UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant x Filed by a Party other than the Registrant ¨
Check the appropriate box:
¨ | Preliminary Proxy Statement |
¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
x | Definitive Proxy Statement |
¨ | Definitive Additional Materials |
¨ | Soliciting Material Pursuant to §240.14a-12 |
BIOGEN INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x | No fee required. |
¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
1) | Title of each class of securities to which transaction applies: |
2) | Aggregate number of securities to which transaction applies: |
3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
4) | Proposed maximum aggregate value of transaction: |
5) | Total fee paid: |
¨ | Fee paid previously with preliminary materials. |
¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
1) | Amount Previously Paid: |
2) | Form, Schedule or Registration Statement No.: |
3) | Filing Party: |
4) | Date Filed: |
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NOTICE OF |
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2016 Annual Meeting of
Stockholders and Proxy Statement
Wednesday, June 8, 2016
9:00 a.m., Eastern Daylight Time
Online at www.virtualshareholdermeeting.com/BIIB
Letter from our Chairman
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April 15, 2016
To our Stockholders:
We invite you to attend our 2016 annual meeting of stockholders, which will be held online on Wednesday, June 8, 2016, beginning at 9:00 a.m., Eastern Daylight Time. You may attend the meeting virtually via the Internet at www.virtualshareholdermeeting.com/BIIB, where you will be able to vote electronically and submit questions. You will need the 16-digit control number included with these proxy materials to attend the annual meeting.
Due to our global stockholder base, we believe that hosting a virtual meeting enhances the ability for a greater number of stockholders to attend and participate in the annual meeting. All stockholders will be able to attend remotely from any location. We are excited to embrace this emerging technology in an attempt to provide expanded access and improved communication with our stockholders. We plan to evaluate the effectiveness of this technology for future meetings.
The following notice of our annual meeting of stockholders contains details of the business to be conducted at the meeting. Only stockholders of record at the close of business on April 11, 2016 will be entitled to notice of, and to vote at, the annual meeting.
On behalf of the Board of Directors, thank you for your continued support and investment in Biogen.
Very truly yours,
STELIOS PAPADOPOULOS
Chairman of the Board
On behalf of the Board of Directors of Biogen Inc.
Notice of 2016 Annual Meeting of Stockholders
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Date: |
Wednesday, June 8, 2016 |
Time: |
9:00 a.m., Eastern Daylight Time |
Place: |
Online at www.virtualshareholdermeeting.com/BIIB |
Record Date: |
April 11, 2016. Only Biogen stockholders of record at the close of business on the record date are entitled to receive notice of, and vote at, the annual meeting. |
Items of Business: |
1. | To elect the eleven nominees identified in this proxy statement to our Board of Directors to serve for a one-year term extending until the 2017 annual meeting of stockholders and their successors are duly elected and qualified. |
2. | To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016. |
3. | To hold an advisory vote on executive compensation. |
4. | To transact such other business as may be properly brought before the meeting and any adjournments or postponements. |
Virtual Meeting: |
To participate in the annual meeting virtually via the Internet, please visit www.virtualshareholdermeeting.com/BIIB. You will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, or your proxy card or the instructions that accompanied your proxy materials. Stockholders will be able to vote and submit questions during the annual meeting. |
You will not be able to attend the annual meeting in person. |
Voting: |
Your vote is extremely important regardless of the number of shares you own. Whether or not you expect to attend the annual meeting online, we urge you to vote as promptly as possible by telephone or Internet or by signing, dating and returning a printed proxy card or voting instruction form, as applicable. If you attend the annual meeting online, you may vote your shares during the annual meeting virtually via the Internet even if you previously voted your proxy. Please vote as soon as possible to ensure that your shares will be represented and counted at the annual meeting. |
Important Notice Regarding the Availability of Proxy Materials for Annual Meeting of Stockholders
To Be Held on June 8, 2016:
The Notice of 2016 Annual Meeting of Stockholders, Proxy Statement, and 2015 Annual Report on Form 10-K are
available at the following website: www.proxyvote.com.
By Order of Our Board of Directors,
SUSAN H. ALEXANDER,
Secretary
225 Binney Street
Cambridge, Massachusetts 02142
April 15, 2016
This notice and proxy statement are first being sent to stockholders on or about April 15, 2016. Our Annual Report on Form 10-K is being sent with this notice and proxy statement.
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Proxy Statement Summary | iii | |||||||
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Corporate Governance at Biogen |
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Director Qualifications, Standards and Diversity
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Audit Committee Matters |
Proposal 2 Ratification of the Selection of Our Independent Registered Public Accounting Firm |
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Proxy Statement Table of Contents (continued) |
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Executive Compensation Matters |
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Potential Payments Upon Termination or Change in Control
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6 | Additional Information |
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Manner and Cost of Proxy Solicitation
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Appendix A GAAP to Non-GAAP Reconciliation | A-1 |
-ii- |
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This summary highlights important information you will find in this Proxy Statement. As it is only a summary, please review the complete Proxy Statement before you vote.
Annual Meeting Information
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DATE: | Wednesday, June 8, 2016 | |
TIME: | 9:00 a.m., Eastern Daylight Time | |
LOCATION: | Online only at www.virtualshareholdermeeting.com/BIIB. You will not be able to attend the meeting in person. | |
RECORD DATE: | April 11, 2016
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Voting Matters and Vote Recommendation
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Voting Matter | Board Recommendation |
Page Number for more detail | ||
Item 1Election of Directors | FOR each nominee | 10 | ||
Item 2Ratification of Selection of Independent Registered Public Accounting Firm for 2016 | FOR | 23 | ||
Item 3Advisory Vote on Executive Compensation | FOR | 26 |
How to Vote
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-iii- |
Proxy Statement Summary (continued) |
Corporate Governance Matters
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We strive to maintain effective corporate governance practices to ensure that our company is managed for the long-term benefit of our stockholders. To that end, we continually review and refine our corporate governance policies, procedures and practices. See Part 2 Corporate Governance at Biogen for more information.
Corporate Governance Highlights
Board and Board Committees | ||||
Number of Independent Director Nominees/Total Number of Director Nominees | 10/11 | |||
Average Age of Directors Standing for Election (as of April 15, 2016) | 62 | |||
All Board Committees Consist of Independent Directors | Yes | |||
Risk Oversight by Full Board and Committees | Yes | |||
Separate Risk Committee | Yes | |||
Separate Chairman and CEO | Yes | |||
Regular Executive Sessions of Independent Directors | Yes | |||
Annual Board and Committee Self-Evaluations | Yes | |||
Annual Independent Director Evaluation of CEO | Yes | |||
Director Education and Orientation | Yes | |||
Annual Equity Grant to Directors | Yes | |||
Director - Stockholder Engagement Initiative | Yes | |||
Shareholder Rights, Accountability and Other Governance Practices | ||||
Annual Election of All Directors | Yes | |||
Majority Voting for Directors and Resignation Policy | Yes | |||
Proxy Access Bylaw (3% ownership, 3 years, nominees for up to 25% of the Board) | Yes | |||
Annual Advisory Stockholder Vote on Executive Compensation | Yes | |||
Stockholder Ability to Call Special Meetings (25% Threshold) | Yes | |||
Stockholder Ability to Act by Written Consent | Yes | |||
Stock Ownership Guidelines for Directors and Executives | Yes | |||
Prohibition from Hedging and Pledging Securities or Otherwise Engaging in Derivative Transactions | Yes | |||
Compensation Recovery in Equity and Annual Bonus Plans | Yes | |||
Absence of a Stockholder Rights Plan (referred to as Poison Pill) | Yes | |||
Strong Commitment to Environmental and Sustainability Matters | Yes | |||
Board Oversight and Expanded Disclosure on Website Related to Corporate Political Contributions and Expenditures | Yes |
Director - Stockholder Engagement Initiative
We value the views of our stockholders and other stakeholders, and we solicit input throughout the year on topics such as business strategy, capital allocation, corporate governance, executive compensation, sustainability and corporate social responsibility initiatives. During fiscal year 2015 and continuing in 2016, independent members of our Board of Directors conducted outreach to stockholders owning approximately 40% of our outstanding shares to discuss a variety of issues, including business, corporate governance, and compensation related matters.
-iv- |
Proxy Statement Summary (continued) |
Our Director Nominees
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Proposal 1 Election of Directors
You are being asked to vote on the election of the following eleven nominees for director. All Directors are elected annually by the affirmative vote of a majority of votes cast. Detailed information about each Directors background, skill sets and areas of expertise can be found beginning on page 10.
