global scale to expand our reach in providing access to affordable medical technologies around the world, including emerging markets;

•Supplementing our internal growth through strategic acquisitions;

•Driving an efficient capital structure and strong shareholder returns.

•Working across our supply chain to minimize environmental impacts;

•Creating more resilient operations based on an enterprise-wide renewable energy strategy;

•Reducing complexity across our manufacturing network and rationalizing our product portfolio;

•Enhancing our quality and risk management systems;

•Simplifying our internal business processes;

•Focusing on cash and expense management in order to improve operating effectiveness and balance sheet productivity.

•Fostering a purpose-driven culture with a focus on positive impact to all stakeholders–customers, patients, employees and communities;

•Improving our ability to serve customers and enhance customer experiences through the digitalization of internal processes and go-to-market approaches;

•Cultivating an inclusive work environment that welcomes and celebrates diverse talent and perspectives.

Adjusted EPS. “Adjusted EPS” is our GAAP diluted EPS less acquisition-related purchase accounting adjustments and finance, integration, restructuring and transaction costs. We use Adjusted EPS because it is one of the primary bases on which BD sets performance expectations each year and earnings is a widely used measure of overall company performance. The use of Adjusted EPS is consistent with how we report our operating results to the financial community.

Revenues. Revenues measures BD’s ability to innovate and compete in the global marketplace. This measure focuses management on achieving strong “top-line” growth, consistent with our business strategy.

Free cash flow as a percentage of sales. This metric recognizes the importance of the efficient use of cash to our ability to fund ongoing investments in our business, including product development, innovation and geographic expansion. “Free cash flow” means net cash from operations, less capital expenditures and capitalized software.

Average return on invested capital ("ROIC"). This metric measures profitability and how effectively company assets are being used. This metric requires our executives to effectively manage a number of different aspects of the business, including new product introductions, productivity improvements and geographic expansion.

Relative TSR. We use relative TSR as a potential modifier of Performance Unit payouts. Relative TSR measures BD’s stock performance (assuming reinvestment of dividends) during the performance period against that of a group of healthcare equipment and life sciences companies included in the S&P 500 Healthcare Index (the “TSR Group”). Performance Unit payouts are modified based on the relative rank of BD’s TSR compared to the TSR Group during the performance period. The use of relative TSR as a modifier allows Performance Unit payouts to reflect BD’s performance, as reflected in our stock price over time, compared to peer companies facing similar business conditions.

• Limits on PIP awards. We do not overweight short-term incentives as a proportion of total pay. PIP awards are also capped at 200% of an executive’s target award to protect against disproportionately large short-term incentives, and the Compensation Committee has the discretion to set PIP awards based on any factors it deems appropriate, including whether management has taken unnecessary or excessive risk.

• Share retention and ownership guidelines. Our share retention and ownership guidelines ensure that our executives have a significant amount of their personal assets tied to the long-term success of BD, and we have a policy prohibiting the pledging of BD shares or hedging against the economic risk of their ownership.

• Use of long-term equity compensation. The largest portion of the compensation paid to our named executive officers is long-term equity compensation that vests over a period of years, which encourages our executives to focus on sustaining BD’s long-term performance.

• Use of Performance Units. A significant portion of executive equity compensation consists of Performance Units that have a three-year performance cycle. This focuses management on sustainable long-term performance. We also cap the payout of these awards at 200% of target.

• Use of multiple performance metrics. We use a number of different performance metrics in our performance-based compensation so that undue weight is not given to any one metric.

•For the Revenues target, for every 1% of performance above target, funding with respect to that measure is increased 22.5% above target (up to a maximum of 190%), and for every 1% below target, funding decreases 12.5% below target (to a minimum of 50%).

• For the Adjusted EPS and Free cash flow targets, for every 1% of performance above target, funding with respect to that measure is increased 5% above target (up to a maximum of 150%), and for every 1% below target, funding decreases 2.5% below target (to a minimum of 75% for Adjusted EPS and 50% for Free cash flow).

• For the Revenues target, performance below 96% of target results in no funding for the Revenue measure, while performance below 90% of the Adjusted EPS target or 80% of the Free cash flow target results in no funding for those measures.

We use a mix of equity compensation vehicles to promote the objectives of our program. SARs reward executives for the creation of shareholder value over the term of the award, and Performance Units measure BD’s performance over a three-year period and are intended to reward sustained long-term financial performance. PTVUs, which represent the smallest portion of equity compensation, were added in 2020 to replace the TVUs that were previously granted to our executives. PTVUs vest only if the Adjusted EPS target for the award has been met over the three-year vesting period. The Compensation Committee issued PTVUs to increase the amount of performance-based equity compensation granted to our executives, consistent with our pay-for-performance philosophy.

