Cardinal Health : 2021 Proxy Statement

Proxy Statement

Notice of Annual Meeting

2021of Shareholders

TABLE OF CONTENTS

LETTER TO CARDINAL HEALTH
SHAREHOLDERS	3
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS	5
PROXY SUMMARY	6
ABOUT US	6
FISCAL 2021 PERFORMANCE	6
RESPONSE TO COVID-19	7
GOVERNANCE AND BOARD HIGHLIGHTS	8
OUR 2021 BOARD NOMINEES	9
SHAREHOLDER ENGAGEMENT: COMPENSATION AND
GOVERNANCE ACTIONS	10
ADDRESSING THE OPIOID EPIDEMIC	11
ESG HIGHLIGHTS	13
VIRTUAL ANNUAL MEETING	14
ROADMAP TO VOTING MATTERS	14
HOW TO VOTE IN ADVANCE OF THE ANNUAL MEETING	14

COMPENSATION DISCUSSION AND ANALYSIS	43
HUMAN RESOURCES AND COMPENSATION COMMITTEE REPORT	59
EXECUTIVE COMPENSATION TABLES	59
PAY RATIO DISCLOSURE	70
EQUITY COMPENSATION PLAN INFORMATION	71

LONG-TERM INCENTIVE PLAN	72
PROPOSAL 4 - APPROVAL OF CARDINAL HEALTH, INC. 2021
LONG-TERM INCENTIVE PLAN	72
AMENDMENT TO RESTATED CODE OF
REGULATIONS	80
PROPOSAL 5 - PROPOSAL TO APPROVE AN AMENDMENT TO
OUR RESTATED CODE OF REGULATIONS TO REDUCE THE SHARE
OWNERSHIP THRESHOLD FOR CALLING A SPECIAL MEETING OF
SHAREHOLDERS	80
SHAREHOLDER PROPOSAL	81
PROPOSAL 6 - SHAREHOLDER PROPOSAL TO ADOPT A
POLICY THAT THE CHAIRMAN OF THE BOARD BE AN
INDEPENDENT DIRECTOR	81

CORPORATE GOVERNANCE

PROPOSAL 1 - ELECTION OF DIRECTORS

BOARD MEMBERSHIP CRITERIA: WHAT WE LOOK FOR OUR DIRECTOR NOMINEES

OUR BOARD'S COMPOSITION AND STRUCTURE

OUR BOARD'S PRIMARY ROLE AND RESPONSIBILITIES AND PROCESSES

STANDARDS OF BUSINESS CONDUCT

RELATED PERSON TRANSACTIONS POLICY AND PROCESS SHAREHOLDER ENGAGEMENT

DIRECTOR COMPENSATION

AUDIT COMMITTEE MATTERS

PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITOR

AUDIT COMMITTEE REPORT

FEES PAID TO ERNST & YOUNG LLP

POLICY ON PRE-APPROVAL OF SERVICES PROVIDED BY ERNST & YOUNG LLP

EXECUTIVE COMPENSATION

PROPOSAL 3 - ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

LETTER FROM THE HUMAN RESOURCES AND COMPENSATION COMMITTEE

15	SHARE OWNERSHIP INFORMATION	83
15	BENEFICIAL OWNERSHIP	83
15	DELINQUENT SECTION 16(a) REPORTS	84
16	OTHER MATTERS	85
23
	GENERAL INFORMATION ABOUT THE ANNUAL MEETING	85
27	COMMUNICATING WITH THE BOARD	87
32	SHAREHOLDER RECOMMENDATIONS FOR DIRECTOR NOMINEES	87
32	SUBMITTING PROXY PROPOSALS AND DIRECTOR NOMINATIONS
33	FOR THE NEXT ANNUAL MEETING	88
35	CORPORATE GOVERNANCE DOCUMENTS	89
37	TRANSFER AGENT	89
	ANNEX A:
37	USE OF NON-GAAP FINANCIAL MEASURES	A-1
37	EXCLUSIONS FROM NON-GAAP FINANCIAL MEASURES	A-1
38	FISCAL 2021 GAAP TO NON-GAAP RECONCILIATIONS	A-2
38	DEFINITIONS	A-3
FISCAL 2021 OPIOID LITIGATION ACCRUAL IMPACT ON
39	INCENTIVE PLAN METRIC RESULTS	A-3
40	ANNEX B: CARDINAL HEALTH, INC. 2021
LONG-TERM INCENTIVE PLAN	B-1
41

GREGORY B. KENNY

Chairman of the Board

September 23, 2021

+6%

REVENUE GROWTH

IN FY 2021 VS FY 2020

+24%

OPERATING CASH FLOW GROWTH FY 2021 VS FY 2020

LETTER TO CARDINAL HEALTH SHAREHOLDERS

In the past extraordinary year, we focused on protecting our employees and serving our healthcare provider customers, while continuing to execute on our strategic priorities. The Board has been active during these challenging times, and below are our insights into key focus areas for the company.