Committee Memberships* | Other Public Boards | |||||||||||||||||
Name, Occupation and Experience | Age* | Independent | AC | CC | CGC | FC | RC | STC | ||||||||||
Alexander J. Denner, Ph.D. Founding Partner, Sarissa Capital |
46 | Yes | 2 | |||||||||||||||
Caroline D. Dorsa Retired Executive Vice President and Chief Financial Officer, Public Service Enterprise Group, Inc. |
56 | Yes | | |||||||||||||||
Nancy L. Leaming Retired Chief Executive Officer and President, Tufts Health Plan |
68 | Yes | 2 | |||||||||||||||
Richard C. Mulligan, Ph.D. Founding Partner, Sarissa Capital and Mallinckrodt Professor of Genetics, Emeritus, Harvard Medical School |
61 | Yes | | |||||||||||||||
Robert W. Pangia Chief Executive Officer, Ivy Sports Medicine, LLC |
64 | Yes | | |||||||||||||||
Stelios Papadopoulos, Ph.D. Chairman, Biogen, and Chairman, Exelixis, Inc. and Regulus Therapeutics, Inc. |
67 | Yes | 3 | |||||||||||||||
Brian S. Posner President, Point Rider Group and Private Investor |
54 | Yes | 2 | |||||||||||||||
Eric K. Rowinsky, M.D. Former Head of R&D and Chief Medical Officer of Stemline Therapeutics, Inc., and Life Sciences Consultant |
59 | Yes | 3 | |||||||||||||||
George A. Scangos, Ph.D. Chief Executive Officer |
67 | No | 2 | |||||||||||||||
The Honorable Lynn Schenk Attorney, Former Chief of Staff to the Governor of California and Former U.S. Congresswoman |
71 | Yes | 1 | |||||||||||||||
Stephen A. Sherwin, M.D. Clinical Professor of Medicine, University of California, San Francisco and Advisor to Life Sciences Companies |
67 | Yes | 4 |
* Age and Committee memberships are as of April 15, 2016.
AC: Audit Committee | CGC: Corporate Governance Committee | RC: Risk Committee | ||
CC: Compensation and Management Development Committee | FC: Finance Committee | STC: Science and Technology Committee |
Chair: | Member: | Financial Expert: |
-v- |
Proxy Statement Summary (continued) |
Our Auditors
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Proposal 2 Ratification of Independent Registered Public Accounting Firm
You are being asked to vote to ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2016. Below is summary information about PricewatersCoopers LLPs fees for services provided in 2015 and 2014. Detailed information about this proposal can be found beginning on page 23.
2015 and 2014 Audit Fees
Type of Fees (in Millions) | 2015 | 2014 | ||||
Audit Fees |
$ | 4,717,996 | $4,436,942 | |||
Audit-Related Fees |
406,442 | 43,032 | ||||
Tax Fees |
542,125 | 476,520 | ||||
All Other Fees |
13,547 | 18,161 | ||||
TOTAL FEES |
$ | 5,680,110 | $4,974,654 |
Executive Compensation Matters
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Proposal 3 Advisory Vote on Executive Compensation
Our Board of Directors recommends that stockholders vote to approve, on an advisory basis, the compensation paid to the Companys named executive officers (NEOs) as described in this Proxy Statement (the say-on-pay vote). Detailed information about the compensation paid to our named executive officers can be found beginning on page 26.
Our compensation program embodies a pay-for-performance philosophy that supports our business strategy and aligns executive interests with those of our stockholders. Highlights of our compensation program for 2015 and our compensation best practices follow.
Pay-for-Performance | ||
Short and long-term incentive compensation rewards financial, strategic, and operational performance and goals that are set to support our long-range plans. |
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Approximately 91% of the compensation pay mix for our CEO was performance-based and at-risk in 2015. |
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Approximately 84% of the compensation pay mix for our other NEOs was performance-based and at-risk in 2015. |
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In 2015, we did not achieve all of our target goals. As a result, our NEOs received lower annual bonus payments and had lower multipliers applied to long-term incentives, in each case consistent with our pay-for-performance philosophy. |
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Other Compensation Best Practices | ||
We provide competitive total pay opportunities after consideration of many factors, including a carefully selected peer group. |
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An independent compensation consultant assists the Compensation and Management Development Committee in setting executive and non-employee director compensation. |
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Our compensation programs do not encourage unnecessary and excessive risk taking, and risk assessments are conducted annually. |
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Payments under our annual bonus plan are capped. |
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Long-term incentive awards are subject to multi-year vesting. |
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Any stock option awards are granted at fair market value; We do not backdate or reprice stock option awards. |
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We maintain robust share ownership guidelines for executive officers and directors. |
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Compensation may be recouped/clawed back under our equity and annual bonus plans. |
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A double-trigger is required for accelerated equity vesting upon change of control for all post-2014 grants. |
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In June 2009, we adopted a policy to eliminate excise tax gross ups for newly-hired executives. |
-vi- |
1 | General Information About the Meeting |
Biogen Inc.
225 Binney Street
Cambridge, Massachusetts 02142
The Board of Directors of Biogen Inc. is soliciting your proxy to vote at our 2016 annual meeting of stockholders (Annual Meeting) to be held at 9:00 a.m., Eastern Daylight Time, on Wednesday, June 8, 2016 for the purposes summarized in the accompanying Notice of 2016 Annual Meeting of Stockholders. Our 2015 Annual Report on Form 10-K is also available with this Proxy Statement.
References in this Proxy Statement to Biogen or the Company, we, us and our refer to Biogen Inc.
What is the purpose of the Annual Meeting? | At our Annual Meeting, stockholders will vote upon the matters that are summarized in the formal meeting notice. This Proxy Statement contains important information for you to consider when deciding how to vote on the matters before the meeting.
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Can I attend the Annual Meeting? | We will be hosting our Annual Meeting virtually via the Internet.
Any stockholder can listen to and participate in the Annual Meeting live via the Internet at www.virtualshareholdermeeting.com/BIIB. The Annual Meeting will start at 9:00 a.m., Eastern Daylight Time, on June 8, 2016. Stockholders may vote and submit questions while connected to the Annual Meeting on the Internet.
You will not be able to attend the meeting in person.
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Why the change to a virtual meeting? | Due to our global stockholder base, we believe that hosting a virtual meeting enhances the ability for a greater number of stockholders to attend and participate in the annual meeting since stockholders can participate remotely from any location. We are excited to embrace this emerging technology in an attempt to provide expanded access and improved communication with our stockholders. We plan to evaluate the effectiveness of this technology for future meetings.
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What do I need in order to be able to participate in the Annual Meeting online? | You will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials or your proxy card or voting instruction form in order to be able to vote your shares or submit questions during the meeting. If you do not have your 16-digit control number, you will be able to listen to the meeting only you will not be able to vote or submit questions during the meeting.
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Who can vote? | Each share of our common stock that you own as of the close of business on the record date of April 11, 2016 (Record Date) entitles you to one vote on each matter to be voted upon at the Annual Meeting. As of the Record Date, 219,051,301 shares of our common stock were outstanding and entitled to vote. We are making this Proxy Statement and other Annual Meeting materials available on the Internet or, upon request, sending printed versions of these materials on or about April 15, 2016 to all stockholders of record as of the Record Date. For 10 days before the Annual Meeting, a list of stockholders entitled to vote will be available for inspection at our offices located at 225 Binney Street, Cambridge, Massachusetts 02142 and will be available for examination during the Annual Meeting at www.virtualshareholdermeeting.com/BIIB. If you would like to review the list, please call our Investor Relations department at (781) 464-2442.
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1 | General Information About the Meeting (continued) |
What am I voting on at the Annual Meeting? | Stockholders will be asked to vote on the following items at the Annual Meeting:
The election to the Board of Directors of the eleven director nominees (Proposal 1);
The ratification of the selection of PricewaterhouseCoopers LLP (PwC) as our independent registered public accounting firm for the fiscal year ending December 31, 2016 (Proposal 2);
The advisory vote on executive compensation (Proposal 3); and
The transaction of such other business as may be properly brought before the meeting and any adjournments or postponements.
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What is the recommendation of the Board on each of the matters scheduled to be voted on at the Annual Meeting? | The Board of Directors recommends that you vote:
FOR each of the director nominees (Proposal 1)
FOR the ratification of the selection of PwC as our independent registered public accounting firm for the fiscal year ending December 31, 2016 (Proposal 2)
FOR the approval of our advisory vote on executive compensation (Proposal 3)
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How do proxies work? | Our Board of Directors is asking for your proxy authorizing the individuals named as proxies to vote your shares at the Annual Meeting in the manner you direct. You may abstain from voting on any matter. If you submit your proxy without specifying your voting instructions, we will vote your shares on the matters scheduled to be voted on at the Annual Meeting in accordance with our Board of Directors recommendations described above. As to any other matter that may properly come before the meeting or any adjournment or postponement, the individuals named as proxies will vote your shares at the Annual Meeting in accordance with their best judgment.
