DHR Danaher Corporation

PROPOSAL 1.

ELECTION OF DIRECTORS OF DANAHER

Danaher’s Amended and Restated Bylaws provide that the number of directors is determined by the Board, and the Board has fixed the number of directors at ten. Danaher’s Certificate of Incorporation provides for the annual election of directors. At the 2016 Annual Meeting, shareholders will be asked to elect each of the ten directors identified below (each of whom has been nominated by the Board and currently serves as a director of the Company) to serve until the 2017 Annual Meeting of shareholders and until his or her successor is duly elected and qualified. Proxies cannot be voted for a greater number of persons than the ten nominees named in this Proxy Statement.

We have set forth below information relating to each nominee for election as director, including: his or her principal occupation and any board memberships at other public companies during the past five years; the other experience, qualifications, attributes or skills that led the Board to conclude that he or she should continue to serve as a director of Danaher; the year in which he or she became a director; and age. Please see “Corporate Governance – Board of Directors and Committees of the Board – Nominating and Governance Committee” for a further discussion of the Board’s process for nominating Board candidates. In the event a nominee declines or is unable to serve, the proxies may be voted in the discretion of the proxy holders for a substitute nominee designated by the Board, or the Board may reduce the number of directors to be elected. We know of no reason why this will occur.

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THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE

FOREGOING NOMINEES.

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CORPORATE GOVERNANCE

Corporate Governance Overview

Our Board of Directors recognizes that Danaher’s success over the long-term requires a robust framework of corporate governance that serves the best interests of all our shareholders. Below are highlights of our corporate governance framework, and additional details follow in the sections below.

Corporate Governance Guidelines, Committee Charters and Standards of Conduct

As part of its ongoing commitment to good corporate governance, our Board of Directors has codified its corporate governance practices into a set of Corporate Governance Guidelines and has also adopted written charters for each of the Audit Committee, the Compensation Committee and the Nominating and Governance Committee of the Board. Danaher has also adopted a code of business conduct and ethics for directors, officers (including our principal executive officer, principal financial officer and principal accounting officer) and employees, known as the Standards of Conduct. The Corporate Governance Guidelines, committee charters and Standards of Conduct referenced above are each available in the “Investor – Corporate Governance” section of our website at http://www.danaher.com.

Board Leadership Structure and Risk Oversight

Board Leadership Structure.   The Board has separated the positions of Chairman and CEO because it believes that, at this time, this structure best enables the Board to ensure that Danaher’s business and affairs are managed effectively and in the best interests of shareholders. This is particularly the case in light of the fact that the Company’s Chairman is Steven Rales, a co-founder of the Company who owns approximately 6.3 percent of the Company’s outstanding shares, served as CEO of the company from 1984 to 1990 and continues to serve as an executive officer of the company. As a result of his substantial ownership stake in the Company, the Board believes that Mr. Rales is uniquely able to understand, articulate and advocate for the rights and interests of the Company’s shareholders. Moreover, Mr. Rales uses his management experience with the Company and Board tenure to help ensure that the non-management directors have a keen understanding of the Company’s business as well as the strategic and other risks and opportunities that the Company faces. This enables the Board to more effectively provide insight and direction to, and exercise oversight of, the Company’s President and CEO and the rest of the management team responsible for the Company’s day-to-day business (including with respect to oversight of risk management).

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Because Mr. Rales is not independent within the meaning of the NYSE listing standards, our Corporate Governance Guidelines require the appointment of a “Lead Independent Director.” Our independent directors have appointed Mr. Ehrlich as our Lead Independent Director. As the Lead Independent Director, Mr. Ehrlich:

Risk Oversight.   The Board’s role in risk oversight at the Company is consistent with the Company’s leadership structure, with management having day-to-day responsibility for assessing and managing the Company’s risk exposure and the Board and its committees overseeing those efforts, with particular emphasis on the most significant risks facing the Company. The Board oversees the Company’s risk management processes directly and through its committees. In general, the Board oversees the management of risks inherent in the operation of the Company’s businesses, the implementation of its strategic plan, its acquisition and capital allocation program, its capital structure and liquidity and its organizational structure, and also oversees the Company’s risk assessment and risk management policies. Each of the Board’s committees also oversees the management of Company risks that fall within the committee’s areas of responsibility. The Audit Committee oversees risks related to financial controls and legal and compliance risks and also assists the Board in overseeing the Company’s risk assessment and risk management policies; the Nominating and Governance Committee oversees corporate governance risks; and the Compensation Committee considers the impact of the Company’s compensation programs on the Company’s risk profile. Each committee reports to the full Board on a regular basis, including as appropriate with respect to the committee’s risk oversight activities. In addition, since risk issues often overlap, committees from time to time request that the full Board discuss particular risks. On an annual basis, the Company’s Risk Committee (consisting of members of senior management) inventories, assesses and prioritizes the most significant risks facing the Company as well as related mitigation efforts and provides a report to the Board. With respect to the manner in which the Board’s risk oversight function impacts the Board’s leadership structure, as described above our Board believes that Mr. Rales’ management experience and tenure help the Board to more effectively exercise its risk oversight function.

