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

Filed by the Registrant    ☒

Filed by a Party other than the Registrant    ☐

Check the appropriate box:

TEVA PHARMACEUTICAL INDUSTRIES LIMITED

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

                                Notice of 2019 Annual Meeting of Shareholders

By Order of the Board of Directors,

Dov Bergwerk

Senior Vice President,

Company Secretary

April 16, 2019

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on June 11, 2019

The accompanying Proxy Statement and our Annual Report are available at www.tevapharm.com/2019proxymaterials. We expect the proxy materials to be mailed and/or made available on or before April 18, 2019.

Table of Contents

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    i

Questions and Answers About the Annual Meeting

The Meeting

When and where will the Annual Meeting be held?

The 2019 Annual Meeting of Shareholders (the “Annual Meeting”) of Teva Pharmaceutical Industries Limited (“we,” “us,” “our” or “Teva”) will be held at Teva’s executive offices at 5 Basel Street, Petach Tikva, 4951033 Israel, on Tuesday, June 11, 2019, at 9:00 a.m., local time.

Who may attend the Annual Meeting?

Attendance at the Annual Meeting, including any adjournments or postponements thereof, will be limited to holders of record as of the close of business on May 2, 2019 (the “Record Date”) who hold ordinary shares or American Depositary Shares (“ADSs”), directly in their own name, and beneficial owners who hold ordinary shares or ADSs through a broker, bank or other nominee rather than directly in their own name, and each of their legal proxy holders or their authorized persons. To gain admission to the Annual Meeting, one must have a form of government-issued photograph identification and proof of ownership as of the Record Date. Legal proxy holders and authorized persons will also need to submit a document of appointment, in accordance with Teva’s Articles of Association.

What is a quorum for the Annual Meeting?

A minimum of two holders of ordinary shares (or ADSs representing such ordinary shares) who are present at the Annual Meeting, in person or by proxy or represented by their authorized persons, and who hold in the aggregate twenty-five percent or more of such ordinary shares (or ADSs representing such ordinary shares), will constitute a legal quorum. At the close of business on March 31, 2019, 1,091,598,003 ordinary shares were outstanding and entitled to vote. Ordinary shares held in treasury will not be included in the calculation to determine if a quorum is present. Abstentions and broker non-votes will be considered present and entitled to vote for the purpose of determining the presence of a quorum. Should no legal quorum be present one half hour after the scheduled time, the Annual Meeting will be adjourned to one week from that day, at the same time and place. Should such legal quorum not be present one half hour after the time set for the Annual Meeting, as adjourned, any two holders of ordinary shares present, in person or by proxy, who jointly hold twenty percent or more of such ordinary shares (or ADSs representing ordinary shares) will then constitute a legal quorum.

Who may vote at the Annual Meeting?

Ordinary Shares

Holders of record of ordinary shares as of the Record Date may vote at the Annual Meeting.

Beneficial owners who hold ordinary shares through a broker, bank or other nominee rather than directly in their own name have the right to direct their broker, bank or other nominee how to vote using the instructions provided by the broker, bank or nominee, but may not vote their shares in person at the Annual Meeting unless they obtain a legal proxy giving them the right to vote their shares at the Annual Meeting from the broker, bank or other nominee holding their shares in street name.

ADSs

As an ADS holder, you will not be entitled to vote in person at the Annual Meeting. To the extent you provide the Depositary (as defined below) or your broker, bank or other nominee, as applicable, with voting instructions, the Depositary has advised us that it will vote the ordinary shares underlying your ADSs in accordance with your instructions.

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    1

Questions and Answers About the Annual Meeting

You also may exercise the right to vote the ordinary shares underlying your ADSs by surrendering your ADSs to Citibank, N.A., as depositary for the ADSs (the “Depositary”) for cancellation and withdrawal of the corresponding ordinary shares pursuant to the terms described in the Second Amended and Restated Deposit Agreement (the “Deposit Agreement”), dated as of December 4, 2018, by and among the Company, the Depositary, and the holders and beneficial owners of ADSs. In order to be able to attend, and vote at the Meeting, you must complete the ADS cancellation process and become a holder of the corresponding ordinary shares by the Record Date. However, it is possible that you may not have sufficient time to withdraw your ordinary shares and vote them at the upcoming Annual Meeting as a holder of record of ordinary shares as of the Record Date. Holders of ADSs may incur additional costs associated with the ADS cancellation process.

Voting

How can I vote my ordinary shares or ADSs?

Your vote is very important and we encourage you to vote your shares and submit your proxy regardless of whether or not you plan to attend the Annual Meeting in person. Each issued and outstanding ordinary share (or ADS representing an ordinary share) shall entitle its holder to one vote on each matter properly submitted at the Annual Meeting. Ordinary shares held in treasury by Teva do not entitle Teva to vote in respect thereof at the Annual Meeting.

Ordinary Shares

Record holders of ordinary shares: If you are the record holder of ordinary shares as of the Record Date, you have the right to (i) vote in person at the Annual Meeting, (ii) vote by submitting your proxy card by mail, (iii) grant your voting proxy to an authorized person, or (iv) if you are a Non-Registered Holder (as defined below), vote by submitting your proxy card and proof of ownership by mail or by submitting your voting instructions through the electronic voting system of the Israeli Securities Authority.

If you choose to submit your proxy card by mail, mark the enclosed proxy card in accordance with the instructions, date, sign and return it to Teva. To be taken into account, your proxy card must be received by Teva by 9:00 a.m., Israel time, on June 7, 2019, unless determined otherwise by the chairman of the Annual Meeting.

If you appoint another person to act as your authorized proxy, such proxy must be written and made known to Teva by 9:00 a.m., Israel time, on June 7, 2019, unless determined otherwise by the chairman of the Annual Meeting.

Non-registered holders of ordinary shares: If you held ordinary shares as of the Record Date pursuant to Section 177(1) of the Israeli Companies Law, 5759-1999, as amended (the “Israeli Companies Law”), whose shares are held through a nominee company (a “Non-Registered Holder”), you may submit your vote (i) by submitting your proxy card by mail, together with a proof of share ownership as of the Record Date, by 9:00 a.m., Israel time, on June 7, 2019, unless determined otherwise by the chairman of the Annual Meeting; or (ii) through the electronic voting system of the Israeli Securities Authority. In order to vote through such electronic voting system, you will need to identify yourself with a personal access code obtained from a member of the Tel Aviv Stock Exchange (“TASE”), which is usually the bank where you held your ordinary shares as of the Record Date. To be taken into account, your vote must be submitted at least six hours prior to the Annual Meeting (i.e., before 3:00 a.m., Israel time, on June 11, 2019). You can access the voting system at https//:votes.isa.gov.il, or through the hyperlink included in Teva’s filing with respect to this Annual Meeting as publicized on MAGNA, the Israeli Securities Authority’s electronic filing system, at www.magna.isa.gov.il, or on the TASE’s website, at www.maya.tase.co.il. A Non-Registered Holder may contact the TASE member holding the shares for instructions on how to vote the ordinary shares and should carefully follow the voting procedures provided.

2     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Questions and Answers About the Annual Meeting

ADSs

The Deposit Agreement sets out the rights of ADS holders as well as the rights and obligations of the Depositary. Each ADS represents the right to receive one ordinary share deposited with Citibank Tel Aviv, as custodian for the Depositary under the Deposit Agreement or any successor custodian.

Record holders of ADSs: If you are a record holder of ADSs as of the Record Date, you will receive instructions from the Depositary for the ordinary shares underlying your ADSs to be voted. If you held ADSs directly as of the Record Date, you have the right to instruct the Depositary how to vote. So long as the Depositary receives your voting instructions by 10:00 a.m., Eastern time, on June 7, 2019, it will, to the extent practicable and subject to Israeli law and the terms of the Deposit Agreement, vote the underlying ordinary shares as you instruct.