Shares represented by valid proxies received in time for the Annual Meeting and not revoked before the Annual Meeting will be voted at the Annual Meeting. You can revoke your proxy and change your vote in the manner described below (under the heading Can I revoke or change my vote after I submit my proxy?). If your shares are held through a bank, broker or other nominee, please follow the instructions that you were provided by your bank, broker or other nominee.
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1 | General Information About the Meeting (continued) |
How do I vote and what are the voting deadlines? | Stockholders of Record. If you are a stockholder of record, there are several ways for you to vote your shares.
By Internet. You may vote at www.proxyvote.com, 24 hours a day, seven days a week. You will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials or your proxy card (if you received a printed copy of the proxy materials). Votes submitted through the Internet must be received by 11:59 p.m., Eastern Daylight Time, on June 7, 2016.
By Telephone. You may vote using a touch-tone telephone by calling 1-800-690-6903, 24 hours a day, seven days a week. You will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials or your proxy card (if you received a printed copy of the proxy materials). Votes submitted by telephone must be received by 11:59 p.m., Eastern Daylight Time, on June 7, 2016.
By Mail. If you received printed proxy materials, you may submit your vote by completing, signing, and dating each proxy card received and returning it in the prepaid envelope. Sign your name exactly as it appears on the proxy card. Proxy cards submitted by mail must be received no later than June 7, 2016, to be voted at the Annual Meeting.
During the Annual Meeting. You may vote during the Annual Meeting by going to www.virtualshareholdermeeting.com/BIIB. You will need the 16-digit control number included on your Notice of Internet Availability or your proxy card (if you received a printed copy of the proxy materials).
If you vote via the Internet or by telephone, your electronic vote authorizes the named proxies in the same manner as if you signed, dated, and returned your proxy card. If you vote via the Internet or by telephone, do not return your proxy card.
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Beneficial Owners. If your shares are held in a brokerage account in your brokers name, then you are the beneficial owner of shares held in street name. If you are a beneficial owner of your shares, you should have received a Notice of Internet Availability of Proxy Materials or voting instructions from the bank, broker or other nominee holding your shares. You should follow the instructions in the Notice of Internet Availability of Proxy Materials or voting instructions provided by your bank, broker or nominee in order to instruct your bank, broker or other nominee on how to vote your shares. The availability of telephone and Internet voting will depend on the voting process of the broker or nominee. Shares held beneficially may not be voted during our Annual Meeting; instead a beneficial holder must instruct their bank, broker, or other nominee in advance of the meeting.
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1 | General Information About the Meeting (continued) |
Can I revoke or change my vote after I submit my proxy? | Stockholders of Record. If you are a stockholder of record, you may revoke or change your vote at any time before the final vote at the Annual Meeting by:
signing and returning a new proxy card with a later date, to be received no later than June 7, 2016;
submitting a later-dated vote by telephone or via the Internet only your latest Internet or telephone proxy received by 11:59 p.m., Eastern Daylight Time, on June 7, 2016, will be counted;
participating in the Annual Meeting virtually via the Internet and voting again; or
delivering a written revocation to our Secretary at Biogen Inc., 225 Binney Street, Cambridge, Massachusetts 02142, to be received no later than June 7, 2016.
Only your latest vote, in whatever form, will be counted.
Beneficial Owners. If you are a beneficial owner of your shares, you must contact the bank, broker or other nominee holding your shares and follow their instructions for revoking or changing your vote.
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Will my shares be counted if I do not vote? | Stockholders of Record. If you are the stockholder of record and you do not vote before the Annual Meeting by proxy card, telephone or via the Internet, or during the Annual Meeting via the Internet, your shares will not be voted at the Annual Meeting.
Beneficial Owners. If you are the beneficial owner of shares, your bank, broker or other nominee, as the record holder of the shares, is required to vote those shares in accordance with your instructions. If no voting instructions are provided, these record holders can vote your shares only on discretionary, or routine, matters and not on non-discretionary, or non-routine, matters. Uninstructed shares whose votes cannot be counted on non-routine matters result in what are commonly referred to as broker non-votes.
The proposal to ratify the selection of our independent registered public accounting firm is a routine matter and our other proposals are non-routine matters. If you do not give your broker voting instructions, your broker (1) will be entitled to vote your shares on the proposal to ratify the selection of our independent registered public accounting firm and (2) will not be entitled to vote your shares on the other proposals. We urge you to provide instructions to your bank, broker or other nominee so that your votes may be counted on all of these important matters.
You should vote your shares by telephone or by Internet according to the instructions provided by your bank, broker or other nominee or by signing, dating and returning a printed voting instruction form to your bank, broker or other nominee to ensure that your shares are voted on your behalf.
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How many shares must be present to hold the Annual Meeting? | A majority of our issued and outstanding shares of common stock as of the Record Date must be present at the Annual Meeting to hold the Annual Meeting and conduct business. This is called a quorum. Shares voted in the manner described above (under the heading How do I vote and what are the voting deadlines?) will be counted as present at the Annual Meeting. Shares that are present and entitled to vote on one or more of the matters to be voted upon are counted as present for establishing a quorum. If a quorum is not present, we expect that the Annual Meeting will be adjourned until we obtain a quorum.
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1 | General Information About the Meeting (continued) |
What vote is required to approve each proposal and how are votes counted? | Proposal 1: Election of Directors: Directors are elected by a majority vote of the votes cast that is, a director will be elected if more votes are cast for that directors election than against that director. Abstentions and broker non-votes, if any, are not counted for purposes of electing directors and will have no effect on the results of this vote.
Proposal 2: Ratification of PwC: The affirmative vote of a majority of shares present in person or represented by proxy and having voting power at the Annual Meeting is required to ratify the selection of PwC as our independent registered public accounting firm for the fiscal year ending December 31, 2016. Abstentions will have the effect of votes against this proposal. Brokers generally have discretionary authority to vote on the ratification of the selection of our independent registered public accounting firm, thus we do not expect any broker non-votes on this proposal.
Proposal 3: Advisory Vote on Executive Compensation: Because this proposal asks for a non-binding, advisory vote, there is no required vote that would constitute approval. We value the opinions expressed by our stockholders in this advisory vote, and our Compensation and Management Development Committee of our Board of Directors (referred to in this Proxy Statement as the Compensation Committee), which is responsible for overseeing and administering our executive compensation programs, will consider the outcome of the vote when designing our compensation programs and making future compensation decisions for our named executive officers. Abstentions and broker non-votes, if any, will not have any effect on the results of those deliberations.
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Are there other matters to be voted on at the Annual Meeting? |
We do not know of any other matters that may come before the Annual Meeting. If any other matters are properly presented at the Annual Meeting, your proxy authorizes the individuals named as proxies to vote, or otherwise act, in accordance with their best judgment.
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Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials? | We have elected to provide access to our proxy materials on the Internet, consistent with the rules of the Securities and Exchange Commission (SEC). Accordingly, in most instances we are mailing a Notice of Internet Availability of Proxy Materials to our stockholders. You can access our proxy materials on the website referred to in the Notice of Internet Availability of Proxy Materials or you may request printed versions of our proxy materials for the Annual Meeting. In addition, you may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis.
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What does it mean if I receive more than one notice regarding the Internet availability of proxy materials or more than one set of printed proxy materials? | If you hold your shares in more than one account, you may receive a separate Notice of Internet Availability of Proxy Materials or a separate set of printed proxy materials, including a separate proxy card or voting instruction form, for each account. To ensure that all of your shares are voted, please vote by telephone or by Internet or sign, date and return a proxy card or voting instruction form for each account.
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1 | General Information About the Meeting (continued) |
Where do I find the voting results of the Annual Meeting? |
We will publish the voting results of the Annual Meeting in a Current Report on Form 8-K filed with the SEC within four business days after the end of the Annual Meeting. You may request a copy of this Form 8-K by contacting Investor Relations, Biogen Inc., 225 Binney Street, Cambridge, Massachusetts 02142, (781) 464-2442. You will also be able to find a copy of this Form 8-K on the Internet through the SECs electronic data system called EDGAR at www.sec.gov or through the Investors section of our website, www.biogen.com.
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Who should I call if I have any questions? | If you have any questions or require any assistance with voting your shares, please contact the bank, broker or other nominee holding your shares, or our Investor Relations department at (781) 464-2442.
