Biogen

June 2

Biogen CEO Michel Vounatsos' total pay package of $18,659,620 for 2020 includes a bonus of $2,565,000 that would not have been received if the compensation committee had not altered its metrics. This year, a record number of companies have adjusted executive compensation metrics (and fortunately a record number of votes have been cast against such adjustments.) While in most cases these adjustments are based on COVID-19 factors, Biogen is an example of how the rationale could be applied to anything.

According to Fierce Pharma, “Generic copies of its multiple sclerosis blockbuster Tecfidera launched starting in August, eroding hundreds of millions of dollars worth of sales for the year. The competition had a ‘real and negative’ effect on Biogen’s financials, the proxy filing reports. In all, Biogen's sales slipped 6% last year versus 2019.”

The point of non-equity incentive awards is to reward performance metrics that are achieved. If compensation committees can get away with saying, “Oops, didn’t anticipate that, here’s a bonus anyway,” it is an admission that it was never intended to be pay for performance.

In addition, shareholders are likely to object to a generous compensation package given to departing CFO Michael McDonnel, which includes a $1 million bonus.

Finally, the company awarded a generous $454,945 in "other" pay to Vounatsos, which is significantly higher than the average of its peers. Many shareholders believe that someone paid as generously as Vounatsos can afford to pay for their own “financial and health planning services” and adequately prepare for their retirement. In addition to a reasonable 401k match, the company contributed an additional $433,320 to Vounatsos’ Supplemental Savings Plan.