Beneficial owners of ADSs that are registered in the name of a broker, bank or other agent: If you beneficially own ADSs as of the Record Date through a broker, bank or other nominee, such intermediary will provide you instructions on how you may vote the ordinary shares underlying your ADSs. Please check with your broker, bank or other nominee, as applicable, and carefully follow the voting procedures provided to you.

How will my ordinary shares or ADSs be voted if I do not vote?

Ordinary Shares

If you hold ordinary shares and do not (i) vote in person at the Annual Meeting, (ii) vote by submitting your proxy card by mail, (iii) grant your voting proxy to an authorized person or (iv) as a Non-Registered Holder, vote by submitting your proxy card and proof of ownership by mail or through the electronic voting system of the Israeli Securities Authority, your ordinary shares will not be counted as votes cast and will have no effect on the outcome of the vote with respect to any matter.

ADSs

If you are a record holder of ADSs and do not instruct the Depositary how to vote the ordinary shares underlying your ADSs, the ordinary shares underlying your ADSs will not be counted as votes cast and will have no effect on the outcome of the vote with respect to any matter.

If you are a beneficial owner whose ADSs are held of record by a broker, your broker has “discretionary voting” authority under the New York Stock Exchange (“NYSE”) rules to vote the shares represented by your ADSs on “routine” matters, such as the ratification of appointment of Kesselman & Kesselman, a member of PricewaterhouseCoopers International Ltd., as our independent registered public accounting firm, even if the broker does not receive voting instructions from you. However, your broker does not have discretionary authority absent specific instructions from you to vote on the following “non-routine” matters: the election of directors, the advisory vote on the compensation of our named executive officers, the approval of the amended Compensation Policy or the approval of director compensation, in which case a broker non-vote will occur and the shares represented by your ADSs will not be voted on these matters.

What are the voting requirements to elect the directors and to approve each of the proposals discussed in this Proxy Statement?

The affirmative vote of the holders of a majority of Teva ordinary shares participating and voting at the Annual Meeting, in person or by proxy or through their representatives, is required to adopt each of the proposals. Cumulative voting is not permitted.

Pursuant to the Israeli Companies Law, Proposal 3 further requires that either (i) such majority includes at least a majority of the holders of ordinary shares who are not controlling shareholders and who do not have a personal benefit or other interest in the matter who are present and voting (abstentions are disregarded) or (ii) the holders of ordinary shares who are not controlling shareholders and who do not have a personal

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    3

Questions and Answers About the Annual Meeting

benefit or other interest in the matter who were present and voted against the approval of such proposals hold, in the aggregate, two percent or less of the voting power in Teva (the “Disinterested Majority”). Accordingly, each shareholder voting on Proposal 3 is required to inform Teva prior to voting whether or not the shareholder is a controlling shareholder of Teva and whether or not the shareholder has a personal benefit or other interest in the proposal. Otherwise, pursuant to the Israeli Companies Law, the shareholder’s vote on such proposal cannot be counted in determining whether the above Disinterested Majority approval requirements are satisfied.

Pursuant to the Israeli Companies Law, such personal benefit or other interest with respect to Proposal 3 is a personal benefit, gain or other interest derived by a shareholder (or a relative or related entity described below) from approving Teva’s amended Compensation Policy with respect to the compensation of Teva’s directors and executive officers. Any benefit or interest arising solely from holding Teva shares is not considered such a personal benefit or other interest under the Israeli Companies Law. Such personal benefit or other interest includes any personal benefit or other interest of (i) a shareholder’s spouse, siblings, parents, grandparents, descendants, spouse’s descendants, siblings or parents or the spouse of any of such persons, (ii) any entity in which a shareholder or one of its aforementioned relatives serves as a director or chief executive officer, owns 5% or more of such entity’s outstanding shares or voting rights or has the right to appoint one or more directors or the chief executive officer and (iii) anyone that has a personal benefit or other interest voting by proxy on behalf of another person (whether or not such other person has a personal benefit or other interest) or anyone that has a personal benefit or other interest voting by granting a proxy to another person (whether or not such other person has a personal benefit or other interest), in each case with respect to Proposal 3.

Under the Israeli Companies Law, a “controlling shareholder” is a shareholder who has the ability to direct the activities of a company (other than if such ability originates solely from holding a position in such company). A shareholder holding 50% or more of the voting rights of a company is presumed to be a controlling shareholder. Teva is not currently aware of any “controlling shareholder,” as defined under the Israeli Companies Law. In addition, it believes that the vast majority of its shareholders should not have a personal benefit or other interest in Proposal 3.

Under the terms of the Deposit Agreement, the Depositary shall endeavor (insofar as is practicable and in accordance with our Articles of Association) to vote or cause to be voted the number of ordinary shares represented by ADSs in accordance with the instructions provided by the holders of ADSs to the Depositary by the deadline set. If instructions are not received by the Depositary by the deadline, the ordinary shares represented by such uninstructed ADSs shall not be voted at the Annual Meeting. If instructions are signed and timely returned to the Depositary, but no specific voting instruction is marked for a proposal, the holder shall be deemed to have directed the Depositary to give voting instructions “FOR” the unmarked proposal; provided that if the personal interest section is not completed, the holder’s vote for Proposal 3 will not be counted for purpose of the Disinterested Majority.

Can I change my vote?

Ordinary Shares

If you hold ordinary shares of record and submit your proxy card to vote by mail or appoint a proxy in advance of the Annual Meeting, you may change your vote by delivering a valid later-dated proxy within the time limitations set forth above, or voting in person at the Annual Meeting.

If you are a Non-Registered Holder of ordinary shares and vote through the electronic voting system of the Israeli Securities Authority, you may revoke your vote through such voting system at least six hours prior to the Annual Meeting (i.e., before 3:00 a.m., Israel time, on June 11, 2019), or by voting in person at the Annual Meeting. If you are a Non-Registered Holder of ordinary shares and submit your proxy card to vote by mail or appoint a proxy in advance of the Annual Meeting, you may change your vote by delivering a valid later-dated proxy within the time limitations set forth above, or voting in person at the Annual Meeting.

4     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Questions and Answers About the Annual Meeting

Attendance at the Annual Meeting will not cause your previous vote to be revoked unless you specifically so request.

ADSs

If you are the record owner of ADSs, you must follow the instructions provided by the Depositary in order to change your vote. If you hold your ADSs through a broker, bank or other nominee, you must follow the instructions provided by your broker, bank or other nominee, in order to change your vote. The last instructions you submit prior to the deadline indicated by the Depositary or the broker, bank or other nominee, as applicable, will be used to instruct the Depositary how to vote the ordinary shares underlying your ADSs. Attendance at the Annual Meeting will not cause your previous vote to be revoked.

Proxy Materials

Why did I receive a “Notice of Internet Availability of Proxy Materials” but no proxy materials?

We distribute our Notice of Annual Meeting of Shareholders, Proxy Statement and Annual Report (collectively, the “proxy materials”) to certain shareholders via the Internet under the “Notice and Access” approach permitted by rules of the U.S. Securities and Exchange Commission (the “SEC”). This approach conserves natural resources and reduces our distribution costs, while providing a timely and convenient method of accessing the materials and voting. On or by April 18, 2019, we expect to have mailed a “Notice of Internet Availability of Proxy Materials” to participating shareholders containing instructions on how to access the proxy materials on the Internet.

Can I access the proxy materials on the Internet?

The proxy materials are available on our website at www.tevapharm.com/2019proxymaterials. Information on our website is not part of the proxy materials and is not incorporated into the proxy statement by reference. Record owners of our ADSs may also access the proxy materials at www.investorvote.com/teva by following the instructions provided by the Depositary. Beneficial owners of our ADSs may also access the proxy materials at www.proxyvote.com by following the instructions provided by your broker, bank or other nominee. Instead of receiving future proxy statements and accompanying materials by mail, most shareholders and ADS holders can elect to receive an e-mail that will provide electronic links to them. Opting to receive your proxy materials online will conserve natural resources and will save us the cost of producing documents and mailing them to you. The proxy materials are also available through Teva’s public filing on MAGNA (the Israeli Securities Authority’s electronic filing system) at www.magna.isa.gov.il, on the TASE’s website at www.maya.tase.co.il, or on the SEC’s website at www.sec.gov.