Director Independence

At least a majority of the Board must qualify as independent within the meaning of the listing standards of the NYSE. The Board has affirmatively determined that other than Messrs. Steven Rales, Mitchell Rales and Thomas P. Joyce, Jr., each of whom is an executive officer of Danaher, all of the remaining seven members of the Board, consisting of Mss. Hefner Filler and List-Stoll, Messrs. Ehrlich, Lohr, Schwieters and Spoon and Dr. Zerhouni, are independent within the meaning of the listing standards of the NYSE. The Board concluded that none of the independent directors possesses any of the bright-line relationships set forth in the listing standards of the NYSE that prevent independence, or except as discussed below, any other relationship with Danaher other than Board membership.

In making its determination with respect to the independence of the directors identified above as independent, the Board considered the following transactions. In 2015, the Company and its subsidiaries sold products to Kraft Foods Group, Inc., where Ms. List-Stoll served as an officer; sold products to and purchased products from Dick’s Sporting Goods, Inc., where Ms. List-Stoll serves as an officer; sold products to and purchased products from Sanofi-Aventis, where Dr. Zerhouni serves as an officer; sold products to and purchased products from Walgreen Co., where Ms. Hefner Filler serves as an officer; and sold products to Wabash National Corp., where an immediate family member of Mr. Ehrlich serves as an officer. In each case, the amount of sales and purchases in 2015 were less than 0.15% of the 2015 revenues of such other company and of Danaher’s 2015 revenues. In all of the cases described above, the sales and purchases were made in the ordinary course of business, on commercial terms and on an arms’-length basis and the director had no role in the decision-making

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with respect to such transactions, and in each case the Board determined that such transactions do not create a material relationship between the director and Danaher and do not affect the director’s independence.

Danaher’s non-management directors (all of whom are independent within the meaning of the listing standards of the NYSE) meet in executive session following the Board’s regularly-scheduled meetings. The sessions are chaired by the Lead Independent Director.

Board of Directors and Committees of the Board

General.   The Board met eight times during 2015. All directors attended at least 75% of the aggregate of the total number of meetings of the Board and of all committees of the Board on which they served (during the period they so served) during 2015. Danaher typically schedules a Board meeting in conjunction with each annual meeting of shareholders and as a general matter expects that the members of the Board will attend the annual meeting. All of the ten directors serving at the time attended the Company’s annual meeting in May 2015.

The membership of each of the Audit, Compensation, Nominating and Governance and Finance committees as of March 14, 2016 is set forth below.

X = committee member; * = Chair

Audit Committee.   The Audit Committee met nine times during 2015. The Audit Committee assists the Board in overseeing:

The Committee also prepares a report as required by the SEC to be included in this proxy statement. The Committee reports to the Board on its actions and recommendations at each regularly scheduled Board meeting. The Board has determined that each of the members of the Audit Committee is independent for purposes of Rule 10A-3(b)(1) under the Securities Exchange Act and the NYSE listing standards, qualifies as an audit committee financial expert as that term is defined in Item 407(d)(5) of Regulation S-K and is financially literate within the meaning of the NYSE listing standards.

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Compensation Committee.   The Compensation Committee met seven times during 2015. The Compensation Committee discharges the Board’s responsibilities relating to compensation of our executive officers, including evaluating the performance of, and approving the compensation paid to, our executive officers. The Committee also:

Each member of the Compensation Committee is an “outside director” for purposes of Section 162(m) (“Section 162(m)”) of the Internal Revenue Code (the “Code”), a “non-employee director” for purposes of Rule 16b-3 under the Securities Exchange Act and, based on the determination of the Board, independent under the NYSE listing standards and under Rule 10C-1 under the Securities Exchange Act. While the Committee’s charter authorizes it to delegate its powers to sub-committees, the Committee did not do so during 2015. The Committee reports to the Board on its actions and recommendations at each regularly scheduled Board meeting. The Chair of the Committee works with our Senior Vice President-Human Resources and our Secretary to schedule the Committee’s meetings and set the agenda for each meeting. Our Senior Vice President-Human Resources, Vice President-Compensation and Secretary generally attend, and from time-to-time our CEO attends, the Committee meetings and support the Committee in preparing meeting materials and taking meeting minutes. In particular, our CEO provides background regarding the interrelationship between our business objectives and executive compensation matters and advises on the alignment of incentive plan performance measures with our overall strategy; participates in the Committee’s discussions regarding the performance and compensation of the other executive officers and provides recommendations to the Committee regarding all significant elements of compensation paid to such officers, their annual, personal performance objectives and his evaluation of their performance; and provides feedback regarding the companies that he believes Danaher competes with in the marketplace and for executive talent. The Committee gives considerable weight to our CEO’s evaluation of and recommendations with respect to the other executive officers because of his direct knowledge of each such officer’s performance and contributions. Danaher’s human resources department also provides the Committee with such data relating to executive compensation as requested by the Committee. The Committee typically meets in executive session, without the presence of management, at each regularly scheduled meeting.

