UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Zimmer Biomet Holdings, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

		Our Purpose   Restore mobility, alleviate pain and improve the quality of life for patients around the world.   Our Mission   Lead the industry in delivering value to healthcare providers, patients and stockholders, while embracing our broader social responsibilities.   Our Values

March 30, 2017

LETTER FROM THE BOARD OF DIRECTORS

TO OUR STOCKHOLDERS

As we approach the 2017 Annual Meeting of Stockholders, your Board of Directors is pleased to take this opportunity to share our perspectives on the past year and certain key areas of focus.

A Strong Start as the New Zimmer Biomet

The year 2016 was marked by solid financial performance, significant portfolio expansion and strategic investments to support long-term growth. In short, 2016 demonstrated the power and innovation of Zimmer Biomet’s presence within musculoskeletal healthcare.

In 2016, Zimmer Biomet delivered consolidated revenue and earnings growth with noteworthy results from the Asia Pacific region. The Company expanded and enhanced its market-leading Knee and Hip portfolios with several key new product introductions, including the Vanguard^® Individualized Design (ID) Knee Replacement and the G7^® Dual Mobility Construct. In addition, the Company launched Zimmer Biomet Signature Solutions, a comprehensive offering of clinical services and technologies designed to assist hospitals, ambulatory surgery centers and medical practices to succeed in today’s value-based reimbursement environment. Zimmer Biomet also made a variety of strategic investments during 2016 in an effort to drive value creation, including the acquisitions of Cayenne Medical, Inc., CD Diagnostics, Inc., Compression Therapy Concepts, Inc., LDR Holding Corporation and Medtech SA. These transactions enhanced the Company’s core offerings, diversified its product portfolio and introduced exciting new platform technologies. As a top priority, the Company also continued to make important investments as it strives to establish a best-in-class Quality Management System across its global network.

As the Board looks to 2017 and beyond, we believe that Zimmer Biomet is well positioned to remain at the forefront of musculoskeletal healthcare, offering technologies, solutions and personalized services designed to address the needs of patients and healthcare professionals. Importantly, we believe this will allow management to deliver growth and drive enhanced stockholder value.

Board Oversight of Risk

While senior management has primary responsibility for managing risk, the Board plays an active role, as a whole and also at the committee level, in risk oversight, with our focus on the top risks facing the Company. Our objective is to help preserve and protect Zimmer Biomet’s enterprise value and increase the likelihood of the Company achieving its financial, operational and strategic objectives while maintaining or enhancing its reputation.

We conduct our oversight responsibilities directly and through four standing committees: Audit; Corporate Governance; Compensation and Management Development; and Research, Innovation and Technology. This oversight structure is designed to increase the effectiveness of the Board’s oversight by taking into account the activities and experience of the various Board committees, including their interactions with management. Each committee reports on its activities to the full Board.

Historically, the full Board has provided oversight of risks relating to the Company’s compliance with laws and regulations enforced by the FDA and comparable foreign government regulators, including product quality and safety. In order to provide an additional layer of oversight and review of these important matters, however, we have decided to establish explicit Board committee responsibility for oversight of FDA regulatory compliance, including product quality and safety. Beginning with our Board and committee meetings to be held in conjunction with the 2017 Annual Meeting of Stockholders, we intend to task the Research, Innovation and Technology Committee with these responsibilities and to amend the committee’s name and charter accordingly.

Board Skills, Diversity and Refreshment

We have an engaged, committed Board that regularly assesses our makeup to ensure we have the right mix of skills and qualifications necessary to guide and oversee the Company. Our rigorous director nomination process identifies candidates with the time, skills and experience to contribute to Zimmer Biomet and to engage with management about all aspects of the Company’s business. Collectively, our Board embodies a range of viewpoints, backgrounds and expertise because we believe that diversity is an important attribute of a well-functioning Board. Consistent with best practices in the corporate governance area, we expect the Board to continue to evolve as the needs of the Company evolve.

Nominees for election at the 2017 Annual Meeting of Stockholders include five directors who joined the Board within the past five years. Collectively, our directors bring a vast array of professional experience relevant to Zimmer Biomet’s business and strategies, including significant experience in key areas such as medical device manufacturing, international operations, government and regulatory affairs, healthcare payment and reimbursement, finance and capital allocation, research and development, risk management, strategic planning and mergers and acquisitions.

We encourage you to review the qualifications, skills and experience that we have identified as important attributes for directors, and how they match up to each of the 2017 director nominees, beginning on page 10 of the proxy statement.

Your Viewpoint is Important

We fully understand that we are here because you have entrusted us as stewards of your capital. We hold ourselves to the highest standards of integrity and fiduciary responsibility, and we work hard and diligently, keeping the interests of stockholders and all other Zimmer Biomet stakeholders – patients, healthcare professionals, Team Members and the communities in which we operate – at the center of our priorities.

We value your support, and we encourage you to share your opinions, suggestions, interests and concerns with us. You can do so by contacting us as described on page 19 of the proxy statement.

As always, we thank you for the trust that you have placed in us.

Christopher B. Begley		Betsy J. Bernard		Paul M. Bisaro
Gail K. Boudreaux		David C. Dvorak		Michael J. Farrell
Larry C. Glasscock		Robert A. Hagemann		Arthur J. Higgins
Michael W. Michelson		Cecil B. Pickett		Jeffrey K. Rhodes

March 30, 2017

DEAR FELLOW STOCKHOLDERS:

We look forward to your attendance either in person or by proxy at the 2017 Annual Meeting of Stockholders of Zimmer Biomet Holdings, Inc. We will hold the meeting at 8:00 a.m. Eastern Time on Friday, May 12, 2017 at The Conrad Indianapolis, 50 West Washington Street, Indianapolis, Indiana 46204.

You will find information regarding the matters to be voted on in the attached Notice of Annual Meeting of Stockholders and Proxy Statement. We are sending many of our stockholders a notice regarding the availability of this proxy statement, our 2016 Annual Report and other proxy materials via the Internet. This electronic process gives you fast, convenient access to the materials, reduces the impact on the environment and reduces our printing and mailing costs. A paper copy of these materials can be requested using one of the methods described in the materials.

Your vote is important. Whether or not you plan to attend the meeting in person, it is important that your shares be represented. Please vote as soon as possible.

		Sincerely,
		David C. Dvorak President and Chief Executive Officer   Zimmer Biomet Holdings, Inc. 345 East Main Street Warsaw, Indiana 46580

		TABLE OF CONTENTS

ZIMMER BIOMET HOLDINGS, INC.

345 East Main Street

Warsaw, Indiana 46580

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF ZIMMER BIOMET HOLDINGS, INC.