How do I request paper copies of the proxy materials at no charge?

You may contact Investor Relations in the United States at +1 (215) 591-8912 or in Israel at +972 (3) 926-7516, by sending an email to TevaIR@tevapharm.com, or by making a request on our website at www.tevapharm.com/InfoRequest, by May 24, 2019.

If you are a record owner of ADSs, you may request proxy materials at www.investorvote.com/teva, by calling toll-free within the U.S. at (866) 641-4276 or by sending an email to investorvote@computershare.com, by May 24, 2019 and following the instructions provided by the Depositary.

If you are a beneficial owner of ADSs, you may request proxy materials by following the instructions at www.proxyvote.com or by calling toll free within the U.S. at (800) 579-1639 or by sending an email to sendmaterial@proxyvote.com by May 24, 2019 and following the instructions provided by your broker, bank or other nominee.

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    5

Questions and Answers About the Annual Meeting

Other Questions

Could other matters be decided at the Annual Meeting?

The only items of business that our Board of Directors intends to present at the Annual Meeting are set forth in this Proxy Statement. As of the date of this Proxy Statement, no shareholder has advised us of the intent to present any other matter, and we are not aware of any other matter to be presented at the Annual Meeting. However, according and subject to the Israeli Companies Law and our Articles of Association, certain shareholders are entitled to propose items to the agenda. For more information, please see “Shareholder Proposals for the 2019 Annual Meeting and the 2020 Annual Meeting” below.

Who will pay for the cost of this proxy solicitation?

Teva will bear the entire cost of solicitation of proxies, including preparation, assembly, printing, and mailing of this Proxy Statement, the voting instruction card and any additional information furnished to shareholders. Teva may reimburse brokerage firms and other persons representing beneficial owners of ordinary shares or ADSs for reasonable expenses incurred by them in forwarding proxy soliciting materials to such beneficial owners. We retained MacKenzie Partners, Inc. to assist with the solicitation of proxies for a fee in the amount of $20,000, plus reimbursable expenses. In addition to solicitation by mail, certain of our directors, officers and regular employees, without additional remuneration, may solicit proxies by telephone, facsimile or personal contact.

Who can I contact if I require further assistance?

If you need assistance in submitting your proxy or have questions regarding the Annual Meeting, please contact our Investor Relations department by email at TevaIR@tevapharm.com or by mail at Teva Pharmaceutical Industries Ltd., 5 Basel Street, Petach Tikva, 4951033 Israel, attention: Investor Relations or by telephone at +1 (215) 591-8912. You may also contact our proxy solicitor, MacKenzie Partners, Inc., by email at proxy@mackenziepartners.com or by calling toll free within the U.S. at +1 (800) 322-2885 or outside the U.S. at + 1 (212) 929-5500.

6     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Proposal 1: Election of Directors

In recent years, we strengthened our Board of Directors with the addition of new highly qualified and talented directors, including several directors with global pharmaceutical experience and other qualifications, adding expertise as well as diversity to our Board of Directors. Through these efforts, we have reduced the average tenure of our directors from 5.1 years of service prior to the 2017 annual meeting of shareholders to 3.5 years. We have reduced the average age of our directors from 67 prior to the 2017 annual meeting of shareholders to 62. Dr. Barer, our Chairman of the Board, is an independent director under NYSE regulations. Kåre Schultz, our President and Chief Executive Officer (the “President and CEO”) serves on the Board, which facilitates collaboration between the Board of Directors and management. Corporate governance remains a high priority and we continue to evaluate the size and composition of the Board to ensure that it maintains dynamic, exceptionally qualified leadership.

Following the recommendation of our Corporate Governance and Nominating Committee, the Board of Directors recommends that shareholders approve the appointment of Amir Elstein, Roberto A. Mignone and Dr. Perry D. Nisen as directors to serve until our 2022 annual meeting of shareholders. All nominees are currently members of the Board of Directors and all nominees qualify as independent directors under NYSE regulations.

In accordance with the Israeli Companies law, all nominees for election as directors at the Annual Meeting have declared in writing that they possess the requisite skills and expertise, as well as sufficient time, to perform their duties as directors.

Directors

The following table sets forth information regarding the directors and director nominees of Teva as of April 16, 2019:

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    7

Proposal 1: Election of Directors

Persons Being Considered for Election at this Annual Meeting

8     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Proposal 1: Election of Directors

As required by Israeli law, all of the foregoing director candidates have declared in writing that they possess the requisite skills and expertise, as well as sufficient time, to perform their duties as a director.

Continuing Directors

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    9

Proposal 1: Election of Directors

10     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Proposal 1: Election of Directors

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    11

Proposal 1: Election of Directors

12     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Proposal 1: Election of Directors

Family Relationships

There are no family relationships among any of our executive officers or directors.

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    13

Corporate Governance and Director Compensation

14     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Corporate Governance and Director Compensation

Board Practices

Under our Articles of Association, the Board of Directors must consist of three to 18 directors (including our President and CEO and two statutory independent directors, if required). Our Board of Directors currently consists of 11 persons, including our President and CEO. Subject to election of all of the directors included in Proposal 1, our Board of Directors will consist of 11 persons, including our President and CEO. The Board of Directors has determined that all of the directors that currently serve and that will serve on the Board of Directors following the Annual Meeting are independent, except for Kåre Schultz, our President and CEO.

We currently maintain a policy to have at least three directors qualify as financial and accounting experts under Israeli law. Accordingly, the Board of Directors has determined that Murray A. Goldberg, Gerald M. Lieberman and Roberto A. Mignone are financial and accounting experts under such criteria.

Our directors are generally entitled to review and retain copies of our documentation and examine our assets, as required to perform their duties as directors and to receive assistance, in special cases, from outside experts at our expense.

Board Diversity

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    15

Corporate Governance and Director Compensation

The chart below summarizes the notable skills, qualifications and experience of each of our directors (in addition to requisite skills and expertise to perform their duties as directors) and highlights the balanced mix of skills, qualifications and experience of the Board as a whole. These are the same attributes that the Board considers as part of its ongoing director succession planning process. This high-level summary is not intended to be an exhaustive list of each director’s skills or contributions to the Board.

Director Terms and Education. Our directors are generally elected in three classes for terms of approximately three years. Due to the complexity of our businesses and our extensive global activities, we value the insight and familiarity with our operations that a director is able to develop over his or her service on the Board of Directors. Because we believe that extended service on our Board enhances a director’s ability to make significant contributions to Teva, we do not believe that arbitrary term limits on directors’ service are appropriate. At the same time, it is the policy of the Board that directors should not expect to be renominated automatically.

In recent years, we strengthened our Board of Directors with the addition of new highly qualified and talented directors, adding expertise as well as diversity to our Board of Directors. Through these efforts, we have reduced the average tenure of our directors from 5.1 years of service prior the 2017 annual meeting of shareholders to 3.5 years. We also reduced the average age of our directors from 67 prior to the 2017 annual meeting of shareholders to 62. Our Chairman of the Board is independent under NYSE regulations, and 10 out of 11 of our directors are independent under NYSE regulations. Our only non-independent director is our President and CEO, which facilitates collaboration between the Board of Directors and management. We continue to evaluate the size and composition of our Board of Directors to ensure it maintains dynamic, exceptionally qualified members.

16     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Corporate Governance and Director Compensation

We provide an orientation program and a continuing education process for our directors, which include business and industry briefings, provision of materials, sessions from leading experts and professionals, meetings with key management and visits to Teva facilities. We evaluate and improve our education and orientation programs on an ongoing basis to ensure that our directors have the knowledge and background needed for them to best perform their duties.