Under the terms of its charter, the Committee has the authority to engage the services of outside advisors and experts to assist the Committee. The Committee has engaged Frederic W. Cook & Co., Inc. (“F.W. Cook”) as the Committee’s independent compensation consultant since 2008. The Committee engages F.W. Cook because it is considered one of the premier independent compensation consulting firms in the country and has never provided any services to the Company other than the compensation-related services provided to or at the direction of the Compensation Committee and the Nominating and Governance Committee. F.W. Cook takes its direction solely from the Committee (and with respect to matters relating to the non-management director compensation program, the Nominating and Governance Committee). F.W. Cook’s primary responsibilities in 2015 were to provide advice and data in connection with the structuring of the executive compensation and equity compensation programs of both Danaher as well as the business Danaher anticipates spinning off in the

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third quarter of 2016, Fortive Corporation, the compensation levels for the Company’s executive officers compared to executive compensation levels at the Company’s peers, the compensation levels for the Company’s directors compared to director compensation levels at the Company’s peers, the compensation levels for Fortive’s anticipated executive officers compared to executive compensation levels at Fortive’s peers, and the compensation levels and practices for Fortive’s directors compared to director compensation levels and practices at Fortive’s peers; assess the Company’s executive compensation program in the context of corporate governance best practices; update the Committee regarding legislative and regulatory initiatives and other trends in the area of executive compensation; provide data regarding the share dilution and compensation costs attributable to the Company’s equity compensation program; and advise regarding the Company’s executive compensation public disclosures. The Committee does not place any material limitations on the scope of the feedback provided by F.W. Cook. In the course of discharging its responsibilities, F.W. Cook may from time to time and with the Committee’s consent, request from management certain information regarding compensation amounts and practices, the interrelationship between our business objectives and executive compensation matters, the nature of the Company’s executive officer responsibilities and other business information.

The Committee has considered whether the work performed by F.W. Cook for or at the direction of the Compensation Committee and the Nominating and Governance Committee raises any conflict of interest, taking into account the factors listed in Securities Exchange Act Rule 10C-1(b)(4), and has concluded that such work does not create any conflict of interest.

Nominating and Governance Committee.   The Nominating and Governance Committee met three times in 2015. The Nominating and Governance Committee:

The Board has determined that all of the members of the Nominating and Governance Committee are independent within the meaning of the NYSE listing standards.

The Nominating and Governance Committee from time-to-time engages an executive search firm to help identify, evaluate and provide background information regarding director candidates, and also considers candidates for Board membership suggested by Board members, management and shareholders. A shareholder who wishes to recommend a prospective nominee for the Board should notify the Nominating and Governance Committee in writing using the procedures described below under “– Communications with the Board of Directors” with whatever supporting material the shareholder considers appropriate. If a prospective nominee has been identified other than in connection with a director search process initiated by the Committee, the Committee makes an initial determination as to whether to conduct a full evaluation of the candidate. The Committee’s determination of whether to conduct a full evaluation is based primarily on the Committee’s view as to whether a new or additional Board member is necessary or appropriate at such time, and the likelihood that the prospective nominee can satisfy the evaluation factors described below and any such other factors as the Committee may deem appropriate. The Committee takes into account whatever information is provided to the Committee with the

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recommendation of the prospective candidate and any additional inquiries the Committee may in its discretion conduct or have conducted with respect to such prospective nominee. If the Committee determines that any such prospective nominee warrants additional consideration, or if the Committee has initiated a director search process and has identified one or more prospective nominees, the Committee will evaluate such prospective nominees against the standards and qualifications set out in Danaher’s Corporate Governance Guidelines, including:

The Committee also considers such other factors as it may deem relevant and appropriate, including the current composition of the Board, any perceived need for one or more particular areas of expertise, the balance of management and independent directors, the need for committee-specific expertise and the evaluations of other prospective nominees. The Board does not have a formal or informal policy with respect to diversity but believes that the Board, taken as a whole, should embody a diverse set of skills, knowledge, experiences and backgrounds appropriate in light of the Company’s needs, and in this regard also subjectively takes into consideration the diversity (with respect to race, gender and national origin) of the Board when considering director nominees. The Board does not make any particular weighting of diversity or any other characteristic in evaluating nominees and directors.

If the Committee determines that a prospective nominee warrants further consideration, one or more members of the Committee (and other members of the Board as appropriate) will interview the prospective nominee. After completing this evaluation and interview process, if the Committee deems it appropriate it will recommend that the Board appoint one or more candidates to the Board or nominate one or more such candidates for election to the Board.

The Committee also reviews and makes recommendations to the Board regarding non-management director compensation (although the Board makes the final determination regarding the amounts and type of non-management director compensation). In connection with its periodic evaluations of non-management director compensation, the Committee reviews the compensation practices for non-management directors within Danaher’s peer group. For a description of the annual compensation paid to each non-management director, please see “Director Compensation.”

Finance Committee.   The Finance Committee met five times in 2015. The Finance Committee approves business acquisitions, investments and divestitures up to the levels of authority delegated to it by the Board.

Majority Voting for Directors

Our Amended and Restated Bylaws provide for majority voting in uncontested director elections, and our Board has adopted a director resignation policy. Under the policy, our Board will not appoint or nominate for election to the Board any person who has not tendered in advance an irrevocable resignation effective in such circumstances where the individual does not receive a majority of the votes cast in an uncontested election and such resignation is accepted by the Board. If an incumbent director is not elected by a majority of the votes cast in an uncontested election, our Nominating and Governance Committee will submit for prompt consideration by

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the Board a recommendation whether to accept or reject the director’s resignation. The Board expects the director whose resignation is under consideration to abstain from participating in any decision regarding that resignation.