To Be Held May 12, 2017

PROXY STATEMENT SUMMARY

We are providing this proxy statement in connection with the solicitation of proxies by our Board of Directors for use at our 2017 annual meeting of stockholders to be held on Friday, May 12, 2017. The Notice of Annual Meeting of Stockholders and related proxy materials, or a Notice of Internet Availability, were first sent to stockholders on or about March 30, 2017. This summary highlights information contained elsewhere in this proxy statement. It does not contain all of the information you should consider, and we urge you to read the entire proxy statement, as well as our 2016 Annual Report, before voting.

MATTERS FOR STOCKHOLDER VOTING

Director Nominees

PROXY STATEMENT SUMMARY

Corporate Governance Highlights

Board Composition and Skills*

PROXY STATEMENT SUMMARY

Executive Compensation Best Practices

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE

At Zimmer Biomet, it’s not just what we make. It’s what we make possible. Simply put, we are in the business of changing people’s lives. We are humbled by that fact and take our responsibility seriously. Because of this, the way we conduct our business is critically important. We are committed to effective corporate governance, adhere to the highest ethical standards and act as a responsible member of our communities.

Our business is managed under the direction of our Board of Directors. The Board has responsibility for establishing broad corporate policies and for our overall performance.

CORPORATE GOVERNANCE

DIRECTOR NOMINEES

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE

OUR BOARD OF DIRECTORS AND CORPORATE

GOVERNANCE FRAMEWORK

DIRECTOR CRITERIA, QUALIFICATIONS AND

EXPERIENCE

We are a global leader in musculoskeletal healthcare. We design, manufacture and market orthopaedic reconstructive products; sports medicine, biologics, extremities and trauma products; office based technologies; spine, craniomaxillofacial and thoracic products; dental implants; and related surgical products. We have operations in more than 25 countries around the world and sell products in more than 100 countries. We operate in markets characterized by rapidly evolving technologies, complex regulatory requirements and significant competition. The Corporate Governance Committee is responsible for reviewing and assessing with the Board, on an annual basis, the experience, qualifications, attributes and skills sought of Board members in the context of our business and the then-current membership of the Board. The committee looks for current and potential directors collectively to have a mix of experience, skills and qualifications, some of which are described below:

In evaluating director candidates and considering incumbent directors for nomination to the Board, the committee considers a variety of factors. These include each candidate’s character and integrity, reputation for working constructively in a collegial environment and availability to devote sufficient time to Board matters. Diversity of background and diversity of gender, race, ethnicity, national origin and age are also relevant factors in the selection process. The committee also considers whether a candidate can meet the independence standards for directors and members of key committees under applicable stock exchange and Securities and Exchange Commission (“SEC”) rules. With respect to incumbent directors, the committee considers the director’s past performance on the Board and contributions to the committees on which he or she serves.

While the Board has not formally adopted a policy regarding director diversity, the committee actively considers diversity in director recruitment and nomination and believes that the diversity of the current Board members and nominees, including as to gender, race, ethnicity, national origin, international work experience and age, provides significant benefits to the Board and to the company.

BOARD LEADERSHIP STRUCTURE

One of the key responsibilities of the Board is to have a leadership structure that allows it to provide effective oversight of management and maximize the contributions of its members. Currently, the Board is led by a non-executive Chairman of the Board selected from among the independent directors. The non-executive Chairman leads the meetings and activities of the Board, while our CEO leads the management, operations and employees of the company and is responsible for executing the company’s strategy. The Board adopted this leadership structure in 2007. The Board believes that this leadership structure allows the Board to function efficiently and effectively and that it continues to be appropriate. However, the Board evaluates its leadership structure on an ongoing basis and is not opposed in concept to combining these roles. Prior to 2007, the positions of Chairman and CEO were held by the same person. The Board believes it should maintain the flexibility to change its leadership structure as circumstances warrant.

Larry Glasscock, who has served as one of our independent directors since 2001, has served as non-executive Chairman since 2013.

CORPORATE GOVERNANCE

The non-executive Chairman of the Board has the following duties and responsibilities:

If the Board decides in the future to combine the positions of Chairman and CEO, the independent directors will designate one of themselves as “Lead Independent Director.” The Lead Independent Director would have duties and responsibilities similar to the current non-executive Chairman, except for the duty to preside at meetings of the Board and stockholders.

The Board of Directors oversees the risk management processes that have been designed and are implemented by our executives to determine whether those processes are functioning as intended and are consistent with our business and strategy. The Board executes its oversight responsibility for risk management directly and through its committees.

The Audit Committee is specifically tasked with overseeing our compliance with legal and regulatory requirements, discussing our risk assessment and risk management processes with management, and receiving information on certain material legal and regulatory matters, including litigation, as well as on information technology and data privacy and security matters. Our head of internal audit, who reports directly to the committee, coordinates our global risk assessment process. We use this process to identify, assess and prioritize internal and external risks, to develop processes for responding to, mitigating and monitoring risks and to inform the development of our internal audit plan, our annual operating plan and our long-term strategic plan. The committee receives detailed reports regarding our enterprise risk assessment process and the committee’s meeting agendas include discussions of individual risk areas throughout the year. Members of our management who have responsibility for designing and implementing our risk management processes regularly meet with the committee. The committee discusses our major financial risk exposures with our CFO and Chief Accounting Officer. The committee receives regular reports from our Chief Compliance Officer on our Corporate Compliance Program, which is designed to address risks related to, among other matters, anti-corruption and anti-kickback laws in the countries where we do business. The committee also receives reports from our General Counsel, Chief Information Officer and other persons who are involved in our risk management processes.

The Board’s other committees oversee risks associated with their respective areas of responsibility. For example, the Compensation and Management Development Committee oversees risks relating to our executive compensation programs and practices. In addition, in conjunction with the full Board, the Compensation and Management Development Committee oversees risks relating to senior management succession planning.

The Board receives detailed regular reports from members of our executive operating committee and other personnel that include discussions of the risks and exposures involved with their respective areas of responsibility. Further, the Board is routinely informed of developments that could affect our risk profile or other aspects of our business. Primary areas of risk oversight for the full Board include general commercial risks in the musculoskeletal healthcare industry, such as competition, pricing pressures and the reimbursement landscape; risks associated with our strategic plan; risks related to our capital structure; and risks pertaining to mergers and acquisitions integration. Historically, the full Board has also provided oversight of risks relating to our compliance with laws and regulations enforced by the U.S. Food and Drug Administration (“FDA”) and comparable foreign government regulators, including product quality and safety. In order to provide an additional layer of oversight and review of these important matters, however, the Board has decided to establish explicit Board committee responsibility for oversight of FDA regulatory compliance, including product quality and safety. Beginning with the Board and committee meetings scheduled for May 2017, the Board intends to task the Research, Innovation and Technology Committee with these responsibilities and amend the committee’s name and charter accordingly, as described in more detail on pages 25-26.