Board Meetings. The Board of Directors holds at least six meetings each year to review significant developments affecting Teva and to consider matters requiring approval of the Board, with additional meetings scheduled when important matters require Board of Directors action between scheduled meetings. A majority of the meetings convened, but not fewer than four, must be in Israel. Members of senior management regularly attend Board meetings to report on and discuss their areas of responsibility. Information regarding the number of Board committee meetings and attendance rates for 2018 is presented in the table on page 22.

Executive Sessions of the Board. Our directors meet in executive session (i.e., without the presence of management, including our President and CEO) generally in connection with each regularly scheduled Board meeting and additionally as needed. Executive sessions are chaired by Dr. Barer, the Chairman of the Board.

Annual Meetings. We do not have a formal policy requiring members of the Board to attend our annual meetings, although all directors are strongly encouraged to attend. Six of our directors attended the 2018 annual meeting of shareholders.

Board Leadership. The Board of Directors recognizes that one of its key responsibilities is to establish and evaluate an appropriate leadership structure for the Board of Directors so as to provide effective oversight of management. The Board of Directors has separate roles for the Chief Executive Officer and Chairman of the Board of Directors, with Dr. Sol Barer serving as independent Chairman and Mr. Kåre Schultz as President and CEO. Dr. Barer’s long career as a senior pharmaceutical executive and leadership roles in various biopharmaceutical companies, as well as his extensive scientific expertise and knowledge of the global pharmaceutical business, have made him an invaluable resource to both the Board of Directors and the Chief Executive Officer. The Board of Directors has determined that this leadership structure is appropriate for Teva at this time.

Board of Directors Role in Risk Oversight. Management is responsible for assessing and managing risk, subject to oversight by the Board of Directors. Our annual risk assessment process includes both a top-down review of strategic risks and a bottom-up review of operational risks, which are presented to the Board of Directors. The Board of Directors fulfills its oversight responsibility for risk assessment and management by reviewing risk management policies and the risk appetite of our operations and business strategy and by instructing its committees to assist and advise in their areas of expertise, as described below. Each committee provides regular updates to the full Board regarding its activities.

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    17

Corporate Governance and Director Compensation

Director Service Contracts. Except for equity awards that accelerate upon termination, we do not have any contracts with any of our non-employee directors that provide for benefits upon termination of services. Information regarding director compensation can be found under “Non-Employee Director Compensation” below.

Communications with the Board. Shareholders, employees and other interested parties can contact any director or committee of the Board of Directors by writing to them care of Teva Pharmaceutical Industries Ltd., 5 Basel Street, Petach Tikva, 4951033, Israel, Attn: Company Secretary or Internal Auditor. Comments or complaints relating to our accounting, internal controls or auditing matters may also be referred to members of the Audit Committee, as well as other appropriate Teva bodies. The Board of Directors has adopted a global “whistleblower” policy, which provides employees and others with an anonymous means of communicating with the Audit Committee.

Nominees for Directors. In accordance with the Israeli Companies Law, a nominee for service as a director must submit a declaration to us, prior to his or her election, specifying that he or she has the requisite qualifications to serve as a director and the ability to devote the appropriate time to performing his or her duties as such and that he or she is not restricted from serving as director under the Israeli Companies Law. All of our directors, including those nominated for appointment as directors at the Annual Meeting, have provided such declaration. A director who ceases to meet the statutory requirements to serve as a director must notify us to that effect immediately and his or her service as a director will terminate upon submission of such notice.

Our Board of Directors believes that it should be composed of directors with diverse, complementary backgrounds and that directors should, at a minimum, exhibit proven leadership capabilities and possess experience at a high level of responsibility within their chosen fields. When considering a candidate for director, our Corporate Governance and Nominating Committee considers whether the directors, both individually and collectively, can and do provide the experience, judgment, commitment, skills and expertise appropriate to lead Teva in the context of its industry. In addition, our Corporate Governance and Nominating Committee considers a nominee’s expected contribution to the diversity of skills, background, experiences and perspectives, as well as whether such nominee could provide added value to any of the committees of the Board of Directors, given the then existing composition of the Board of Directors as a whole. Our Corporate Governance and Nominating Committee also provides input and guidance regarding the independence of directors, for formal review and approval by our Board of Directors.

When seeking candidates for directorships, our Corporate Governance and Nominating Committee may solicit suggestions from incumbent directors, management, shareholders and others. Additionally, the Board of Directors has in the past used and may continue to use the services of third party search firms to assist in the identification and analysis of appropriate candidates. After conducting an initial evaluation of a prospective candidate, members of the Board of Directors will interview that candidate if they believe the candidate may be suitable. The Chairman of the Board of Directors may also ask the candidate to meet with certain members of executive management.

18     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Corporate Governance and Director Compensation

If our Corporate Governance and Nominating Committee believes a director should be re-approved or a candidate would be a valuable addition to the Board of Directors, it may recommend to the Board of Directors that candidate’s appointment or election, who, in turn, can submit the candidate for consideration by the shareholders.

The Israeli Companies Law provides a process by which one or more shareholders holding 1% or more of the voting rights of Teva may propose the nomination of a candidate to the Board of Directors. See “Shareholder Proposals for the 2019 Annual Meeting and the 2020 Annual Meeting” below.

Non-Employee Director Compensation

As required by the Israeli Companies Law, we have adopted a Compensation Policy for Executive Officers and Directors (the “Compensation Policy”), which is presented for shareholder approval at least once every three years and presented this year for the approval of shareholders under Proposal 3. Pursuant to the Israeli Companies Law and regulations promulgated thereunder, any arrangement between Teva and a director relating to his or her compensation as a director or other position with Teva must generally be consistent with Teva’s Compensation Policy and approved by the Compensation Committee, the Board and by a simple majority of Teva’s shareholders.

As approved at our 2015 and 2017 annual general meetings of shareholders, our non-employee director annual compensation program (applicable to all non-employee directors except for the Chairman of the Board) is comprised of:

At our 2017 annual general meeting of shareholders, our shareholders approved an annual fee of $567,000 for our Chairman of the Board. This fee is in addition to the annual equity-based award in the form of RSUs to which our Chairman is entitled with an approximate grant date fair value of $378,000 and a three years cliff vesting, as approved at our 2015 annual general meeting of shareholders. Our Chairman is also entitled to certain office and secretarial and other services and benefits. The Chairman of the Board is not entitled to additional annual cash fees for service on Board Committees.

In light of Teva’s recent challenges, our Chairman of the Board waived 100% of the annual cash fee and each of our other current directors waived 50% of the annual cash Board membership fee in respect of 2018.

Fees for Board and committee service are payable over the period of time during which the individual serves as a non-employee director. In the event that a non-employee director serves as a member of the Board during only part of the year, a pro-rated amount of the annual board membership fee and standing committee fees will be paid. Upon completion of a non-employee director’s service as a director, other than removal pursuant to a shareholder resolution due to a breach of fiduciary duties, any unvested awards granted to such director by virtue of such position and held by such director will immediately become vested.

In addition, Teva reimburses or covers its directors’ expenses (including travel expenses) incurred in connection with meetings of the Board and its committees or performing other services for Teva in their capacity as non-employee directors, in accordance with Israeli law and the Compensation Policy.

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    19

Corporate Governance and Director Compensation

Non-employee directors, including the Chairman of the Board, are also entitled to certain perquisites having an aggregate monetary value of no more than $10,000 per year per director. In 2018, no perquisites were provided to our non-employee directors. VAT, if applicable, is added to the above director compensation, in accordance with applicable law.

No additional compensation is received for attendance at a Board or committee meeting.

The Compensation Committee and the Board are currently recommending that shareholders approve revisions to the Compensation Policy, including with respect to directors’ compensation, as set forth in Proposal 3, and revised director compensation program as set forth in Proposal 4 and summarized below.

