April 11, 2015

Dear Fellow Stockholder:

It is my pleasure to invite you to attend Quest Diagnostics’ 2015 Annual Meeting of Stockholders. At the meeting, stockholders will vote:

Stockholders also will transact any other business as may properly come before the meeting or any adjournment or postponement thereof.

Attendance at the meeting is limited to stockholders at the close of business on March 16, 2015, or their duly appointed proxy holder.

We enclose our proxy statement, our Annual Report and a proxy card; distribution of these materials is scheduled to begin on April 11, 2015. Your vote is very important. Whether or not you plan to attend the meeting, I urge you to submit your proxy. Most stockholders may submit a proxy via mail, telephone or the Internet. Instructions on how to submit your proxy are included with your proxy card and these proxy materials. Please submit your proxy promptly.

Thank you for your continued support of Quest Diagnostics.

	Sincerely,
	Daniel C. Stanzione, Ph.D.
	Chairman of the Board

PROXY SUMMARY

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.

Annual Meeting of Stockholders

Meeting Agenda

Management Proposals

Advisory Resolution to Approve Executive Compensation. We are asking our stockholders to approve, on an advisory basis, the compensation of our named executive officers.

Ratify the Appointment of Independent Registered Accounting Firm for 2015. We are asking our stockholders to ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2015.

Approve Amendments to the Employee Plan. As we do every few years, we are asking our stockholders to approve amendments to the Amended and Restated Employee Long-Term Incentive Plan (the “Employee Plan”). The amendments will increase the number of shares available for issuance under the Employee Plan, and, with respect to awards that are designed to qualify as performance-based compensation for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended, clarify the performance goals that may be used and performance goal measurement.

2016 Annual Meeting of Stockholders

Board Nominees

The following table provides summary information about our directors. The first eight are the Board’s nominees for election at the annual meeting; the terms of the last three expire in 2016. In 2014, each of our incumbent directors attended at least 75% of the meetings of the Board and the Board committees on which he or she served.

Executive Compensation Highlights

Our Board of Directors is firmly committed to pay for performance and has built a strong foundation for our executive compensation program. The chart above outlines the main components of our program for executive officers in 2014. The objective of our program is to attract and retain talented executives who have the skills and experience required to help us achieve our strategic objectives and advance the long-term interests of our stockholders. The compensation opportunity for our named executive officers is directly tied to corporate performance, including both financial and non-financial results, and individual performance. Recently the Board has taken additional steps to strengthen our compensation program and to foster improved Company performance.

Our 2014 compensation actions and incentive award payouts demonstrated our pay for performance alignment.

Our Compensation Discussion and Analysis, which includes a discussion of our program’s “Best Practices,” begins on page 20. The 2014 compensation of our named executive officers is set forth in tables beginning at page 38.

2014 Business Performance Highlights

In 2014, we executed our 5-point strategy, achieved financial performance exceeding key target levels and had strong total shareholder return.

INFORMATION ABOUT OUR CORPORATE GOVERNANCE

Proposal No. 1—Election of Directors

Our Board of Directors currently has eleven directors divided into three classes. The Board is becoming declassified, so that in 2016 all directors will be elected annually.

At our 2013 annual meeting, our stockholders approved an amendment to our certificate of incorporation to institute the annual election of directors; previously, directors were divided into three classes, with members of each class elected to three-year terms. Pursuant to our transition to annual election of all directors, members of the class of directors elected at the 2015 annual meeting will serve a one-year term, expiring in 2016. Members of the class of directors elected in 2013 (Dr. Baldwin, Mr. Pfeiffer and Mr. Rusckowski) currently remain in office, with terms expiring in 2016.

Each director holds office until his or her successor has been elected and qualified or the director’s earlier resignation, death or removal. The biographies of each of the nominees and continuing directors below contain information regarding the person’s service as a director of the Company, business experience, other director positions and the experience, qualifications, attributes and skills that led the Board to conclude as of the date of this proxy statement that the person should serve as a director of the Company.

Nominees for Election

After considering the recommendation of the Governance Committee, the Board nominated Dr. Britell, Ms. Gregg, Dr. Leiden, Mr. Main, Mr. Ring, Dr. Stanzione, Dr. Wilensky and Mr. Ziegler to serve as directors for a term expiring at the 2016 annual meeting. Each nominee currently is a director of the Company whose term expires at the 2015 annual meeting. The Board believes that each nominee possesses the qualities and experience that nominees should possess in accordance with the Company’s Corporate Governance Guidelines, which set forth the Board’s philosophy regarding Board composition and identify key qualifications and other considerations (the relevant portion of the Company’s Corporate Governance Guidelines is set forth below under the heading “Board Nomination Process” beginning on page 9). Each nominee has consented to serve if elected.

Ms. Gregg and Dr. Leiden each became a director after our last annual meeting. The Governance Committee’s third party search firm recommended several candidates, including Ms. Gregg and Dr. Leiden, as potential director candidates to the Governance Committee. After the directors interviewed Ms. Gregg and Dr. Leiden, the Governance Committee unanimously recommended to the Board that Ms. Gregg and Dr. Leiden be elected a director, and the Board unanimously elected Ms. Gregg, effective July 22, 2014 and Dr. Leiden, effective December 1, 2014.

		Jenne K. Britell, Ph.D., 72, is the non-executive chair of United Rentals, Inc. and a director of Crown Holdings, Inc. Dr. Britell is a member of the Council on Foreign Relations, and a director of the U.S. Russia Foundation for Entrepreneurship and the Rule of Law. Since 2010, Dr. Britell has been Senior Managing Director at Brock Capital Group, advising companies and investors regarding strategy, acquisitions and asset deployment, including in connection with financial services. From 2001 to 2009, she was the Chairman and Chief Executive Officer of Structured Ventures, Inc., which advised domestic and foreign companies on financial services products and strategy. From 1996 to 2000, she was a senior officer of GE Capital, serving as President of GE Capital Global Commercial & Mortgage Banking and Executive Vice President of GE Capital Global Consumer Finance from 1999 to 2000 and serving as President and Chief Executive Officer of GE Capital Central and Eastern Europe from 1998 to mid-1999. Dr. Britell served as a director of West Pharmaceuticals Corporation from 2005 until 2008. She has been a director of Quest Diagnostics since August 2005. She has extensive executive and advisory experience, including in corporate governance, corporate finance, capital markets, international business and strategic planning, with multinational corporations operating in complex, regulated industries.
		Vicky B. Gregg, 60, retired as Chief Executive Officer of Blue Cross Blue Shield of Tennessee in 2012. Prior to becoming CEO in 2003, Ms. Gregg served in a number of other leadership roles, including President and Chief Operating Officer. Before that, she held a series of senior roles at Humana Health Plans. Ms. Gregg served as a member of the U.S. National Institutes of Health Commission on Systemic Interoperability. She currently serves on the Boards of TeamHealth Holdings, Inc., First Horizon National Corporation and the Electric Power Board of Chattanooga. Previously, Ms. Gregg served on several national boards, including America’s Health Insurance Plans (Chair 2010-2011), the BlueCross BlueShield Association, the National Institute for Healthcare Management (Chair 2012), and the Healthcare Leadership Council. She has been a director of Quest Diagnostics since July 2014. Ms. Gregg has extensive executive and advisory experience, including in general management and strategic planning, with a range of health care organizations, and extensive experience with healthcare issues and the operation of the U.S. healthcare system, including as a practicing nurse.

