SecProbe.io

CORRESP
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  December 10,
  2010

  Mr. Jeffrey
  Riedler

  Assistant
  Director

  Division
  of Corporation Finance

  United
  States Securities and Exchange Commission

  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 November 19, 2010, we have enclosed our response
  in the attachment to this letter.

  Although the staff’s
  comments are directed at Abbott’s disclosure about targets used in executive
  pay decisions relating to incentive compensation, we have also considered the
  comments as they apply to the Compensation Discussion and Analysis,
  generally.  We have, therefore,
  prepared a comprehensive revision of that section, as well.  Because we believe our response to the
  staff’s specific comments is best understood when read in the context of the
  entire Compensation Discussion and Analysis, we included language that
  illustrates our plans for our 2011 proxy statement’s Compensation Discussion
  and Analysis, while specifically highlighting the portions that are directly
  responsive to the staff’s comments.  We
  recognize the staff will likely review the actual 2011 Compensation
  Discussion and Analysis in due course next year.

  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 actions 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

1.               Please refer to your response to Comments 1 and
2.  As you noted, Item 402(b) of
Regulation S-K calls for a discussion and explanation of all material elements
of a registrant’s compensation of its named executive officers.  In determining which elements of compensation
are material, please be advised that the Staff has not taken the position that
goals weighted at less than 20% are by definition immaterial.  Nor must a performance target be strictly
numerical in order for disclosure of that target to be useful information to
investors in assessing a company’s executive compensation program.  While disclosure of every one of the
company-wide, business unit and individual goals set for the named executive
officers is not necessary, limiting specific discussions of performance goals
to numerical targets that were weighted at least 20% or more is not
appropriate.  It is also not appropriate
to exclude a discussion of significant goals, some that were weighted at 25%,
merely because they pertained to a single division and were not
company-wide.  To the extent that your
executive compensation is structured to reward performance, investors should be
given a meaningful opportunity to assess how well the pay-for-performance model
is being applied.

Therefore, please expand your proposed disclosure
of your pre-determined 2009 “Financial Goals” and “Business Process and Other
Financial Goals” to identify and discuss the specific items of company-wide, business
unit and individual performance where material, that were taken into account in
setting compensation and making compensation decisions as to each named
executive officer.  Please refer to Items
402(b)(v) and (vii) of Regulation S-K.  To the extent that an element of compensation
was material and was tied to individual or corporate performance, you should
identify the specific performance objective(s) established, if any, the
actual performance level achieved and the relationship of the level of achievement
to the compensation award ultimately granted.
Where such objectives were quantified, your disclosure should likewise
be quantified.

Response:

In preparing our
Compensation Discussion and Analysis (CD&A) disclosure, we have taken into
account both quantitative and qualitative considerations consistent with the
guidance about “materiality” set out in Staff Accounting Bulletin No. 99.  Instruction 1 to Item 402(b) of
Regulation S-K, which relates to the Compensation Discussion and

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Analysis (CD&A),
requires companies to “provide investors material information that is necessary
to an understanding of the registrant’s compensation policies and decisions
regarding the named executive officers,” and we believe that we have met this
standard in describing our executive compensation program and 2009 actions.

We also note that executive
compensation actions at Abbott are not solely dictated by numeric or formulaic
applications of measurable criteria.
Although compensation actions take into account some financial goals,
they also reflect a wide range of subjective criteria.  Final awards are driven in significant part
based on the exercise of discretion by the Compensation Committee in
consultation with its independent consultant, both at the individual goal level
(whether the goal is measurable or subjective) and in the overall assessment of
the officer’s performance.