At any meeting of shareholders for which the Secretary of the Company receives a notice that a shareholder has nominated a person for election to the Board of Directors in compliance with the Company’s Amended and Restated Bylaws and such nomination has not been withdrawn on or before the tenth day before the Company first mails its notice of meeting to the Company’s shareholders, the directors will be elected by a plurality of the votes cast (which means that the nominees who receive the most affirmative votes would be elected to serve as directors).

Website Disclosure

We may provide disclosure in the “Investor – Corporate Governance” section of our corporate website, http://www.danaher.com, of any of the following: (1) the identity of the presiding director at meetings of non-management or independent directors, or the method of selecting the presiding director if such director changes from meeting to meeting; (2) the method for interested parties to communicate directly with the Board or with individual directors, the Lead Independent Director or the non-management or independent directors as a group; (3) the identity of any member of Danaher’s Audit Committee who also serves on the audit committees of more than three public companies and a determination by the Board that such simultaneous service will not impair the ability of such member to effectively serve on Danaher’s Audit Committee; and (4) contributions by Danaher to a tax exempt organization in which any non-management or independent director serves as an executive officer if, within the preceding three years, contributions in any single fiscal year exceeded the greater of $1 million or 2% of such tax exempt organization’s consolidated gross revenues. We also intend to disclose any amendment to the Standards of Conduct that relates to any element of the code of ethics definition enumerated in Item 406(b) of Regulation S-K, and any waiver from a provision of the Standards of Conduct granted to any of our directors, principal executive officer, principal financial officer, principal accounting officer, or any other executive officer, in the “Investor – Corporate Governance” section of our corporate website, http://www.danaher.com, within four business days following the date of such amendment or waiver.

Communications with the Board of Directors

Shareholders and other parties interested in communicating directly with the Board or with individual directors, the Lead Independent Director or the non-management or independent directors as a group may do so by addressing communications to the Board of Directors, to the specified individual director or to the non-management or independent directors, as applicable, c/o Corporate Secretary, Danaher Corporation, 2200 Pennsylvania Avenue, N.W., Suite 800W, Washington, D.C. 20037-1701.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The following section discusses and analyzes the compensation provided to each of the executive officers set forth in the Summary Compensation Table below, also referred to as the “named executive officers.”

Executive Summary and Overview

Introduction

Danaher’s executive compensation program, and in particular its emphasis on long-term equity awards tied closely to shareholder returns and subject to significant vesting and holding periods, has been fundamental in attracting skilled executives, encouraging them to build long-term careers with Danaher and motivating them to achieve sustainable, long-term operating and financial performance through a range of economic cycles.

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Danaher has recently significantly revised its executive compensation program to strengthen its alignment with shareholder interests, increase management accountability and align with recognized best practices:

2015 Performance

2015 was a transformative year for Danaher, as we consummated our $13.6 billion acquisition of Pall Corporation, a leading global provider of filtration, separation and purification solutions, and announced plans to separate into two, publicly traded companies in 2016. Pall is a highly complementary addition to Danaher’s Life Sciences platform, significantly expands Danaher’s recurring revenue base and provides a strong foundation for Danaher to grow in the filtration segment both organically and through acquisition. In the third quarter of 2016, Danaher intends to separate into a science and technology growth company that will retain the Danaher name and a diversified industrial growth company named Fortive Corporation that will consist of the businesses that currently constitute Danaher’s Test & Measurement segment, Industrial Technologies segment (other than its Product Identification platform) and Retail/Commercial Petroleum platform. Danaher’s Board determined that our shareholders would be best served by Danaher’s separation into two, more focused companies, which will provide each company access to the capital necessary to pursue organic and inorganic growth opportunities and also allow investors to more effectively value each respective business. The separation is expected to occur through a tax-free, pro rata spin-off of Fortive to Danaher shareholders, with Mr. Joyce continuing to serve as President and CEO of New Danaher and Mr. Lico serving as President and CEO of Fortive.

We do not anticipate that our executive compensation philosophy or the general structure of our executive compensation program will change significantly as a result of the Separation. We believe our executive compensation programs are well aligned with the interests of our shareholders and are instrumental to achieving our business strategy. Our executive compensation program has helped drive strong business performance, both in 2015 and historically. In 2015, while preparing for the Separation and against the backdrop of slowing growth in industrial segments and certain high-growth markets, Danaher continued to deliver strong operational and financial performance and used its healthy financial position to continue investing robustly in growth opportunities. During 2015, Danaher:

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Danaher’s 2015 and prior year growth investments yielded tangible year-over-year improvements in 2015:

Danaher 2014-2015 Year-Over-Year Growth from Continuing Operations

Our commitment to continue investing in future growth and our generation of the cash flow to fund such investments has positioned us to grow our business on a profitable and sustainable basis.

Long-Term Performance

Danaher Compounded, Average Annual Shareholder Returns, 1996-2015

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2015 Executive Compensation

Below is a comparison of key aspects of our named executive officer compensation for 2015 compared to 2014 (excluding Mr. Beck, who was hired in April 2014 and resigned in December 2015):

Compensation Governance

The Committee recognizes that the success of our executive compensation program over the long-term requires a robust framework of compensation governance. As a result, the Committee regularly reviews external executive compensation practices and trends and recently has improved Danaher’s executive compensation policies and practices in the following ways.