2018 Director Compensation

20     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Corporate Governance and Director Compensation

Mr. Schultz was not and will not be entitled to any compensation in his capacity as a member of the Board or any committee thereof.

We purchase directors’ and officers’ liability insurance for our directors and executive officers, as approved by our shareholders and consistent with the Compensation Policy. In addition, we release our directors from liability and indemnify them to the fullest extent permitted by law and our Articles of Association, and provide them with indemnification and release agreements for this purpose, substantially in the form approved by our shareholders at our 2012 annual meeting.

Any director elected to serve as a member of our Board and all directors currently serving on our Board will be compensated in the manner described in Proposal 4, subject to the approval thereof at the Annual Meeting, and will benefit from the insurance, indemnification and release discussed above.

Proposed Revisions to Non-Employee Director Compensation Program

During 2018, as part of its annual process and in response to shareholder feedback, the Compensation Committee conducted a review and competitive assessment of Teva’s non-employee director compensation program with the assistance of Semler Brossy Consulting Group LLC (“Semler Brossy”), its independent compensation consultant. Following such review, the Compensation Committee recommended to the Board, and the Board approved, a new director compensation program, aimed at aligning director compensation to the median of our peer group, which is being put forth for approval at the Annual Meeting under Proposal 4. Subject to the approval of shareholders at the Annual Meeting, the new director compensation program will become effective as of January 1, 2019 (except for equity-based compensation which will be effective as of the date of the Annual Meeting).

The main changes to the program relative to the prior program are summarized below:

For a comprehensive review of the new program, see Proposal 4.

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    21

Corporate Governance and Director Compensation

Committees of the Board

Our Articles of Association provide that the Board of Directors may delegate its powers to one or more committees as it deems appropriate to the extent such delegation is permitted under the Israeli Companies Law. The Board of Directors has appointed the standing committees listed below, as well as ad-hoc committees appointed from time to time for specific purposes determined by the Board.

We have adopted charters for all of our standing committees, formalizing the committees’ procedures and duties. These committee charters are available on our website at www.tevapharm.com.

Current Committee Composition and Board and Committee Attendance

In 2018, our Board of Directors met 10 times, with an average attendance rate of 97%. In 2018, each of our current directors attended at least 90% of the meetings of the Board and Board committees on which he or she served. In 2018, our Board of Directors and various Board committees met frequently to review and approve the important strategic activities throughout the year.

Audit Committee

The Israeli Companies Law mandates publicly held Israeli companies to appoint an audit committee. As a NYSE-listed company, Teva’s Audit Committee must be comprised solely of independent directors, as defined by SEC and NYSE regulations.

The responsibilities of our Audit Committee include, among others: (a) identifying flaws in the management of our business and making recommendations to the Board of Directors as to how to correct them and providing for arrangements regarding employee complaints with respect thereto; (b) making determinations and considering providing approvals concerning certain related party transactions and certain actions involving conflicts of interest; (c) reviewing the internal auditor’s performance and approving the internal audit work program and examining our internal control structure and processes; (d) examining the independent auditor’s scope of work and fees; and (e) providing for arrangements regarding employee complaints regarding questionable accounting or auditing matters and monitoring compliance with and investigating alleged violations and enforcing provisions of Teva’s Code of Conduct. Furthermore, the Audit Committee discusses the financial statements and the disclosure under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (the “MD&A”) and presents to the Board of Directors its recommendations with respect to the proposed financial statements and MD&A.

22     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Corporate Governance and Director Compensation

In accordance with the Sarbanes-Oxley Act and NYSE requirements, the Audit Committee is directly responsible for the appointment, compensation and oversight of the work of our independent auditors. In addition, the Audit Committee is responsible for assisting the Board of Directors in monitoring our financial statements, the effectiveness of our internal controls and our compliance with legal and regulatory requirements. The Audit Committee also discusses our policies with respect to risk assessment and risk management with respect to financial reporting and risks that may be material to us and major legislative and regulatory developments that could materially impact Teva’s contingent liabilities and risks.

The Audit Committee charter sets forth the scope of the committee’s responsibilities, including its structure, processes and membership requirements; the committee’s purpose; its specific responsibilities and authority with respect to, among others, registered public accounting firms; complaints relating to accounting, internal accounting controls or auditing matters; and its authority to engage advisors as determined by the Audit Committee.

The Audit Committee also reviews and receives briefings concerning Teva’s information security and technology risks, including cybersecurity, and has been briefed on Teva’s information security and risk management programs. Teva’s information security office leads our cybersecurity risk management program.

All of the Audit Committee members have been determined to be independent as defined by SEC and NYSE regulations.

The Board of Directors has determined that, of the directors on this committee, Gerald M. Lieberman (chair), Murray A. Goldberg and Roberto A. Mignone are “audit committee financial experts” as defined by applicable SEC regulations.

Human Resources and Compensation Committee

Publicly held Israeli companies are required to appoint a compensation committee. Our Compensation Committee includes only independent directors, as defined by SEC and NYSE regulations.

The Compensation Committee is responsible for establishing annual and long-term performance goals and objectives for our executive officers, as well as reviewing our compensation philosophy and policies (including our Compensation Policy).

The Compensation Committee is responsible for reviewing plans for the succession of our chief executive officer and other senior members of executive management.

The Compensation Committee also evaluates the performance of our chief executive officer and other executive officers, makes recommendations to the Board of Directors regarding the compensation of our executive officers and directors, reviews any organizational restructuring pertaining to the roles, responsibilities and selection of executive officers and oversees our labor practices.

Corporate Governance and Nominating Committee

The role of our Corporate Governance and Nominating Committee is to (i) identify individuals who are qualified to become directors; (ii) recommend to the Board of Directors director nominees for each annual meeting of shareholders; and (iii) assist the Board of Directors in establishing and reviewing Teva’s statement of corporate governance principles and promoting good corporate governance in Teva.

All of the committee members must be, and have been determined to be, independent as defined by NYSE regulations.

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    23

Corporate Governance and Director Compensation

Finance and Investment Committee

The role of our Finance and Investment Committee is to assist the Board of Directors in fulfilling its responsibilities with respect to our financial and investment strategies and policies, including determining policies on these matters and monitoring implementation. It is also authorized to approve certain financial transactions (such as material loans and other financing arrangements), review our financial risk management policies and evaluate the execution, financial results and integration of Teva’s completed acquisitions, as well as various other finance-related matters, including our global tax structure and allocation policies. According to the committee’s charter, at least one of the committee’s members must be qualified as a financial and accounting expert under SEC regulations and/or the Israeli Companies Law.

The Board of Directors has determined that, of the directors on this committee, Gerald M. Lieberman, Murray A. Goldberg and Roberto A. Mignone are financial and accounting experts under Israeli law.

Compliance Committee

The role of our Compliance Committee is to oversee our: (i) policies and practices for complying with laws, regulations and internal procedures; (ii) policies and practices regarding issues that have the potential to seriously impact our business and reputation; (iii) global public policy positions; and (iv) social responsibility and community outreach.

A majority of committee members must be determined to be independent as defined by NYSE regulations. The chairperson of the Audit Committee shall be invited by the committee chairperson to participate in the Compliance Committee, as deemed relevant to the committee’s agenda.

Science and Technology Committee

The Science and Technology Committee oversees our overall strategic direction and investment in research and development and technological and scientific initiatives. As part of this responsibility, it reviews scientific and R&D strategy and priorities, scientific aspects of business development activities and technological trends. It assists the Board of Directors in risk management oversight relating to R&D and our intellectual property, advises on our intellectual property strategy, reviews new technology in which Teva is, or is considering, investing and reviews the efficacy and safety profile of new pharmaceuticals.

All of the committee members must be determined to have scientific, medical or other related expertise. A majority of committee members must be determined to be independent as defined by NYSE regulations.