Based on this approach and
the above materiality standard, we will expand our future CD&A disclosure
to provide more detail about the process that the Compensation Committee
follows in determining awards in light of the significant role that its
discretion plays in compensation actions.
We also plan to provide additional information about annual bonus
targets and the achievements of each of our named officers to illustrate how
compensation actions correlate to the performance of both Abbott and the
individuals in question.   We plan to
make these changes as part of a broader reorganization and revision of the
CD&A.  We have attached as Annex A
an example of our planned disclosure approach based on the Committee’s 2009
compensation actions, highlighting the portions that are directly responsive to
the staff’s comment about performance goals with bold text and with asterisks
that precede and follow those portions.
(Our proposed change in approach does not affect our 2010 CD&A
beginning with the text under the caption “Post Termination and Other Benefits,”
and we have not reproduced that text in the attachment.)

We believe that this
expanded discussion will provide investors with useful additional context for
the Committee’s compensation actions.

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Annex A

Executive
Compensation

Introduction

This
Compensation Discussion and Analysis (“CD&A”) describes Abbott’s (the “Company”)
executive compensation program in 2009.
In particular, this CD&A explains how the Compensation Committee
(the “Committee”) and Board of Directors made its compensation decisions for
our executives, including the five named Executive Officers:  Miles D. White, Chairman of the Board and
Chief Executive Officer; Thomas C. Freyman, Executive Vice President, Finance &
Chief Financial Officer; Laura J. Schumacher, Executive Vice President, General
Counsel and Secretary; Olivier Bohuon, Executive Vice President, Pharmaceutical
Products Group; and James V. Mazzo, Senior Vice President, Abbott Medical
Optics.

It
is organized in three primary sections:
first, a description of the pay philosophy the Committee has established
for our Executive Officers; second, a description of the process the Committee
utilizes to examine performance in the context of executive pay decisions; and
lastly, a discussion of the significant performance goals and results for each
named Executive Officer.

The
Committee believes performance must always be assessed in the context of market
and business conditions.

In
2009, Abbott successfully managed through two challenges that faced every
multinational company — the impact of the global recession and currency
fluctuations.  In addition, Depakote sales were impacted by nearly $1 billion due to
generic competition.  Abbott exceeded
expectations despite these events, delivering double-digit growth in adjusted earnings.

This
past year also demonstrated the balance within Abbott’s diverse mix of business
and the strength of its financial position.
The Company generated record operating cash flow of more than $7
billion.  Abbott returned nearly $2.5
billion to shareholders in the form of dividends, reflecting an 11 percent
increase and representing the 37th consecutive
year of Abbott dividend increases.

Abbott’s
return of cash to shareholders through dividends, together with Abbott’s stock
price appreciation, has generated a total shareholder return of 20 percent over
the last 3 years — compared to a decline of 16 percent for the Standard &
Poor’s Index (S&P 500) over the same time period.  Abbott’s five-year total shareholder return
of 32 percent was 30 percentage points higher than the return of the S&P
500, which delivered 2 percent.

To
sustain success in the future, last year Abbott took strategic actions to
augment and reshape the business portfolio for the long term, adding early- and
late-stage pipeline technologies, as well as new growth platforms.

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This
includes the addition of Solvay Pharmaceuticals, which extends the Company’s
footprint in Eastern Europe and emerging markets, adding approximately $2.9 billion
in annual sales of stable, global pharmaceutical brands.  With Solvay, Abbott expects to more than
double our overall presence in emerging markets.  Solvay also adds approximately $500 million
of incremental R&D investment capacity.

Abbott
further broadened its medical products business early in 2009 by entering the
vision care market with the acquisition of Advanced Medical Optics.  Abbott augmented this business later in the
year with the acquisition of Visiogen, adding a new and promising late-stage
pipeline technology.  The vision care
market is a sustainable, long-term growth platform, and Abbott is now a leader
in LASIK and cataract technologies.

In
the vascular business, Abbott entered the fast-paced sector of structural heart
repair with the acquisition of Evalve and its pioneering technology for the
minimally invasive treatment of mitral regurgitation, the result of a
structural heart defect.  In molecular
diagnostics, Abbott added Ibis Biosciences, a leader in advanced molecular
diagnostics.