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These more recent changes complement the following compensation governance practices that have been a hallmark of Danaher’s program.

Overview and Objectives of Our Named Executive Officer Compensation Program

The goal of our compensation program for named executive officers is to build long-term value for our shareholders. Toward this goal, under the Committee’s direction we have developed an executive compensation program designed to:

To achieve these objectives we have developed a compensation program that combines annual and long-term components, cash and equity, and fixed and variable payments, with a bias toward compensation that is dependent on company performance, particularly long-term, equity-based compensation. Our executive compensation program rewards our executive officers when they build long-term shareholder value, achieve annual business goals and maintain long-term careers with Danaher.

The Company provides its shareholders an opportunity to cast an annual advisory vote with respect to its named executive officer compensation as disclosed in the Company’s annual proxy statement (the “say on pay proposal”). At the Company’s annual meeting of shareholders in May 2015, 89% of the votes cast on the say on pay proposal were voted in favor of the proposal. The Committee believes this result affirms shareholders’ support of the Company’s named executive officer compensation and did not make changes to the Company’s executive compensation program as a result of such vote.

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Risk Considerations and Review of Executive Compensation Practices

Risk-taking is a necessary part of growing a business, and prudent risk management is necessary to deliver long-term, sustainable shareholder value. The Committee believes that the Company’s executive compensation program supports the objectives described above without encouraging inappropriate or excessive risk-taking. In reaching this conclusion, the Committee considered in particular the following attributes and risk-mitigation features of our compensation program.

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In determining the appropriate mix of compensation elements for each named executive officer for 2015, the Committee considered the factors referred to under “–Named Executive Officer Compensation Framework” (without assigning any particular weight to any factor) and exercised its judgment:

The graphic below illustrates the percentage of 2015 named executive officer compensation (based on the 2015 Summary Compensation Table) that each element of compensation accounted for:

Long-Term Incentive Awards

In 2015, following a comprehensive review of the Company’s executive annual equity compensation program and with the assistance of F.W. Cook, the Committee introduced into the Company’s executive equity compensation program performance stock units, or PSUs, that vest based on the Company’s TSR ranking relative to the constituents of the S&P 500 Index over a three-year performance period. As a result, in 2015 one-half of the annual equity awards granted to the named executive officers were granted as stock options, one-quarter were granted as RSUs and one-quarter were granted as PSUs. The Committee introduced relative-TSR based PSUs (including the two-year holding period following vesting of the PSUs, described below) to further strengthen the alignment of our executive long-term incentive compensation program with the long-term interests of our shareholders. Consistent with that objective, the Committee chose the constituents of the S&P 500 Index as the relative TSR comparator group because it is a broad and stable group of companies that represents investors’ alternative capital investment opportunities.

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In February 2015, the Committee subjectively determined the target dollar value of equity compensation to be delivered to each named executive officer. The Committee took into account that the ultimate, realized value of each award will depend substantially on the Company’s long-term performance as well as each of the following factors (none of which was assigned a particular weight by the Committee):

With the exception of our President and CEO, who was promoted to that position in September 2014, the 2015 equity compensation awards for Danaher’s named executive officers tended to be larger than the equity compensation awarded by Danaher’s peers to officers in comparable positions based on recent, publicly available data, because (1) the competitive demand for our executives, particularly in light of our 2014 leadership transition, requires that we make greater efforts to retain our executives, (2) the vesting and holding periods applicable to our awards have been longer than typical for our peer group, (3) for high-level executives the Committee seeks to have equity-based compensation constitute a higher percentage of total compensation than is typical of our peers and (4) unlike many of our peers we do not provide a defined benefit pension plan for our executives, and therefore our long-term incentive awards represent a particularly important capital accumulation opportunity.

The Committee translated the target dollar value attributable to PSUs into a target number of PSUs, established threshold, target and maximum performance levels and established a payout percentage curve that relates each level of performance to a payout expressed as a percentage of the target PSUs. Payout at 100% of the target level requires that the Company achieve above-median performance and rank at the 55 ^th percentile of the constituent companies comprising the S&P 500 Index, while the PSUs pay out at 200% for performance that equals or exceeds the 75 ^th percentile, 50% for performance at the 35 ^th percentile and 0% for performance below the 35 ^th percentile. The payout percentages for performance between threshold and target, or between target and maximum, respectively, are determined by linear interpolation. Notwithstanding the above, if the Company’s absolute TSR performance for the period is negative a maximum of 100% of the target PSUs will vest (regardless of how strong the Company’s performance is on a relative basis), and if the Company’s absolute TSR performance for the period is positive a minimum of 25% of the target PSUs will vest.