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2 | Corporate Governance at Biogen |
7 |
2 | Corporate Governance at Biogen (continued) |
8 |
2 | Corporate Governance at Biogen (continued) |
9 |
3 | Board of Directors |
Proposal 1 Election of Directors
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||||
Our Board of Directors currently consists of the following directors, all serving one-year terms extending until the Annual Meeting and until their successors are duly elected and qualified:
Alexander J. Denner | Robert W. Pangia | George A. Scangos | ||
Caroline D. Dorsa | Stelios Papadopoulos | Lynn Schenk | ||
Nancy L. Leaming | Brian S. Posner | Stephen A. Sherwin | ||
Richard C. Mulligan | Eric K. Rowinsky |
All current directors are standing for reelection to serve a one-year term extending until the 2017 annual meeting of stockholders and until their successors are duly elected and qualified, unless they resign or are removed. Our Board of Directors has nominated these eleven directors for reelection based on its carefully considered judgment that the experience, qualifications, attributes and skills of our nominees qualify them to serve on our Board of Directors. As described in detail below, our nominees have considerable professional and business expertise. We know of no reason why any nominee would be unable to accept nomination or election.
If any nominee is unable to serve on our Board of Directors, the shares represented by your proxy will be voted for the election of such other person as may be nominated by our Board of Directors. In addition, in compliance with all applicable state and federal laws and regulations, we will file an amended proxy statement and proxy card that, as applicable, (1) identifies the alternate nominee(s), (2) discloses that such nominees have consented to being named in the revised proxy statement and to serve if elected and (3) includes the disclosure required by Item 7 of Schedule 14A with respect to such nominees. All nominees have consented to be named in this Proxy Statement and to serve if elected.
Our Nominees for Director
(Information is as of April 15, 2016)
Alexander J. Denner, Ph.D.
|
| Experience |
Dr. Denner, 46, has served as one of our directors since 2009. Dr. Denner is a founding partner and Chief Investment Officer of Sarissa Capital Management LP. Sarissa Capital focuses on improving the strategies of companies to better provide stockholder value. From 2006 to 2011, Dr. Denner served as a Senior Managing Director at Icahn Capital. Prior to that, he served as a portfolio manager at Viking Global Investors and Morgan Stanley Investment Management.
| Qualifications |
Dr. Denner has significant experience overseeing the operations and research and development of healthcare companies and evaluating corporate governance matters. He also has extensive experience as an investor, particularly with respect to healthcare companies, and possesses broad healthcare industry knowledge.
| Biogen Committee Memberships |
Corporate Governance (Chair)
Finance
| Other Current Public Company Boards |
Ariad Pharmaceuticals, Inc. (Chair)
The Medicines Company
| Former Public Company Directorships Held in the Past Five Years |
Amylin Pharmaceuticals, Inc.
Vivus, Inc.
Enzon Pharmaceuticals, Inc.
10 |
3 | Board of Directors (continued) |
Caroline D. Dorsa
|
| Experience |
Ms. Dorsa, 56, has served as one of our directors since 2010. Ms. Dorsa served as the Executive Vice President and Chief Financial Officer of Public Service Enterprise Group Incorporated, a diversified energy company, from April 2009 until her retirement in October 2015, and served on its board of directors from 2003 to April 2009. From February 2008 to April 2009, she served as Senior Vice President, Global Human Health, Strategy and Integration at Merck & Co., Inc., a pharmaceutical company. From November 2007 to January 2008, Ms. Dorsa served as Senior Vice President and Chief Financial Officer of Gilead Sciences, Inc., a life sciences company. From February 2007 to November 2007, she served as Senior Vice President and Chief Financial Officer of Avaya, Inc., a telecommunications company. From 1987 to January 2007, Ms. Dorsa held various financial and operational positions at Merck & Co., Inc., including Vice President and Treasurer, Executive Director of U.S. Customer Marketing and Executive Director of U.S. Pricing and Strategic Planning. Since December 2015, Ms. Dorsa has served as a director of Intellia Therapeutics, Inc., a life sciences company that recently filed a registration statement with the SEC for an initial public offering of its common stock.
| Qualifications |
Ms. Dorsa has significant financial and accounting expertise and a deep knowledge of the pharmaceutical industry. Her strategic perspective on the industry is particularly valuable to our Board of Directors as it oversees our growth initiatives and reviews both internal development projects and external opportunities.
| Biogen Committee Memberships |
Audit (Chair)
Risk
| Other Current Public Company Boards |
None
| Former Public Company Directorships Held in the Past Five Years |
None
Nancy L. Leaming
|
| Experience |
Ms. Leaming, 68, has served as one of our directors since 2008. Ms. Leaming has been an independent consultant since 2005. From 2003 to 2005, she served as the Chief Executive Officer and President of Tufts Health Plan, a provider of healthcare insurance. From 1986 to 2003, Ms. Leaming served in several executive positions at Tufts Health Plan, including President, Chief Operating Officer and Chief Financial Officer.
| Qualifications |
Ms. Leaming has well-developed leadership skills and financial acumen and provides insights into the healthcare reimbursement and payor market, where she served for 20 years in senior operational, financial and managerial roles.
| Biogen Committee Memberships |
Audit
Risk
| Other Current Public Company Boards |
Hologic, Inc.
Edgewater Technology, Inc.
| Former Public Company Directorships Held in the Past Five Years |
None
11 |
3 | Board of Directors (continued) |
Richard C. Mulligan, Ph.D.
|
| Experience |
Dr. Mulligan, 61, has served as one of our directors since 2009. Dr. Mulligan is a founding partner of Sarissa Capital Management LP. Sarissa Capital focuses on improving the strategies of companies to better provide stockholder value. In 2013, Dr. Mulligan became the Mallinckrodt Professor of Genetics, Emeritus, at Harvard Medical School, after serving as the Mallinckrodt Professor of Genetics and Director of the Harvard Gene Therapy Initiative since 1996. Prior to that, he was Professor of Molecular Biology at the Massachusetts Institute of Technology, a member of the Whitehead Institute for Biomedical Research, and the Chief Scientific Officer of Somatix Therapy Corporation, a drug discovery and development company that he founded. Dr. Mulligan was named a MacArthur Foundation Fellow in 1981.
| Qualifications |
Dr. Mulligan has scientific expertise in the areas of molecular biology, genetics, gene therapy, and biotechnology, as well as extensive experience within the healthcare industry, including overseeing the operations and research and development of healthcare companies.
| Biogen Committee Memberships |
Science and Technology (Chair)
Compensation and Management Development
| Other Current Public Company Boards |
None
| Former Public Company Directorships Held in the Past Five Years |
Cellectis SA
Enzon Pharmaceuticals, Inc.
Robert W. Pangia
|
| Experience |
Mr. Pangia, 64, served as a director of the Company from 1997 to 2003 during the period the Company was operated as IDEC Pharmaceuticals, and has served as a director since 2003 following IDECs merger with Biogen Inc. Mr. Pangia has been the Chief Executive Officer of Ivy Sports Medicine, LLC, a medical device company, since 2011. He has also been a partner in Ivy Capital Partners, LLC, the general partner of Ivy Healthcare Capital, L.P., a private equity fund specializing in healthcare investments, since 2003. From October 2007 to October 2009, he served as the Chief Executive Officer of Highlands Acquisition Corp., a special purpose acquisition company. From 1996 to 2003, Mr. Pangia was self-employed as an investment banker. From 1987 to 1996, he held various senior management positions at PaineWebber, a financial services company, including Executive Vice President and Director of Investment Banking for PaineWebber Incorporated of New York, member of the board of directors of PaineWebber, Inc., Chairman of PaineWebber Properties, Inc., and member of several of PaineWebbers executive and operating committees.
| Qualifications |
Mr. Pangia has significant financial acumen and breadth of expertise within the healthcare industry.
| Biogen Committee Memberships |
Compensation and Management Development (Chair)
Finance
| Other Current Public Company Boards |
None
| Former Public Company Directorships Held in the Past Five Years |
None
12 |
3 | Board of Directors (continued) |
Stelios Papadopoulos, Ph.D.
|
| Experience |
Dr. Papadopoulos, 67, has served as one of our directors since 2008 and as our independent Chairman since June 2014. Dr. Papadopoulos also serves as the Chairman of Exelixis, Inc., a drug discovery and development company that he co-founded in 1994, and Chairman of Regulus Therapeutics, Inc., a biopharmaceutical company developing medicines targeting micro-RNAs. Previously, he was an investment banker with Cowen & Co., LLC, a financial services company, focusing on the biotechnology and pharmaceutical sectors, from 2000 until his retirement as Vice Chairman in August 2006. Prior to joining Cowen & Co., Dr. Papadopoulos served for 13 years as an investment banker at PaineWebber, Inc., a financial services company, where he was most recently Chairman of PaineWebber Development Corp., a PaineWebber subsidiary focusing on biotechnology.
| Qualifications |
Having founded multiple life sciences companies and worked as an investment banker focused on the life sciences industry, Dr. Papadopoulos brings to our Board of Directors a first-hand understanding of the demands of establishing, growing and running life sciences businesses.
| Biogen Committee Memberships |
Audit
Finance
Science and Technology
| Other Current Public Company Boards |
BG Medicine, Inc.