FISCAL 2021 PERFORMANCE

In fiscal 2021, the company grew revenue and non-GAAP earnings per share, divested the Cordis business, identified $250 million of additional cost savings opportunities, strengthened our balance sheet with strong operating cash flow and debt reduction, and extended our Red Oak Sourcing venture with CVS Health. Despite these achievements, performance in our business segments fell below expectations in the latter part of the year. As we start fiscal 2022, we remain confident in our strategy and are encouraged by the tailwinds behind our growth areas, such as Specialty and Nuclear, and strong cash flow generation.

RESPONDING TO THE 2020 SAY-ON-PAY VOTE

In response to the disappointing 2020 say-on-pay vote, our Human Resources and Compensation Committee Chair and I undertook a broad-based and multi-faceted effort to meet with investors and understand and address their concerns. In these meetings, shareholders expressed support for the fundamentals of our executive compensation program and its alignment of pay and performance but thought that we should have disclosed how the Committee considered opioid litigation accruals in our compensation determinations last year.

Based on what we heard from shareholders as well as on progress on the opioid litigation settlement, the Human Resources and Compensation Committee took a set of actions. We provide detailed disclosure in this proxy statement about how the impact of the opioid litigation on the company and its shareholders was considered in fiscal 2021 compensation decisions.

CardinalHealth / 2021 PROXY STATEMENT

3

LETTER TO CARDINAL HEALTH SHAREHOLDERS

OUR ONGOING RESPONSE TO THE OPIOID EPIDEMIC

The Board's Ad Hoc Committee on opioids continues to oversee the company's controlled substance anti-diversion program as well as the company's efforts to defend and resolve governmental opioid litigation. In July, we announced that we and two other national distributors have negotiated a proposed settlement agreement which, if all conditions are satisfied, would result in the settlement of a substantial majority of opioid lawsuits filed by state and local governmental entities. We believe the proposed settlement agreement and the process it establishes are important steps toward achieving broad resolution of governmental opioid claims and delivering meaningful relief to communities across the United States.

THE COMPOSITION OF OUR BOARD AND UPDATES TO OUR COMMITTEES

My fellow directors and I seek to create a culture of open, direct, and respectful dialogue among our members, who bring an array of skills, backgrounds, and expertise. This year, we reaffirmed our commitment to diversity when we amended our Corporate Governance Guidelines to reflect our practice of including women and racially and ethnically diverse candidates in the initial pool of candidates for new director searches.

As a result of our director retirement age limit, Mike Losh is stepping down from the Board at the Annual Meeting of Shareholders. On behalf of the Board, we thank him for his valuable service to the Board and as Audit Committee Chair. In addition, Cal Darden retired from the Board earlier this year, and we thank him for his many contributions over the span of his 15 years of service on the Board.

This past May, the Board formed a new standing Risk Oversight Committee to oversee compliance, legal, regulatory, and quality matters. The Committee is chaired by John Weiland and is composed entirely of independent directors. This new committee oversees some of the areas previously under the purview of the Audit Committee.

The Ad Hoc Committee remains in place to oversee opioid matters. To ensure there is strong communication and effective coordination between committees, John Weiland is sitting on both the Risk Oversight and Audit Committees and Sheri Edison and I are sitting on both the Risk Oversight and Ad Hoc Committees.

A CONTINUED COMMITMENT TO OPERATING RESPONSIBLY AND SUSTAINABLY

During the past year, we continued to advance our environmental, social, and governance, or ESG, agenda. With respect to diversity, equity, and inclusion, we established specific goals to significantly increase the representation in management of women, African American and Black, and other ethnically diverse employees. Addressing environmental sustainability, we established a significant enterprise-wide greenhouse gas reduction goal for Scope 1 and Scope 2 emissions.

NAVIGATING THE GLOBAL COVID-19 PANDEMIC

As the global pandemic has entered a new phase with the advent of effective vaccines and new virus variants, we have continued to prioritize the health and safety of our employees so we can fulfill our mission of delivering critical products and solutions to frontline healthcare workers around the world. In addition to expanded sick leave, paid-time-off, and child and elder care resources available to employees, we have taken steps to ensure that we are addressing workplace wellness and self-care. Although our operating environment remains dynamic, the pandemic has reinforced our critical role in the supply chain and highlighted opportunities for us to enhance our operations and evolve for future growth.

LOOKING FORWARD

The Board thanks our dedicated employees for their efforts during this past year. They have come together during the pandemic to truly deliver for our customers. We all continue to navigate this challenging time with resolve and purpose. On behalf of our Board, I thank you for your share ownership and for your continued support of the company. Together, we will enable Cardinal Health to perform our essential role in healthcare now and into the future.

Sincerely,

Gregory B. Kenny

Chairman of the Board

4	CardinalHealth / 2021 PROXY STATEMENT

NOTICE

OF ANNUAL MEETING

OF SHAREHOLDERS

September 23, 2021

Due to the public health impact of the coronavirus ("COVID-19") pandemic and to support the health and well-being of our employees and shareholders, this year's Annual Meeting of Shareholders ("Annual Meeting") will again be conducted exclusively online without an option for physical attendance. You will be able to participate in the virtual meeting online, vote your shares electronically, and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/CAH2021.

VIRTUAL MEETING

This year's meeting is a virtual shareholder meeting at

www.virtualshareholdermeeting.com/CAH2021.

RECORD DATE

September 7, 2021. Only shareholders of record at the close of business on the record date are entitled to receive notice of, and to vote at, the Annual Meeting.

PROXY VOTING

Make your vote count. Please vote your shares promptly to ensure the presence of a quorum during the Annual Meeting. Voting your shares now via the Internet, by telephone, or by signing, dating, and returning the enclosed proxy card or voting instruction form will save the expense of additional solicitation. If you wish to vote by mail, we have enclosed an addressed envelope with postage prepaid if mailed in the United States. Submitting your proxy now will not prevent you from voting your shares during the Annual Meeting, as your proxy is revocable at your option. We are requesting your vote to:

FRIDAY, NOVEMBER 5, 2021

8:00 a.m. Eastern Time

Virtual Meeting

www.virtualshareholdermeeting.com/CAH2021

VOTE IN ADVANCE OF THE MEETING IN ONE OF FOUR WAYS:

INTERNET

Visit 24/7

www.proxyvote.com

BY TELEPHONE

Call the toll-free number 1-800-690-6903 within the United States, U.S. territories, or Canada

BY MAIL

Mark, sign, and date proxy card and return by mail in enclosed postage-paid envelope

Virtual Meeting

See page 85 for instructions on how to attend

Please refer to the enclosed proxy materials or the information forwarded by your bank, broker, or other holder of record to see which voting methods are available to you.

ITEMS OF BUSINESS

1. Elect the 11 director nominees named in the proxy statement;
2. Ratify the appointment of Ernst & Young LLP as our independent auditor for the fiscal year ending June 30, 2022;
3. Approve, on a non-binding advisory basis, the compensation of our named executive officers;
4. Approve the Cardinal Health, Inc. 2021 Long-Term Incentive Plan;
5. Approve an amendment to our Restated Code of Regulations to reduce the share ownership threshold for calling a special meeting of shareholders;
6. Vote on a shareholder proposal described in the accompanying proxy statement, if properly presented at the meeting; and
7. Transact such other business as may properly come before the meeting or any adjournment or postponement.

MEETING DETAILS

See "Proxy Summary" and "Other Matters" for details.

Important notice regarding the availability of proxy materials for the Annual Meeting to be held on November 5, 2021: The Notice of Annual Meeting of Shareholders, the accompanying proxy statement, and our 2021 Annual Report to Shareholders are available at www.proxyvote.com. These proxy materials are first being sent or made available to shareholders commencing on September 23, 2021.

By Order of the Board of Directors.

John M. Adams, Jr.

Senior Vice President, Associate General Counsel and Secretary

CardinalHealth / 2021 PROXY STATEMENT

5