CORPORATE GOVERNANCE

We are committed to maintaining the highest standards of business conduct and corporate governance, which we believe are essential to running our business efficiently, serving stockholders well and maintaining our integrity in the marketplace. We have adopted a Code of Business Conduct and Ethics that applies to all directors, officers and employees and a Code of Ethics for Chief Executive Officer and Senior Financial Officers (the “finance code of ethics”), a code of ethics that applies to our CEO, CFO, Chief Accounting Officer and Corporate Controller, and other finance organization employees. The Board of Directors has adopted Corporate Governance Guidelines, which, in conjunction with our Restated Certificate of Incorporation, Restated By-Laws, Board committee charters and key Board policies, form the framework for our governance. The current version of the Code of Business Conduct and Ethics, the finance code of ethics, the Board’s Corporate Governance Guidelines and the charters for each of the Audit Committee, Compensation and Management Development Committee, Corporate Governance Committee, and Research, Innovation and Technology Committee, as well as the Board’s policies on auditor ratification and stockholder rights plans, are available in the Investor Relations/Corporate Governance section of our website, www.zimmerbiomet.com. If we make any substantive amendments to the finance code of ethics or grant any waiver, including any implicit waiver, from a provision of the code to our CEO, CFO, or Chief Accounting Officer and Corporate Controller, we will disclose the nature of that amendment or waiver in the Investor Relations section of our website. The Board regularly reviews corporate governance developments and modifies its Corporate Governance Guidelines, committee charters and key practices as warranted.

Pursuant to New York Stock Exchange requirements, the Board’s Corporate Governance Guidelines and the charters of each of the Board’s committees, the Board and each of its committees are required to conduct self-evaluations of their performance. The Board recognizes that a robust and constructive evaluation process is an essential component of good corporate governance. These self-evaluations, which are conducted annually, are intended to facilitate a candid assessment and discussion by the Board and each committee of its effectiveness as a group in fulfilling its responsibilities, evaluating its performance and identifying areas for improvement. The Chair of the Corporate Governance Committee oversees the annual self-evaluation process. Each director is expected to participate and provide feedback on a range of topics, including: the Board and committee agendas; meetings; practices and dynamics; Board refreshment; committee structure, membership and leadership; the flow of information to and from the Board and its committees; management succession planning; and stockholder engagement. Director feedback is solicited on an individual basis through written questionnaires/assessments, individual director interviews and/or group discussions. From time to time, the Board retains a third party experienced in corporate governance matters to act as a facilitator for the self-evaluation process, including preparing and reviewing the written questionnaires/assessments and conducting individual director interviews. The Chair of the Corporate Governance Committee, along with the third party facilitator (when one is retained) reviews the feedback from the self-evaluation process and makes recommendations for areas with respect to which the Board and its committees should consider improvements. These areas are further discussed at a meeting led by the Chair of the Corporate Governance Committee and the third party facilitator (when one is retained) at which all Board members are present. At the conclusion of this meeting, the Chair of the Corporate Governance Committee, working with the senior management team, develops action plans for any items that require follow-up.

The Board’s Corporate Governance Guidelines, which are available on our website as described above, include criteria adopted by the Board to assist it in making determinations regarding the independence of its members. The criteria are consistent with the New York Stock Exchange listing standards regarding director independence. To be considered independent, the Board must determine that a director has no material relationship, directly or indirectly, with us. In assessing independence, the Corporate Governance Committee and the Board consider a wide range of relevant facts and circumstances. The Board has determined that each of our non-employee directors, Christopher B. Begley, Betsy J. Bernard, Paul M. Bisaro, Gail K. Boudreaux, Michael J. Farrell, Larry C. Glasscock, Robert A.

CORPORATE GOVERNANCE

Hagemann, Arthur J. Higgins, Michael W. Michelson, Cecil B. Pickett, Ph.D. and Jeffrey K. Rhodes, meets these standards and is independent. The remaining director, David C. Dvorak, is our CEO and is not independent.

Our Restated By-Laws require directors to be elected by the majority of the votes cast with respect to that director in uncontested elections (the number of shares voted “for” a director must exceed the number of votes cast “against” that director). In a contested election (a situation in which the number of nominees exceeds the number of directors to be elected), the standard for election of directors will be a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors. If a nominee who is serving as a director is not elected at the annual meeting, under Delaware law the director would continue to serve on the Board as a “holdover director.” However, under our Restated By-Laws, any director who fails to be elected must tender his or her resignation to the Board. The Corporate Governance Committee would then make a recommendation to the Board whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the Corporate Governance Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date the election results are certified. The director who tenders his or her resignation will not participate in the Board’s decision. If a nominee who was not already serving as a director is not elected at the annual meeting, under Delaware law that nominee would not become a director and would not serve on the Board as a “holdover director.” All nominees for election as directors at the 2017 annual meeting are currently serving on the Board.

The Corporate Governance Committee screens candidates and recommends candidates for nomination to the full Board. In seeking and evaluating director candidates, the committee considers individuals in accordance with the criteria described above under “Director Criteria, Qualifications and Experience.” Director candidates may be recommended by Board members, a third-party search firm or stockholders.

The committee considers candidates proposed by stockholders and evaluates them using the same criteria as for other candidates. A stockholder who wishes to recommend a director candidate for consideration by the committee should send such recommendation to our Corporate Secretary at Zimmer Biomet Holdings, Inc., 345 East Main Street, Warsaw, Indiana 46580, who will then forward it to the committee. Any such recommendation should include a description of the candidate’s qualifications for board service, the candidate’s written consent to be considered for nomination and to serve if nominated and elected, and addresses and telephone numbers for contacting the stockholder and the candidate for more information. A stockholder who wishes to nominate an individual as a candidate for election, rather than recommend the individual to the committee as a nominee, must comply with the advance notice requirements set forth in our Restated By-Laws. (See “What is the deadline to propose actions for consideration or to nominate individuals to serve as directors at the 2018 annual meeting of stockholders?” on page 80 for more information on these procedures.)

Stockholders or other interested parties may contact our directors by writing to them either individually or as a group or partial group (such as all independent directors), c/o Corporate Secretary, Zimmer Biomet Holdings, Inc., 345 East Main Street, Warsaw, Indiana 46580. If you wish your communication to be treated confidentially, please write the word “CONFIDENTIAL” prominently on the envelope and address it to the director by name so that it can be forwarded without being opened. Communications addressed to multiple recipients, such as to “Board of Directors,” “Audit Committee,” “Independent Directors,” etc. will necessarily have to be opened and copied by the Office of the Corporate Secretary in order to forward them, and hence cannot be treated confidentially.