Exelixis, Inc. (Chair)
Regulus Therapeutics, Inc. (Chair)
| Former Public Company Directorships Held in the Past Five Years |
Anadys Pharmaceuticals, Inc.
Brian S. Posner
|
| Experience |
Mr. Posner, 54, has served as one of our directors since 2008. Mr. Posner has been a private investor since March 2008 and is the President of Point Rider Group LLC, a consulting and advisory services firm within the financial services industry. From 2005 to March 2008, Mr. Posner served as the President, Chief Executive Officer and co-Chief Investment Officer of ClearBridge Advisors LLC, an asset management company and a wholly-owned subsidiary of Legg Mason. Prior to that, Mr. Posner co-founded Hygrove Partners LLC, a private investment fund, in 2000 and served as its Managing Partner for five years. He served as a portfolio manager and an analyst at Fidelity Investments, a financial services company, from 1987 to 1996 and, from 1997 to 1999, at Warburg Pincus Asset Management/Credit Suisse Asset Management where he also served as co-Chief Investment Officer and Director of Research.
| Qualifications |
Given his substantial experience as a leading institutional investment manager and advisor, Mr. Posner brings a professional investors perspective and significant management and financial expertise that is valuable to our Board of Directors as it oversees our strategy for enhancing stockholder value.
| Biogen Committee Memberships |
Finance (Chair)
Audit
Corporate Governance
| Other Current Public Company Boards |
AQR Funds
Arch Capital Group Ltd.
| Former Public Company Directorships Held in the Past Five Years |
Anadys Pharmaceuticals, Inc.
BG Medicine, Inc.
RiverPark Funds
13 |
3 | Board of Directors (continued) |
Eric K. Rowinsky, M.D.
|
| Experience |
Dr. Rowinsky, 59, has served as one of our directors since 2010. He has served as President of RGenix, Inc., a privately-held life sciences company, since November 2015 and as its Executive Chairman since December 2015. From January 2012 to November 2015, Dr. Rowinsky was the Head of Research and Development and Chief Medical Officer of Stemline Therapeutics, Inc., a biotechnology company focusing on the discovery and development of therapeutics targeting cancer stem cells. Dr. Rowinsky is an Adjunct Professor of Medicine at New York University and has been an independent consultant since January 2010. Prior to that, he was the Chief Medical Officer of Primrose Therapeutics, Inc., a start-up biotechnology company focusing on the development of therapeutics for polycystic kidney disease, from August 2010 until its acquisition in September 2011. From 2005 to December 2009, he served as the Chief Medical Officer and Executive Vice President of ImClone Systems Incorporated, a life sciences company. From 1996 to 2004, Dr. Rowinsky held several positions at the Cancer Therapy & Research Centers Institute for Drug Development, including Director of the Institute and Director of Clinical Research. During that time, he held the SBC Endowed Chair for Early Drug Development and Clinical Professor of Medicine at the University of Texas Health Science Center at San Antonio. From 1988 to 1996, Dr. Rowinsky was an Associate Professor of Oncology at the Johns Hopkins School of Medicine and on the staff of the Johns Hopkins Hospital.
| Qualifications |
Dr. Rowinsky has extensive research and drug development experience, oncology expertise, and broad scientific and medical knowledge.
| Biogen Committee Memberships |
Compensation and Management Development
Corporate Governance
Science and Technology
| Other Current Public Company Boards |
BIND Therapeutics, Inc.
Fortress Biotech Inc.
Navidea Biopharmaceuticals, Inc.
| Former Public Company Directorships Held in the Past Five Years |
Mast Therapeutics, Inc. (formerly Adventrx Pharmaceuticals, Inc.)
George A. Scangos, Ph.D.
|
| Experience |
Dr. Scangos, 67, has served as our Chief Executive Officer and one of our directors since July 2010. Prior to that, he served as the President and Chief Executive Officer of Exelixis, Inc., a drug discovery and development company, from 1996 to July 2010. From 1993 to 1996, Dr. Scangos served as President of Bayer Biotechnology, where he was responsible for research, business development, process development, manufacturing, engineering and quality assurance of Bayers biological products. Before joining Bayer in 1987, Dr. Scangos was a Professor of Biology at Johns Hopkins University for six years, where he is still an adjunct professor. Dr. Scangos served as non-executive Chairman of Anadys Pharmaceuticals, Inc., a biopharmaceutical company, from 2005 to July 2010 and was a director of the company from 2003 to July 2010. He also served as the Chair of the California Healthcare Institute in 2010 and was a member of the board of the Global Alliance for TB Drug Development until 2010. In March 2016, Dr. Scangos was appointed Chairman of the Board of Directors of Pharmaceutical Research and Manufacturers of America (PhRMA).
| Qualifications |
Dr. Scangos has extensive training as a scientist, significant knowledge and experience with respect to the biotechnology, healthcare and pharmaceutical industries, and a comprehensive leadership background resulting from service on various boards of directors and as an executive in the pharmaceutical industry.
| Biogen Committee Memberships |
None
| Other Current Public Company Boards |
Agilent Technologies, Inc.
Exelixis, Inc.
| Former Public Company Directorships Held in the Past Five Years |
None
14 |
3 | Board of Directors (continued) |
Lynn Schenk, J.D.
|
| Experience |
Ms. Schenk, 71, served as a director of the Company from 1995 to 2003 during the period the Company was operated as IDEC Pharmaceuticals, and has served as a director since 2003 following IDECs merger with Biogen Inc. Ms. Schenk is an attorney and consultant in private practice with extensive public policy and business experience. She is also a trustee of the Scripps Research Institute, a director of the California High Speed Rail Authority Board and a trustee of the University of California, San Diego Foundation. From 1999 to 2003, she served as Chief of Staff to the Governor of California, during which time she led the effort to create the Institutes for Science and Innovation at the University of California. She headed the States Executive Branch risk management team post 9/11 and during the California energy crisis. From 1993 to 1995, Ms. Schenk was a Member of the United States House of Representatives, representing San Diego, California and served on the House Energy & Commerce Committee with a special emphasis on biotechnology. From 1980 to 1983, she was the California Secretary of Business, Transportation and Housing during which she formed the California Commission on Industrial Innovation.
| Qualifications |
Ms. Schenks strong public policy, government, legal and private sector experience provides vital insights to our Board of Directors about significant issues affecting the highly regulated life sciences industry. She brings public sector operations and management expertise to our Board of Directors. She has demonstrated her commitment to boardroom excellence by completing the National Association of Corporate Directors (NACD) comprehensive program of study for corporate directors. Ms. Schenk currently serves as an NACD Board Leadership Fellow. She supplements her skill sets through ongoing engagement with the director community, and access to leading practices.
| Biogen Committee Memberships |
Risk (Chair)
Compensation and Management Development
| Other Current Public Company Boards |
Sempra Energy
| Former Public Company Directorships Held in the Past Five Years |
None
15 |
3 | Board of Directors (continued) |
Stephen A. Sherwin, M.D.
|
| Experience |
Dr. Sherwin, 67, has served as one of our directors since 2010. Dr. Sherwin currently divides his time between advisory work in the life sciences industry and patient care and teaching in his specialty of medical oncology. He is a Clinical Professor of Medicine at the University of California, San Francisco, and a volunteer Attending Physician in Hematology-Oncology at San Francisco General Hospital. Dr. Sherwin previously served as the Chairman of Ceregene, Inc., a life sciences company that he co-founded, from 2001 until its acquisition by Sangamo Biosciences, Inc. in 2013. He was also a co-founder and chairman of Abgenix, Inc., an antibody company which was acquired by Amgen Inc. in 2006. From 1990 to October 2009, he served as the Chief Executive Officer of Cell Genesys, Inc., a life sciences company, and was its Chairman from 1994 until the companys merger with BioSante Pharmaceuticals, Inc. in October 2009. Prior to that, he held various positions at Genentech, Inc., a life sciences company, most recently as Vice President, Clinical Research. Dr. Sherwin is board certified in internal medicine and medical oncology.
| Qualifications |
Dr. Sherwin has extensive knowledge of the life sciences industry and brings more than 30 years of experience in senior leadership positions at large and small publicly traded life sciences companies to our Board of Directors.
| Biogen Committee Memberships |
Finance
Risk
Science and Technology
| Other Current Public Company Boards |
Aduro Biotech, Inc.
