Welcome to Stryker's 2015 annual shareholder meeting. This presentation contains information that includes or is based on forward-looking statements within the meaning of the Federal Securities law that are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements.
Such factors include, but are limited to, weakening of economic conditions that could adversely affect the level of demand for our products, pricing pressures, generally including cost containment measures that could adversely affect the price of demand of products changed in foreign exchange markets, legislative and regulatory actions, unanticipated issues arising in connection with clinical studies and otherwise that affect U.S. Food and Drug Administration approval of new products, changes in reimbursement levels from third-party payers, a significant increase in product liability claims, the ultimate total cost with respect to Rejuvenate and ABG II matter, the impact of investigative and legal proceedings and compliance risks, resolution of tax audits, the impact of the federal legislation to reform the United States healthcare system, changes in financial markets, changes in competitive environments, our ability to integrate acquisitions, and our ability to realize anticipated cost savings as a result of workforce reductions and other restructuring activities.
Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission, including our annual report on Form 10-K and quarterly reports on Form 10-Q. Your meeting will begin momentarily.
He needs no introduction in this audience. John obviously led the company for over three decades, helping to build Stryker into the Fortune 500 company that it is today. Accompanying John are his wife, Rose Marie, daughters Sarah and Janine. Also joining us today are two members of the Stryker family. Pat Stryker is a philanthropist and community activist. She grew up in Kalamazoo and resides in Fort Collins. Pat founded Bohemian Foundation and is the owner of Bohemian Companies. Jon Stryker is the founder and president of the Arcus Foundation. He was a founding board member of the Ol Pejeta Conservancy, Save the Chimps, Florida and Greenleaf Trust. Jon serves on the board of the Kalamazoo College and Friends of the High Line in New York City and is a registered architect in the state of Michigan.
Pat, Jon, and Ronda Stryker, a member of our board of directors, who will be formally introduced shortly, are grandchildren of Dr. Homer Stryker, the founder of the company, and children of Lee Stryker, former president of the company. Please extend a warm welcome to these special guests. You are also reminded that our meeting today may include forward-looking information. These factors are included in the most recent Form 10-K and are covered by the statement you see on the screen, as well as printed on the agenda. That I can officially call the meeting to order, I'll ask Dean to establish that this meeting has been duly called and that a quorum is present.
Thank you, Kevin, and good afternoon. With me, I have an affidavit from the proxy solicitor related to the mailing of the notice of the meeting and proxy materials on March 19, 2015, to all shareholders of record as of March 2, 2015, the record date fixed by the board of directors. I have a certified list of the shareholders of record of the company as of March 2, 2015, which is available for inspection by any shareholder during and immediately following the meeting, and the minutes of the 2014 annual meeting of shareholders, which are also available for inspection by any shareholder. Bill Berry, Vice President, Corporate Controller, and Jeanne Blondia, Vice President, Finance and Treasurer, have been appointed to serve as inspectors of election.
Based on the proxies received, the inspectors have reported to me that a majority of the 378,976,960 shares of common stock entitled to vote are represented at the meeting, either in person or by proxy. A quorum of common stock is therefore present and the meeting may proceed.
Thank you, Dean. On the basis of the secretary's report, this meeting is duly constituted and we are ready to transact business. First, I would like to introduce you to the individuals who serve as directors of the corporation. They are unchanged from last year and are all present and seated at the front of the room. Starting in the back row and reading from left to right. Ronda Stryker is Vice Chair and a Director of Greenleaf Trust, Vice Chair of Spelman College, and a trustee of Kalamazoo College. Allan Golston is President, U.S. Program for the Bill & Melinda Gates Foundation. Allan chairs our audit committee. Bill Parfet is Chairman and Chief Executive Officer of MPI Research. He is Lead Independent Director and Chairs our Compensation Committee. Andy Silvernail is Chairman and Chief Executive Officer of IDEX Corporation.
