I'd like to welcome you to AbbVie's Annual Meeting of Shareholders. We appreciate you joining us. I'll start by introducing our Directors who are joining us today: Dr. Robert J. Alpern, Roxanne S. Austin, William H.L. Burnside, Jennifer L. Davis, Thomas C. Freyman, Brett J. Hart, Melody B. Meyer, Dr. Susan E. Quaggin, Edward J. Rapp, Rebecca B. Roberts, Glen F. Tilton, and Frederick H. Waddell. Next, I'd like to introduce the members of the executive management team who are here with me today. Rob Michael, President and Chief Operating Officer, Perry Siatis, Executive Vice President, General Counsel, and Secretary, and Scott Reents, Executive Vice President, Chief Financial Officer. In February of this year, we announced that the Board had unanimously elected Rob Michael as AbbVie's next Chief Executive Officer, effective July 1st.
This succession event is a result of years of planning and oversight by the Board, and we are confident in Rob's ability to lead AbbVie and build upon the company's strong track record of success. I will remain on the Board as Executive Chairman, following my retirement as CEO, for a period of transition. It has been immensely gratifying to serve with the people of AbbVie, and it has been a great privilege to also serve millions of patients around the world. I look forward to continuing to contribute to AbbVie as Executive Chairman of the Board. Now, I will turn it over to Rob for comments on our 2023 performance. Rob?
Thank you, Rick. In 2023, we delivered another year of outstanding performance, with earnings per share of $11.11. Our total net revenues of more than $54 billion were approximately $2.3 billion ahead of our initial guidance. AbbVie's growth platform, the base business excluding Humira, delivered a full year sales increase of more than 8%, with revenue growth accelerating to more than 15% in the fourth quarter. This enabled us to both absorb the largest loss of exclusivity in our industry's history and continue investing for long-term growth. In 2023, we increased R&D spending by nearly $700 million and invested in external innovation. This includes the acquisition of ImmunoGen, which we closed in February of this year, and Cerevel Therapeutics, which we anticipate closing in the middle of 2024.
Both transactions will help AbbVie deliver sustainable long-term growth in the 2030s and beyond. In closing, this is an exciting time for our company as we begin our next chapter. AbbVie's outlook is very strong, and we are well-positioned to deliver high single-digit compound annual revenue growth through the end of the decade. Rick, I'll hand it back to you.
Thank you, Rob. Now I'll call our meeting to order. Proxies in the form solicited by the Board of Directors have been received, representing 85.9% of the shares entitled to vote. More than a majority of outstanding shares are present in person or by proxy. We have a quorum. Today, we have eight business items on the agenda. They include the election of Class III Directors, the ratification of our auditor, an advisory vote on the approval of executive compensation, an advisory vote on the frequency of future approvals of executive compensation, a management proposal regarding the elimination of supermajority voting, and finally, three shareholder proposals. These items are now before the meeting. If you haven't voted and you joined the meeting using your control number, you may click the "Vote Here" button on the virtual meeting website screen and follow the instructions provided.
Please remember, if you have voted by proxy, either by mail, phone, or over the internet, your shares have already been voted as you directed. I will now turn to Perry to review the meeting's business items in more detail. Following these business items, we will close the polls, announce preliminary voting results, and open the meeting for questions. Perry?
Thank you, Rick. The first order of business is the election of Class III Directors. The Board of Directors has recommended you vote in favor of these directors. The next item on our agenda is the ratification of the selection of Ernst & Young as our auditor. The Audit Committee and the Board of Directors have reviewed the qualifications of Ernst & Young and recommended ratification of the firm's appointment. The next item on the agenda is the advisory vote on executive compensation. Shareholders are asked to approve the compensation of the executives named in the proxy on an advisory basis. The Board of Directors has recommended a vote in favor of these executives' compensation. The next item on the agenda is the advisory vote on the frequency of future approvals of executive compensation.
The Board of Directors has recommended a vote in favor of annual advisory votes on executive compensation. The next item on the agenda is the management proposal to eliminate super majority voting. The Board of Directors has recommended a vote in favor of eliminating super majority voting.... Now turning to shareholder proposals. The first shareholder proposal is the simple majority vote proposal detailed in the proxy statement. This proposal is submitted by John Chevedden on behalf of Kenneth Steiner. Mr. Chevedden is on the line representing the proponent. Operator, could you please open Mr. Chevedden's line? Mr. Chevedden, would you like to move the proposal?