		Jeffrey M. Leiden, M.D., Ph.D., 59, has been Chairman, President and CEO of Vertex Pharmaceuticals Incorporated since 2011. He has served as a member of Vertex’s board of directors since 2009. Prior to joining Vertex in 2011, Dr. Leiden was a Managing Director at Clarus Ventures, a life sciences venture capital firm he joined in 2006. From 2000 to 2006, he served as President and Chief Operating Officer and Chief Scientific Officer at Abbott Laboratories, where he had responsibility for managing all aspects of Abbott’s global pharmaceutical business. Previously, Dr. Leiden held several academic and hospital appointments, including as Chief of Cardiology at the University of Chicago, the Elkan R. Blout Professor of Biological Sciences at the Harvard School of Public Health and Professor of Medicine at Harvard Medical School. He has extensive consulting experience in the pharmaceutical and medical device areas. Dr. Leiden served as a director of Abbot Laboratories from 2001 to 2006, Shire Pharmaceuticals plc from 2007 to 2011and Millennium Pharmaceuticals, Inc. from 2008 to 2009. He is a fellow of the American Academy of Arts and Sciences, and an elected member of the Institute of Medicine of the National Academy of Sciences. Dr. Leiden has been a director of Quest Diagnostics since December 2014. He has extensive executive and advisory experience, including in general management and strategic planning, with a range of health care organizations, and extensive experience with healthcare issues and the operation of the U.S. healthcare system, including as a practicing physician.
		Timothy L. Main, 56, is Chairman of the Board of Directors of Jabil Circuit, Inc., an electronic product solutions company providing comprehensive electronics design, manufacturing and management services to global electronics and technology companies. Mr. Main was Chief Executive Officer of Jabil from 2000 until 2013. As CEO, Mr. Main led Jabil’s growth strategy, increasing annual revenues nearly fivefold to reach $17 billion in 2012, and expanding in Asia and other emerging markets. He has been a director of Quest Diagnostics since January 2014. Mr. Main has extensive executive experience, including in international, operations, corporate governance and general management in a complex industry.
		Timothy M. Ring, 57, has been Chairman and Chief Executive Officer of C. R. Bard, Inc. since 2003. He is a director of C. R. Bard, Inc. and was director of CIT Group Inc. from 2005 to 2009. Mr. Ring is a Trustee of the New Jersey Health Foundation. Mr. Ring has been a director of Quest Diagnostics since December 2011. Mr. Ring has extensive executive experience, including in strategic planning and international operations, with a multinational corporation operating in the healthcare industry.

		Daniel C. Stanzione, Ph.D., 69, retired from Lucent Technologies Incorporated in 2000 and is President Emeritus of Bell Laboratories and an independent consultant. Dr. Stanzione began his career in 1972 with Bell Laboratories, where he led the teams working on the first microprocessors and digital signal processors. He was appointed President of Network Systems, Lucent’s largest business unit, in 1996 and was appointed Chief Operating Officer of Lucent in 1997. Dr. Stanzione is a director of InterNAP Network Services Corporation, where he serves as non-executive chairman. Dr. Stanzione served as a director of Avaya Inc. from 2000 until 2007. He has been a director of Quest Diagnostics since January 1997, and its Chairman since May 1, 2012. Dr. Stanzione has extensive executive experience, including in general management and strategic planning, with multinational corporations operating in complex industries.
		Gail R. Wilensky, Ph.D., 71, is a Senior Fellow at Project HOPE, an international non-profit health foundation, which she joined in 1993. From 2008 through 2009, Dr. Wilensky served as President of the Defense Health Board, an advisory board in the Department of Defense. From 1997 to 2001, she was the chair of the Medicare Payment Advisory Commission. From 1995 to 1997, she chaired the Physician Payment Review Commission. In 1992 and 1993, Dr. Wilensky served as a deputy assistant to the President of the United States for policy development relating to health and welfare issues. From 1990 to 1992, she was the administrator of the Health Care Financing Administration where she directed the Medicare and Medicaid programs. Dr. Wilensky is a director of UnitedHealthcare Corporation. She served as a director of Manor Care Inc. from 1998 until 2009, Gentiva Health Services, Inc. from 2000 until 2009, Cephalon Inc. from 2002 to 2011 and SRA International, Inc. from 2005 to 2011. Dr. Wilensky also served as a Commissioner of the World Health Organization’s Commission on the Social Determinants of Health and as the Non-Department Co-Chair of the Defense Department’s Task Force on the Future of Military Health Care. She has been a director of Quest Diagnostics since January 1997. Dr. Wilensky has extensive experience, including in strategic planning, as a senior advisor to the U.S. government and private enterprises regarding healthcare issues and the operation of the U.S. healthcare system.
		John B. Ziegler, 69, retired in January 2006 as the President, Worldwide Consumer Healthcare, of GlaxoSmithKline plc. He joined a predecessor company of GlaxoSmithKline in 1991, and held positions of increasing responsibility during his tenure. He has been a director of Quest Diagnostics since May 2000. He has extensive executive experience, including in sales, marketing, strategic planning and international operations, with multinational corporations operating in the healthcare industry.

Directors Continuing in Office (Terms expire at the 2016 Annual Meeting)

		John C. Baldwin, M.D., 66, is Senior Advisor for Health Affairs to the Texas Tech University System and a tenured professor. He oversees health research, education, and accreditation issues for the university. From 2007 to 2009, he served as President of Texas Tech University Health Sciences Center. From 2005 to 2007, he was President and Chief Executive Officer of CBR Institute for Biomedical Research. From 1998 to 2005, Dr. Baldwin was the Associate Provost for Health Affairs at Dartmouth College and Professor of Surgery at Dartmouth Medical School. From 1994 to 1998, Dr. Baldwin was the head of the surgical programs at Baylor College of Medicine and its affiliated hospitals. Dr. Baldwin was also the Governor of the American College of Surgeons from 1991 through 1997 and the President of the International Society of Cardiothoracic Surgeons in 1999. Dr. Baldwin has served as the Vice-Chair of the Board of Overseers of Harvard University. Dr. Baldwin served as a director of Massey Energy Company from 2004 until 2006. He has served since 2012 as a member of the Defense Health Board, an advisory board in the Department of Defense. Dr. Baldwin also has served as a member of the Medicare Payment Advisory Commission. He has been a director of Quest Diagnostics since May 2004. Dr. Baldwin has extensive executive experience, including in strategic planning, with major organizations, and extensive experience with healthcare issues and the operation of the U.S. healthcare system, including as a practicing physician.
		Gary M. Pfeiffer, 65, retired in 2006 as the Senior Vice President and Chief Financial Officer of E.I. du Pont de Nemours and Company. He joined DuPont in 1974, where he held positions of increasing responsibility in finance and international operations, as well as in various DuPont divisions. Mr. Pfeiffer served as Secretary of Finance for the state of Delaware from January through June 2009. Mr. Pfeiffer is a director of InterNAP Network Services Corporation and Solazyme, Inc., and served as a director of Talbots, Inc. from 2005 to 2012. He is the non-executive Chair of the Board of Directors of Christiana Care Health System, a regional hospital system located in Delaware. Mr. Pfeiffer has been a director of Quest Diagnostics since December 2004. He has extensive executive experience, including in corporate finance, accounting, international operations, and strategic planning, with a multinational corporation operating in complex industries.
		Stephen H. Rusckowski, 57, has been President and Chief Executive Officer of Quest Diagnostics since May 2012. From November 2006 to May 2012, Mr. Rusckowski was the Chief Executive Officer of Philips Healthcare, the largest unit of Royal Philips Electronics, and a member of the Board of Management of Royal Philips Electronics and its Executive Committee. He joined Philips when it acquired Agilent’s Healthcare Solutions Group in 2001, and was the CEO of Philips Imaging Systems business group before assuming his role as CEO of Philips Healthcare. Mr. Rusckowski has been a director of Quest Diagnostics since May 2012. He is a director of Xerox Corporation and was a director of Covidien plc from December 2013 to January 2015. Currently, Mr. Rusckowski is the Chairman of the America Clinical Laboratory Association. He has extensive executive experience, including in strategic planning and international operations, with multinational corporations operating in the healthcare industry. Mr. Rusckowski’s employment agreement with the Company provides for him to be nominated for election to the Board.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR EACH NOMINEE. PROXIES SOLICITED BY THE BOARD WILL BE VOTED FOR EACH NOMINEE UNLESS OTHERWISE INSTRUCTED.

Governance Practices

The Board believes that good corporate governance is important. The Board has adopted a set of Corporate Governance Guidelines to enhance its own effectiveness and to demonstrate its commitment to strong corporate governance for the Company. The Board reviews these Guidelines, no less frequently than annually, for possible revision, including in response to changing regulatory requirements, evolving practices and the concerns of our stockholders. The Company also has adopted a Code of Business Ethics applicable to all directors, officers and employees. The Corporate Governance Guidelines and Code of Business Ethics are published on our corporate governance website at www.QuestDiagnostics.com.

The Company has strong corporate governance policies and practices and executive compensation policies and programs, and listens to the concerns of its stockholders.

Director Independence

The Board assesses annually the independence of each director in accordance with the Company’s Corporate Governance Guidelines and New York Stock Exchange listing standards. The independence guidelines in the Company’s Corporate Governance Guidelines are consistent with the independence requirements in the New York Stock Exchange listing standards and include guidelines as to categories of relationships that are considered not material for purposes of director independence.

All members of the Audit and Finance Committee and the Compensation Committee must be independent under the Company’s Corporate Governance Guidelines. Pursuant to the charters of the Audit and Finance Committee and Compensation Committee, respectively, members of these committees also must satisfy separate independence standards based on requirements of the Securities and Exchange Commission and NYSE, respectively.