Any PSUs that vest following the three-year performance period are subject to an additional two-year holding period and are paid out in shares of Company common stock following the fifth anniversary of the commencement of the performance period. Vesting is contingent on continued employment throughout the three-year performance period and until the Committee certifies satisfaction of the performance criteria, except that in the event of death during the performance period the executive receives a prorated portion of the target award based on the percentage of the performance period during which he or she was employed, and in the event of retirement during the performance period the executive receives a prorated portion of the shares actually earned based on the Company’s performance over the performance period. Any dividends paid on the Company’s common stock during the performance period are credited to the PSU accounts and paid in cash, but are only paid out to the extent the underlying PSUs vest based on performance and are not paid until the shares underlying the vested PSUs are issued.

The Committee continues to apply an Adjusted EPS performance metric to executive RSU grants to link realization of the award to the Company’s operational performance and because the Committee believes that Adjusted EPS growth correlates strongly with shareholder returns. The Committee views the RSU performance criteria as ancillary in importance to the time-based vesting requirement, however, given that RSUs are a key retention tool.

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Annual Incentive Awards

2015 Performance Formula

For 2015, the Committee assigned each executive officer a target bonus percentage representing a percentage of the officer’s base salary as of March 31, 2015 (for 2015, Mr. Joyce’s target bonus percentage was set at 200%, Ms. Lalor’s at 110% and the rest of the named executive officers at 125%). Subject to Danaher’s achievement of positive net income for the year, each named executive officer would be eligible for a bonus equal to the target bonus amount multiplied by the Composite Payout Percentage (which is the sum of the Company Payout Percentage (weighted 60%) and the Personal Payout Percentage (weighted 40%)), subject to the Committee’s exercise of discretion. The Committee exercised its judgment in determining each element of the 2015 formula. In determining the target bonus percentage for each officer, the Committee considered the amount of annual cash incentive compensation awarded to the officer in prior years, the relative complexity and importance of the officer’s position and the amount of annual cash incentive compensation that peer companies would offer such officer. With respect to Mr. Joyce in particular, although the Committee did not target the performance-based portion of his annual cash compensation at any particular percentage of his annual cash compensation, the Committee set his base salary at a level lower, and his target annual bonus opportunity at a level higher, than typical among the Company’s peer companies to ensure that his annual cash compensation is highly performance-based. For each Company performance metric, the Committee set the performance target at a level it believes is reasonably achievable while requiring what it believes would be outstanding performance to achieve the maximum payout level. In determining the target performance level and payout percentage curve for the metrics, the Committee considered historical performance data for the Company and its peer group, analyst consensus earnings estimates for the Company’s peer group, the Company’s annual budget and macroeconomic/end-market trends. In determining the annual personal performance objectives for each officer, the Committee did not assign a particular weighting to any of the objectives but set the quantitative objectives at levels that, while achievable, would in the Committee’s opinion require personal performance appreciably above the executive’s prior year performance level. Each element of the 2015 performance formula is further described below:

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Following the end of 2015, the Committee used its judgment and determined for each officer a Personal Payout Percentage between 0% and 200%. Without assigning any particular weight to any individual factor, the Committee took into account the size of the Company Payout Percentage for the year, the amount of annual cash incentive compensation awarded to the executive in prior years, the executive’s execution against his or her personal performance objectives for the year, the executive’s overall performance for the year and the amount of annual cash incentive compensation that peer companies would offer such executive. The Company awarded Mr. Joyce a Personal Payout Percentage of 180% for 2015, based primarily on his leadership with respect to the Company’s financial performance, the successful consummation of the Pall acquisition and the Company’s preparation for the Separation.

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2016 Performance Formula

In establishing annual incentive award opportunities for 2016, the Committee adjusted the calculation of the Company Payout Percentage in the following manner to take into account the anticipated Separation (the Committee anticipates reverting to the prior design for 2017):

Base Salaries

The Committee reviews base salaries for executive officers in February of each year and in connection with promotions. In February 2015, the Committee subjectively determined 2015 base salaries for the named executive officers, as set forth in the Summary Compensation Table. The Committee concluded that Mr. Joyce’s existing base salary was competitive within the context of his overall compensation package, and did not increase his base salary in 2015. In determining the 2015 base salaries for Ms. Lalor and Messrs. Comas, Beck, Daniel and Lico, without giving specific weight to any particular factor, the Committee used the prior year’s base salary as the initial basis of consideration and then considered the individual factors described under “— Named Executive Officer Compensation Framework,” focusing on the relative complexity and importance of the executive’s role within Danaher, the market value of the executive’s role and the executive’s performance in the prior year. Given that base salary is one of the elements in the formula for determining annual cash incentive compensation, the Committee also considered how changes in base salary would impact annual cash incentive compensation.

Other Compensation

Severance Benefits.   We have entered into Proprietary Interest Agreements with each of our named executive officers that include post-employment non-competition, non-solicitation and confidentiality obligations and (except for Ms. Lalor and Mr. Beck) provide for severance payments under certain circumstances. Mr. Joyce’s agreement also provides for additional cash payments and the pro rata acceleration of the time-based vesting applicable to his outstanding equity awards if the Company terminates his employment without cause. Danaher’s Senior Leader Severance Pay Plan, which each of the named executive officers participates in, also provides for severance payments under certain circumstances. We believe the post-employment restrictive covenants included in these agreements are critical in protecting our proprietary assets, and that the severance payments payable upon a termination without cause are generally commensurate with the severance rights our peers offer executives in comparable roles.