Hello, this is John Chevedden, Proposal Six, Simple Majority Vote. Shares request that the Board of Directors take the steps necessary to ensure that each voting requirement on charter bylaws that call for a greater than simple majority vote be replaced by a requirement for a majority of the votes cast for and against proposals or a simple majority. This means the closest standard to a majority of the votes cast for and against such proposals. Shareholders are willing to pay a premium for shares of companies that have excellent corporate governance. Supermajority voting requirements have been found to be one of six entrenching mechanisms that are negatively related to company performance, according to What Matters in Corporate Governance by Lucian Bebchuk of the Harvard Law School.
Supermajority requirements, like those at our company, can be used to block corporate governance improvements supported by most shareholders, but opposed by a status quo management. This proposal topic went from 74% to 88% support at Weyerhaeuser, Alcoa, Waste Management, Goldman Sachs, FirstEnergy, McGraw Hill, and Macy's. These votes would have been higher than 74%-88% support if more shareholders had access to independent proxy voting advice. This proposal topic also received overwhelming 98% support at the 2023 annual meetings of American Airlines and The Carlyle Group. This majority vote proposal will help improve AbbVie shareholder rights. AbbVie recently scored a dismal nine in shareholder rights, with 10 being the worst possible score.
If improved shareholder rights increased the market capitalization of AbbVie by 1/4 of 1%, it would result in a $600 million increase in the market capitalization of AbbVie. Thus, if AbbVie spends a six-figure sum to encourage more shareholders to vote in order to obtain the required 80% approval of all outstanding shares outstanding required for this proposal topic, it would result in an astounding 6,000% return, or $600 million on the investment of the six-figure sum. Unless the Board of Directors invests a paltry sum for a $286 billion company to encourage more shareholders to vote for this proposal topic, AbbVie will be riddled with second-class corporate governance, as reflected in AbbVie scoring a dismal nine in shareholder rights, with 10 being the worst possible score.
The unfortunate result will be that shareholder value will miss out on billions of potential gain. Please vote yes. Simple majority vote, Proposal Six.
The Board of Directors opposes this proposal for the reasons stated in the proxy statement. In particular, even if this shareholder proposal passes, simple majority voting will not be the result. The bylaws require a supermajority of outstanding shares to eliminate the supermajority voting requirement. Since 2018, the Board has consistently taken steps through management proposals to eliminate the supermajority vote. This shareholder proposal does nothing to advance the issue. The next shareholder proposal is the lobbying proposal detailed in the proxy statement. This proposal is submitted by Zevin Asset Management and the co-filers noted in the proxy statement. Ms. Marcela Pinilla is on the line representing the proponent. Operator, could you please open Ms. Pinilla's line? Miss, would you like to move the proposal?
Yes, and thank you very much. Good morning. I'm Marcela Pinilla with Zevin Asset Management, and on behalf of Zevin Asset Management and co-filers Dana Investment Advisors and Miller/Howard Investments, I hereby move Proposal Seven, asking our company to provide a report on its state and federal lobbying expenditures, including indirect funding of lobbying through trade associations and social welfare groups. Investors are asking companies, including AbbVie, to disclose all payments to third-party groups that use money to influence policy. AbbVie's reporting of its own direct lobbying data is scattered among federal and state regulators and is difficult to obtain. We do know that for its direct lobbying, AbbVie has spent over $67 million on federal lobbying since 2013, and there is incomplete disclosure about AbbVie's spending at a state level, where an expert has called finding this information nearly impossible.
AbbVie is required to report its lobbying data and already has this information, so it is not a burden to provide additional information. This proposal also requests disclosure of so-called dark money payments to trade associations or social welfare groups where there are no limits or disclosure requirements. AbbVie stockholders face a blind spot here. Trade associations spend $hundreds of millions to lobby. For example, AbbVie belongs to the Chamber of Commerce, which has spent over $1.8 billion on lobbying since 1998. For 2023, AbbVie now lists three trade associations, which received more than $25,000 in dues and gives a percent used for lobbying. Unfortunately, AbbVie's disclosure is incomplete and leaves out many memberships and trade associations that lobby, like serving on the Board of the HR Policy Association and belonging to AdvaMed, BioNJ, and the Healthcare Distribution Alliance.
We do not have visibility into how many other significant memberships are being left out. Further, many of AbbVie's trade association lobbying positions contradict company public positions, resulting in values misalignment and reputational risk. AbbVie believes, for example, in climate change mitigation as a material issue to its company, yet the U.S. Chamber reportedly has been a central actor against climate legislation for over two decades. AbbVie also fails to disclose its payments to 501(c)(4) social welfare organizations, which also lobby. Companies can give unlimited and undisclosed amounts to these groups, and FirstEnergy's trial, over $60 million of dark money payments, led a prosecutor to note that a social welfare group is a perfect entity to receive a secret bribe.
AbbVie supports social welfare, social welfare groups which lobby, like the Alliance for Patient Access, which claims to be pro-consumer but consistently advocates against policies to lower drug prices, and the Alliance for a Stronger FDA. What is the extent of AbbVie's contributions to these dark money social welfare groups? Stockholders have no way to know. AbbVie is hiding its payments to social welfare groups from stockholders by not being transparent. Lobbying transparency is a safety mechanism for our company, and it's to guard our reputation for our company. And finally, what gets disclosed gets managed. Thank you very much.
Thank you, Mrs. Pinilla. The Board of Directors opposes this proposal for the reasons stated in the proxy statement. The final item on the agenda is the patent process proposal detailed in the proxy statement. This proposal is submitted by Friends Fiduciary Corporation and the co-filers notated in the proxy statement. Ms. Amy Carr is on the line representing the proponent. Operator, could you please open Ms. Carr's line? Ms. Carr, would you like to move the proposal?
Yes, thank you. Good morning, fellow shareholders and members of the Board. My name is Amy Carr. I am the senior shareholder advocate at Friends Fiduciary Corporation. We invest on behalf of Quaker faith communities, schools, and other organizations across the country, and we are long-term shareholders of AbbVie. I hereby move item eight, the stockholder proposal, to issue a report on patent process. The proposal asks AbbVie's Board of Directors to establish and report on a process by which the impact of extended patent exclusivities on product access would be considered in deciding whether to apply for secondary and tertiary patents. Secondary and tertiary patents are patents applied for after the main ingredient patent or molecule patent.
We believe that the process that our proposal seeks would be beneficial to AbbVie because extended exclusivity periods gained from secondary patents and the resulting delay in generic entry limit patient access and saddle the healthcare system with unsustainable costs, thereby creating potential regulatory and reputational risks for the company. Companies like AbbVie play an important role in developing new and improved medicines for the benefit of society. Generic drug companies also benefit society by supplying cheaper equivalents of brand-name medicines, which leads to the reduction of drug prices and facilitates access to affordable medicines. When the interests of these two players are kept in balance, benefits are maximized for society, which receives innovative and improved medicines as well as timely access to generic drugs. We believe that balance is now out of whack.
Given the high prices their drugs command absent competition, branded drug makers like AbbVie have strong incentives to delay generic competition as long as possible. Our proposal does not seek to prohibit AbbVie from applying for secondary and tertiary patents on its medicines. It only asks that the company discloses the process through which the impact on patient access would be considered when the company applies for these additional patents. We recognize the value created by pharmaceutical innovation, and the proposal would not limit in any way the company's ability to obtain primary patents covering drugs' active ingredients or require a particular outcome when the company analyzes whether to pursue secondary and tertiary patents. The proposal simply asks AbbVie to take the impact on patient access into account when making decisions about applying for such secondary and tertiary patents. For these reasons, we urge shareholders to vote for this proposal.
Thank you.
Thank you, Ms. Carr. The Board of Directors opposes this proposal for the reasons stated in the proxy statement. The polls are now closed. We have a preliminary report from the Inspector of Elections, which shows that the nominees for the Board of Directors have been elected. The appointment of Ernst & Young has been ratified. The advisory vote on executive compensation has passed. The advisory vote on the frequency of executive compensation approvals supported annual advisory votes. The management proposal regarding the elimination of supermajority voting did not receive the necessary vote needed to approve the amendment. The shareholder proposal for a simple majority vote has not been approved. The shareholder proposal on lobbying has not been approved. And finally, the shareholder proposal on patent process has not been approved. The final detailed voting results will be available in our upcoming report on Form 8-K.
Now we will turn to the Q&A portion of the meeting. The virtual meeting website allows shareholders who join the meeting using their control numbers to submit questions by filling out the Ask a Question box. We will answer as many questions as possible before the meeting is scheduled to end and we move to our Board meeting. If we do not have time to respond to all the questions, a member of our engagement team will reach out to you following the meeting to respond, assuming you provided your contact information when you joined the meeting. Ian, can we please have the first question?
Will AbbVie continue to raise the dividend in coming years?
Scott, you can take that question.
Thank you, Rick. AbbVie's business generates substantial cash flow, including $19 billion of free cash flow in 2023. This allows us to meet all of our capital allocation priorities, which include investing in external innovation that supports our long-term growth objectives, ensuring a strong balance sheet by continuing to pay down debt, and supporting a strong and growing dividend. The dividend is our primary means of returning capital to shareholders and is an important part of AbbVie's investment identity. We remain committed to growing the dividend, which we have increased by 4.7% earlier this year, and is now up 288% since inception.
Next question: Can you provide some insight into your succession planning and the selection of Rob Michael as AbbVie's next CEO?
Thank you for your question. It's an important question. The Board has been planning for my eventual succession for a long time, in fact, I'd say many years. It has been a thorough, thoughtful, and deliberate process to ensure that we have the right plan in place for a potential successor. The Board conducted a thorough process to identify the right leader for AbbVie's next chapter. Rob has been a critical member of our executive leadership team and an integral part of AbbVie's impact since our inception, including establishing the financial planning organization, the development of our diversified business strategy, and more recently, successfully navigating the end of exclusivity for Humira in the U.S. Rob has also played an important role in key business development opportunities that have been critical to delivering on our long-term growth strategy, including the acquisitions of Allergan and ImmunoGen and the pending Cerevel transaction.
Reflecting on their unanimous vote, the Board has the highest level of confidence in Rob and looks forward to working with him to create meaningful value for all of our shareholders and all of our stakeholders.
All right, next question. Looking to the future, would AbbVie consider additional M&A deals? And if so, what types of deals would the company consider?
Thank you for your question. This is Rob. We have what we need in our current portfolio to deliver high single-digit growth in this decade. Unlike many of our peers, we do not have major headwinds from near-term LOE. Our business development efforts are focused on assets that can drive growth in the next decade. These are typically smaller-sized, early-stage deals, and we prioritize opportunities that elevate standard of care for patients in areas of high unmet need within our five key growth areas. Each area has a specific strategy. For example, in immunology, since Skyrizi and Rinvoq will drive robust growth over the next nine years, our focus is on new mechanisms that can raise standard of care, either as a monotherapy or in combination.
In oncology, while the ImmunoGen deal adds depth to our ADC platform, we are also focused in other areas like multispecifics and next-generation CAR T therapy. In neuroscience, Cerevel adds depth to our pipeline with assets like emraclidine, their core antagonist, tavapadon, but we're also focused on opportunities in migraine and neurodegeneration. Within eye care, we are very excited about the REGENXBIO program in wet AMD and diabetic retinopathy, and Aldeyra has the potential to add a nice growth driver in corneal health with reproxalap, but we continue to look for further innovation in glaucoma and retinal disease. And finally, within aesthetics, we focus on opportunities that can bring new consumers into our providers' practices. So we continue to assess external innovation across all of our key growth areas, and we have the financial wherewithal to pursue those assets.
I think, we have time for one more question.
In 2023, AbbVie again increased its R&D spend. What are the company's R&D priorities?
Thank you for your question. This is Rob again. Since AbbVie's inception, we have consistently increased our annual R&D investment from $3.2 billion in 2013 to $7.8 billion in 2023. During that time, we have produced five blockbuster therapies and have achieved 27 FDA approvals for medicines across our core therapeutic areas. Today, our medicines treat more than 60 million patients worldwide. Our R&D priorities are focused on elevating the standard of care for patients in our five key growth areas. Again, these are immunology, oncology, neuroscience, aesthetics, and eye care, and we will achieve this by building depth in our core disease areas, driving acceleration of our program timelines, and further developing our capabilities in target identification, genetic medicine, and data science.
I'd like to thank all of our shareholders for the confidence and trust that they put in AbbVie. Our meeting is now adjourned.
The conference has now concluded. Thank you for your participation. You may now disconnect your lines.