CORPORATE GOVERNANCE

The Board meets on a regularly scheduled basis during the year to review significant developments affecting us and to act on matters requiring Board approval. It also holds special meetings when an important matter requires Board action between scheduled meetings. Members of senior management regularly attend meetings of the Board and its committees to report on and discuss their areas of responsibility. Directors are expected to attend Board meetings, meetings of committees on which they serve and stockholder meetings. Directors are expected to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities. During 2016, the Board held nine meetings and committees of the Board held a total of 25 meetings. All directors attended 75% or more of the meetings of the Board and committees on which they served. With one exception, all current directors then in office attended the 2016 annual meeting of stockholders.

Each regularly scheduled Board meeting normally begins with a session between the CEO and the independent directors. This provides a platform for discussions outside the presence of the non-Board management attendees, as well as an opportunity for the independent directors to go into executive session (without the CEO) if requested by any director. The independent directors may meet in executive session, without the CEO, at any time, and are scheduled for such independent executive sessions at each regularly scheduled Board meeting. Larry Glasscock, in his capacity as non-executive Chairman, presides at these executive sessions.

On an annual basis, each director and executive officer is obligated to complete a director and officer questionnaire which requires disclosure of any transactions with us in which the director or executive officer, or any member of his or her immediate family, has an interest. Under our Audit Committee’s charter, which is available on our website at www.zimmerbiomet.com, our Audit Committee must review and approve all related person transactions in which any executive officer, director, director nominee or more than 5% stockholder of the company, or any of their immediate family members, has a direct or indirect material interest. The Audit Committee may not approve a related person transaction unless (1) it is in or not inconsistent with our best interests and (2) where applicable, the terms of such transaction are at least as favorable to us as could be obtained from an unrelated third party.

Under our Code of Business Conduct and Ethics, which is available on our website at www.zimmerbiomet.com, our Human Resources Department, in consultation with our Legal Department and Compliance Office, is charged with reviewing and approving any conflict of interest involving any other employee.

In connection with our entry into the merger agreement related to our acquisition of Biomet, we entered into a stockholders agreement dated as of April 24, 2014 and amended as of March 30, 2015 with LVB Acquisition Holding, LLC (“LVB Holding”) and the other signatories thereto (the “Sponsor Funds”). The Sponsor Funds are affiliates of The Blackstone Group, L.P. (“Blackstone”), Goldman Sachs & Co. (“Goldman Sachs”), KKR & Co., L.P. (“KKR”) and TPG Global, LLC (“TPG”). The stockholders agreement took effect as of the closing date of the merger, June 24, 2015, at which time LVB Holding became the beneficial owner of approximately 14.8% of our outstanding common stock. As further described below, the stockholders agreement automatically terminated on August 12, 2016, the closing date of the August 2016 Stock Sale (as defined below). The stockholders agreement set forth certain governance arrangements and contained various provisions relating to, among other things, representation on our Board, the acquisition of additional equity interests in us, prohibitions on taking certain actions relating to our company, transfer restrictions, voting arrangements and registration rights.

The stockholders agreement granted certain rights to LVB Holding and, in certain circumstances, its transferees (collectively, the “Principal Stockholder Investors”). LVB Holding was originally the only Principal Stockholder Investor;

CORPORATE GOVERNANCE

however, after the distribution transaction described below, Sponsor Funds affiliated with Blackstone, Goldman Sachs, KKR and TPG each became a Principal Stockholder Investor for various periods of time until such time as each Sponsor Fund sold all of its respective shares of our common stock distributed to it by LVB Holding as described below.

Pursuant to the stockholders agreement, on the closing date of the merger, our Board increased the number of directors on our Board by two and appointed two individuals designated by the Sponsor Funds as directors, Messrs. Michelson and Rhodes. The stockholders agreement provided that at each future annual or special meeting of our stockholders at which directors were to be elected, we would nominate and use our reasonable best efforts to cause our stockholders to elect to our Board the following number of individuals designated by the Principal Stockholder Investors:

The rights of the Principal Stockholder Investors to designate individual(s) for nomination to our Board pursuant to the stockholders agreement terminated on June 16, 2016, the closing date of the June 2016 Stock Sale (as defined below), due to the Principal Stockholder Investors beneficially owning at that time less than 30% of the shares of our common stock acquired by the Principal Stockholder Investors as merger consideration at the closing of the merger. As a result, the stockholders agreement required the Principal Stockholder Investors to cause their designated directors, Messrs. Michelson and Rhodes, to immediately resign from our Board unless otherwise consented to by a majority of the other members of our Board. However, as previously disclosed, we temporarily waived such obligation to allow our Board the opportunity to further discuss its future composition and, following such discussions, the other members of our Board unanimously consented on July 15, 2016 to Messrs. Michelson and Rhodes continuing to serve as directors of our company. Consequently, the Principal Stockholder Investors were not obligated to cause Messrs. Michelson and Rhodes to resign from our Board.

The stockholders agreement contained a number of other provisions that applied during 2016 until the stockholders agreement automatically terminated on August 12, 2016, the closing date of the August 2016 Stock Sale and the date on which the Principal Stockholder Investors, in the aggregate, beneficially owned less than 3% of the total number of votes that may be cast in the election of our directors. Those provisions included:

As a result of the termination of the stockholders agreement, the stockholders agreement became of no further force and effect, except for certain customary provisions, such as continuing indemnification and confidentiality obligations, which survive termination for the periods set forth in the stockholders agreement.

CORPORATE GOVERNANCE

February 2016 LVB Holding Distribution, Stock Sale and Share Repurchase. On February 4, 2016, pursuant to the stockholders agreement, we filed a shelf registration statement on Form S-3, registering for resale the shares of our common stock held by LVB Holding. On or about February 4, 2016, LVB Holding approved the distribution of all of the shares of our common stock held by it to its members, the majority of which were distributed to the Sponsor Funds. On February 4, 2016, certain Sponsor Funds affiliated with Blackstone and Goldman Sachs launched an underwritten public offering of shares of our common stock owned by them. On February 10, 2016, Sponsor Funds affiliated with Blackstone sold 7,351,708 shares of our common stock, constituting all of the shares of our common stock distributed to them by LVB Holding, and Sponsor Funds affiliated with Goldman Sachs sold 3,675,850 shares of our common stock, constituting approximately one-half of the shares of our common stock distributed to them by LVB Holding (collectively, the “February 2016 Stock Sale”). In the February 2016 Stock Sale, the selling Sponsor Funds received proceeds of approximately $1,060.4 million and we paid expenses of the offering on behalf of the selling Sponsor Funds, as required by the stockholders agreement, of approximately $875,000. Following the February 2016 Stock Sale and our concurrent share repurchase (discussed below), the remaining Sponsor Funds collectively held approximately 9.4% of the outstanding shares of our common stock (Goldman Sachs – 1.9%; KKR – 3.8%; and TPG – 3.7%); however, each remaining Sponsor Fund disclaimed beneficial ownership of the shares of our common stock held by each of the other remaining Sponsor Funds.