Code of Business Conduct

Teva has adopted a code of business conduct applicable to its directors, executive officers, and all other employees. A copy of the code is available to every Teva employee on Teva’s internet site, upon request to its human resources department, and to investors and others on Teva’s website at www.tevapharm.com or by contacting Teva’s investor relations department, legal department or the internal auditor. If we make any amendment or grant any waiver to this code that applies to our chief executive officer, chief financial officer, chief accounting officer or controller, or persons performing similar functions, and that relates to an element of the SEC’s “code of ethics” definition, then we will disclose the nature of the amendment or waiver on Teva’s website. The Board of Directors has approved a whistleblower policy which functions in coordination with Teva’s code of business conduct and provides an anonymous means for employees and others to communicate with various bodies of Teva, including the Audit Committee. Teva has also implemented a training program for new and existing employees concerning the code of business conduct and whistleblower policy.

24     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Corporate Governance and Director Compensation

Principles of Corporate Governance

We have adopted a set of corporate governance principles, which is available on our website at www.tevapharm.com. We place great emphasis on maintaining high standards of corporate governance and continuously evaluate and seek to improve our governance standards. These efforts are expressed in our corporate governance principles, our committee charters and the policies of our Board of Directors. Teva is in compliance with all corporate governance standards currently applicable to Teva under Israeli and U.S. laws, SEC regulations and NYSE listing standards.

Insider Trading Policy

Our directors, executive officers and employees, as well as their immediate family members, persons living in their home and entities controlled by any of the foregoing persons are subject to Teva’s insider trading policy (the “Policy”). The Policy prohibits insider trading and certain speculative transactions (including short sales, buying put and selling call options and other hedging or derivative transactions in Teva’s securities), and establishes a regular blackout period schedule during which directors, executive officers and certain employees may not trade in Teva’s securities. In addition, the Policy establishes pre-clearance procedures that directors and executive officers must observe prior to effecting any transaction in Teva’s securities. The Policy applies not only to Teva’s ADSs and ordinary shares, but also to its debt securities and other securities for which Teva securities serve as underlying assets.

Board Evaluation Process

Our Board of Directors is committed to continuous improvement and recognizes the fundamental role a robust Board of Directors and committee evaluation process play in ensuring that our Board of Directors maintains optimal composition and functions effectively.

In the annual self-evaluation process, the members of the Board of Directors conduct a confidential oral assessment of the performance, risk oversight and composition of the Board and any committees of which he or she is a member with the Company Secretary. As part of the evaluation process, the Board of Directors, in conjunction with the Corporate Governance and Nominating Committee, reviews the effectiveness and overall composition, including director tenure, board leadership structure, diversity and skill sets, of the Board of Directors to ensure the Board of Directors serves the best interests of shareholders and positions the company for future success. The results of the oral assessments are then summarized and communicated back to each committee, committee chair and the entire Board of Directors. After the evaluations, each committee, committee chair and the entire Board of Directors and management work to improve upon any issues presented during the evaluation process and to identify opportunities that may lead to further improvement. The Corporate Governance and Nominating Committee also uses this process to assess and determine the characteristics and skills required of prospective candidates for election to the Board of Directors.

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    25

Corporate Governance and Director Compensation

Shareholder Engagement

Following our 2018 annual meeting of shareholders, our Board of Directors initiated a shareholder outreach effort, led by the Chairman of the Board and the Chair of the Compensation Committee, to deepen relationships with our shareholders to help inform discussions on a number of issues, including corporate governance and executive compensation, and to solicit important shareholder feedback. Beginning in late 2018 and continuing through early 2019, we engaged in a productive shareholder outreach effort to better understand our shareholders’ concerns. During this time, we contacted shareholders representing approximately 50% of our outstanding shares to engage in dialogue regarding our financial performance, corporate governance and executive compensation program. Our Chairman of the Board and the Chair of the Compensation Committee participated in discussions with shareholders representing approximately 37% of our outstanding shares, including several shareholders that voted “against” the 2018 say-on-pay proposal. We also engaged with the research teams at proxy advisory firms Institutional Shareholder Services Inc. and Glass Lewis & Co.

In addition to the compensation-related changes made in response to shareholder engagement described under “Executive Compensation—Compensation Discussion & Analysis—Shareholder Engagement,” in response to feedback from our shareholders that opioid-related risks deserve greater attention from the healthcare industry, we are committing to prepare and publicly release by November 15, 2019 a report related to opioid-related governance measures taken by the Company.

For more information regarding our shareholder engagement program, please see “Executive Compensation—Compensation Discussion & Analysis—Shareholder Engagement.”

Social Impact and Responsibility

Teva is committed to helping patients around the world to access affordable medicines and benefit from innovations to improve their health. We have a rich history of providing innovative, high-quality generic and specialty drugs, and health solutions to patients around the world. At Teva, Social Impact means aligning our corporate resources and expertise with relevant areas of social need. We are dedicated to promoting health and increasing access to treatment for patients. Teva has participated in the United Nations Global Compact since 2010, which encourages companies around the world to adhere to principles of responsible business.

We remain actively engaged with our shareholders and other key stakeholders on our environmental, social and governance performance relative to our financial results. Our Board of Directors remains actively engaged on these issues with oversight of our Social Impact and Responsibility initiatives by our Compliance Committee.

Our Social Impact and Responsibility efforts are focused in the following areas, among others:

Contributing to Healthy Communities. For Teva, a healthy community is one in which individuals have access to resources and conditions that enable them to live their healthiest lives. Cultivating healthier communities allows us to support people around the world on their individual paths toward wellness, thereby creating value for society and our business.

Leading a Responsible Business. At Teva, a responsible business is one that enacts and enforces strong practices and controls to ensure all activities are carried out reliably, ethically, and transparently. As a global company that influences the health and safety of millions of people, we recognize our responsibility to conduct our business with integrity. Operating in this manner helps ensure our long-term sustainability, allowing us to focus on what matters most—improving health.

Reporting and Disclosures. Teva reports its Social Impact and Responsibility efforts using the Global Reporting Initiative (GRI) Sustainability Reporting Standards and publishes results in our annual Social Impact reports.

26     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Corporate Governance and Director Compensation

For more information about Teva’s Social Impact and Responsibility practices, including our most recent annual Social Impact report as well as position and policy statements on issues relating to environmental, social and governance issues, please see Teva’s website at https://www.tevapharm.com/corporate_responsibility/. Information on our website is not part of the proxy materials and is not incorporated into the proxy statement by reference.

Executive Officers

The following table sets forth information regarding our executive officers as of April 16, 2019:

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    27

Corporate Governance and Director Compensation

28     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Corporate Governance and Director Compensation

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    29

Executive Compensation

COMPENSATION DISCUSSION AND ANALYSIS

This compensation discussion and analysis (“CD&A”) describes the philosophy, objectives, process, components and additional aspects of our 2018 executive compensation program. This CD&A is intended to be read in conjunction with the tables that immediately follow this section, which provide further historical compensation information for the following named executive officers (“NEOs”):

Quick CD&A Reference Guide

I. Executive Summary

Compensation Objectives

In order to accomplish our key corporate objectives, we must attract, motivate and retain highly skilled and experienced people to execute our corporate strategy and lead our team. To that end, our executive officer compensation program is designed to:

2018 Select Business Highlights

In 2017, we faced significant challenges in both our generic medicines business and our specialty medicines business. In order to deal with these challenges and as part of our transformation, the Board conducted a global search process for our next CEO and in September 2017, appointed Mr. Schultz to the position, a leader with extensive global pharmaceutical experience and a strong track record in corporate

30     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Executive Compensation

turnarounds, driving growth and leading international expansion. In 2018, we made significant progress on our strategic plan to reduce costs and return to growth, as detailed below.