The Board has determined that a substantial majority (ten of eleven) of our directors is independent. Each member, including the chair, of each of the Audit and Finance Committee, the Compensation Committee, the Governance Committee and the Quality, Safety & Compliance Committee qualifies as independent, including under the committee-specific independence requirements discussed above. The Board has determined the following directors to be independent: Dr. Baldwin, Dr. Britell, Ms. Gregg, Dr. Leiden, Mr. Main, Mr. Pfeiffer, Mr. Ring, Dr. Stanzione, Dr. Wilensky and Mr. Ziegler. Mr. Rusckowski is not independent because he is a Company officer. In making its determinations as to the independence of the directors, the Board reviewed relationships between the Company and the directors, including ordinary course

commercial relationships in the last three years between the Company and entities of which Dr. Leiden, Mr. Main and Mr. Ring, respectively, is an executive officer; these relationships did not exceed a certain amount of that entity’s gross revenues in any year.

William F. Buehler served as a director during part of 2014. During 2014, the Board determined that Mr. Buehler qualified as independent, including under the committee-specific independence requirements discussed above.

Stockholder Access

Stockholders and any other person may communicate with the Board by sending an email to our Chairman at ChairmanoftheBoard@QuestDiagnostics.com or by writing to the full Board or any individual director or any group or committee of directors, c/o Corporate Secretary, Three Giralda Farms, Madison, New Jersey 07940. Communications received at the email address are automatically routed to our Chairman with a copy to our General Counsel and Corporate Secretary. The Chairman determines whether any such communication should be distributed to other members of the Board. Communications received by the Corporate Secretary addressed as set forth above, other than communications unrelated to the duties and responsibilities of the Board, are forwarded to the intended directors.

The Audit and Finance Committee established a procedure whereby complaints and concerns with respect to accounting, internal controls and auditing matters may be submitted to the Audit and Finance Committee. All communications received by a director relating to the Company’s accounting, internal controls or auditing matters are immediately forwarded to the Chairman of the Audit and Finance Committee and are investigated and responded to in accordance with the procedures established by the Audit and Finance Committee. In addition, the Company has established a hotline (known as CHEQline) pursuant to which employees can anonymously report accounting, internal controls and financial irregularities (as well as compliance concerns on other laws).

Our Corporate Governance Guidelines provide that directors are encouraged and expected to attend the annual stockholders meeting. All of our directors then in office attended the 2014 annual stockholders meeting.

Board Nomination Process

The Governance Committee is responsible for reviewing with the Board, on an annual basis, the composition of the Board as a whole and whether the Company is being well served by the directors, taking into account each director’s independence, skills, experience, availability for service to the Company and other factors the Governance Committee deems appropriate. The Governance Committee is responsible for recommending director nominees to the Board, including re-nomination of persons who are already directors. The Governance Committee does not set specific, minimum qualifications that nominees must meet in order for the Governance Committee to recommend them to the Board, but rather believes that each nominee should be evaluated based on his or her own merits, taking into account the Company’s needs and the composition of the Board. Recommendations are made by the Governance Committee in accordance with the Company’s Corporate Governance Guidelines, which set forth the Board’s philosophy regarding Board composition and identify key qualifications and other considerations. The Governance Committee believes that the Board should be comprised of individuals whose backgrounds and experience complement those of other Board members, and also considers whether a prospective nominee promotes a diversity of talent, skill, expertise, background, perspective and experience, including with respect to age, gender, ethnicity, place of residence and specialized experience. The Governance Committee does not assign specific weights to particular criteria and nominees are not

required to possess any particular attribute. The key qualifications and other considerations set forth in the Company’s Corporate Governance Guidelines are set forth below.

The Governance Committee considers suggestions from many sources, including stockholders, regarding possible candidates for director. Stockholders may recommend candidates for consideration as director by sending an email to our Chairman at ChairmanoftheBoard@QuestDiagnostics.com or writing to the full Board or any independent Board member, c/o Corporate Secretary, Three Giralda Farms, Madison, New Jersey 07940. The recommendation should contain the proposed nominee’s name, biographical information and relationship to the stockholder. The Governance Committee evaluates stockholder recommendations for director candidates in the same manner as other director candidate recommendations. Stockholders may also nominate director candidates. See “Frequently Asked Questions” beginning on page 65 for information regarding the process and deadline for stockholders to submit director nominations for the 2016 annual meeting.

When the Governance Committee identifies a need to add a new Board member, the Governance Committee identifies candidates by seeking input from Board members and considering recommendations for nominees submitted by other sources, including stockholders. The Governance Committee also from time to time hires third-party search firms to assist in identifying and evaluating candidates for nomination. After the Governance Committee ranks the candidates, the Chairman of the Board, the President and Chief Executive Officer and other Board members interview the candidates selected by the Governance Committee. Members of senior management also may interview candidates. After the interview process, the Governance Committee re-assesses the candidates and then makes its recommendation for director candidates to the Board, which determines which candidates are nominated for election by the stockholders or elected by the Board.

Board Committees

During 2014, the Board held 8 meetings. In order to fulfil its responsibilities, the Board has delegated certain authority to its committees. There are five standing committees. Each of our incumbent directors attended at least 75% of the total number of meetings of the Board and the committees on which he or she served. Any director may attend meetings of any committee of

which the director is not a member. The following table shows the membership of each of the committees during 2014 and the number of meetings held by each committee in 2014.

		Audit and Finance		Compensation		Governance		Quality, Safety & Compliance		Executive
John C. Baldwin, M.D. (1)
Jenne K. Britell, Ph.D.
William F. Buehler (2)
Vicky B. Gregg (3)
Jeffrey M. Leiden, M.D., Ph.D. (4)
Timothy L. Main
Gary M. Pfeiffer
Timothy M. Ring
Daniel C. Stanzione, Ph.D.
Stephen H. Rusckowski
Gail R. Wilensky, Ph.D.
John B. Ziegler (5)
Number of meetings		12		7		7		4		0

For each year, a schedule of Board meetings is established before the year begins. Committee meetings are generally scheduled for the day before, or the day of, meetings of the full Board, except that meetings of the Executive Committee are scheduled only when needed. The Board and each committee also hold such additional meetings as the Board or committee, respectively, determines necessary or appropriate.

A brief description of each of the Board committees and their functions is set forth below. Additional information about the committees can be found in their charters, which are available on our corporate governance website at www.QuestDiagnostics.com.

Audit and Finance Committee

The Audit and Finance Committee:

The Board has determined that each of Dr. Britell and Mr. Pfeiffer qualifies as an “audit committee financial expert” as defined by the Securities and Exchange Commission. For descriptions of the experience of Dr. Britell and Mr. Pfeiffer, see “Proposal No. 1—Election of Directors” beginning on page 2.

Compensation Committee

The Compensation Committee:

For more information regarding the Company’s processes and procedures for executive compensation, including regarding the role of executive officers and compensation consultants in connection with determining or recommending executive and director compensation, see “Compensation Discussion and Analysis” beginning on page 20.

Governance Committee

The Governance Committee:

Quality, Safety & Compliance Committee

The Quality, Safety & Compliance Committee:

Executive Committee

The Executive Committee may act for the Board, except with respect to certain major corporate matters, such as mergers, election of directors, removal of directors or the Chief Executive Officer,

amendment of the Company’s charter or by-laws, declaration of dividends and matters delegated to other Board committees.

Board Leadership Structure and Role in Risk Oversight

In 2012, our Board elected a non-executive Chairman of the Board to lead it. For nearly ten years before that, our independent directors had selected a Lead Independent Director, and the Board retains the flexibility to revise our leadership structure if, in the exercise of its fiduciary duty, the Board determines that a different structure is appropriate. Currently, the Board believes that having a non-executive Chairman helps the administration and organization of the Board and facilitates the effective conduct of its duties, including the activities of the independent directors. The principal responsibilities of the Chairman of the Board are to:

The Board plays an active role in overseeing the Company’s key risks and has considered its role in risk oversight in determining the current Board leadership structure. The Company’s management is responsible for managing the risks, which it does through a committee of senior managers that leads the Company’s enterprise risk management program. The program is designed to identify and address the Company’s key risks from time to time, including without limitation medical quality, cybersecurity and billing. The Board has delegated to its Audit and Finance Committee primary responsibility for overseeing that program. The Audit and Finance Committee receives periodic updates regarding the program. In addition, the Board’s Quality, Safety and Compliance Committee reviews the adequacy and effectiveness of policies and programs to ensure the Company’s compliance with laws and regulations applicable to its business (other than securities and accounting laws and regulations, which the Audit and Finance Committee oversees), and its medical quality program, and regularly receives reports regarding these topics. In addition, the Compensation Committee annually reviews the compensation arrangements for the Company’s senior management team members to assess whether they encourage risk taking that is reasonably likely to have a material adverse effect on the Company. Each of these committees regularly updates the Board regarding its activities. In addition, each year the full Board of Directors reviews the enterprise risk management program.