Compensation
Philosophy and Components of Pay

Abbott
and its Compensation Committee have established a compensation philosophy that
is designed to attract and retain executives whose talent and contributions
sustain the profitable growth of the Company.
The intent of this philosophy is to directly support achievement of the
Company’s primary business strategies and goals, while also aligning executives’
performance and rewards with shareholders’ interests.  Consequently, the Committee believes the vast
majority of executive compensation at Abbott is, by definition therefore,
performance-based.

There
are four primary pay components that make up our executive pay program:  base pay, benefits, annual bonuses, and
long-term incentives.  Each serves
complimentary, but different and specific purposes.

Base
Pay

Setting
appropriate levels of base pay ensures Abbott can attract and keep a leadership
team that will continue to meet our commitments to customers and patients and
sustain profitable growth for our shareholders.
Talented executives have choices of where they work, and our base pay
rates need to be competitive in the context of total compensation.

Benefits

As
with all Abbott employees, Executive Officers are provided certain employment
and post-employment benefits.  Benefits
are an important part of retention and capital preservation for all levels of
employees, protecting against the expense of unexpected catastrophic loss of
health and/or earnings potential, as well as providing a means to save and
accumulate for retirement or other post-employment needs.

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Annual
Bonus

Abbott’s
annual bonus (short-term incentive) is intended to align executives’ interests
directly with the annual operating strategies, financial goals, and leadership
requirements of the business.  They
provide a direct link between executives’ short-term incentives and the
Company’s annual performance results through both measurable financial and
operational performance and subjective assessments of strategic progress.  Some goals, strategies, and leadership
requirements may apply to all executives and as such, may be corporate
priorities that are shared by all Executive Officers in any given year (for
example, earnings per share targets in 2009, as will be discussed later).  Measurable financial goals apply to some
executives, reflecting their specific areas of responsibility.  Most executives also carry strategic or
leadership-oriented goals, which require qualitative, subjective assessment of
their progress during the year.  Finally,
the process allows for Committee discretion, since many goals, especially for
certain positions, cannot be reduced to formulaic, numerical targets, or
anticipated in advance.  By definition,
therefore, short-term incentives directly tie executives’ pay with both company
and individual results allowing for Committee discretion to address unforeseen
developments.  In the aggregate,
short-term incentives should be paid roughly at target when results are substantively
met, below target if not substantively met, and above target if substantively
exceeded.

Long-Term
Incentives

Long-term
incentives serve two primary purposes:
first, to directly align the largest component of executive pay with
shareholders’ direct, long-term interests; and secondly, to help ensure
continued performance success through effective focus and retention of
executive talent.  Executives’ interests
are directly aligned with those of shareholders in two ways — first, through
direct stock ownership.  Executives, as
shareholders, benefit from the results they create for other shareholders.  Secondly, the level of awards executives
receive vary, by design, through operation of the Plan and through the
Committee’s judgment, based on the Company’s overall performance, as assessed
by the Committee.  The Committee
considers, among others, measures that either directly track shareholder
returns or operating or strategic results which lead to the creation or loss of
shareholder value.  Awards are further
differentiated based on each executive’s specific contribution to long-term
strategic results and leadership contribution.
To achieve this outcome, Abbott grants non-qualified stock options,
full-value performance-based shares, and full-value restricted shares, subject
to vesting requirements.  Historically,
and in 2009, long-term incentives have comprised roughly 70 percent of total
compensation for Abbott executives.  Accordingly,
this is a compelling and direct link of executives’ long-term incentive with
Company and shareholder results.

How
Executive Pay Decisions Are Made

*******

As
noted previously, the vast majority of pay decisions are
performance-based.  Specific goals and
targets are the foundation of our pay-for-performance process and this segment
will describe how they apply to specific pay components.  It is

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important
to remember, however, that while our pay process is based on a comprehensive,
multi-level review at all levels, it is not formulaic.  Some goals can be measured objectively
against pre-determined financial results.
Others take the form of the Committee’s subjective assessment of success
and progress against strategic objectives or leadership results, which cannot be