In connection with the February 2016 Stock Sale, we concurrently purchased (and subsequently retired) from Barclays, the underwriter for the offering, 2,599,833 shares of our common stock that were the subject of the offering for a total purchase price of approximately $250 million, or $96.16 per share, which was the weighted average price per share paid by Barclays in the offering.

June 2016 Stock Sale. On June 13, 2016, certain Sponsor Funds affiliated with KKR, Goldman Sachs and TPG launched an underwritten public offering of shares of our common stock owned by them. On June 16, 2016, Sponsor Funds affiliated with KKR sold 3,764,820 shares of our common stock, constituting approximately one-half of the shares of our common stock distributed to them by LVB Holding, Sponsor Funds affiliated with Goldman Sachs sold 3,675,858 shares of our common stock, constituting all of the remaining shares of our common stock distributed to them by LVB Holding, and Sponsor Funds affiliated with TPG sold 3,675,855 shares of our common stock, constituting approximately one-half of the shares of our common stock distributed to them by LVB Holding (collectively, the “June 2016 Stock Sale”). In the June 2016 Stock Sale, the selling Sponsor Funds received proceeds of approximately $1,281.8 million and we paid expenses of the offering on behalf of the selling Sponsor Funds, as required by the stockholders agreement, of approximately $650,000. Following the June 2016 Stock Sale, the remaining Sponsor Funds collectively held approximately 3.7% of the outstanding shares of our common stock (KKR – 1.9%; and TPG – 1.8%); however, each remaining Sponsor Fund disclaimed beneficial ownership of the shares of our common stock held by the other remaining Sponsor Fund.

Goldman, Sachs & Co., an affiliate of certain of the selling stockholders in the June 2016 Stock Sale, served as an underwriter and received an underwriting discount totaling approximately $3.0 million in connection with the sale.

August 2016 Stock Sale. On August 9, 2016, certain Sponsor Funds affiliated with KKR and TPG launched an underwritten public offering of shares of our common stock owned by them. On August 12, 2016, Sponsor Funds affiliated with KKR sold 3,764,820 shares of our common stock, constituting all of the remaining shares of our common stock distributed to them by LVB Holding, and Sponsor Funds affiliated with TPG sold 3,675,855 shares of our common stock, constituting all of the remaining shares of our common stock distributed to them by LVB Holding (collectively, the “August 2016 Stock Sale”). In the August 2016 Stock Sale, the selling Sponsor Funds received proceeds of approximately $959.8 million and we paid expenses of the offering on behalf of the selling Sponsor Funds, as required by the stockholders agreement, of approximately $650,000. Following the August 2016 Stock Sale, none of the Sponsor Funds hold shares of our common stock distributed to them by LVB Holding.

From time to time, we do business with companies that are affiliated with one or more of the Sponsor Funds. We believe that all such arrangements have been entered into in the ordinary course of business and have been conducted on an arm’s-length basis.

CORPORATE GOVERNANCE

Our Restated By-Laws provide that the Board may delegate certain of its responsibilities to committees. During 2016, the Board had four standing committees: an Audit Committee; a Compensation and Management Development Committee; a Corporate Governance Committee; and a Research, Innovation and Technology Committee. Each of the committees is composed entirely of independent directors. In addition, the members of the Audit Committee and the Compensation and Management Development Committee meet the heightened standards of independence required by SEC rules and New York Stock Exchange listing standards.

The table below shows the current membership of each Board committee and the number of meetings held during 2016.

COMMITTEE ASSIGNMENTS

Robert A. Hagemann, Chair

Christopher B. Begley

Gail K. Boudreaux

Larry C. Glasscock

The Audit Committee is directly responsible for the appointment, retention, compensation and oversight of our independent registered public accounting firm, including the review and approval of audit fees. The principal functions of the Audit Committee include:

CORPORATE GOVERNANCE

The Board of Directors has determined that Ms. Boudreaux and Messrs. Begley, Glasscock and Hagemann qualify as “audit committee financial experts” as defined by SEC rules. See pages 10 through 12 for a description of their respective business experience. Stockholders should understand that this designation is an SEC disclosure requirement related to these directors’ experience and understanding with respect to certain accounting and auditing matters. The designation does not impose upon these directors any duties, obligations or liabilities that are greater than those that are generally imposed on them as members of the Audit Committee and the Board, and their designation as audit committee financial experts pursuant to this SEC requirement does not affect the duties, obligations or liability of any other member of the Audit Committee or the Board.

See also the “Audit Committee Matters” section of this proxy statement for additional information about the Audit Committee’s responsibilities and actions and the Audit Committee Report.

Arthur J. Higgins, Chair

Betsy J. Bernard

Paul M. Bisaro

Michael J. Farrell

Cecil B. Pickett, Ph.D.

The Compensation and Management Development Committee has overall responsibility for approving and evaluating the executive compensation plans, policies and programs of the company. The duties of the Compensation and Management Development Committee include:

None of the members of the Compensation and Management Development Committee during 2016 or as of the date of this proxy statement is or has been our officer or employee or had any relationship requiring disclosure under Item 404 of Regulation S-K of the Securities Exchange Act of 1934, as amended (“Exchange Act”). None of our executive officers served on the compensation committee or board of any company that employed any member of the Compensation and Management Development Committee or the Board or otherwise under circumstances requiring disclosure under Item 404 of Regulation S-K.

The report of the Compensation and Management Development Committee appears on page 55.

CORPORATE GOVERNANCE

At the request of the Compensation and Management Development Committee, Willis Towers Watson, the committee’s compensation consultant, conducted an in-depth qualitative review of the potential risks associated with our executive compensation program in the fall of 2015 and it updated its assessment in the fall of 2016. The components of our executive compensation program are part of our global compensation structure, and the majority of the compensation policies or practices that apply to other levels of our employees or to any of our subsidiaries or divisions are included in our executive compensation program. For 2016, Willis Towers Watson found that our executive compensation program is in alignment with current market practices, contains an appropriate balance of risk versus rewards and incorporates appropriate risk mitigating factors. Consistent with prior years, Willis Towers Watson found no design features in our executive compensation practices that pose a significant concern from the perspective of motivating senior officers to knowingly expose us to excessive enterprise risk. We believe that our compensation policies and practices do not encourage excessive risk-taking and are not reasonably likely to have a material adverse effect on us.