Benefits and Perquisites.   All of our executives are eligible to participate in our employee benefit plans, including our group medical, dental, vision, disability, accidental death and dismemberment, life insurance, flexible spending and 401(k) plans. These plans are generally available to all U.S. salaried employees and do not

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discriminate in favor of executive officers. In addition, the Committee makes certain perquisites available to the named executive officers; please see the footnotes to the Summary Compensation Table for additional details. We believe these limited perquisites help make our total executive compensation plan competitive, are generally commensurate with the perquisites offered by our peers, are cost-effective in that the perceived value of these items is higher than our actual cost and (with respect to the professional services and airplane use in particular) help to maximize the amount of time that the executives spend on Danaher business. The Committee has also adopted a policy prohibiting any tax reimbursement or gross-up provisions in our executive compensation program (except under a policy applicable to management employees generally such as a relocation policy).

In addition, each named executive officer participates in the Amended and Restated Danaher Corporation & Subsidiaries Executive Deferred Incentive Program, or EDIP. The EDIP is a shareholder-approved, non-qualified, unfunded deferred compensation program available to selected members of our management; for a summary of the plan, please see “Employee Benefit Plans — Executive Deferred Incentive Program.” We use the EDIP to tax-effectively contribute amounts to executives’ retirement accounts and give our executives an opportunity to defer taxes on cash compensation and realize tax-deferred, market-based notional investment growth on their deferrals. The amount we contribute annually to the executives’ EDIP accounts is set at a level that we believe is competitive with comparable plans offered by other companies in our industry. EDIP participants do not fully vest in such amounts until they have participated in the program for 15 years or have reached age 55 with at least five years of service with Danaher.

Named Executive Officer Compensation Framework

Determining Named Executive Officer Compensation

Danaher’s compensation program is grounded on the principle that each executive officer must consistently demonstrate exceptional personal performance in order to remain an executive officer of Danaher. Within the framework of this principle and the other objectives discussed above, the Committee exercises its judgment in making executive compensation decisions. The factors that generally shape particular executive compensation decisions (none of which are assigned any particular weight by the Committee) are the following:

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The philosophy and goals of our compensation program have remained consistent over time, although the Committee considers the factors above within the context of the then-prevailing economic environment and may adjust the terms and/or amounts of compensation accordingly so that they continue to support our objectives.

For a description of the role of the Company’s executive officers and the Committee’s independent compensation consultant in the executive compensation process, please see “Corporate Governance – Board of Directors and Committees of the Board – Compensation Committee.”

Long-Term Incentive Compensation Philosophy and Grant Practices

Philosophy .  The Committee believes that the combination of stock options, RSUs and PSUs effectively balances the goals of incentivizing and rewarding shareholder value creation while supporting our talent retention objectives. Stock options and PSUs inherently incentivize shareholder value creation, since option holders realize no value unless our stock price rises after the option grant date and the value of PSUs is tied directly to the Company’s relative TSR performance. In addition, our stock options and RSUs vest over five years and our PSUs are subject to three-year vesting and a further two-year holding period, which periods are longer than typical for our peer group, promote stability and encourage officers to take a long-term view of our performance. We believe our stock option award program in particular has contributed significantly to our strong performance record, which in turn has generally made our stock option awards valuable over the long-term and highly effective in recruiting, motivating and retaining skilled officers. While RSUs and PSUs offer more modest upside potential than stock options, during periods of stock market declines or modest growth they are more likely to support our talent retention objectives.

Grant practices .  The Committee grants equity awards under Danaher’s 2007 Stock Incentive Plan (the “2007 Plan”), which is described in “Employee Benefit Plans – 2007 Stock Incentive Plan.” Executive equity awards are approved at regularly scheduled Committee meetings (typically scheduled in advance of the calendar year in which they occur), at the time of an executive hire or promotion or upon identification of a specific retention concern. The grant date of equity awards approved by the Committee is either the date of Committee approval or a date subsequent to the approval date as specified by the Committee. The timing of equity awards has not been coordinated with the release of material non-public information. The Committee’s general practice is to approve annual equity awards to executives at the Committee’s regularly scheduled meeting in February, when the Committee reviews the performance of the executive officers and typically determines the other components of executive compensation. A target dollar value of annual equity compensation is determined for each officer. Beginning in 2015, the target dollar value is allocated one-half to stock options and one-quarter to each of RSUs and PSUs. The target dollar values attributable to RSUs and PSUs, as applicable, is translated into a target number of RSUs or PSUs using an average closing price over a twenty trading day period ending on the grant date, to avoid the potential volatility impact of using a single-day closing price. The target dollar value attributable to stock options is translated into a number of stock options based on a specified option value (because the Committee does not use the Black Scholes methodology to value options for purposes of converting the target dollar value into the number of awarded options, the target dollar value used by the Committee for awarding options is different than the Black Scholes-based option value reported in the Summary Compensation Table). The exercise price for stock option awards under the 2007 Plan equals the closing price of Danaher’s common stock on the date of grant.