Related Person Transactions

The Company has a written policy pursuant to which it evaluates proposed transactions involving a related person and the Company in which the amount involved exceeds $120,000. A related person is any director or executive officer of the Company, any immediate family member of a director or executive officer, or any person who owns 5% or more of the Company’s outstanding common stock. The office of the General Counsel is primarily responsible for the administration of the policy and for determining, based on the facts and circumstances, whether the Company or a related person has a direct or indirect material interest in the transaction. Certain transactions are defined not to be related person transactions under the policy.

The Governance Committee reviews any proposed transaction in which a related person has a direct or indirect material interest, except for any compensation arrangements involving an immediate family member of a director or an executive officer. In the event that the General

Counsel becomes aware of a related person transaction not approved in advance, the General Counsel will arrange for the related person transaction to be reviewed and, if appropriate, ratified at the next regularly scheduled meeting of the Governance Committee. Any member of the Governance Committee who is a related person with respect to a transaction under review may not participate in any review, consideration or approval of the transaction.

In considering any related person transaction, the Governance Committee determines whether the transaction is fair to the Company. In considering a proposed transaction involving a director or the immediate family member of a director, the Governance Committee also assesses whether the proposed transaction could reasonably be expected to impact the independence of the director under the Company’s Corporate Governance Guidelines, the New York Stock Exchange listing standards or other applicable rules.

Compensation arrangements involving an immediate family member of an executive officer are reviewed and approved by the Chief Executive Officer and the Senior Vice President, Chief Human Resources Officer, unless such person is an immediate family member of the Chief Executive Officer, in which case the compensation arrangement is approved by the Compensation Committee. Compensation arrangements involving an immediate family member of a director are reviewed and approved by the Compensation Committee.

2014 Directors Compensation Table

Annual Cash Retainer Fees. During 2014, our non-employee directors received an annual cash retainer fee of $55,000, payable in quarterly instalments of $13,750. The director who served as chair of our Compensation Committee, and the director who served as chair of our Quality, Safety and Compliance Committee, each received an additional $10,000 annual fee, and the director who served as the Chair of the Audit and Finance Committee received an additional $30,000 fee. The director who served as non-executive Chairman and Chairman of the Governance Committee received an additional $72,500 fee.

Meeting Fees. Non-employee directors receive a meeting fee of $1,500 for attending each Board or committee meeting at which a majority of directors attend in person and $750 for attending a meeting at which a majority of directors attend by telephone.

Long-Term Incentive Plan for Non-Employee Directors. Each non-employee director participates in the Company’s Long-Term Incentive Plan for Non-Employee Directors (the “Director Plan”). The Director Plan currently authorizes the grant of non-qualified stock options and/or a stock award (which may be in the form of shares or RSUs) on the date of the annual stockholders meeting, in such proportions as the Board may determine, covering a limited number of shares of the Company’s common stock. If a person is appointed or elected as a director other than on the

date of the annual stockholders meeting, the Board may grant to such director a prorated option and/or stock award, in such proportions as the Board may determine. The Director Plan also permits a one-time grant to a non-employee director of stock options and stock awards covering a limited number of shares of common stock of the Company upon initial election to the Board. The annual option grants become exercisable, and annual RSUs generally vest and convert to shares of our common stock, in three equal annual installments, beginning on the first anniversary of the grant date, regardless of whether the non-employee director remains a director.

The aggregate number of shares of the Company’s common stock which may be issued pursuant to stock awards or the exercise of options granted under the Director Plan may not exceed 2,400,000 (subject to adjustments in certain circumstances). The exercise price of all stock options issued under the Director Plan is the fair market value of our common stock on the grant date.

For 2014, the Board fixed the value of the annual equity award to non-employee directors at approximately $168,000 and determined that the award would be delivered entirely in the form of RSUs. The 2014 award was granted effective May, 21, 2014, with each non-employee director receiving an award of 2,924 RSUs. The director who served as non-executive Chairman and Chairman of the Governance Committee during 2014 received an additional grant of 1,262 RSUs, granted effective May 21, 2014, having a grant date value of approximately $72,500.

A director may elect to receive annual retainer and meeting fees in stock options or stock awards in lieu of cash. The number of options issued in lieu of cash for the retainer and meeting fees is based on the estimated value on the grant date of such options using the same option-valuation model used for recognizing expense for financial statement reporting purposes. The number of shares issued in lieu of cash for the retainer and meeting fees is based on the fair market value of the stock on the date that the cash payment would otherwise be made. Options granted in lieu of retainer and meeting fees vest immediately. Options, once vested, will be exercisable through the tenth anniversary of the date of grant even if the director’s service on the Board terminates.

Deferred Compensation Plan for Directors. Under the Company’s Deferred Compensation Plan for Non-Employee Directors, each non-employee director may elect to defer, until a date specified by the director or until the director’s termination of service as a director, all or a portion of the director’s cash compensation or any stock grants awarded pursuant to the Director Plan. Cash amounts deferred may be indexed to (i) a cash account under which amounts deferred earn interest, compounded quarterly, at the prime rate of Citibank, N.A. in effect on the first date of each calendar quarter or (ii) the Company’s common stock.

The following table sets forth the 2014 compensation of our non-employee directors. Mr. Rusckowski, our only employee director during 2014, received no additional compensation for serving as director. None of our non-employee directors receives any consulting or other non-director fees from the Company.

Director Compensation Program for 2015. No changes were made in the director compensation program for 2015.

Stock Ownership Information

We encourage our directors, officers and employees to own our common stock; owning our common stock aligns their interests with the interests of our stockholders. The Company maintains stock ownership and retention guidelines for its directors and executive officers. Under the guidelines for directors, each director’s ability to sell shares associated with equity awards is limited until the director owns not less than 6,000 shares of our common stock. The guidelines for our executive officers are discussed in “Compensation Discussion and Analysis” beginning on page 20.

The following tables show the number of shares of the Company’s common stock beneficially owned by (1) each person who is known to the Company to own beneficially more than 5% of the Company’s common stock, (2) each director of the Company and each nominee, (3) each named executive officer and (4) all directors, nominees and executive officers as a group. Information in the table regarding the Company’s directors, nominees and executive officers is provided as of March 5, 2015.

INFORMATION REGARDING EXECUTIVE COMPENSATION

Proposal No. 2—Advisory Resolution to Approve Executive Compensation

Section 14A of the Securities Exchange Act entitles stockholders to vote to approve or not approve, on an advisory (non-binding) basis, our executive officer compensation as disclosed in the Compensation Discussion and Analysis and accompanying compensation tables and narrative. We are asking stockholders to approve the following resolution:

RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and related narrative disclosure, is hereby APPROVED.

Pay for Performance. As discussed in “Compensation Discussion and Analysis” below, our executive compensation program is designed to pay for performance, to align the interests of our executive officers with the interest of our stockholders, to support the Company’s long and short term business goals and to promote the Company’s profitable growth. Our program reflects many “best practices.” The Company has continued to build on the strong foundation of its executive compensation program, and has recently taken additional steps to bolster the alignment of its compensation program with the interests of stockholders. Our executive compensation structure and levels in 2014 clearly demonstrates our commitment to aligning pay and performance.

Advisory Vote. This vote is advisory. We conduct an advisory vote to approve executive officer compensation annually; the next stockholder advisory vote to approve executive compensation will take place at the Company’s 2016 annual meeting. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the executive compensation policies and practices described in this proxy statement. The Board and the Compensation Committee value the opinions of the Company’s stockholders and will take into account the outcome of the vote, in conjunction with such other factors as the Board and the Compensation Committee consider appropriate, in connection with the Company’s executive compensation program.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL. PROXIES SOLICITED BY THE BOARD WILL BE VOTED FOR THIS PROPOSAL UNLESS OTHERWISE INSTRUCTED.

Compensation Discussion and Analysis

Executive Summary

Introduction

The Compensation Committee (the “Committee”) determined 2014 compensation for the Company’s named executive officers after considering, among other things, the Company’s performance, the competitive market for executive talent, and the current environment in the healthcare industry, including in diagnostic information services. Building on the strong foundation of the Company’s executive compensation program and its track record of pay for performance, the Company recently has taken additional steps to bolster the alignment of its compensation program with the Company’s strategy and the interests of stockholders. Our executive compensation structure, compensation opportunity levels and pay outcomes in 2014 reflect our firm commitment to align pay with performance and the Company’s financial results and focus management on implementing the Company’s five-point business strategy.

2014 Company Performance

In 2014, we made good progress executing our five-point business strategy and delivering on our commitments. The Company achieved improvement in financial and operating metrics and exceeded several key financial targets. 2014 revenues from continuing operations of $7.4 billion were approximately 4% above the prior year, adjusted diluted earnings per share for 2014 increased 2.5% to $4.10 per share and we generated $938 million in operating cash flow. Our total shareholder return in 2014 was 28.1%, versus 18.6% for the median company in our compensation peer group and 13.7% for the S&P 500 index. In November 2014, at our second Investor Day, we shared our progress on our strategy and the commitments that we made in November 2012, reaffirmed our strategy and outlined our path forward. Set forth below are summary highlights of the Company’s 2014 progress on its five-point strategy.

Restore Growth

Drive Operational Excellence

Simplify the organization to enable growth and productivity

Refocus on diagnostic information services

Deliver disciplined capital deployment

2014 Incentive Payment Outcomes Aligned with Performance; Additional Compensation Highlights

2014 payouts for our annual cash incentive awards and performance share awards for our named executive officers were aligned with the Company’s 2014 financial performance, and clearly demonstrated our commitment to aligning pay and performance. Reflecting the Company’s 2014 performance, 2014 annual cash incentive compensation for our named executive officers was 95% of target level. Payout on performance share awards for performance periods ending December 31, 2013 and December 31, 2014 reflected performance well below targets during the relevant 3-year performance periods. The following bullets summarize key aspects of 2014 compensation for our named executive officers. Please also see the charts, on page 28 and 33, respectively, discussing our historical payouts for our annual incentive awards and performance share awards.

For the performance year 2014, similar to 2013, actual earn-outs from performance shares were well below the targeted opportunity, reflecting sub-par three-year performance results. Taken in the aggregate, the results of our annual and long-term incentive programs demonstrate our commitment to aligning executive compensation with Company performance.

Recent Compensation Actions

At the Company’s 2014 annual meeting of stockholders, approximately 94% of votes cast on the say-on-pay proposal voted in favor of the compensation of our named executive officers. Both before and after the meeting, we undertook a multi-pronged effort to gain insights that would help us to improve our compensation program and to understand the concerns of our investors. We held discussions with our investors, including stockholders holding approximately 40% of the Company’s outstanding common stock, to discuss our executive compensation program (stockholders holding an additional significant percentage of our shares declined our invitation to have a discussion). The Committee also received advice from the Committee’s independent compensation consultant, considered market practices at peer companies and considered management recommendations based on the Company’s strategic direction and market practices. Insights gained from these efforts, including the feedback from our investors, were evaluated by our Committee, along with the results of the say-on-pay advisory vote, and were taken into account by the Committee in taking action regarding the Company’s compensation program in and for 2014.

Recently, the Committee has taken additional steps to strengthen our compensation program to foster improved Company performance.

performance share awards are: revenue growth (40%); return on invested capital (35%); and run-rate savings on the Company’s Invigorate cost excellence program (25%).

Strong Foundation

Our program is designed to align executive compensation with the Company’s performance. In recent years the Committee has built a strong foundation for our executive compensation program, and, in addition to the actions noted above, has taken numerous steps to enhance the program’s alignment of pay and performance.

Best Practices

Our program reflects many best practices.

Executive Compensation Philosophy

The objective of our executive compensation program is to attract and retain talented executives who have the skills and experience required to help us achieve our strategic objectives and advance the long-term interests of our stockholders. The Committee is firmly committed to pay for performance: the compensation opportunity for our named executive officers is directly tied to corporate performance, both financial and non-financial results, and individual performance.

The principal components of compensation for our named executive officers are:

Our executive compensation program is designed to:

We make very limited use of employment agreements with executive officers. Of our named executive officers, only Mr. Rusckowski, our President and Chief Executive Officer, has an employment agreement. Our other named executive officers are “at will” employees.

We believe that our executive compensation program is fully aligned with stockholder interests. Our annual cash incentives reward the achievement of annual performance, including operating and strategic goals (both financial and non-financial). The Committee generally sets, for both annual and long-term incentive compensation, performance goals with targets based on the Company’s operating plan and aligned with our strategy; non-financial goals generally are objective in nature. The Committee’s recent approach is discussed in “Annual Cash Incentive Compensation” on page 28 and “Long-Term Incentive Awards” on page 31. Our compensation mix, long-term incentive awards and key performance metrics are designed to foster long term stockholder value creation and reduce emphasis on risky short-term behavior. Our equity awards, including their vesting features, combined with our senior management share retention and ownership guidelines, are designed to link executive compensation to long-term stock performance.

Under our pay for performance approach, significantly more than half of the total compensation of our executive officers is performance-based, in the form of annual incentive compensation and long-term incentive awards. For Mr. Rusckowski, approximately 87% of his target total compensation for 2014 was performance-based. In addition, the greater portion of the incentive awards of our executive officers is focused on long-term awards (equity), to drive stockholder value.

Executive Share Retention Guidelines

Since 2005 we have maintained senior management retention and ownership guidelines. In 2014, for the third consecutive year, the Committee enhanced the guidelines. The updated guidelines now provide that the minimum shareholding requirement for our CEO is six times base salary. Under the guidelines, an officer’s ability to sell shares associated with equity awards is limited until the officer satisfies a minimum ownership position. Our executive officers are required to retain 75% of net shares received from vesting of RSUs and performance shares and from the exercise of stock options, until they achieve their minimum shareholding requirement. For our executive officers other than our CEO, the minimum shareholding requirement is four times base salary. For other employees subject to the guidelines, the minimum shareholding requirement is two or three times base salary, depending on position. The Committee periodically reviews these guidelines and may adjust them. We determine the number of shares corresponding to these thresholds on April 1 of each year using the average annual price of our common stock during the preceding calendar year and the executive’s base salary as of the first business day in April. For purposes of determining whether an employee has met the minimum shareholding requirements, we give the employee credit for shares subject to unvested RSUs but do not give the employee credit for shares subject to stock options or unvested performance share awards.

As of December 31, 2014, all of our named executive officers hold stock in excess of his or her minimum ownership requirement, except for Mr. Davis, who only joined the Company in April 2013. Under our policy, if a named executive officer satisfies the minimum share ownership requirements in our guidelines, the Committee monitors future equity awards to that person to assure that the interests of the named executive officer and stockholders continue to be significantly aligned and, if warranted, adjust the minimum share ownership requirements or add retention requirements.

Policies Regarding Hedging and Pledging our Common Stock

Our directors and executive officers are prohibited from pledging Quest Diagnostics common stock to secure a loan, and from holding such stock in a margin account. Our directors and executive officers also are prohibited from entering into transactions that result in a financial benefit

if our stock price declines, or any hedging transaction involving our stock, including but not limited to the use of financial derivatives (such as puts and calls), short sales or any similar transactions. In addition, our directors and executive officers, as well as certain other employees, may purchase or sell Company securities only during window periods of 30 calendar days that generally begin on the second business day following the issuance of our quarterly earnings releases.

Setting Executive Compensation

The Committee establishes the Company’s general compensation philosophy. The Committee oversees our executive compensation program and regularly monitors our executive compensation to ensure adherence to our compensation philosophy. The Committee is supported in its work by our Senior Vice President, Chief Human Resources Officer and his staff and the Committee’s independent compensation consultant.

Within the framework of the executive compensation programs approved by the Committee, the Chief Executive Officer recommends to the Committee individual compensation for the executive officers, other than himself. These recommendations are based on market data and Company and individual performance. He also recommends incentive compensation measures to align compensation with our corporate objectives. The Chief Executive Officer is present during the portions of Committee meetings in which compensation decisions regarding the named executive officers other than the Chief Executive Officer are reviewed and decided, but the Committee retains the final authority for all such decisions. The Chief Executive Officer does not make any recommendations to the Committee regarding his own compensation.

The Committee annually reviews the compensation arrangements for the Company’s executive officers to assess whether the arrangements encourage risk taking that is reasonably likely to have a material adverse effect on the Company. The Committee conducted an annual review in October 2014 and concluded that the compensation arrangements for the Company’s executive officers do not encourage risk taking that is reasonably likely to have a material adverse effect on the Company.

The Committee engaged Pay Governance LLC as its independent compensation consultant. At the Committee’s request, in 2014 the consultant provided analyses and information regarding market practices and trends in executive and director compensation, advised the Committee on the design of our executive compensation programs to ensure the linkage between pay and performance, and provided related advice and services (e.g., in connection with the proposed amendment of the Employee Plan). Pay Governance periodically meets with the Committee’s Chairman to discuss compensation matters, and it periodically participates in private sessions of the Committee (without Company employees present). Pay Governance provides no services to the Company other than its services to the Committee, has no other ties to management that could jeopardize its fully independent status, and has strong internal governance policies that help ensure that it maintains its independence. Pay Governance reports directly to, and is directly accountable to, the Committee. The Committee has the sole authority to retain, terminate and obtain the advice of Pay Governance, at the Company’s expense. In February 2015, the Committee conducted a formal assessment of Pay Governance in accordance with Securities and Exchange Commission and New York Stock Exchange rules and determined that Pay Governance is independent from the Company’s management and that its work for the Committee has not raised any conflict of interest.

Competitive Pay Information

For each named executive officer, the Committee annually reviews performance and approves all elements of compensation, including base salary, annual incentive awards and long-term incentive awards, except for our broad-based employee benefit programs. After the Committee approves the compensation of our named executive officers, the Committee reports the compensation to the full Board.

To assist the Committee with its review, our Human Resources department, in consultation with the Committee’s consultant, annually prepares analyses of each named executive officer’s

compensation, including tally sheets. The review includes current and prior year compensation information regarding base salary, target and paid annual incentive compensation, deferred compensation activity and balances, aggregate equity grant values, perquisites, and all other compensation, as well as estimates of the amounts payable to each named executive officer upon termination of employment under various circumstances, including termination in connection with a change in control.

The compensation targets for, and compensation earned by, each named executive officer are analysed relative to market data for comparable positions in a peer group. In 2014, after considering the recommendation of its independent consultant, the Committee enhanced the Company’s peer group by replacing two companies having revenues and a market capitalization significantly higher than the Company’s, Express Scripts Holdings and Medtronic, with Catamaran and Agilent Technologies. Thus, the peer group now consists of the following 16 companies, which are generally in the healthcare services, equipment and distribution industries.

For the named executive officers, the Committee establishes target compensation consistent, to the extent possible, with comparable positions in the peer group and provides our named executive officers with the opportunity to earn greater rewards for performance that exceeds established goals. Our practice is to establish base salary, annual cash incentive targets and long-term incentive award levels and terms to deliver total direct compensation at market competitive levels, depending upon the named executive officer’s responsibilities, expertise and experience, along with individual and Company performance. We adjust the comparisons to take account of different scope of job responsibility where appropriate. Specific consideration is given to the weighting of fixed and at-risk components of pay relative to the peer group. No single element of compensation is set without considering the total direct compensation of the named executive officers relative to the marketplace, as well as the impact of any change on the other components of our pay model. The economic value of each participant’s prior equity awards at the date of grant is considered when setting annual compensation packages. We do not take into account realized or unrealized gains from previous equity awards in setting subsequent total compensation levels. Based on the 2014 review, the target total direct compensation for Mr. Rusckowski, the Chief Executive Officer, was at the 49th percentile of the peer group, while the target total direct compensation for the other named executive officers ranged from the 17^th percentile to the 81^st percentile.

Pay Components

Base Salary

We pay base salary to our executives to provide them a steady source of income for their services to the Company. The Committee annually reviews and approves base salaries for the named executive officers. Consistent with our executive compensation philosophy, base salaries are set at levels competitive with the peer group. The Committee determined 2014 base salary adjustments based on an assessment of our 2013 results and each named executive officer’s position, performance, scope of responsibility, current salary level and market comparables. When considering base salary adjustments for 2014, the Committee recognized that the Company’s 2013 financial performance was below planned levels, and that our stock price declined in 2013 when many companies in our peer group and the S&P 500 experienced substantial growth. After considering these factors, the Committee determined that, absent a change in responsibilities, the

2014 base salary for each named executive officer would not be increased from the 2013 level and established the 2014 base salary for each named executive officer identified in the following chart, at the level and reflecting the increase set forth in the chart.

In 2014, Ms. Doherty and Mr. Davis both undertook additional responsibilities. Mr. Davis became Senior Vice President, Operations, and Ms. Doherty assumed responsibility for the Company’s employer solutions, healthcare information technology and risk assessment businesses. The total base salary paid to each named executive officer in 2014 is reported in the “2014 Summary Compensation Table” on page 38.

Annual Cash Incentive Compensation

Introduction

We generally pay annual incentives to our executive officers in accordance with the SMIP, which our stockholders approved at our 2003 annual stockholders meeting.

The Committee’s approach to annual incentive compensation generally has been:

The following table sets forth, for each year since 2005, the aggregate annual cash incentive payments as compared to target for the named executive officers then in office. Since 2005, even in years that the Company had strong financial performance, annual incentive compensation payouts never reached 1.5x target. The Committee believes that these results demonstrate the rigor of the targets adopted, that targets have been set at reasonable levels and that annual incentive compensation has been sensitive to Company performance.

Annual Incentive Compensation for 2014

For 2014, we paid annual incentive compensation under the SMIP to all the named executive officers. The Committee determined the incentive target for annual incentive compensation for each

named executive officer at the beginning of 2014. In establishing the targets, the Committee considered the factors discussed above. For 2014, the Committee determined that the incentive target percentages for each named executive officer would not be changed from 2013.

For each named executive officer who received an annual cash incentive for 2014, the threshold, target and maximum performance criteria were established with payout opportunities set at zero, one-times (1x), and two-times (2x) target incentive, respectively. Rewards for performance levels between these levels were interpolated. All annual cash incentive payments to our named executive officers are subject to the achievement of specific performance goals and, if achieved, are scheduled to be paid on or before March 15th of the year following the completion of the performance year. The Committee retains the discretion to adjust performance measures to focus on the operating performance of the Company, to avoid unintended compensation results and to ensure that participants are not inadvertently given incentives to avoid taking actions in the long-term interest of the Company and its stockholders.

For 2014, the target incentives and payouts for the named executive officers are summarized in the following chart.

In 2014, annual cash incentive payouts for the named executive officers were based on performance against both financial and non-financial goals. The principal financial goals related to achieving budget targets, including earnings per share, revenues and operating income. The additional goals were integrally related to, and designed to foster key elements of, the Company’s five-point strategy. The Committee set the performance measures and the weights for each based on the relative importance of the goals. Each of the named executive officers had the same goals and weightings. The following chart shows the goals, the relative weight allocated to each goal, results and resulting payout factors for 2014.

Assessment of employee engagement was based on indices built from employee survey questionnaires.

Medical quality and customer experience focused on medical quality (50%) and customer service (50%), as part of the Company’s five-point strategy. These goals were developed to drive operational excellence during 2014 and to position the Company for the future. The medical quality goals included measures such as lost specimens and revised reports; the service quality goals included measures such as patient waiting time, first call resolution and turn-around times.

Adjusted diluted earnings per share (EPS) from continuing operations, revenue and adjusted operating income were weighted heavily in order to provide the proper incentive to management to stimulate profitable growth. When the Committee established these performance standards for the year, it retained discretion to adjust them for the effect of certain specified items. For 2014, the Committee retained discretion to adjust EPS from continuing operations and operating income for the following categories: (i) gains and losses from the sale of a business; (ii) charges related to the impairment of goodwill or intangible assets; (iii) charges related to reorganization and restructuring

programs; (iv) charges related to the acquisition or integration of a company or business; (v) cumulative effect, or one-time gains or losses, associated with the adoption of accounting changes; (vi) extraordinary gains or losses; (vii) gains or losses on debt extinguishment; and (viii) effects of changes in tax laws or the rate on deferred tax assets and liabilities. The Committee selected these categories because the Committee desires to incent management to focus on the operating performance of the Company and these categories (1) reflect matters outside the control of participants which could create “windfall” benefits or undue penalties for participants (for example, changes in tax laws or accounting standards) or (2) accommodate the Committee’s concern not to inadvertently penalize participants for taking actions in the long-term interest of the Company and its stockholders (for example, a restructuring of operations) out of concern for the action’s impact on EPS from continuing operations or operating income.

In accordance with the Quest Diagnostics policy, for fiscal year 2014 the Committee made several adjustments to the Company’s results for purposes of calculating performance under the SMIP. The Committee made these adjustments, which totaled $.32 per share in the case of EPS from continuing operations, and $136 million in the case of operating income, to ensure that participants would not be rewarded for certain gains or penalized for having made decisions intended to foster long-term value creation, rationalize operations and allow for long-term reductions in cost. When making these adjustments, the Committee also noted the Company’s performance in 2014, including the items discussed in “Executive Summary—2014 Company Performance” beginning on page 20. The Company disclosed these adjustments when reporting its quarterly and annual 2014 financial performance. The following table reconciles the adjustments made for 2014 and provides a brief description of each adjustment.

Non-Recurring Items Excluded from 2014 SMIP Calculations

Some individual adjustments made by the Committee had the effect of increasing adjusted diluted EPS from continuing operations and adjusted operating income; others had the effect of decreasing these measures. Had the Committee not made the adjustment to EPS from continuing operations, the weighted payout factor percentage for this performance measure would have been

0%. Had the Committee not made the adjustment to operating income, the payout factor percentage for this measure would have been 0%. The following table shows, on a pro forma basis, the payments that would have been made, both as a percentage of target and as a percentage of salary, had the Committee not made the foregoing adjustments (these amounts would replace the numbers under the headings “2014 Actual Payment as a % of Target” and “2014 Actual Payment as a % of Salary” in the table on page 29).

Without giving effect to the adjustments to EPS from continuing operations and operating income described above, the annual incentive awards to the Company’s named executive officers in respect of 2014 as reported in the “Non-Equity Incentive Plan Compensation” column in the 2014 Summary Compensation Table on page 38 would have been as follows: Mr. Rusckowski—$879,060; Mr. Guinan—$318,780; Dr. Cohen—$258,714; Ms. Doherty—$241,004; and Mr. Davis $241,872.

2014 Conclusion

Overall, the Committee believes that the annual incentive payments made to our named executive officers for 2014 were consistent with the objectives of our executive compensation program.

Long-Term Incentive Awards

Introduction

We design our long-term incentive awards to:

In determining the value of the long-term incentive component of each named executive officer’s compensation, the Committee considers, without limitation:

The Committee is responsible in its use of equity as long-term incentive compensation. The number of shares outstanding in connection with our equity awards as a percentage of our total outstanding shares (our “overhang”) is modest relative to our peer group.

Timing of Equity Awards; Awards Committee

It has been the Committee’s practice to make annual equity grants at a meeting held shortly after we announce our prior year’s earnings. It also has been the Committee’s practice to make equity grants to new hires and promoted employees, and other grants in special cases, from time to time as appropriate.

In 2013, upon the Committee’s recommendation, the Board created a new committee, the Awards Committee, consisting of one director, and delegated to the committee (i) certain authority

to grant equity awards under the Employee Plan and (ii) authority to make corrections to awards approved by the Compensation Committee, to the extent the Awards Committee determines that corrections are necessary or appropriate to carry out the Compensation Committee’s intentions. At this time, the Awards Committee consists of Mr. Rusckowski.

The Awards Committee is authorized to grant the full range of awards that can be issued under the Employee Plan. There are, however, significant limits on awards that the Awards Committee may grant. These include: (i) a prohibition on awards to executive officers; (ii) a prohibition on awards to any individual whose base salary exceeds a threshold amount; (iii) an annual limit on awards issuable to any individual; and (iv) an annual limit on aggregate awards. In addition, awards issued by the Awards Committee are required to vest over three years, in accordance with a schedule approved by the Board that is consistent with the vesting schedule that applies to equity awards approved by the Compensation Committee. It is expected that the Awards Committee will approve awards from time to time as it determines appropriate, and that the awards will be issued for, among other purposes, new hires, promoted employees, employee retention and special recognition awards, including for high-performing employees who generally are not eligible for annual equity awards. The Awards Committee regularly reports to the Compensation Committee awards granted by, and corrections made by, the Awards Committee. In 2014, 70,024 options, 3,827 performance shares, and 16,240 restricted share units were granted by the Awards Committee.

Approach to Performance Share Awards

For many years, the Committee has included an annual grant of performance shares in the long-term incentive awards to our employees, including our executive officers. Performance shares encourage a long-term view and reinforce the link between financial results and rewards. Our performance shares are generally based on a three-year performance period and reward financial and operational performance during that period. The value that they provide depends on the level of achievement of predefined performance goals over the multi-year performance period. If minimum performance levels are not achieved, the performance shares are forfeited and provide no value. New performance share awards are made each year such that participating named executive officers will participate in up to three overlapping performance periods.

For each performance share award, the Committee establishes baselines, target performance levels and the measurement period. No performance shares will be earned if a specified minimum performance level is not achieved. For performance above the threshold level, payment will vary with actual performance achieved, up to a maximum payment of 2 times the target level. Determination of the shares payable pursuant to each award is made after the end of the performance period.

The Committee’s approach to performance share awards has been:

The following table sets forth, for each year since 2005, the aggregate performance share award payouts as compared to target for the named executive officers then in office. Since 2005, although in some cases targets have been exceeded, performance share award payouts have never reached 1.5x target. The Committee believes that these results demonstrate the rigor of the targets adopted, that targets have been set at reasonable levels and that performance share award payouts have been sensitive to Company performance.

Determination of February 2011 Performance Share Awards

In February 2014, the Committee determined payment for performance share awards made in February 2011. At the time of grant, the Committee established baselines, target performance levels and the measurement period. The performance measure was the compound annual growth rate of the Company’s income from continuing operations (subject to adjustment for predefined categories discussed below and calculated in accordance with the plan). The measurement period was January 1, 2011 to December 31, 2013.

When the Committee established this performance measure, it retained discretion to adjust income from continuing operations as reported in the Company’s financial statements to ignore the effect of certain specified items (generally under the same categories identified above in the discussion of annual incentive compensation, and for the same reasons). The following table shows the targeted performance levels (awards for performance between these percentiles are interpolated on a straight-line basis).

In accordance with Quest Diagnostics policy, for purposes of calculating the award payouts, the Committee determined to adjust 2013 income from continuing operations. When making the adjustments, the Committee recognized that the Company’s 2013 financial performance was below planned levels, and that our stock price declined in 2013 when many companies in our peer group and the S&P 500 experienced substantial growth. The Committee also recognized that the Company executed its 5-point strategy launched in November 2012, and that despite a challenging environment, the Company implemented a great deal of change in a very short time and made good progress, including:

The Committee excluded several items from the Company’s results for purposes of calculating performance under the awards. The Committee made these adjustments to exclude the impact of unusual or nonrecurring items that had a negative impact on 2013 income from continuing operations and to incent management to make decisions that are focused on long-term value creation. These are the same adjustments that the Committee approved for the 2013 annual incentive compensation under the SMIP and were discussed in the Company’s 2014 proxy statement. The Company disclosed these adjustments when reporting its quarterly and annual 2013 financial performance. The following table reconciles the adjustments, which totaled $(202) million, made for 2013 and provides a brief description of each adjustment.

Unusual or Non-Recurring Items Excluded from 2013 Calculation of Income from Continuing Operations

In the aggregate, the adjustments made by the Committee had the effect of decreasing income from continuing operations, with the result that the awards were cancelled without payout. The Committee determined that the compound annual growth rate in the Company’s income from continuing operations for the performance period was (4.8)% (4.7% if the Committee had not made the adjustments described above) and that the earnings multiple applicable to these awards during the performance period was 0% of target (decreased from 127% if the Committee had not made such adjustments). The Committee determined that the awards would be cancelled without payout, based on the Company’s failure to meet threshold performance criteria during the performance period.

2014 Equity Awards

In February 2014, the Committee awarded long-term compensation for 2014 to the named executive officers, resulting in the equity awards shown for them in the “2014 Summary Compensation Table” and the “2014 Grants of Plan-Based Awards Table” on pages 38 and 40.

In considering the size of the award for each of these named executive officers, the Committee considered the factors described above, including the performance of the Company and the executive during 2013 and the competitive market for executive talent. In an effort to maintain market competitive levels in the total compensation of our named executive officers, in 2014 the Committee awarded to our named executive officers, except Mr. Davis, equity awards having the same value as the awards that they received in 2013. Mr. Davis’s 2014 equity award was increased, reflecting his increased responsibilities upon becoming Senior Vice President, Operations.

After discussion regarding potential changes in approach for 2014 long-term incentive awards, the Committee determined to maintain the general structure of the long-term incentive program for 2014, with some modifications from 2013. In August 2013, the Compensation Committee approved a new approach to vesting of the Company’s equity awards in the change in control context. The new approach provides for “double trigger” vesting in connection with a change in control. Thus, the awards vest in connection with a change in control only if the executive’s employment is actually or constructively terminated within two years after a change in control. The Compensation Committee also eliminated pro rata vesting upon voluntary resignation from employment and approved an enhanced form of employee equity award agreement. The awards approved by the Committee for the named executive officers in February 2014 reflect all these enhancements.

For 2014, the Committee decided again that the more senior participants in the equity award program, including all our executive officers, would receive a mix of annual equity awards consisting of over 75% stock options and performance share grants, with the remainder consisting of RSUs. To better align with market practice, the Committee also determined that less senior participants in the program would receive equity awards consisting solely of stock options and RSUs. The Committee also approved a significant number of equity awards, consisting solely of RSUs, to high-performing employees who generally do not receive equity awards as part of their annual compensation. These “special recognition awards” were designed to foster an alignment of shareholder interests with a broader group of employees, and to incent these employees to continue to perform at a high level. The Committee believes that this program, emphasizing performance shares and options for our most senior employees, including all of our executive officers, reflects a focus on pay for performance and competitive considerations, and supports our business strategy. The program also fosters the ownership culture that the Committee seeks to encourage among our employees, including our senior management.

We continued to use stock options as a component of our equity awards in 2014 because they align incentives with stockholder interests by rewarding appreciation in stock price. We believe that stock options are an appropriate incentive to motivate our employees. Stock options generally vest 33-1/3 percent on each of the first, second and third anniversaries of the grant date.

In 2013, the performance measure for performance share awards was based 50% on revenue growth and 50% on average return on invested capital. As part of the Committee’s effort to maintain alignment of executive compensation with achievement of the Company’s financial goals and stockholder value, the Committee maintained these same performance measures for 2014. For purposes of the awards, we will calculate average return on invested capital by averaging, over the three-year performance period: (i) our annual income from continuing operations (excluding net income attributable to non-controlling interests) plus after-tax interest expense, divided by (ii) the total average debt and average stockholder equity for the relevant year. The target performance shares subject to the 2014 performance share awards will be earned over a three-year period ending December 31, 2016 and will be paid out in shares of the Company’s common stock after the end of the performance period to the extent that the performance level is achieved. Determination of the shares payable pursuant to the 2014 performance share award will be made after the end of the performance period.

For our most senior employees, including our executive officers, less than 25% of the total value of the 2014 annual equity award was delivered in the form of RSUs, which generally vest as follows: 25% on each of the first and second anniversaries of the grant date and 50% on the third anniversary of the grant date. The Committee considers stock options and performance shares to be more strongly performance-related than RSUs. We believe that RSUs enhance retention across business cycles because they retain a portion of their value if our stock price declines from the grant date price. RSUs also foster an ownership culture, help motivate employees to perform at peak levels across business cycles and motivate increasing stockholder value.

2015 Actions

In February 2015, the Committee determined payment for performance share awards made in February 2012. The performance period for those awards ended on December 31, 2014. The performance measures were the compound annual growth rate of the Company’s revenues (50%) and the compound annual growth rate in the Company’s return on invested capital (50%) (in each case subject to adjustment for predefined categories and calculated in accordance with the plan). The Committee determined that the earnings multiple applicable to these awards during the performance period was 2% of target. Determination of these awards will be discussed in the 2016 Compensation Discussion and Analysis.

After discussion regarding potential changes in approach for 2015 long-term incentive awards, in February 2015 the Committee determined to revise the performance measures for the 2015 performance share awards by adding a new measure. The new measure, which focuses on the Company’s Invigorate cost excellence program, furthers the alignment of the performance shares with the Company’s five-point strategy during the three-year performance period that coincides with the three-year tenure of the new phase of the Invigorate program. The Committee determined that the performance measures for the performance share awards would be: revenue growth (40%); return on invested capital (35%); and run-rate savings on the Company’s Invigorate cost excellence program (25%).

Other

Benefits

All employees who satisfy certain service requirements, including the named executive officers, are entitled to participate in the 401(k) Plan, in which participants may defer a portion of their eligible cash compensation up to limits established by law. All the named executive officers also are eligible to participate in the SDCP. The purposes of the 401(k) Plan and the SDCP are to provide eligible employees an opportunity to save for their retirement and, through Company matching contributions and credits, to provide supplemental retirement income to help us compete in the market for talented employees. For additional information regarding the SDCP, see “2014 Nonqualified Deferred Compensation Table” on page 45.

As part of his or her total compensation package, each named executive officer is eligible to participate in our broad-based employee benefit plans, such as medical, dental, group life insurance and disability plans and the employee stock purchase plan. Each of these benefits is provided on the same basis as available to other exempt employees. Our benefits are designed to attract and retain talented employees and to provide them with competitive benefits.

Perquisites

Perquisites represent a minor component of executive compensation. We provide perquisites that we believe are reasonable and competitive. In 2014, the named executive officers except Dr. Cohen were entitled to receive tax and financial planning services, within certain limits. The Company has a security plan approved by the Committee for Mr. Rusckowski; Mr. Rusckowski and his family use Company aircraft for personal travel. Pursuant to an Aircraft Timesharing Agreement approved by the Committee, Mr. Rusckowski will reimburse the Company for its aggregate incremental cost arising out of Mr. Rusckowski’s personal use of Company aircraft after the

aggregate incremental cost to the Company of Mr. Rusckowski’s personal use exceeds $100,000 in a year. Pursuant to his employment agreement, the Company also reimbursed Mr. Rusckowski for driver and vehicle costs. These perquisites are disclosed in the “2014 Summary Compensation Table” on page 38.

Severance

The Company’s Executive Officer Severance Plan covers the named executive officers. No named executive officer will receive any severance benefits solely as a result of a change of control. For additional information, see “2014 Potential Payments upon Termination or Change in Control” on page 46 We believe that the severance benefits provided to our named executive officers are consistent with market practice and are appropriate recruiting and retention tools. The named executive officers have agreed to non-competition and non-solicitation covenants for a period following termination of employment.

Impact of Tax Treatment

The Internal Revenue Code precludes a public company from taking a tax deduction for annual compensation in excess of $1 million paid to its chief executive officer and the three most highly paid executive officers other than the chief financial officer. This limitation does not apply to compensation that meets the tax code requirements for qualifying performance-based compensation. Annual incentive awards for 2014 were awarded under the SMIP, which specifies a maximum amount that can be awarded to a participant for any year based on the Company’s earnings, i.e., 1% of the Company’s income before taxes and extraordinary gains and losses as reported in its audited consolidated financial statements for the relevant fiscal year, after adjustment for certain items identified in the SMIP. The amount of annual incentive actually awarded for the year, however, is determined by the Committee, applying the compensation framework described above and subject to the condition that the Company may pay less (but not more) than the maximum. For 2014, the Committee certified the maximum amount payable under the SMIP as $9,486,000 per executive and exercised its discretion to award lesser amounts under the plan. The Company’s annual cash bonuses and equity awards generally are designed to satisfy the requirements for deductible compensation, but the Committee retains the flexibility to pay compensation or grant awards that may not be deductible if the Committee determines it to be consistent with the Company’s objectives for our executive compensation program. The portion of Mr. Rusckowski’s base salary over $1 million is not considered performance-based and is not deductible by the Company.

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis. Based on its review and discussions with management, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into the Company’s Annual Report on Form 10-K for 2014.

Compensation Committee

Timothy M. Ring, Chairman
John C. Baldwin, M.D.
Vicky B. Gregg
Jeffrey M. Leiden, M.D., Ph. D.
Gail R. Wilensky, Ph.D.

Risk Assessment

Management has reviewed the Company’s significant compensation programs for employees other than the Company’s executive officers to identify any programs that it believes create, individually or in combination, risks that are reasonably likely to have a material adverse effect on the Company. In assessing the risk of these compensation programs, management considered the plan designs, plan operation, plan controls, management oversight and review and competitive norms. The Board’s Compensation Committee assessed the risk of plans that apply to our senior management team, including our executive officers, considering the risk guidelines suggested by the Center on Executive Compensation. In each case, it was concluded that the programs do not encourage imprudent risk taking and that the risks arising from them are not reasonably likely to have a material adverse effect on the Company.

2014 Summary Compensation Table

This table summarizes the compensation for 2014 for each of our named executive officers.

2014 Grants of Plan-Based Awards Table

This table provides information about plan-based awards granted in 2014.