Betsy J. Bernard, Chair

Paul M. Bisaro

Gail K. Boudreaux

Larry C. Glasscock

Michael W. Michelson

Jeffrey K. Rhodes

The Corporate Governance Committee oversees the Board’s corporate governance policies and practices. The duties of the Corporate Governance Committee include:

Cecil B. Pickett, Ph.D., Chair

Christopher B. Begley

Michael J. Farrell

Robert A. Hagemann

Arthur J. Higgins

Michael W. Michelson

Jeffrey K. Rhodes

CORPORATE GOVERNANCE

The Research, Innovation and Technology (“RIT”) Committee assists the Board in its oversight of our research, innovation and technology initiatives in the context of our overall corporate strategy, goals and objectives. The RIT Committee reviews and considers the following as it deems appropriate:

As discussed above in “Board’s Role in Risk Oversight,” the full Board has historically provided oversight of risks relating to our compliance with laws and regulations enforced by the FDA and comparable foreign government regulators, including product quality and safety. In order to provide an additional layer of oversight and review of these important matters, however, the Board has decided to establish explicit Board committee responsibility for oversight of FDA regulatory compliance, including product quality and safety. Beginning with the Board and committee meetings scheduled for May 2017, the Board intends to task the RIT Committee with these responsibilities and amend the committee’s name and charter accordingly.

We expect that the committee will be re-named to incorporate the word “Quality” and that its charter will be amended to address its expanded scope of responsibilities, including the following:

The Board believes that providing competitive compensation is necessary to attract and retain qualified non-employee directors. The key components of director compensation include annual retainers, committee chair annual fees and equity-based awards. It is the Board’s practice to provide a mix of cash and equity-based compensation to more closely align the interests of directors with our stockholders.

The following table sets forth information regarding the compensation we paid to our non-employee directors for 2016. Mr. Dvorak is not included in this table because he received no additional compensation for his service as a director.

CORPORATE GOVERNANCE

2016 Director Compensation Table

2016 STOCK AWARDS

CORPORATE GOVERNANCE

We pay non-employee directors quarterly, on the last day of March, June, September and December. During 2016, we paid non-employee directors an annual retainer of $95,000 subject to mandatory deferral requirements as described below, and we paid Board committee chairs an additional annual retainer of $12,000. We paid our non-executive Chairman of the Board an additional annual retainer of $150,000. Accordingly, we paid the following amounts during 2016:

Directors who commence service on the Board, or who commence service as a committee chair or as non-executive Chairman, are paid applicable quarterly fees beginning with the quarter during which they commence such service. Similarly, directors who terminate service on the Board or terminate service as a committee chair or as non-executive Chairman are paid applicable quarterly fees through the quarter during which such service terminated.

We awarded each non-employee director who was elected or re-elected at the 2016 annual meeting of stockholders 500 DSUs as of the date of the annual meeting with an initial value based on the price of our common stock on that date. We require that these annual DSU awards be credited to a deferred compensation account under the provisions of the Restated Deferred Compensation Plan for Non-Employee Directors. DSUs represent an unfunded, unsecured right to receive shares of our common stock or the equivalent value in cash, and the value of DSUs varies directly with the price of our common stock. We also require that 50% of a director’s annual retainer be deferred and credited to his or her deferred compensation account in the form of DSUs with an initial value equal to the amount of fees deferred until the director holds a total of at least 5,000 DSUs.

Non-employee directors may elect to defer receipt of compensation in excess of their mandatory deferral and annual DSU award. Elective deferrals are credited to the director’s deferred compensation account in the form of either treasury units, dollar units or DSUs with an initial value equal to the amount of fees deferred. The value of treasury units and dollar units does not change after the date of deferral. Amounts deferred as treasury units are credited with interest at a rate based on the six-month U.S. Treasury bill discount rate for the preceding year. Amounts deferred as dollar units are credited with interest at a rate based on the rate of return of our invested cash during the preceding year. When we pay cash dividends on our common stock, amounts deferred as DSUs are credited with additional DSUs equal to the number of shares of our common stock that could have been purchased if we paid cash dividends on the DSUs held in directors’ deferred compensation accounts and such cash was reinvested in our common stock. These additional DSUs are subject to mandatory deferral.

All treasury units, dollar units and DSUs are immediately vested and payable following termination of the non-employee director’s service on the Board. We settle annual DSU awards and mandatory deferral DSUs in shares of our common stock. We pay the value of treasury units, dollar units and elective deferral DSUs in cash. Non-employee directors may elect to receive the cash payment in a lump sum or in not more than ten annual installments.

During 2016, we also awarded each continuing non-employee director RSUs as of the date of the annual meeting of stockholders with an initial value of $130,000 based on the price of our common stock on that date. These awards were made under the Stock Plan for Non-Employee Directors. The RSUs vested immediately and are subject to mandatory deferral until May 3, 2019, or, if later, the director’s retirement or other termination of service from the Board. We will settle the RSUs in shares of our common stock.

We provide non-employee directors with travel accident insurance and reimburse reasonable expenses they incur for transportation, meals and lodging when on Zimmer Biomet business. We also reimburse non-employee directors for reasonable out-of-pocket expenses, including tuition costs incurred in attending director education programs.

AUDIT COMMITTEE MATTERS

AUDIT COMMITTEE MATTERS

AUDIT COMMITTEE MATTERS

The Audit Committee is responsible for monitoring the integrity of our financial statements, the qualifications, performance and independence of the independent registered public accounting firm, the performance of our internal audit function and compliance with certain legal and regulatory requirements. The committee is directly responsible for the appointment, retention, compensation and oversight of our independent registered public accounting firm.

Management is responsible for the financial reporting process, including the system of internal control, for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States and for management’s report on internal control over financial reporting.

The independent registered public accounting firm is responsible for auditing the consolidated financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States as well as rendering an opinion on the company’s internal control over financial reporting.

The committee’s responsibility is to oversee and review the financial reporting process and to review and discuss management’s report on internal control over financial reporting. Committee members are not, however, professionally engaged in the practice of accounting or auditing and do not provide any expert or other special assurance as to such financial statements concerning compliance with laws, regulations or accounting principles generally accepted in the United States or as to the independence of the independent registered public accounting firm. The committee relies, without independent verification, on the information provided to it and on the representations made by management and the independent registered public accounting firm.

See also “CORPORATE GOVERNANCE – Committees of the Board – Audit Committee” on page 23 for additional information about the Audit Committee’s functions and composition.