Srikant Datar is the Arthur Lowes Dickinson Professor of Accounting at the Graduate School of Business Administration at Harvard University. Now moving to the front row, from left to right. Howard Cox is a partner of Greylock and its affiliated venture capital partnerships. He is our longest-serving director. I am the Chairman and Chief Executive Officer of Stryker. As the sole member of management on our board, I provide management's business perspectives and the necessary link to the company's day-to-day operations. Roch Doliveux is former CEO and Chairman of the executive committee of UCB, a global biopharmaceutical company. Louise Francesconi is former president of Raytheon Missile Systems. She chairs our Governance and Nominating Committee. Let's please acknowledge our board of directors with a round of applause. Next, the Stryker leadership team. I am proud and honored to have the opportunity to introduce them to you.
These are the men and women who, along with our other corporate officers and division leaders, run the various parts of Stryker's businesses. Ramesh Subrahmanian is leading our international group. He has leadership experience with various large multinational companies. Yin Becker is responsible for public affairs, communications, and strategic marketing. She brings many years of experience in med tech with focus on customers, education, and branding. Bijoy Sagar, our newest member of leadership team. He joined Stryker in May 2014 as our Chief Information Officer. Bijoy has experience with large global multinational companies and is off to a very strong start in his role. Katherine Owen is responsible for investor relations and business development. She was formerly a Wall Street analyst. Mike Hutchinson is our general counsel. He has broad legal experience inside and outside the company. Lonny Carpenter has held many leadership roles at Stryker.
He oversees our global quality and operations group, as well as our new European business operations. David Floyd leads our Orthopaedics group. David has vast experience in the orthopedics industry. Timothy Scannell has led multiple businesses at Stryker and is currently leading our MedSurg and Neurotechnology group. William Jellison is our CFO. He is responsible for the company's financial operations and has spent half his career in the global med tech market. Steve Benscoter is VP Global Human Resources. He has held leadership roles in many other functions in addition to HR throughout his Stryker career. As you can see, we have a talented and experienced leadership team, which is aligned on taking Stryker to new heights. Let's please acknowledge them with a round of applause. Next, I would like to acknowledge our other corporate officers. We have one new corporate officer, Irene Corbe, pictured in the middle.
She joined Stryker in April 2014 as Vice President of Internal Audit, following many years at Whirlpool, where she had held a similar responsibility leading their audit function. Our other corporate officers and their areas of responsibility are represented on this slide. This is a group of accomplished executives who take great measures to keep Stryker on track. Let's please acknowledge them with a round of applause. Here are the list of our division presidents who are the leaders responsible for the day-to-day operations of the company. I would like to ask those who are present in the room today to please stand. Today, we have Brad Paddock, our President of Spine; Brad Saar, President of Medical, which is based here in Kalamazoo; Bill Hufnagle, President of Reconstructive; and Spencer Stiles, President of Instruments, and Spencer is also going to be based here in Kalamazoo.
He was previously our President of Spine, is relocating to Kalamazoo this summer, has already started his new job. Jim Heath, unfortunately, is not able to be with us today. Longtime President of Stryker Instruments has retired, and he has passed the reins over to Spencer. Let's please give these four a round of applause. Also joining us today is Rich Witzel, partner of Skadden, Arps, Slate, Meagher & Flom, our corporate counsel, and Bill Miller, partner of Ernst & Young, our independent accounting firm. We will now vote on the three proposals that are included in the proxy and reflected on the agenda. If anyone during this voting period would like to speak or raise a question, please move to the microphone located in the aisles. Remember, these comments should relate to the specific proposal being voted on.
For these proposals listed in the proxy statement and on the agenda, our corporate bylaws do not require motions and seconds, so the polls are now officially open for voting on these proposals. Any shareholder of record who is present may vote by ballot, and if you're previously granted a proxy, your vote by ballot will automatically revoke your proxy. If anyone wishes to vote by ballot, please raise your hand, and one of the inspectors will deliver a ballot to you. Your ballots will be collected after the proposals have been presented. Also, if any shareholder in the room has a complete proxy in hand, it will be collected at that time. Okay. First matter for the election of nine directors, constituting the entire board of directors. The nominees for election as directors are Howard E. Cox Jr., Srikant M. Datar, Roch Doliveux, Louise L. Francesconi, Allan C.