Neurocrine Biosciences, Inc.
Rigel Pharmaceuticals, Inc.
Verastem, Inc.
| Former Public Company Directorships Held in the Past Five Years |
Biosante Pharmaceuticals, Inc.
Vical, Inc.
OUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF EACH DIRECTOR NOMINEE NAMED ABOVE.
16 |
3 | Board of Directors (continued) |
Our Board of Directors met 16 times in 2015. Our Board of Directors also has six standing committees. The principal functions of each committee, the committee composition in 2015 and number of meetings held in 2015 are described in the table below. The chair of each committee periodically reports to our Board of Directors on committee deliberations and decisions. Each committees charter is posted on our website, www.biogen.com, under the Corporate Governance subsection of the Investors section of the website. Also posted there are our Corporate Governance Principles which, together with our committee charters, comprise our governance framework.
Committee | Function | 2015 Members | Meetings in 2015 |
|||||
Audit |
Assists our Board of Directors in its oversight of: the integrity of our financial statements; our accounting and financial reporting processes; the independence, qualifications and performance of our independent registered public accounting firm; our global tax compliance and tax audit processes; and our internal audit and corporate compliance functions.
The Audit Committee has the sole authority and direct responsibility for the appointment, compensation, retention, evaluation and oversight of the work of our independent registered public accounting firm. |
Caroline D. Dorsa (Chair) Nancy L. Leaming Stelios Papadopoulos Brian S. Posner |
10 | |||||
Compensation and Management Development |
Assists our Board of Directors with oversight of executive compensation and management development, including: recommending to our Board of Directors the compensation for our Chief Executive Officer, and approving the compensation for our other executive officers; administration of our equity and other management incentive plans; reviewing executive and senior management development programs (including succession plans for executives and senior management); and recommending to our Board of Directors the compensation of our independent directors. |
Robert W. Pangia (Chair) Caroline D. Dorsa* Richard C. Mulligan Eric K. Rowinsky Lynn Schenk |
6 | |||||
Corporate Governance |
Assists our Board of Directors in assuring sound corporate governance practices and identifying qualified nominees to our Board of Directors and its committees. | Alexander J. Denner (Chair) Brian S. Posner Eric K. Rowinsky Lynn Schenk* |
8 | |||||
Finance |
Assists our Board of Directors with oversight of our financial strategy, policies and practices. | Brian S. Posner (Chair) Alexander J. Denner Robert W. Pangia Stelios Papadopoulos Stephen A. Sherwin |
6 | |||||
Risk |
Assists our Board of Directors with oversight of managements exercise of its responsibility to assess and manage risks associated with our business and operations.
For more information on our Board oversight of risks, please see Board Risk Oversight below. |
Lynn Schenk (Chair) Alexander J. Denner* Caroline D. Dorsa Nancy L. Leaming Stephen A. Sherwin |
5 | |||||
Science and Technology |
Assists our Board of Directors with oversight of our key strategic decisions involving research and development matters and our intellectual property portfolio. | Richard C. Mulligan (Chair) Stelios Papadopoulos Eric K. Rowinsky Stephen A. Sherwin |
7 |
| Determined by our Board of Directors to be an audit committee financial expert. |
* | Effective April 1, 2016, this director no longer serves on this committee. |
17 |
3 | Board of Directors (continued) |
| Attendance at Board and Committee Meetings. No current director attended fewer than 75% of the total number of meetings of our Board of Directors and the committees on which he or she served during 2015. |
| Executive Sessions. Under our Corporate Governance Principles, the independent directors of our full Board are required to meet without management present at least four times each year, and may also meet without management present at such other times as determined by our Chairman, or if requested by at least two other directors. In 2015, the independent directors of our full Board met without management present six times. Each committee of the Board also had numerous executive sessions throughout the year. |
| Attendance at Stockholder Meeting. We expect all of our directors and director nominees to attend our annual meetings of stockholders. All of our directors attended our 2015 Annual Meeting of Stockholders. |
This section describes our compensation program for our non-employee directors and shows the compensation paid to or earned by our non-employee directors during 2015. Dr. Scangos receives no compensation for his service on our Board of Directors.
Retainers, Meeting Fees and Expenses
The following table presents the retainers and meeting fees for all non-employee members of our Board of Directors in effect in 2015:
Retainers | Meeting Fees | |||||||||
Annual Board Retainer |
$ | 65,000 | Board of Directors Meetings (per meeting day): |
|||||||
Annual Retainers (in addition to Annual Board Retainer):
|
In-person attendance
|
$ | 2,500 | |||||||
Telephonic attendance |
$ |
1,500 |
| |||||||
Independent Chairman of the Board |
$ | 50,000 | Committee Meetings (per meeting) |
$ | 1,500 | |||||
Audit Committee Chair |
$ | 25,000 | Attendance at Annual Science and Technology Committee Portfolio Review (per day) |
$
|
1,500
|
| ||||
Compensation and Management Development Committee Chair |
$ | 20,000 | ||||||||
Corporate Governance Committee Chair |
$ | 15,000 | ||||||||
Finance Committee Chair |
$ | 15,000 | ||||||||
Risk Committee Chair |
$ | 15,000 | ||||||||
Science and Technology Committee Chair |
$ | 15,000 | ||||||||
Audit Committee Member (other than Chair) |
$ | 5,000 |
18 |
3 | Board of Directors (continued) |
19 |
3 | Board of Directors (continued) |
Name (a) |
Fees (b) |
Stock (c) |
Change in Pension (d) |
All Other (e) |
Total (f) |
|||||||||||
Alexander J. Denner |
$ | 143,500 | $ | 270,008 | | | $ | 413,508 | ||||||||
Caroline D. Dorsa |
$ | 159,500 | $ | 270,008 | | | $ | 429,508 | ||||||||
Nancy L. Leaming |
$ | 129,000 | $ | 270,008 | | | $ | 399,008 | ||||||||
Richard C. Mulligan |
$ | 131,500 | $ | 270,008 | | | $ | 401,508 | ||||||||
Robert W. Pangia |
$ | 141,000 | $ | 270,008 | $49,509 | | $ | 460,517 | ||||||||
Stelios Papadopoulos |
$ | 186,500 | $ | 404,040 | | $10,000 | $ | 600,540 | ||||||||
Brian S. Posner |
$ | 157,500 | $ | 270,008 | | $21,000 | $ | 448,508 | ||||||||
Eric K. Rowinsky |
$ | 131,500 | $ | 270,008 | | | $ | 401,508 | ||||||||
Lynn Schenk |
$ | 144,500 | $ | 270,008 | | $15,000 | $ | 429,508 | ||||||||
Stephen A. Sherwin |
$ | 128,500 | $ | 270,008 | | $5,000 | $ | 403,508 |
Notes to the 2015 Director Compensation Table
(1) | Reflects the grant date fair value of annual time-vested restricted stock unit grants made in 2015 to non-employee directors granted under the Non-Employee Directors Equity Plan, as described in the narrative preceding this table. These restricted stock units are scheduled to vest in full and be settled in shares on the first anniversary of the grant date, generally subject to continued service. Grant date fair values were computed in accordance with Accounting Standards Codification (ASC) Topic 718 and determined by multiplying the number of restricted stock units granted by the fair market value of the Companys common stock on the relevant grant date. |
(2) | The amounts in column (d) represent earnings in the Voluntary Board of Directors Savings Plan that are in excess of 120% of the average applicable federal long-term rate. The federal long-term rate for 2015 applied in this calculation is 3.16%, the federal long-term rate effective in January 2015 when the Fixed Rate Option (FRO) under this plan was established for 2015. Only Mr. Pangia has deferred compensation allocated to the FRO. |
(3) | The amounts in column (e) represent the amount of matching contributions made in 2015 by the Biogen Foundation on behalf of the director pursuant to the terms of a matching gift program offered by the Biogen Foundation to all U.S. employees and non-employee directors of Biogen. Under the matching gift program, the Biogen Foundation matches gifts to eligible U.S.-based non-profit organizations, in accordance with the Biogen Foundations guidelines, up to an annual maximum per donor of $25,000 per calendar year and up to a program total of $1.5 million per calendar year. The matching contributions made by the Biogen Foundation are not taxable income to the director, and the director may not take any tax deductions for such matching contributions. |
20 |
3 | Board of Directors (continued) |
Director Equity Outstanding at 2015 Fiscal Year-End
The following table summarizes the equity awards that were outstanding as of December 31, 2015, for each of the non-employee directors serving during 2015.
Option Awards(1) | Stock Awards(2) | |||||
Name | Number of Securities Underlying Unexercised Options |
Number of Shares or Units of Stock That Have Not Vested | ||||
Alexander J. Denner |
| 695 | ||||
Caroline D. Dorsa |
27,570 | 695 | ||||
Nancy L. Leaming |
| 695 | ||||
Richard C. Mulligan |
| 695 | ||||
Robert W. Pangia |
17,125 | 695 | ||||
Stelios Papadopoulos |
| 1,040 | ||||
Brian S. Posner |
| 695 | ||||
Eric K. Rowinsky |
| 695 | ||||
Lynn Schenk |
| 695 | ||||
Stephen A. Sherwin |
12,000 | 695 |
Notes to the Director Equity Outstanding at 2015 Fiscal Year-End Table
(1) | All stock options were granted with a ten-year term. Stock options vested in full on the first anniversary of the grant date. All stock options were vested and exercisable as of December 31, 2015. |
(2) | Restricted stock units granted to non-employee directors as part of the annual grant vest in full on the first anniversary of the grant date. |
Our Board of Directors provides oversight of material risks facing the Company. Our Board of Directors regularly receives information about our material strategic, operational, financial and compliance risks and managements response to, and mitigation of, such risks. In addition, our risk management systems, including our risk assessment processes, internal controls over financial reporting, compliance programs and internal and external auditing procedures are designed, in part, to inform management and our Board of Directors about our material risks. As part of its risk oversight function, our Board of Directors and its committees review this framework, its operation and our strategies for generating long-term value for our stockholders to ensure that such strategies will not motivate management to take excessive risks.
21 |
3 | Board of Directors (continued) |
In determining the allocation of risk oversight responsibilities, our Board of Directors and its committees generally oversee material risks within their identified area of concern. The Board and each committee meet regularly with management to ensure that management is exercising its responsibility to identify relevant risks and is adequately assessing, monitoring, and taking appropriate action to mitigate risk. A summary of the key areas of risk oversight responsibility of the Board and each of its committees is set forth below:
Board or Committee | Area of Risk Oversight | |||
Board |
Corporate and commercial strategy and execution, pricing and reimbursement, competition, and other material risks. |
|||
Audit |
Financial, accounting, disclosure, corporate compliance, distributors, anti-bribery and anti-corruption matters, and other risks, including cybersecurity, reviewed in its oversight of the internal audit and corporate compliance functions. |
|||
Compensation and Management Development |
Workforce and compensation matters. |
|||
Corporate Governance |
Corporate governance and board succession, director independence, potential conflicts of interest and related party transactions involving directors and executive officers. |
|||
Finance |
Financial, capital and credit risks. |
|||
Risk |
The Companys risk governance framework and infrastructure designed to identify, assess, manage and monitor the Companys material risks; The risk management policies, guidelines and practices implemented by Company management; The allocation of risk oversight responsibilities to the Board and its committees; Information technology, cybersecurity, environmental, health and sustainability and other material risks not allocated to the Board or another committee; and Material government and other investigations. |
|||
Science and Technology |
Research and development activities, clinical development and drug safety, and intellectual property. |
The Compensation Discussion and Analysis (CD&A) section of this Proxy Statement describes our compensation policies, programs and practices for our executive officers. Our goal-setting, performance assessment and compensation decision-making processes described in the CD&A apply to all employees. We offer a limited number of short-term cash incentive plans, with employees eligible for either our annual cash incentive plan or a sales incentive compensation plan; no employee is eligible to participate in more than one cash incentive plan at any time. Our annual cash incentive plan is consistently maintained for all participants globally, with the same Company performance goals, payout curves and administrative provisions regardless of the participants job level, location or function in the Company. We also have a long-term incentive program that provides different forms of awards depending upon an employees level, but is otherwise consistent throughout the Company.
In the CD&A, we describe the risk-mitigation controls for our compensation programs, including the role of our Compensation Committee to review and approve the design, goals and payouts under our annual cash incentive plan and long-term incentive program as well as approving each executive officers compensation. In addition, we have reviewed the processes, controls and design of our sales incentive compensation plans. Based on our assessment, we believe that our compensation policies, programs and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.
22 |
4 | Audit Committee Matters |
Proposal 2 Ratification of the Selection of Our Independent Registered Public Accounting Firm
|
||||
OUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF
THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2016.
23 |
4 | Audit Committee Matters (continued) |
24 |
4 | Audit Committee Matters (continued) |
Policy on Pre-Approval of Audit and Non-Audit Services
25 |
5 | Executive Compensation Matters |
Proposal 3 Advisory Vote on Executive Compensation
|
||||
OUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ADVISORY VOTE ON EXECUTIVE COMPENSATION.
26 |
5 | Executive Compensation Matters (continued) |
COMPENSATION DISCUSSION AND ANALYSIS
|
This Compensation Discussion and Analysis (CD&A) describes our compensation strategy, philosophy, policies, and practices underlying our executive compensation program for 2015. It also provides information regarding the manner and context in which compensation was earned by and awarded to our 2015 named executive officers listed below, whom we refer to collectively as Named Executive Officers or NEOs.
George A. Scangos, Ph.D. Chief Executive Officer |
Paul J. Clancy, M.B.A. Executive Vice President, Chief Financial Officer |
John G. Cox, M.S., M.B.A Executive Vice President, Pharmaceutical Operations & Technology |
Susan H. Alexander, J.D. Executive Vice President, Chief Legal Officer and Corporate Secretary |
Kenneth A. DiPietro Executive Vice President, Human Resources |
Douglas E. Williams, Ph.D.* Former Executive Vice President, Research and Development |
Stuart A. Kingsley* Former Executive Vice President, Global Commercial Operations |
* | Dr. Williams separated from the Company in August 2015 and Mr. Kingsley separated from the Company in February 2016. |
|
Financial Performance
We had strong financial growth in 2015, when compared to our exceptional performance in 2014.
A reconciliation of our GAAP to non-GAAP financial measures is provided in Appendix A to this Proxy Statement.
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5 | Executive Compensation Matters (continued) |
Product and Pipeline Developments
Approvals
| ELOCTA was approved by the European Commission for the treatment of hemophilia A. |
Applications for Marketing
Biologics license applications and/or marketing authorization applications for four product candidates were accepted by the U.S. Food and Drug Administration (FDA) or the European Medicines Agency (EMA):
| ZINBRYTA for the treatment of multiple sclerosis (FDA and EMA). |
| ALPROLIX for the treatment of hemophilia B (EMA). |
| BENEPALI and FLIXABI, two anti-TNF biosimilars developed through our joint venture, Samsung Bioepis (EMA). |
Data Readouts
| TYSABRI (Phase 3 Secondary Progressive MS; Phase 2 Acute Ischemic Stroke) |
| Anti-Lingo (Phase 2 - Acute Optic Neuritis) |
| Aducanumab (Phase 1b - Alzheimers disease) |
| Nusinersen (Phase 2 - Spinal Muscular Atrophy in infants and children) |
Phase 3 Initiation
| Commenced two global Phase 3 studies to assess aducanumab in patients with early Alzheimers disease. |
Capital Allocation
| Returned approximately $5.0 billion to stockholders through our share repurchase program. |
| Completed transactions giving us access to potential therapies in new areas, including: neuropathic pain; an oral compound that targets the sphingosine 1-phosphate receptor for multiple autoimmune indications; and gene-based therapies in multiple ophthalmic diseases. |
| Invested in new manufacturing facilities in Solothurn, Switzerland and Research Triangle Park, North Carolina. |
Other Notable Achievements in the Workplace and Community
| Achieved carbon neutrality |
| Ranked No. 1 on the Corporate Knights 2015 Global 100, an index of the most sustainable corporations in the world |
| Named Biotechnology Industry Leader on Dow Jones Sustainability World Index |
Total Shareholder Return
| Our one, three and five-year total shareholder return (TSR) compared to our peer group and the Standard & Poors 500 (S&P 500) is set forth below. |
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2015 Executive Compensation Programs and Pay-for-Performance Alignment
We believe our executive compensation programs are effectively designed and have worked well to implement a pay-for-performance culture that is aligned with the interests of our stockholders. In 2015, our executive compensation programs consisted of base salary, short- and long-term incentives and other benefits.
91% of our CEOs and 84% of our other NEOs 2015 compensation was performance-based and at-risk.
* | Reflects actual salary and target bonus and planned approximate long-term incentive (LTI) grant date value awarded in 2015. NEO pay mix excludes Dr. Williams due to partial year employment with Biogen in 2015. |
Our 2015 performance-based compensation payouts align with our commitment to strong performance.