* For information on how Adjusted Performance is calculated, see Appendix A.

•in the absence of any threshold performance hurdles, which produced funding at 52% of target;

•if adjustments were made for the estimated impact of the pandemic on the PIP performance metrics, which yielded funding at 88%; and

•if the company’s performance was measured against the company’s revised internal forecast set in April 2020 following the outbreak of the pandemic, which produced funding of 109%.

This range of alternative funding scenarios provided the Compensation Committee additional perspective on the effect of the PIP’s design, including the role of performance thresholds, on the funding factor under the PIP formula. These scenarios also showed the overall impact of the pandemic on the company’s financial results and PIP funding, and management’s performance during the year in operating the company following the outbreak.

In addition to these alternative payout scenarios, the Compensation Committee considered resilience actions taken by management to enable BD to weather the significant disruption and uncertainty caused by the pandemic (including safeguarding the health and safety of BD associates), contribute to the global pandemic response and position the company for success as economic conditions improve. To assist in this review, management shared with the Compensation Committee its views on the critical priorities for the company for the balance of the fiscal year following the outbreak of the virus.

After discussions with management and Pay Governance, the Compensation Committee decided it would review management’s efforts during the year with respect to the following resilience factors to guide its use of discretion and assess management’s performance:

Quality – Driving quality improvements, including delivering on our quality commitments and improving the company’s quality systems.

Customers – Developing products that are critical to the global COVID-19 response and meeting milestones on the company’s top R&D programs.

Finance/shareholders – managing through the macroeconomic uncertainty created by the pandemic and optimizing the company’s revenue and liquidity.

Operations & supply continuity – responding to pandemic-related changes in customer demand and ensuring supplier stability and supply chain continuity.

Employee safety and well-being – safeguarding associate safety, effecting pandemic-related compensation or workforce actions in a fair and transparent manner, and demonstrating BD’s values and culture.

We have entered into agreements with the named executive officers relating to their employment following a change in control of BD. These agreements provide the executives with continued employment for a period of two years following a change in control, and provide certain benefits to the executives in the event their employment is terminated without “cause” or they leave their employment for “good reason” (also known as a constructive termination) during such period. Generally, these benefits include a severance payment equal to a multiple of the executive’s salary and PIP award, and certain other benefits. A more complete description of the terms and potential payouts of our change in control agreements begins on page 53.

General purpose. Our change in control agreements are intended to retain the executives and provide continuity of management in the event of an actual or potential change in control of BD. These change in control benefits are reviewed from time-to-time by the Compensation Committee to ensure that they are consistent with our compensation objectives and market practices. Based on information provided by Pay Governance, change in control arrangements are used by a substantial majority of the companies in the Comparison Group, and the terms of our agreements, including the severance multiple, are consistent with the prevailing practices at those companies. The Compensation Committee believes the benefits provided under these agreements are appropriate and consistent with our objective of attracting and retaining highly qualified executives.

Triggering events. Our agreements contain a “double-trigger”—that is, there must be a change in control of BD and a termination of the executive’s employment (either without cause by BD or for good reason by the executive) in order for any payments to be made. We opted for a double trigger, rather than a “single-trigger” that provides for severance payments solely on the basis of a change in control, since a double trigger is consistent with the purpose of encouraging the continued employment of the executive following a change in control.

Tax reimbursement payments. In certain instances, payments made to an executive upon termination may be subject to a 20% excise tax. Under the agreement with Mr. Forlenza, to offset the effect of this tax, we will reimburse him for any resulting excise tax. This allows him to recognize the full intended economic benefit of the agreement and eliminates unintended disparities between executives that the excise tax can arbitrarily impose, owing to the particular structure of this tax provision. However, based on what the Compensation Committee believes are best practices in executive compensation, it is our policy that any new change in control agreements that we enter into with executive officers will not contain these provisions. The agreements with the other named executive officers, including Mr. Polen, do not contain tax reimbursement provisions.

To increase executive share ownership and promote a long-term perspective when managing our business, our named executive officers and certain other senior executives are required to retain 50% of the net after-tax shares received from any equity compensation awards granted to them after they become subject to the guidelines. They are subject to this requirement until they achieve and maintain the required ownership level set forth below. Previously, persons subject to the guidelines were required to hold 75% of the net after-tax shares, but this was lowered after benchmarking the company’s practices against other companies.

Fiscal Year 2020 Summary Compensation Table

(2)    Stock Awards and SAR Awards. The amounts shown in the “Stock Awards” column and “SAR Awards” column reflect the grant date fair value of the awards under FASB ASC Topic 718 (disregarding estimated forfeitures). For a description of the methodology and assumptions used to determine the amounts reflected in these columns, see Note 8 to the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020.

