Report: Investors Urge Ouster of Regeneron Director Over Executive Compensation
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Regeneron’s top executives are coming under fire for their enormous compensation packages ahead of the company’s annual shareholder meeting set for tomorrow. Two of the company’s largest shareholders call for the ouster of a company director who heads the compensation committee.
According to FiercePharma, Glass Lewis and Institutional Shareholder Services are calling for shareholders to vote against the reappointment of director George Sing, who is the chairman of the Board of Directors Compensation Committee. Glass Lewis and Institutional Shareholder Services both oppose the compensation committee’s plan to eliminate the annual bonus of stock options for Chief Executive Officer Leonard Schleifer and Chief Scientific Officer George Yancopoulos and replace them with a grant of $130 million worth of prepaid performance restricted stock units (PSUs). The company opted for this compensation package to retain the services of the two executives for years to come. Yancopoulos and Schleifer have a combined annual compensation of approximately $270 million.
When the PSUs were first announced earlier this year, Regeneron said the awards would be provided “upon achievement of ambitious, predetermined cumulative [total shareholder return] goals over a primary performance period of five years.” Based on the current plan, Shleifer and Yancopoulos will not receive additional stock options until December 2025.
Glass Lewis and ISS called the PSUs highly concerning. The investor groups said the PSUs tied the compensation committee’s hands and eliminated yearly performance incentives for the two executives. While the full value of the $130 million PSU grants are not guaranteed, the investor groups said the amount is significantly substantial when compared to C-Suite compensation packages at other companies across the globe.
New York-based Regeneron has emerged as a leading company in the battle against COVID-19. Earlier this month, the U.S. Food and Drug Administration updated the Emergency Use Authorization previously granted to the company for REGEN-COV, its antibody cocktail. The FDA greenlit a lower dose version of the medication, combining two monoclonal antibodies, casirivimab and imedvimab. As BioSpace previously reported, the updated authorization was based on clinical data that showed REGEN-COV decreased the risk of hospitalization or death by 70% in high-risk, non-hospitalized patients. The results were consistent between the 1,200 mg and 2,400 mg doses.
The company is also well-situated from its ongoing partnership with Sanofi for Dupixent, a fully human monoclonal antibody that inhibits the signaling of the interleukin-4 and interleukin-13 proteins. Dupixent has been a strong revenue driver for both Regeneron and Sanofi. Dupixent generated $1.4 billion in revenue for Regeneron in the fourth quarter of 2020.
Regeneron has a market cap of about $52 billion.