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    31

Executive Compensation

Key Aspects of 2018 Executive Compensation

2018 CEO Compensation—Unchanged, Majority Performance-Based: There was no increase to the target total direct compensation of the CEO as compared to 2017. During 2018, the CEO continued to have the same base salary, target annual cash incentive opportunity and target value of the long-term equity grant. Half of such long-term equity grant was provided in the form of performance share units (“PSUs”) that will vest at the end of a three-year performance period, and the remainder was split between stock options and restricted share units (“RSUs”). During our annual competitive assessment process, we confirmed that CEO annual target total direct compensation is reasonable, closely aligned with levels at peer companies, and within the limits of the Compensation Policy. Separately, as previously disclosed with respect to the hiring of Mr. Schultz in 2017, and in accordance with his employment agreement, Mr. Schultz received a sign-on cash payment of $20 million as part of the package to induce him to join the Company during an extremely challenging time and due to our firm belief that his skills and experiences were key to Teva’s success. Because this one-time cash award was paid in 2018, it is disclosed in our 2018 Summary Compensation Table. See “—V. Components of Our Compensation Program—Leadership Transitions” for a detailed description of Mr. Schultz’s employment terms.

2018 CEO Target Total Direct Compensation(*)

2018 CEO Long-Term Incentives—Increased Allocation to Performance-Based Equity: The Compensation Committee and the Board raised the portion of equity granted to the CEO that is subject to performance-based vesting conditions to 50% by allocating half of the value of the CEO’s target equity

32     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Executive Compensation

grant to PSUs and 25% to each of RSUs and stock options. In 2019, the Compensation Committee and the Board similarly raised the NEOs’ allocation to PSUs to 50%.

2018 Annual Incentive Plan—Increased Weighting of Company-Wide Financial Measures and Simplified: The Compensation Committee and the Board simplified the annual cash incentive goals by increasing the weight allocated to Company-wide financial measures to 75% in 2018, up from 42% for executive officers and 56% for the CEO in 2017, in order to focus executive officers on what they believe are the most critical strategic priorities of servicing debt, controlling expenses and improving profitability.

2018 Performance Achievement and Incentive Compensation Payout: In 2017, no annual cash incentive payouts were made due to our financial results that were well below the aggressive targets that we had established. At the beginning of 2018, we established annual cash incentive goals aligned with the high end of our 2018 outlook as communicated to investors in February. These goals were again deemed rigorous and challenging, particularly given the significant headwinds we were facing. Key assumptions were made in constructing our 2018 outlook including a decline in total revenue compared to 2017 mainly because of an:

In spite of the challenges we faced, we made exceptional progress, mainly because we achieved:

We outperformed the high end of our 2018 outlook as communicated to investors in February for non-GAAP EPS and Free Cash Flow mainly due to the above. The Compensation Committee and the Board determined that the Company’s achievement was 117% of our 2018 non-GAAP EPS target goal and 132% of our 2018 Free Cash Flow target goal, although the latter was capped at 120% for annual incentive compensation purposes. These results, together with strong CEO and other NEO individual performance achievement, resulted in 2018 annual cash incentive payouts of 135% of target for the CEO and between 168% and 180% of target for the other NEOs, reflecting their superior performance in spite of the challenges we faced.

In addition, the Compensation Committee and the Board approved the achievement relative to target performance goals for the PSUs granted in 2016 with a performance period of 2016-2018. The Compensation Committee and the Board determined a combined 3-year performance achievement of

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    33

Executive Compensation

97.75% of our Net Revenue target goals and 97.26% of our non-GAAP Operating Profit target goals. The average of these percentages, 97.51%, resulted in an earning percentage of 75.09% of the target number of units.

Realizable Pay Demonstrates Pay for Performance Alignment: Realizable pay reflects the actual value of annual incentives and equity awards received or to be received by our NEOs, and fluctuates with increases or decreases in share price. For this reason, contrasting target pay with realizable pay provides a meaningful demonstration of pay for performance alignment.

When the Company does not meet performance targets and/or the share price decreases, an executive’s realizable pay is affected. The following charts demonstrate the relationship between the target and realizable values, in each of the past three years, of our NEOs’: (1) annual incentive, and (2) annual equity grants following the conclusion of the applicable three-year performance period. The equity grants to the NEOs in 2014, 2015 and 2016 included PSUs and stock options. The realizable value of this equity has been calculated by multiplying the number of earned shares for each PSU grant by the stock price per share on the last trading day of the relevant performance period, and by determining the intrinsic (or “in the money”) value of stock options on these dates.

With respect to PSUs, for 2014 grants, the Company’s three-year performance produced an earning percentage of 112.84%. However, because the share price had decreased, the realizable value of such PSUs represented only 91% of the original target value. For 2015 grants, the Company’s three-year performance did not achieve the threshold level, and no PSUs were earned. For 2016 grants, the Company’s three-year performance produced an earning percentage of 75.09%, but because of the decrease in the share price, the realizable value of such PSUs represented just 22% of the target value. With respect to stock options granted in 2014, 2015 and 2016, because of the decrease in the stock price, all stock options granted did not have any intrinsic value at the conclusion of the respective performance periods.

Average NEO Annual Cash Incentive Payout as % of Target		NEO Annual Equity Grant Realizable Value as % of Target Value

Other NEO Base Salaries and Target Annual Cash Incentive Opportunities Were Not Increased: In light of the restructuring plan and the challenges the Company was facing, there were no increases to base salaries for the other NEOs compared to the end of 2017. In addition, there were no increases to target annual cash incentive opportunities as a percentage of base salary compared to the end of 2017.

34     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Executive Compensation

2018 Say-on-Pay Vote and Shareholder Engagement

In 2018, we became a U.S. domestic issuer and therefore were subject to a shareholder advisory vote on the compensation of our NEOs (the “say-on-pay” vote) for the first time. At the 2018 annual meeting of shareholders, our shareholders approved, on an advisory basis, the compensation of our NEOs, with approximately 76% of the votes cast on the matter “For” such approval. The Compensation Committee and the Board reviewed the result of the say-on-pay vote and recognized that it signaled the existence of concerns with the 2017 compensation program for our NEOs or one of its elements, and a need for shareholder engagement to better understand such concerns.

Beginning in late 2018 and continuing through early 2019, our Board engaged in a productive shareholder outreach effort to deepen relationships with our shareholders to help inform discussions on a number of issues, including executive compensation and corporate governance. During this time, we contacted shareholders representing approximately 50.2% of our outstanding shares. Our Chairman of the Board and the Chair of the Compensation Committee participated in discussions with shareholders representing approximately 37% of our outstanding shares, including several shareholders that voted “against” the 2018 say-on-pay proposal. We also engaged with the research teams at proxy advisory firms Institutional Shareholder Services Inc. and Glass Lewis & Co.

Feedback from our shareholders was shared and discussed with the Compensation Committee, the Corporate Governance and Nominating Committee and the Board. Much of the feedback from our shareholders related to the one-time sign-on cash award provided to Mr. Schultz in connection with his appointment as our CEO in September 2017. As this cash award represented a singular compensation event to recruit a seasoned leader in the pharmaceutical industry with an extensive background leading global companies’ restructuring initiatives, this cash award does not reflect an ongoing component of our executive compensation program. Such one-time sign-on awards, particularly of such magnitude and structure, are not ones that the Compensation Committee and the Board take lightly; however, they felt that in this circumstance, it was absolutely critical for the future of the Company.

The Compensation Committee and the Board made significant efforts to address shareholders’ concerns, and in turn, revised certain elements of the Company’s go-forward executive compensation program that strengthen the alignment between pay and performance, enhance executive officers’ and directors’ alignment with shareholders, and provide greater transparency into our compensation practices and decisions. In addition to refining our executive compensation program, we also established critical feedback channels to ensure that we continually receive and consider shareholder input going forward. The Compensation Committee and the Board are committed to continually evaluating changes to the program that will enhance the link between our long-term strategy and objectives and the incentives for our executive officers, and enhancing alignment between our executive officers’ and our shareholders’ interests.