Peer Group Compensation Analysis

The Committee does not target a specific competitive position versus the market or peer companies in determining the compensation of our executives because in light of the Company’s diverse mix of businesses, strict benchmarking against a selected group of companies would not provide a meaningful basis for establishing compensation. However, the Committee believes it is important to clearly understand the relevant market for executive talent to inform its decision-making and ensure that our executive compensation program supports our

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recruitment and retention needs and is fair and efficient. As a result, the Committee has worked with F.W. Cook to develop a peer group for purposes of assessing competitive compensation practices, and periodically reviews compensation data for the peer group derived from publicly filed proxy statements.

The Company’s peer group consists of the companies set forth below (the “peer companies”):

The Committee selected companies for inclusion in this peer group based on (i) the extent to which they compete with us in one or more lines of business, for executive talent and for investors, and (ii) comparability of revenues, market capitalization, net income, total assets and number of employees. The table below sets forth for this peer group and Danaher information regarding revenue, net income and total assets (based on the most recently reported four quarters for each company as of April 30, 2015), market capitalization (as of April 30, 2015) and employee headcount (based on each company’s most recent fiscal year end as of April 30, 2015), in each case derived from the Standard & Poor’s Compustat database.

The peer group compensation data that the Committee reviewed in 2015 in connection with its 2015 executive compensation decisions estimated the 25 ^th , median and 75 ^th percentile positions among our peers with respect to base salary, annual cash incentive compensation (target and actual), average actual annual cash incentive compensation from 2012-2014, total annual cash compensation (target and actual), long-term incentive compensation, total direct compensation (target and actual), all other compensation, annual change in pension value and above-market interest on non-qualified deferred compensation, and actual total compensation, in each case with respect to each respective named executive officer position.

Stock Ownership Policies

Stock Ownership Requirements

To further align management and shareholder interests and discourage inappropriate or excessive risk-taking, our stock ownership policy requires each executive officer to obtain a substantial equity stake in Danaher within five years of their appointment to an executive position. Our CEO is required to own shares with a market value of at least five times his base salary. The requirement for Executive Vice Presidents is three times base salary and for Senior Vice Presidents, two times base salary. Once an executive officer has acquired a number of Company shares that satisfies the ownership multiple then applicable to him or her, such number of shares then becomes his or her minimum ownership requirement (even if the officer’s salary increases or the fair market

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value of such shares subsequently changes) until he or she is promoted to a higher level. Under the policy, beneficial ownership includes shares in which the officer or his or her spouse or child has a direct or indirect interest, notional shares of Danaher stock in the EDIP plan, shares held in a 401(k) plan, unvested RSUs and PSUs (based on target number of shares until vested and then based on the actual number of vested shares), but does not include shares subject to unexercised stock options. Each named executive officer serving as an executive officer as of December 31, 2015 was in compliance with the stock ownership requirements as of such date.

Pledging Policy

In addition, Danaher’s Board has adopted a policy that prohibits any director or executive officer from pledging as security under any obligation any shares of Danaher common stock that he or she directly or indirectly owns and controls (other than shares already pledged as of February 21, 2013), and provides that pledged shares of Danaher common stock do not count toward Danaher’s stock ownership requirements.

Hedging Policy

Danaher policy prohibits Danaher employees (including the named executive officers) and directors from engaging in any transactions involving a derivative of a Danaher security, including hedging transactions.

Recoupment Policy

To further discourage inappropriate or excessive risk-taking, the Committee has adopted a recoupment policy applicable to Danaher’s executive officers, other individuals who serve on the Danaher Leadership Team (which consists primarily of Company corporate officers) and certain other employees (the “covered persons”). Under the policy, in the event of a material restatement of Danaher’s consolidated financial statements (other than any restatement required pursuant to a change in applicable accounting rules), Danaher’s Board may, to the extent permitted by law and to the extent it determines that it is in Danaher’s best interests to do so, in addition to all other remedies available to Danaher require reimbursement or payment to Danaher of:

In addition, both of the stock plans in which Danaher’s executive officers participate contain a provision for recovering awards upon certain circumstances. Under the terms of the Company’s 2007 Plan and the 1998 Stock Plan, no associate can exercise any outstanding equity award after such time he or she is terminated for gross misconduct. In addition, under the terms of the EDIP, if the administrator determines that termination of an employee’s participation in the EDIP resulted from the employee’s gross misconduct, the administrator may determine that the employee’s vesting percentage is zero with respect to all balances that were contributed by Danaher.

Regulatory Considerations

Section 162(m) generally disallows a tax deduction to public corporations for compensation in excess of $1 million paid for any fiscal year to a company’s CEO or to any of the company’s other three most highly compensated executive officers (other than the CFO). The statute generally exempts qualifying performance-

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based compensation from the deduction limit if certain conditions are met. We review the tax impact of our executive compensation on the Company as well as on the executive officers. In addition, we review the impact of our compensation programs against other considerations, such as accounting impact, shareholder alignment, market competitiveness, effectiveness and perceived value to employees. Because many different factors influence a well-rounded, comprehensive executive compensation program, some of the compensation we provide to our executive officers might not be deductible under Section 162(m).

Treatment of Equity-Based Compensation Awards Upon Fortive Separation

We expect that Danaher equity awards outstanding at the time of the Separation will be adjusted using the following principles:

The following table provides additional information regarding each type of Danaher equity award. As a result of the adjustments to such awards in connection with the separation, the precise number of Fortive options, RSUs and restricted shares will not be known until the distribution date or shortly thereafter.

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