(3)    Non-Equity Incentive Plan Compensation. Includes amounts earned under BD’s PIP. These amounts are paid in January following the fiscal year in which they are earned, unless deferred at the election of the named executive officer.

(4)    Change in Pension Value and Nonqualified Deferred Compensation Earnings.

Pension—Amounts shown are the aggregate changes in the actuarial present value of accumulated benefits under defined benefit pension plans (including our nonqualified Restoration Plan). These amounts represent the difference between the present value of accumulated pension benefits (determined as of the first date on which the executive is eligible to retire and commence unreduced benefit payments) at the beginning and end of the fiscal years shown. Mr. Kaltenbach does not participate in BD's defined benefit pension plans, which were closed to new participants effective January 1, 2018. Additional information regarding the pension benefits of our named executive officers begins on page 48.

Deferred Compensation—Earnings on nonqualified deferred compensation are not included in this column, because no named executive officer earned above-market or preferential earnings (as defined in the rules of the SEC) on nonqualified deferred compensation during the fiscal years shown. Information on the named executive officers’ nonqualified deferred compensation accounts is on page 51.

(5) All Other Compensation. Amounts shown for fiscal year 2020 include the following:  

•Matching contributions under plans—The amounts shown reflect BD matching contributions credited pursuant to defined contribution plans.

•Matching charitable gifts—The amounts shown are matching contributions made (or committed to be made) through matching gift programs, under which BD matches charitable contributions made to qualifying non-profit organizations, subject to a $5,000 per calendar year limit.

•Term life insurance—BD provides incremental term life insurance benefits to Mr. Forlenza beyond those provided to BD associates generally. The amounts shown reflect the dollar value of the insurance premiums paid by BD for this incremental insurance.

•Corporate aircraft. Pursuant to a policy adopted by the Board of Directors, Mr. Forlenza and Mr. Polen are encouraged to use BD aircraft for personal travel. The value of their personal use of BD aircraft is measured by the incremental variable costs incurred by BD in connection with their personal flights that are not reimbursed by them. These variable costs include fuel, trip-related maintenance, crew travel expenses, on-board catering, and landing and parking fees. If the aircraft flies empty before picking up or after dropping off Mr. Forlenza or Mr. Polen at a destination on a personal flight, the cost of the empty flight is included in the incremental cost. Since BD aircraft are used predominantly for business purposes, we do not include fixed costs that do not change in amount based on usage, such as depreciation and pilot salaries.

•Relocation Assistance—BD provided Mr. Kaltenbach with mortgage subsidy assistance of $13,070 and tax assistance of $4,720 in connection with his hire. 

Information Regarding Plan Awards in Fiscal Year 2020

Grants of Plan-Based Awards in Fiscal Year 2020  

 (2)     The amounts shown represent the range of possible payouts that the named executive officer could have earned under the PIP for fiscal year 2020, based on certain assumptions. Actual payments to the named executive officers under the PIP are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 42. The amount in the “Threshold” column assumes BD achieved the minimum threshold performance levels for each performance measure, resulting in available funding for awards at 60% of target, and that the named executive officer received a payment equal to 60% of his award target.

Performance Units. Performance Units are performance-based restricted stock units that vest three years after grant. The potential payouts under these awards range from zero to 200% of target. The actual payout will be based on BD’s performance against the performance targets set for these awards over the three-year performance period covering fiscal years 2020-2022. A more detailed discussion of the performance measures used for these awards appears in the Compensation Discussion and Analysis section of this proxy statement. Performance Units are not transferable, and holders may not vote any shares underlying the award until the shares have been distributed. Dividends do not accrue on these awards.

PTVUs. PTVUs are restricted stock units that represent the right to receive shares of BD common stock upon vesting. PTVU awards vest three years from the grant date subject to meeting the EPS performance target of the awards. PTVUs are not transferable, and holders may not vote any shares underlying the award until the shares have been distributed. Dividends do not accrue on these awards.

SARs. A SAR represents the right to receive, upon exercise, shares of BD common stock equal in value to the difference between the BD common stock price at the time of exercise and the exercise price of the award. SARs are not transferable. SARs have a ten-year term, and become exercisable in four equal annual installments, beginning one year from the grant date.

Change in control. The Performance Units, PTVUs and SARs listed in the above table fully vest, under certain circumstances, following a change in control or in the event of a termination of employment following a change in control. See “Accelerated vesting of equity compensation awards upon a change in control” on page 54.

Outstanding Equity Awards at 2020 Fiscal Year-End  

    Set forth below is the value of the exercisable SARs held by named executive officers at the end of fiscal year 2020. The value represents the difference between $232.68, the closing price of BD common stock on September 30, 2020, and the exercise price of each exercisable SAR held by the named executive officer. These values may not reflect the value actually realized by the named executive officers upon exercise.