The committee held 12 meetings during 2016. The meetings were designed, among other things, to facilitate and encourage communication among the committee, management, our internal auditor and PwC. At these meetings, the committee:

AUDIT COMMITTEE MATTERS

The Audit Committee has adopted a policy for pre-approval of audit and permitted non-audit services by our independent registered public accounting firm. The Audit Committee will consider annually and, if appropriate, pre-approve the provision of audit and permitted non-audit services. The Audit Committee will also consider on a case-by-case basis and, if appropriate, pre-approve specific services that are not otherwise pre-approved. Any proposed engagement that does not fit within the definition of a pre-approved service may be presented to the Audit Committee for consideration at its next regular meeting or, if earlier consideration is required, to the Chair of the Audit Committee between regular meetings. The Audit Committee Chair has the delegated authority to pre-approve such services up to a specified fee amount. These pre-approval decisions are reported to the full Audit Committee at its next scheduled meeting.

The following table shows the fees that we paid or accrued for audit and other services provided by PwC for the years 2016 and 2015. All of the services described in the following fee table were approved in conformity with the Audit Committee’s pre-approval process described above.

AUDIT COMMITTEE MATTERS

The Audit Committee has reviewed and discussed with management and PwC the audited financial statements for the year ended December 31, 2016, and PwC’s evaluation of the company’s internal control over financial reporting. The committee has discussed with PwC the matters that are required to be discussed by applicable PCAOB standards. PwC has provided the committee the written disclosures and the letter required by applicable requirements of the PCAOB regarding PwC’s communications with the committee concerning independence, and the committee has discussed with PwC that firm’s independence. The committee has concluded that PwC’s provision of audit and non-audit services to the company and its affiliates is compatible with PwC’s independence.

Based on the reviews and discussions described above, and subject to the limitations on the committee’s role and responsibilities as described in this proxy statement and in the Audit Committee’s charter, the Audit Committee recommended to the Board of Directors, and the Board approved, that the audited consolidated financial statements for the year ended December 31, 2016 be included in our Annual Report on Form 10-K for filing with the SEC.

Audit Committee

Robert A. Hagemann, Chair

Christopher B. Begley

Gail K. Boudreaux

Larry C. Glasscock

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

The Board of Directors is committed to excellence in corporate governance and recognizes the interest our stockholders have expressed with respect to our executive compensation program. As a part of this commitment, and in accordance with Section 14A of the Exchange Act, our stockholders are being asked to approve, on a non-binding, advisory basis, the compensation of our named executive officers (“NEOs”) as reported in this proxy statement. This proposal, commonly known as a “Say on Pay” proposal, gives stockholders the opportunity to endorse or not endorse our executive compensation program for our NEOs for 2016.   A detailed description of our executive compensation program is available in the Compensation Discussion and Analysis section of this proxy statement (“CD&A”). Our Board and Compensation and Management Development Committee believe that our executive compensation program is tied to performance, aligns with stockholder interests and merits stockholder support. Accordingly, the Board recommends that stockholders vote in favor of the following resolution:   “RESOLVED, that the stockholders of Zimmer Biomet Holdings, Inc. approve, on an advisory basis, the compensation of the company’s named executive officers as disclosed in this proxy statement pursuant to the SEC’s executive compensation disclosure rules, including the CD&A, the compensation tables and narrative disclosures.”   Although this vote is non-binding, the Board and the Compensation and Management Development Committee value the views of our stockholders and will review the voting results. If there are significant negative votes, we will take steps to understand those concerns that influenced the vote, and consider them in making future decisions about executive compensation. We currently conduct annual advisory votes on executive compensation, and we expect to conduct the next advisory vote at our 2018 annual meeting of stockholders.   Our Board recommends a vote FOR the advisory resolution approving executive compensation.

In accordance with Section 14A of the Exchange Act, our stockholders are being asked to vote, on a non-binding, advisory basis, on how frequently they would like to cast future Say on Pay votes. By voting on this proposal, commonly known as a “Say on Frequency” proposal, our stockholders may indicate whether they would prefer that we conduct future advisory votes on NEO compensation once every one, two, or three years. Our prior Say on Frequency vote occurred in 2011. At that year’s meeting, stockholders agreed with the Board’s recommendation that advisory votes on executive compensation should occur every year. Although the Say on Frequency vote is non-binding, the Board and the Compensation and Management Development Committee value the views of our stockholders and will take into account the results of this year’s Say on Frequency vote in determining the frequency of future Say on Pay votes.   After careful consideration of the frequency alternatives, the Board believes that continuing to conduct an advisory vote on executive compensation on an annual basis is currently appropriate for Zimmer Biomet and our stockholders. The Board believes that an annual vote is consistent with our company’s efforts to engage in an ongoing dialogue with our stockholders on executive compensation and corporate governance matters.   Our Board recommends a vote for the option of 1 YEAR on the Say on Frequency proposal.

EXECUTIVE COMPENSATION

This CD&A describes our executive compensation program for 2016. Our program is designed to achieve the following fundamental objectives:

To accomplish these objectives, the Compensation and Management Development Committee of our Board annually reviews and approves our executive compensation program components and target compensation levels, as well as specific performance metrics and targets, payout ranges and actual payouts.

This CD&A describes the compensation of the following NEOs for 2016.

The year 2016 marked our first full year of operating results as Zimmer Biomet, during which we made progress toward realizing the powerful commercial, operational and financial synergies that formed the basis of our landmark merger in 2015. Business and financial highlights from 2016 include the following:

EXECUTIVE COMPENSATION

Based on the business and financial performance highlighted above, as well as other factors discussed in this CD&A, the Compensation and Management Development Committee made the following decisions with respect to CEO compensation for 2016:

Each year, the Compensation and Management Development Committee takes into account the results of the Say on Pay vote cast by our stockholders. At our 2016 annual meeting, stockholders showed solid support for our executive compensation program, with approximately 81% of votes cast approving our advisory Say on Pay resolution. This show of support, although significant, represented a decrease from recent years. In each of 2015, 2014 and 2013, more than 95% of the stockholders who voted on our Say on Pay proposal voted in favor of the proposal.

Since our 2016 annual meeting, we have actively engaged with many of our largest stockholders as part of our normal investor relations activities. At the committee’s request, our executive compensation program was one of the topics discussed during these interactions. The stockholders that we spoke with were supportive of our focus on performance-based compensation and the metrics that we use. They were also supportive of changes that we have made to our executive compensation program over the last several years, some of which are described below.