The following table summarizes the common points of feedback we received from our shareholders and the Compensation Committee and Board’s actions in response to such feedback. See “Proposal 1: Election of Directors—Shareholder Engagement” set forth above regarding additional actions related to corporate governance.

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    35

Executive Compensation

36     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Executive Compensation

As part of the broader review to further enhance our executive compensation program, the Compensation Committee and the Board made the following additional changes to our compensation program:

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    37

Executive Compensation

II. Compensation Governance

Compensation Governance

As part of the efforts of the Compensation Committee, to ensure that our compensation program, which includes our policies and practices, aligns our executive officers’ interests with those of Teva and its shareholders, the Compensation Committee assesses the effectiveness of our compensation program periodically and reviews risk mitigation and governance matters. We do this by maintaining the following best practices:

38     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Executive Compensation

Compensation Policy under the Israeli Companies Law

Due to our unique position as an Israeli company with an extensive global footprint, we aim to adopt compensation policies and practices that match those of similar global companies, but we must also comply with applicable Israeli law, including the requirement that Israeli publicly traded companies adopt a compensation policy which is brought for shareholders’ approval and contains certain limits on elements of compensation. All executive compensation decisions must generally be consistent with that policy.

As approved at our 2016 annual meeting of shareholders, and as required by the Israeli Companies Law, we have adopted a Compensation Policy regarding the terms of office and employment of our “office holders” (as defined under the Israeli Companies Law, which includes directors, the CEO, other executive officers and any other managers directly subordinate to the CEO), including cash compensation, equity-based awards, releases from liability, indemnification and insurance, severance and other benefits (the “Terms of Office and Employment”). Each of our NEOs is an “office holder” within the meaning of the Israeli Companies Law. The Compensation Policy is reviewed from time to time by the Compensation Committee and Board to ensure its alignment with our compensation philosophy and objectives and to consider its appropriateness for Teva and is required to be brought at least once every three years to our shareholders for approval. Because three years have elapsed since our shareholders last approved the Compensation Policy in 2016, and as further described in “Proposal 3: Approval of Amended Compensation Policy” set forth below, Teva is submitting to shareholders a proposal to approve an amended Compensation Policy. Unless specifically indicated otherwise, reference to our Compensation Policy in this CD&A shall mean the Company’s Compensation Policy in effect for 2018.

Pursuant to the Israeli Companies Law, arrangements between Teva and its office holders must generally be consistent with the Compensation Policy. However, under certain circumstances, we may approve an arrangement that is not consistent with the Compensation Policy, if the arrangement is approved by a majority of our shareholders who participate and vote, provided that (i) the majority includes a majority of the votes cast by shareholders who participate and vote (abstentions are disregarded) who (A) are not controlling shareholders and (B) do not have a personal interest in the matter, or (ii) the votes cast against the arrangement by shareholders who are not controlling shareholders and who do not have a personal interest in the matter who participate and vote constitute two percent or less of the voting power of the Company (a “special majority”).

In addition, pursuant to the Israeli Companies Law, the Terms of Office and Employment generally require the approval of the Compensation Committee and the Board. The Terms of Office and Employment as applicable to directors further require the approval of the shareholders by a simple majority. The Terms of Office and Employment with respect to a CEO generally require the approval of the shareholders by the special majority referenced in the immediately preceding paragraph. Under certain circumstances, shareholder approval is not required with respect to the Terms of Office and Employment of a candidate for CEO if the Compensation Committee determines that the engagement will be frustrated if the approval is pursued, provided that the terms are consistent with the compensation policy. This provision was followed in the recruitment of our CEO, Kåre Schultz.

Under certain circumstances, if the Terms of Office and Employment of office holders who are not directors are not approved by the shareholders, where such approval is required, the Compensation Committee and the Board may nonetheless approve such terms. In addition, non-material amendments of the Terms of Office and Employment of office holders who are not directors may be approved by the Compensation Committee only and non-material amendments of the Terms of Office and Employment of office holders who are not directors and excluding the CEO may be approved by the CEO only, provided such approvals are permitted under the Compensation Policy and consistent therewith. Accordingly, pursuant to our Compensation Policy, our CEO is currently authorized to approve benefits and perquisites for any other executive officer with respect to any calendar year, provided that it does not exceed the value of such executive officer’s one-month base salary.

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    39

Executive Compensation

III. Compensation Philosophy and Objectives

We are committed to transparent and ethical business practices. Maintaining high standards of corporate governance and legal compliance are key factors in our success. This allows us to create long-term value for our shareholders as well as all of our other stakeholders, including employees, customers, suppliers and, above all, patients worldwide.

Our executive officer compensation philosophy also values the following principles:

Our objectives with respect to executive officer compensation, as summarized below, are designed to: (i) link pay to performance; (ii) align executive officers’ interests with those of Teva and its shareholders over the long term; (iii) encourage balanced risk management; and (iv) provide competitive compensation packages that motivate our executive officers.

40     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Executive Compensation

IV. Compensation Determination Process

The Compensation Committee and the Board design the executive compensation program with the intention of accomplishing the goals described above. In determining executive compensation, the Compensation Committee obtains input and advice from its independent compensation consultant, as applicable, and reviews recommendations from our CEO with respect to the performance and compensation of our other executive officers. The Compensation Committee and, if applicable, the Board, review and approve compensation and performance awards of the CEO and executive officers and consider financial, operational and share price performance to determine appropriate executive compensation parameters.

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    41

Executive Compensation

Key Participants

The roles and responsibilities of all parties involved with the compensation determination process are set forth below:

42     Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement

Executive Compensation

Role of Independent Compensation Consultant

The Compensation Committee has the authority to retain independent compensation consultants to assist it in the performance of its duties and responsibilities without consulting or obtaining the approval of management of the Company. The Compensation Committee retained Pay Governance LLC (“Pay Governance”) as its independent compensation consultant in 2015, and in July 2018, the Compensation Committee selected a new advisor, Semler BrossyConsulting Group LLC (“Semler Brossy”). Pay Governance and Semler Brossy reported directly to and were directly accountable to the Compensation Committee. While the Compensation Committee took into consideration the review and recommendations of these independent advisors when making decisions about the Company’s executive and director compensation practices and governance related topics, the Compensation Committee ultimately made its own independent decisions about these matters.

The Compensation Committee assessed the independence of Pay Governance and Semler Brossy pursuant to the rules of the SEC and the NYSE. In doing so, the Compensation Committee considered each of the factors set forth by the SEC and NYSE with respect to a compensation consultant’s independence. The Compensation Committee also considered the nature and amount of work performed for the Compensation Committee and the fees paid for those services in relation to the firms’ total revenues. After these reviews, the Compensation Committee concluded that there were no conflicts of interest, and that both Pay Governance and Semler Brossy were independent pursuant to SEC and NYSE rules.

Compensation Peer Group and Peer Selection Process

In setting compensation for our CEO and executive officers, the Compensation Committee and the Board consider comparative compensation information from a relevant group of peer companies (the “Peer Group”) as one point of reference.

The Peer Group was selected based on primary selection criteria, including:

Company revenues are considered a primary factor in determining the Peer Group, which has been constructed so that our revenues are generally in the middle of the revenue range of the Peer Group companies. The Compensation Committee believes that the Peer Group companies are the companies with which we compete for talent. Periodically, the Compensation Committee reassesses the companies within the Peer Group and makes changes as appropriate, considering changes in the Peer Group companies, such as mergers and acquisitions, and changes in our business.

The Compensation Committee and the Board consider data from the Peer Group companies in reviewing market pay levels and practices. Other factors considered include sustained performance, criticality of contributions to Teva and the executive officer’s role, skills, experience and development. The Compensation Committee retains discretion in determining the nature and extent of the use of Peer Group data.

Teva Pharmaceutical Industries Ltd.  2019 Proxy Statement    43

Executive Compensation

The Peer Group established for setting 2018 compensation consisted of the following companies: