SecProbe.io

CORRESP
1
filename1.htm

September 30,
2010

Mr. Jeffrey
P. Riedler

Assistant
Director

United
States Securities and Exchange Commission

Division
of Corporation Finance

Mail
Stop 4720

100
F Street NE

Washington,
D.C.  20549

RE:  File Number 001-02189

Dear
Mr. Riedler:

In
reply to your letter of August 18, 2010, we have enclosed our response in
the attachment to this letter.

As
per your request, Abbott acknowledges that we are responsible for the adequacy
and accuracy of the disclosure in the filing; staff comments or changes to
disclosure in response to staff comments do not foreclose the Commission from
taking any action with respect to the filing; and Abbott may not assert staff
comments as a defense in any proceeding initiated by the Commission or any
person under the federal securities laws of the United States.

Very
truly yours,

  /s/
  Thomas C. Freyman

  Thomas
  C. Freyman

  Executive
  Vice President, Finance,

  And
  Chief Financial Officer

Enclosure

Abbott Laboratories

Form 10-K for Fiscal Year
ended December 31, 2009

Filed March 15, 2010

File No. 001-02189

Definitive Proxy Statement of
Schedule 14A filed March 15, 2010

Executive Compensation

Compensation Discussion and
Analysis

Compensation Components

Performance-Based Annual Cash
Incentives. page 14

We have reconsidered the
issues raised by Comments 1 and 2 of your letter of August 18, 2010, which
concern issues addressed in response to Comment 5 of your letter of June 16,
2010.  We address Comments 1 and 2,
copied immediately below, together in our response that follows the Comments.

1.               We note your
response to Comment 5 regarding corporate goals and reissue the comment in
part.  Please expand your proposed
disclosure of your pre-determined 2009 financial goals to describe each goal in
greater detail.  For example, your
proposed disclosure lists “Key Financial Goals (sales, margin, etc.)” as
one performance measure.  Please revise
your proposed disclosure to discuss the sales goal, margin goal, and other
goals separately, identifying each unlisted goal.  Please provide similar expanded proposed
disclosure for the goals underlying the “Business Process and Other Financial
Goals” measure.  Identify the weighting
of each goal. In addition, please quantify each goal and target, and describe
the level of achievement of all the financial goals.

2.               We note your
response to Comment 5 regarding the individual goals and reissue the comment.
We note your statement in your supplemental response that providing disclosure
regarding the specific pre-determined individual goals would cause the company
competitive harm. Please note in order to keep your performance metrics
confidential pursuant to Instruction 4 to Item 402(b) of Regulation S-K,
you must submit an analysis supporting your conclusion that you are likely to
suffer competitive harm if the information is disclosed. We are generally only
willing to grant confidential treatment for performance goals if you can
demonstrate how the disclosure of these goals will allow your competitors to
discover information about break even points, cost structures relating to
specific products or similarly sensitive information. In these instances, you
must submit a detailed analysis, identifying the competitively harmful information
and demonstrating how the information could be harmful to your company.

Response to Comments 1 and 2:

Having re-examined the
officers’ goals, we believe we can disclose the officers’ material pre-determined
individual goals and be fully responsive to the requirements of the

applicable rules without
including information the disclosure of which would cause competitive harm.

We note that Item 402(b) calls
for a discussion and explanation of all “material elements” (emphasis added) of a
registrant’s compensation of its named executive officers.  For the named executive officers in Abbott’s
2010 proxy statement, between six and twenty-eight different financial and
business process goals were taken into account in determining each named
executive officer’s 2009 bonus amount.
Almost all of the goals that
were weighted, received a weighting of below 20%. Indeed, only one company-wide goal, which was incorporated into the
bonus determination was weighted at 20%.
Similarly, some of the financial goals reflected measures of
business unit (rather than corporate-wide) performance, and we believe that
disclosure of the numerical targets or results for those goals are not material
to an understanding of Abbott’s compensation programs. In addition, only two of the named executive officers carried
division-level goals with a weighting of 20% or more.  Each of these officers carried a goal
specific to that officer’s division which was weighted at 25%.  No other goals were weighted at 20% or
more.  Thus, out  of the more than fifty individual goals set
for Abbott’s named executive officers in 2009 only the one corporate-wide goal
and two division-level goals had weighting of 20% or more. We believe
disclosure of numerical targets associated with goals established under our annual bonus program as currently designed,
other than corporate-wide objective financial goals that are weighted at least
20%, is not material to our shareholders’ understanding of our compensation
programs for our named executive officers and, therefore, such numerical
targets are not required to be disclosed.  Furthermore, many of the business process
goals taken into account were not susceptible to being assigned, and were not
assigned, a numerical target (such as, for example, for one named executive
officer, “implementing a corporate structure for certain global financial  activities”).

Finally, for Mr. White,
in determining the bonus amount to be paid, our Compensation Committee
considers the factors referred to above which are both comprehensive and
extensive (for example, in 2009, his goals included financial goals such as
goals related to sales, return on assets, and earnings at both a company and
division level, and business process goals, such as goals related to business
strategy, market expansion, commercial expansion, and corporate
leadership).  These goals are considered
both individually and within the context of the then-prevailing economic,
business, regulatory and competitive environment, recent compensation history
and other factors that the Compensation Committee determines at the time to be
relevant.

In light of the foregoing,
in future proxy statements Abbott will expand its disclosure of our named
executive officers’ predetermined goals, identifying each material goal, and
that goal’s weighting, and for corporate-wide goals the targeted numerical
performance (if any) and the corresponding level of achievement.  Attachment A contains an example of our
proposed disclosure in response to these Comments.  It will be revised, and perhaps reformatted,
to include all of the named executive officers and such other appropriate
updates and other changes as are necessary.

2

Attachment
A

Example
of Proposed Proxy Disclosure

Performance-Based Annual
Cash Incentives

Each of the named officers
participates in the 1998 Abbott Laboratories Performance Incentive Plan.  The Performance Incentive Plan is designed to
comply with the requirements of Section 162(m) of the Internal Revenue
Code of 1986 for performance-based compensation.

Each year, maximum award
allocations for Performance Incentive Plan participants as a percentage of
consolidated net earnings are set.  For
[insert year], the maximum award for the Chief Executive Officer was [insert
percentage] of adjusted consolidated net earnings for the fiscal year and for
all other Performance Incentive Plan participants [insert percentage] of
adjusted consolidated net earnings.
Historically, and in [insert year], the Committee exercised its
discretion to deliver Performance Incentive Plan awards below the maximums.

Except as provided below,
awards  paid to Performance Incentive Plan
participants  are based on pre-established
performance criteria, each of which is weighted, and a target level of bonus
for each participant.  The actual amount
paid to each such participant is based in part on a combination of the officer’s
performance in relation to his or her established goals, the officer’s target
award level, and an overall assessment of the officer’s contribution to the
Company.

For [insert year], Abbott’s
[adjusted earnings per share]* was used as a financial measure for each of the
following named executive officers.  That
goal determined [insert percentage] of the potential bonus payable to each of
them: T. C. Freyman, O. Bohuon, [other NEOs] [Disclose target and performance.]

Each of named executive
officers had various other performance goals, including financial and business
process goals.  In addition to
performance against these individual goals, the awards received by each of the
named executive officers also reflect a qualitative assessment by the Committee
and senior management of the officer’s success in meeting Abbott’s core
leadership requirements and overall contribution to Abbott’s success in [insert
year].  Set forth below, for each of our
named executive officers, is certain information concerning their performance
goals and targets for [insert year], including the material financial and other
performance goals (those weighted at 20% or more in the bonus calculation), and
the numerical performance targets and results for each such goal that was based
on corporate-wide results, if applicable.
Each named executive officer’s award is reflected in the Summary
Compensation Table on page [xx] in the “Non-Equity Incentive Plan
Compensation” column alongside the officer’s name.

* Disclosure to include only
those corporate-wide targets that are weighted at least 20% in the overall
bonus calculation (taking into account the weighting of business process
goals).

3

Mr. White

Business Process Goals:
[individual business performance, leadership development and succession, and
personal leadership.]

The Committee considered Mr. White’s
goals as part of its overall review of his performance and did not weight them
on an individual or aggregate basis.
Although his award is based on certain pre-established performance
criteria, the Committee does not set a target level of bonus and does not
believe that the various items and performance measures considered in
determining his bonus amount can or should be reduced to a linear formula.  The Committee carefully considers a wide
range of factors, including then-prevailing economic, business, regulatory and
competitive environmental factors, in addition to a review of Mr. White’s
individual performance and the performance of the Company, as a basis for
applying discretion and judgment in setting his individual award amount at the
appropriate level.

Mr. Freyman

Material Additional
Financial Goals: [return on assets (weighting, target and result), return on
equity (weighting, target and result), cash flow (weighting, target and result)
and maintenance of debt ratings (weighting, target and result), and
price/earnings ratio (weighting, target and result)]*.

Material Business Process
Goals: [no business process goal was weighted more than 10%.  Collectively, the business process goals for Mr. Freyman
were weighted 30% and included improving foreign exchange management, managing
the financing and integration of the AMO acquisition and implementing a
corporate-wide structure for certain global financial  activities].

Mr. Bohuon

Material Additional
Financial Goals: [divisional earnings before taxes (weighting)]. *

Material Business Process
Goals: [no business process goal was weighted more than 10%.  Collectively, the business process goals for Mr. Bohuon
were weighted 30% and included
                                                                                                  ].

[insert
data for other NEOs]

Abbott uses various non-GAAP
financial measures including, adjusted sales, adjusted diluted earnings per
share, adjusted return on assets, and adjusted return on equity as

* Disclosure to include only
those corporate-wide targets that are weighted at least 20% in the overall
bonus calculation (taking into account the weighting of business process
goals).

4

performance goals. These
non-GAAP measures adjust for factors that are unusual or unpredictable, such as
acquisition-related costs, cost reduction initiatives, litigation and other
settlements, acquired in-process research and development, gains and losses
related to certain investments, and changes in accumulated other comprehensive
income. The Committee reviews these measures annually.

5