EXECUTIVE COMPENSATION

The committee believes that the decreased level of support in 2016 was largely the result of a negative say-on-pay voting recommendation issued by a proxy advisory firm, which we believe was driven by concerns regarding certain one-time awards granted in connection with the Biomet merger in June 2015. In connection with this transformative business combination, the Board appointed a new senior management team to lead Zimmer Biomet. Five of our ten current executive officers previously held senior management positions with Biomet. While continuing the key elements of the legacy Zimmer executive compensation program post-merger, the committee also approved certain one-time awards in 2015 in connection with the merger. The one-time awards were designed to provide equity-based incentives for legacy Biomet executives to accept leadership positions with the combined company and to align our new senior leadership team, as well as to promote the integration of Zimmer and Biomet and the achievement of related net operating synergies, as a successful integration is critical to our long-term value creation strategy.

The committee views the Biomet merger as a landmark combination and the associated one-time awards as uncommon for our company and not indicative of our ongoing compensation practices. For instance, during 2016, as described above, Zimmer Biomet completed numerous acquisitions, but the committee did not grant executives any special one-time awards in connection therewith. In the future, if an opportunity for a transformative business combination similar to the Biomet merger were to arise, the committee will be mindful of possible concerns regarding compensation arrangements as it evaluates what it is in the best interests of our stockholders.

In light of the significant stockholder support of our 2016 Say on Pay proposal and positive feedback from many of our largest stockholders, the committee made no material changes to our executive compensation program for 2017.

EXECUTIVE COMPENSATION

The committee has designed our executive compensation program and practices to align executives’ financial interests with those of our stockholders. Following is a description of key program features and practices that illustrate this alignment:

EXECUTIVE COMPENSATION

The following table describes the elements of target direct compensation for 2016. Our executive compensation program uses a mix of fixed and variable compensation elements and provides alignment with both short- and long-term business goals through annual and long-term incentive opportunities. We also offer retirement plans and welfare benefits that are generally available to all employees, and we provide a very limited range of perquisites or other benefits to our executive officers. The committee seeks to provide a total pay opportunity that is competitive with our closest peer group and industry competitors, but which also places a greater emphasis on at-risk equity-based compensation.

EXECUTIVE COMPENSATION

Target compensation for individual executives may vary from the percentiles noted above based on a variety of factors, such as experience and time in the position, the nature of the executive’s responsibilities, criticality of the role and difficulty of replacement, internal equity, retention concerns, individual performance and expected future contributions, readiness for promotion to a higher level, and, in the case of externally recruited executives, compensation earned at a prior employer.

Our NEOs’ total direct compensation is heavily weighted toward variable compensation elements, meaning actual amounts earned will differ from targeted amounts as a result of company and individual performance. We emphasize performance-based compensation that appropriately rewards executives for delivering results that meet or exceed multiple pre-established goals over one- and three-year periods, with metrics and targets selected because they are directly linked to our strategic goals. In addition, our long-term incentive program rewards both absolute stock price growth and relative TSR.

EXECUTIVE COMPENSATION

With respect to 2016, almost 90% of our CEO’s total direct compensation was variable and tied to our annual and long-term performance, including stock price performance. The committee assesses each NEO’s target total direct compensation opportunity annually to facilitate alignment with the objectives of our compensation program and market practice.

To assess whether our compensation was consistent with the target levels described above, in December 2016 the committee reviewed an analysis of our CEO’s target 2016 compensation conducted by Willis Towers Watson. The analysis, which excluded the three-year Zimmer Biomet cash integration incentive opportunity, included the following:

This information was then compared to competitive pay level compensation information collected for our peer group discussed below. The table below summarizes the market positioning of target compensation for our CEO compared to the data available for the peer group.

EXECUTIVE COMPENSATION

In addition to the market review of 2016 compensation discussed above, Willis Towers Watson assessed, at the committee’s request, the pay-for-performance alignment of our CEO’s compensation over the three-year period ended December 31, 2015. This assessment was intended to evaluate the degree to which the realizable pay of our CEO is aligned with corporate performance. Specifically, Willis Towers Watson examined the extent to which the value realized (or potentially realizable in future years) by our CEO under our executive compensation program was aligned with our total shareholder return performance over the three-year period, relative to the companies in our peer group discussed below. With respect to Zimmer Biomet and each peer company, Willis Towers Watson reviewed the following:

The analysis for the 2013-2015 period revealed that, relative to our peer group, our CEO’s realizable pay was strongly aligned with our TSR performance. Specifically, our CEO’s pay was at the 19^th percentile of the peer group, while our TSR performance was at the 26^th percentile.

EXECUTIVE COMPENSATION

Annual base salary increases for our global employee population, including NEOs, are generally effective in April of each year. In setting NEOs’ base salaries for 2016, the committee considered our 2016 employee merit increase guidelines, market data based on peer group benchmarking and internal equity. After considering these factors, as detailed below, the committee approved a base salary increase of (1) 3.0% for Messrs. Dvorak, Florin and Phipps, consistent with the merit increase guidelines for employees based in the U.S.; (2) 3.0% for Dr. Mazur-Hofsaess, slightly above the merit increase guidelines for employees based in Switzerland; and (3) 4.5% for Mr. Yi, consistent with the merit increase guidelines for employees based in Singapore.

Based on company and individual performance as described more fully below, the committee determined that our CEO would receive a payout of 83.4% of his target opportunity under our annual cash incentive plan framework for 2016, while the other NEOs would receive payouts from 83.4% to 86.8% of their respective target opportunities, as follows:

In February 2016, the committee identified participants and established an upper limit on annual cash incentive compensation that could be paid to NEOs for 2016 under the stockholder-approved Zimmer Biomet Holdings, Inc. Executive Performance Incentive Plan (the “Section 162(m) Plan” or the “EPIP”) based on net earnings for 2016. The

EXECUTIVE COMPENSATION

Section 162(m) Plan is designed to ensure that annual cash incentive compensation payable to NEOs qualifies as “performance-based compensation” under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). Under the Section 162(m) Plan, if we reported net earnings for 2016, a cash incentive of 5% of our 2016 net earnings would be payable to each NEO, subject to a maximum of 400% of such NEO’s base salary as of January 1, 2016, and subject to the committee’s ability to exercise negative discretion to reduce the amount of the actual payout to each NEO. The committee recognized that the potential payouts under the Section 162(m) Plan would be significantly larger than normal payout opportunities for annual cash incentives, and therefore the committee stated its expectation that it would exercise negative discretion as appropriate to reduce each NEO’s payout under the Section 162(m) Plan based on the committee’s consideration of performance relative to the metrics and terms set forth in an annual cash incentive plan framework that it established, as described below.

In February 2017, the committee certified 2016 net earnings achievement and the maximum annual cash incentive payable to each NEO under the Section 162(m) Plan. It then exercised negative discretion to adjust the actual payments to a level it deemed appropriate for each NEO according to the annual cash incentive plan framework and the committee’s consideration of the NEO’s individual performance, as described below.