Golston, Kevin A. Lobo, William U. Parfet, Andrew K. Silvernail, and Ronda E. Stryker. As there have been no other nominations during the designated nominating period, and in accordance with our bylaws, the nominations are now closed. The second matter to come before the meeting is ratification of the appointment of Ernst & Young LLP as the company's independent registered public accounting firm for 2015. Under SEC rules, the responsibility for the appointment and oversight of the company's auditors resides with the audit committee. However, today, we continue our practice of asking shareholders to ratify this appointment. The third matter to come before the meeting is an advisory vote to approve named executive officer compensation. The philosophy in setting executive compensation is discussed in detail in the proxy statement under Compensation Discussion and Analysis, which begins on page nine.
All of the proposals on the agenda are now before the meeting, and the polls are now open. Please complete your ballot and return it to the inspectors. Proxies will also be collected at this time. The inspectors will complete the vote count, and we will announce the results later in the meeting. While that's taking place, I will share a review of Stryker's performance and future outlook. To begin, before I get into the business results, I want to start with our mission. We launched this mission over a year ago. Together with our customers, we are driven to make healthcare better. This is the unifying purpose of the company and why our employees come to work each and every day: to make a difference, to improve lives, to improve healthcare workers as well, and to make healthcare better.
We also launched, over a year ago, our core values, and we're very explicit about it. Integrity, we do what's right. Accountability, we do what we say. People, we grow talent. Performance, we deliver. These are enduring values that our Chairman Emeritus, John Brown, created many years ago. We've now written them down on paper, and these are the standards that we hold ourselves accountable to as we perform our activities each and every day. Looking at the results for 2014, we delivered $9.7 billion in sales. You can see that we have a broad presence across three segments: Neurotechnology and Spine, Orthopaedics, and MedSurg. No single one unit represents more than 15% of our sales. Very broad across these three segments.
We're pursuing global market leadership in each and every one of these areas, we do it through business specialization, including specialized sales forces in each and every one of those slivers of the pie chart. That business unit specialization has been an engine of growth for Stryker and will continue to be for years to come. Look at this history of performance chart. Stryker became a public company in 1979, and for 35 consecutive years, we have grown sales. That's uninterrupted 35 years. Of course, during that period, there were recessions, there were many conflicts, lots of issues around the world, and every year, we've managed to deliver an increase in sales. If you look at the last number of years, you can see that that's actually accelerating at a very rapid rate.
This is a chart showing the last three years, a history of organic revenue growth. This excludes foreign currency as well as acquisitions. What is the underlying growth of the company? In the blue bar chart, you can see Stryker clearly outperforming the average of the med tech market, a group of 20 peers, larger med tech companies. We have consistently grown over 200 basis points faster than the average of the med tech market. Our organic growth is now at the high end of med tech, and it's been sustained over a three-year timeframe. I'm now going to run through a number of key growth drivers. The first one I'm going to talk about is MAKO. Obviously, this was a very big acquisition we did recently Robotic-assisted surgery.
We have total hip arthroscopy offerings, which now include the Stryker implants, just recently approved to be used with the robot, as well as partial knee arthroplasty. We are also pursuing an indication for total knee, which we are working on with the FDA right now. We believe that MAKO will absolutely transform orthopedic surgery, providing precise placement of implants. So far, we're performing very well. If you look at the last two quarters, we had 20 robot placements in the fourth quarter, another nine in the first quarter of this year. We're gaining momentum, and we feel very bullish about the prospects of robotic surgery for the future. Next, we have a number of high-growth segments that we play in, and we're looking to continue to expand our portfolio and specialize sales teams in these high-growth segments.
The first photo is the ReUnion shoulder platform, which is an example of extremities. Upper extremities, basically from the shoulder to the finger, are an area where we want to have significant growth in the future. It's a high-growth space. Lower extremities, we call foot and ankle. It's not pictured on the slide, but that's been an engine of growth for the last three years. We've been growing roughly 30% a quarter over the last three years in foot and ankle. We would like to now focus more on upper extremities as an additional engine of growth. The middle picture, you can see an example of a clot retriever, which is part of our neurovascular business, but our neurotechnology business has been very strong performers, roughly double-digit growth over the last couple of years, and we see significant opportunity to continue to grow in the neurotechnology space.
The far right picture is an example of a sports medicine product. Pivot Hip Arthroscopy was an acquisition that we did recently. It's a very fast-growing space in sports medicine. Again, another unit of Stryker that's been growing at healthy double-digit rates, and we still see significant opportunities for improvement. Next, talking about geographic expansion. We have extremely strong presence in the United States, very high market shares. We are now focused on Europe to really try to drive the similar kind of market shares that we enjoy in the United States to drive those in Europe. We created a new headquarters in Amsterdam, and we now have those businesses being managed on a transatlantic basis with all the sales and marketing people in Europe reporting to the division presidents. It's a model change that we're extremely excited about. We had a strong first quarter.
Momentum is gaining in Europe. The headquarters is a flagship place for us, which we didn't have before, where we've planted the Stryker flag. We bring surgeons in for training. Incredible excitement in Europe and an area of focus for us for accelerated growth. On the right-hand side, you see a picture of the Trauson manufacturing. Trauson was the acquisition that we did in China with lower priced spine and trauma products. It has been performing exceptionally well since the deal. It's been now two years since the acquisition, enjoying extremely high growth. Now we look to expand Trauson outside of China. We've launched in eight other countries, but we have some big markets that we haven't yet launched in. India being a very large trauma market where we're launching that in the second half of this year.
Brazil is another large market where we'll be launching next year. Acquisitions. We've been extremely busy and I have a slide a little later that'll show you those. Here's a picture of three of them, the Patient Safety Technologies, which is part of our Instruments division here in Kalamazoo, Berchtold, which is now part of our endoscopy, and then Small Bone Innovations, which is a total ankle replacement. We've had this spectacular growth in foot and ankle over the last three years without a total ankle. We just acquired this in the middle of last year, and it's enjoying very fast adoption. It was the one gap in our portfolio that we filled via acquisition. Ramping up growth of our recent acquisitions is yet another growth driver.
I'm only talking about things that are additional to our core business, which is of course performing very well. In addition to that core growth, we have these other growth drivers, acquisitions being one of them. I mentioned focusing on accelerating global growth. We want to absolutely maintain our very strong presence in the U.S. We seek to grow in Europe. Also in Japan, we had a challenging year last year with an ERP implementation that caused some difficulties. They had a nice bounce-back quarter in the first quarter. We look to maintain that momentum throughout the year, especially in hips and knees. Japan is a market where we've enjoyed high market shares for many years, and we want to get that back on track. In emerging markets, you can see on this slide represent only 8% of our sales.
We still have a long way to go in emerging markets, including Latin America and Asia. Our main focus, really China, India, and Latin America right now. Russia and Turkey are obviously markets going through a lot of turmoil, so we're going to be a little bit tempered in our investments in those two countries while they find their footing. Of course, expanding Trauson is a huge opportunity for us with a great portfolio that's doing exceptionally well in China. We now need to get those products expanded outside of China. Innovation. I mentioned a lot about acquisitions, but we're very focused also on internal innovations. If you look at over the last three years, we've grown our internal R&D spending on a compound annual basis over 10%. A very significant commitment to internal research and development.
We're driving innovation with both products and services. Increasingly, we're getting into services which complement our product offerings. In all cases, we're focused on improving outcomes, be them health economic outcomes or clinical outcomes, and sometimes both, to deliver savings to the hospitals as well as efficiencies in the operating rooms, as well as patient care and caregiver care. Many of our offerings actually provide advantages to the nurses and the physicians that use our products. Leverage. As we continue to grow at a very rapid rate at the high end of med tech, we're also seeking to drive initiatives to improve profitability. Our global quality and operations program, we had a five-year program of $500 million, which is moving very well. We also have a huge opportunity to reduce inventories through product rationalization.
We talk a lot about focusing on power brands, and power brands are the engine of our growth, but we also have a long tail of additional products that we are in the process of rationalizing. SG&A, for two consecutive years, we've taken our SG&A down 80 basis points two years ago, 140 basis points last year. We've made very good strides in SG&A, and we want to continue to drive that down using shared services much more extensively. Lastly, and not leastly, especially with our new CIO, Bijoy, on board, we have a big initiative to simplify and rationalize our information technology footprint. As a company that has been historically extremely decentralized, we have many disparate information technology systems, and we have a drive now to rationalize, streamline, and that'll make things go much quickly.
M&A, I mentioned before, we've been very active and very busy in mergers and acquisitions. You can see all of these listed here. The ones in blue are core business. We call them tuck-in acquisitions that fit neatly inside one of our divisions. That's going to continue to be the bulk of the deals we do in terms of numbers of deals, will be core deals. They work very well. We know how to do those. We have strong selling and distribution channels, and we buy technology, and we plug it right in. We have great success with those. Occasionally, we have an adjacent business, something a little bit different, like Ascent, which is now renamed Stryker Sustainability, our neurovascular business, which has done exceptionally well since the acquisition.
I mentioned Trauson, and even though it is spine and trauma products, we kind of consider it an adjacency because it's a low-price segment in hospitals that we had never sold to before. It's quite different for us, but it's been very successful. We're going to continue the strategy. You're going to see us continue to be active in M&A. It's the number 1 use of our cash and an engine of growth in addition to our internal development. Our balance sheet continues to be very strong. At the end of last year, we finished with over $5 billion of cash and over $1 billion of net cash, excluding debt. I mentioned before our capital allocation strategy in order of priority is number 1, acquisitions to drive sales growth and innovation.
Next, dividends. Our plan on dividends is to increase those slightly faster than the rate of our earnings growth. You should expect consistent dividend improvements. Share repurchases, which are the most fungible of the three and can vary from year to year, depending on the pace of our acquisitions. This next chart shows the Stryker stock price for 2014 versus the S&P. You can see that we are up 26% versus the Standard & Poor's index of 11%. Two consecutive years of significantly outperforming the stock price. If you'd like to give an applause, you can do that, John. Thank you. It's always nice to see a large shareholder applaud the stock price.
To summarize the business presentation, we are extremely well-positioned for the future as we continue to drive organic growth at the high end of med tech, continue to be a growth company, which we have been for the last, I showed you the chart, for the last 35 years, but since the inception of Stryker. Stryker is a growth company. It will continue to be a growth company. We're going to deliver operational leverage. We have those levers I mentioned on the previous slide to drive increased profitability. We will maintain a healthy balance sheet and cash flow generation and introduce a steady flow of innovation. Innovation is the lifeblood of our company. We will continue to do that both through internal R&D as well as acquisition. With that, I'd like to turn the stage back to Jeanne, who will report on the results of the voting.
Thanks, Kevin. I am advised by the inspectors of election that each of the persons nominated for director in Proposal 1 received at least 297,582,644 votes in favor of his or her election, and therefore each has been duly elected a director of the company. I'm also advised by the inspectors of election that at least 307,023,192 shares, representing 90% of the total shares cast on Proposal 2, were voted for ratification of the appointment of Ernst & Young LLP as independent registered public accounting firm for 2015. I therefore declare that Ernst & Young LLP is appointed as the company's independent registered public accounting firm for 2015. I'm also advised by the inspectors of election that at least 295,737,943 shares, representing 96% of the total shares cast on Proposal 3, were voted in favor of the advisory vote on the resolution relating to the company's named executive officer compensation.
The final results of the meeting will be filed on our Form 10-Q with the SEC shortly. The business portion of the meeting is now adjourned.
Now we'll turn to Q&A. Any shareholder who would like to ask a question, please proceed to a microphone located in the main aisles. If you need a microphone and cannot get up to the aisle, please raise your hand, and we will bring a microphone to you. Before you ask a question, please state your name, whether or not you are a shareholder, the organization you are affiliated with. Finally, we ask that the audience grant speakers the courtesy of concluding their remarks without interruptions. We may stop discussions that are irrelevant to the company's business, derogatory, and not in good taste, repetitious, or related to personal grievances. Yes.
Hi, my name is Robert Endias. I'm a private shareholder. Corporations, institutions, governments are being hit hard by cyberattacks. What is Stryker doing to protect its data?
Thank you for the question. This is obviously a key topic for both our leadership team as well as the board of directors. Bijoy Sagar is our new CIO, and he actually just provided a recent update to our board of directors on our cyberattack program. We have a very extensive program that we're implementing at Stryker. It's not really the place and time for me to go through that in a lot of detail, but I can tell you it's something that we are very concerned about, something that the board has placed a lot of diligence on, and we frankly have regular updates scheduled on cyber. We just did our most recent one at this meeting today. Any other questions?