Whereas: Executive compensation should be directly tied to measurable outcomes that reflect the company’s financial performance. For a company like Gilead Sciences, whose financial performance is the key driver of its position as a tremendous biopharmaceutical innovator and leader, compensation structures must prioritize metrics that reinforce profitability, customer trust, and operational excellence. The particular use of ESG and DEI metrics in executive compensation — often based on subjective or activist criteria — diverts focus from these core business imperatives and dilutes executive responsibility. Unfortunately, as per Bowyer Research analysis, Gilead Sciences incorporates such metrics, including tying executive compensation (specifically cash incentives) to what it describes in its 2025 proxy statement1 as “progress[ing] our culture of inclusion through a variety of initiatives” without adequately explaining what such initiatives entail. While proponents of ESG and DEI argue for these metrics, Gilead’s fiduciary duty demands that executive compensation should be tied to value creation, not to metrics that are legally risky, ideologically divisive, or strategically ambiguous. This is of particular importance to investors given Gilead’s role as a federal contractor, with the current administration’s strong stance on DEI initiatives demanding further scrutiny as to whether Gilead’s executive compensation is in keeping with recent executive orders. Studies indicate that ESG-linked executive compensation introduces a ‘dual mandate’ that confuses strategic priorities. One study in particular2 notes that “the demand for ESG-based compensation is, explicitly or implicitly, based on the recognition that corporate executives do not have, on their own, sufficiently strong incentives to give weight to the welfare of stakeholders.” Further, ISS analysis3 indicates that “DEI targets are more consistently achieved than financial goals,” raising questions of whether compensation elements like Gilead’s, which use nonspecific references to “inclusive” strategies while vaguely citing to the company’s “product, pipeline, and people” goals, actually positively impact business performance at all. Shareholders deserve transparency regarding exactly what kind of “inclusion” Gilead Sciences prioritizes, and how such ESG & DEI metrics improve business returns. As a company with obligations to both fiduciary responsibility & nondiscrimination, this integration of ESG and DEI metrics into executive compensation exposes Gilead Sciences to insufficiently disclosed material risks. These risks include litigatory exposure stemming from subjective/activist criteria that may be difficult to quantify under scrutiny, regulatory uncertainty as federal and state agencies increasingly examine governance practices for compliance with anti-discrimination standards, and reputational harm, especially if compensation metrics are perceived as prioritizing ideological goals over fiduciary duty. Shareholders are right to ask Gilead Sciences to address the obvious business liability/high risk caused by diluting executive compensation with goals unrelated to business performance and shareholder return.