In 2015, we did not achieve all the aggressive target goals that we set in the beginning of the year. As a result, the payouts as a percentage of target awards for our 2015 annual bonus plan, 2015 cash-settled performance units, and 2015 market stock units were below target payouts.
Annual Bonus Plan 56.25%*
75% Company Performance Multiplier
(The overall multiplier was further reduced because the individual multiplier was the same as the company multiplier) |
Cash-Settled Performance Units (CSPUs) 80.00%*
Performance multiplier for the CSPUs during the 2015 performance period.
(Earned units are subject to three year vesting) |
Market Stock Units (MSUs) 67.00%*
Performance multiplier for the MSUs during the 2015 performance period. |
* | Actual multiplier for applicable 2015 award. |
2015 Advisory Vote on Executive Compensation
At our 2015 Annual Meeting of Stockholders, we continued to receive support for our executive compensation programs with approximately 98% of the votes cast for approval of our annual Say on Pay proposal. The Compensation Committee viewed this as very positive support for our executive compensation programs and their alignment with long-term stockholder value creation and noted that the Companys executive compensation programs have been effective in implementing the Companys stated compensation philosophy and objectives.
Our Compensation Committee is committed to continually reviewing our executive compensation programs on a proactive basis to ensure the ongoing alignment of such programs with the interests of our stockholders.
In 2015, we reviewed the external landscape, the results from our Say-on-Pay proposal at last years annual meeting of stockholders, the results of our current compensation programs and the improvements that were made in 2014. The Compensation Committee was satisfied that our existing compensation programs further our pay-for-performance outcomes, and accordingly, did not recommend any significant changes to our executive compensation programs for 2015.
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Performance Goals and Target Setting Process
Early each year, the Compensation Committee reviews and establishes the pay level of each element of total compensation for our executive officers. Total compensation is comprised of base salary, target annual bonus and long-term incentive awards. A summary of the process the Compensation Committee follows in setting compensation is described below:
Target Setting |
Monitoring & Tracking The Compensation Committee closely monitors the progress against the performance goals throughout the year and engages in dialogue with management on such progress. |
Results & Awards: Compensation Committee Actions | ||
The Compensation Committee assesses the outcomes of the prior year to determine whether the intended behaviors and results were achieved with respect to the incentives from the prior year.
The Compensation Committee and the CEO discuss potential goals for the upcoming year that are tied to the short and longer-term strategic goals of the Company.
The annual business plan for the year is approved by the Board of Directors, and incentive goals and targets are aligned with the business plan.
Payout curves for each goal are established by the Company and approved by the Compensation Committee.
The goals are then applied to the executives, including NEOs, so that there is full alignment of executive incentive goals with the critical objectives that have been set forth for the year.
The Compensation Committee also reviews base salaries, bonus and LTI planning ranges, plan designs, benefits, and peer group data. |
Reviews and certifies the annual Company results against the pre-established goals for the performance-based plans.
Reviews and discusses the performance of the CEO.
Reviews and discusses the Company, team, and individual performance of each executive officer as assessed by the CEO.
Reviews and discusses the CEOs recommended compensation levels for each executive officer other than himself in the context of such executive officers contributions to the Company and his or her potential.
Approves the final executive officer compensation for each NEO other than the CEO, including base salary, bonus and long-term incentive awards.
Reviews CEO compensation and recommends to the Board of Directors for approval the compensation of the CEO, including base salary, bonus and long-term incentive awards. |
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2015 Annual Bonus Plan Company Target and Results Table
Set forth below is a summary of the Company goals and weightings that the Compensation Committee established for the 2015 annual bonus plan and the degree to which we attained these goals. As described below, the Company performance multiplier was 75%. Because the individual performance multiplier was the same as the Company performance multiplier for 2015, the combined annual bonus multiplier for each NEO was 56.25%.
Performance Range | ||||||||||||||||||||||||
Company Goals
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Weight
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Threshold
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Target
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Max
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Results
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Payout
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FINANCIAL |
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EPS |
25 | % | $ | 14.98 | $ | 17.69 | $ | 20.40 | $ | 16.86 | (1) | 90 | % | |||||||||||
Revenue |
25 | % | $ | 10,609M | $ | 11,609M | $ | 12,610M | $ | 10,921M | (1) | 71 | % | |||||||||||
CAPITALIZE |
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Expand MS Franchise |
20 | % |
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Specific market goals are not disclosed for competitive reasons |
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Below Goal (2) |
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0 | % | ||||||||||||||
Expand Hemophilia Franchise |
5 | % | |
Below Goal (2) |
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0 | % | |||||||||||||||||
EXTEND |
||||||||||||||||||||||||
Build and Advance Total Pipeline |
25 | % |
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Increase pipeline value based on the shape of the pipeline and the economic value |
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Above Goal (3) |
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140 | % | ||||||||||||||
Weighted Company Performance Multiplier |
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75 | %* |
* | Numbers may not recalculate due to rounding. |
Notes to 2015 Annual Bonus Plan Company Targets and Results Table
(1) | These financial measures were based on our publicly reported revenue of $10,764 million and our publicly announced non-GAAP diluted EPS of $17.01. For purposes of the 2015 annual bonus plan, revenue was adjusted to neutralize the effects of foreign exchange rate fluctuations and EPS was reduced to account for the net impact of the unplanned share repurchases under our $5.0 billion share repurchase program and our $6.0 billion debt financing. |
(2) | Threshold market goals for the MS and Hemophilia franchises were not met. Specific details are not disclosed for competitive reasons. |
(3) | The Company continued to expand and re-shape its pipeline of promising pre-clinical and clinical stage programs, through advancement of internal programs, entering into multiple external collaborations, and exceeding expectations of the level of confidence in and momentum of its clinical stage portfolio. Specific details are not disclosed for competitive reasons. |
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2015 Cash-Settled Performance Units Company Target and Results Table
The final CSPU performance multiplier was determined by the Compensation Committee and applied to the target units granted to determine the actual units earned and eligible to vest. The following chart shows the pre-established performance goals and the actual results that determined the final CSPU Multiplier for 2015:
Company Goals (1) | Weight % |
Target Performance Range | Payout | |||||||||||
Threshold | Target | Max | Results | |||||||||||
EPS |
33.3% | $14.98 | $17.69 | $21.21 | $16.86 | 90.1% | ||||||||
Revenue |
33.3% | $10,609M | $11,609M | $12,910M | $10,921M | 70.5% | ||||||||
Adjusted Free Cash Flow |
33.3% | $3,386M | $4,034M | $4,874M | $3,681M | 79.8% | ||||||||
Weighted CSPU Performance Multiplier |
80%* |
* | Numbers may not recalculate due to rounding. |
Notes to 2015 Cash-Settled Performance Units Company Targets and Results Table
(1) | See Notes to 2015 Annual Bonus Plan Company Targets and Results Table for definitions and adjustments related to EPS and Revenue goals and results. Adjusted Free Cash Flow was increased to exclude the impact of interest expense related to our $6.0 billion debt financing, which was not contemplated in determination of the Target Performance Range. |
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The following table shows the compensation paid to or earned by our NEOs during the years ended December 31, 2015, December 31, 2014 and December 31, 2013, for the year(s) in which they were a named executive officer.
Name and Principal Position (a) |
Year (b) |
Salary (c) |
Bonus(1) (d) |
Stock (e) |
Non-Equity (f) |
Change in (g) |
All Other (h) |
Total (i) | ||||||||||||||||||||||||||||||||
George A. Scangos |
2015 | $ | 1,538,462 | | $ | 13,015,232 | $ | 1,181,250 | $ | 184,724 | $ | 954,718 | $ | 16,874,386 | ||||||||||||||||||||||||||
Chief Executive Officer |
2014 | $ | 1,375,000 | | $ | 12,120,939 | $ | 4,047,313 | $ | 86,634 | $ | 1,001,483 | $ | 18,631,369 | ||||||||||||||||||||||||||
2013 | $ | 1,498,462 | | $ | 9,195,217 | $ | 3,560,480 | $ | 89,477 | $ | 671,511 | $ | 15,015,147 | |||||||||||||||||||||||||||
Paul J. Clancy |
2015 | $ | 747,498 | | $ | 2,543,374 | $ | 284,655 | $ | 45,960 | $ | 332,115 | $ | 3,953,602 | ||||||||||||||||||||||||||
EVP, Chief Financial Officer |
2014 | $ | 698,389 | | $ | 2,824,497 | $ | 811,632 | $ | 25,454 | $ | 330,045 | $ | 4,690,017 | ||||||||||||||||||||||||||
2013 | $ | 745,223 | | $ | 2,808,961 | $ | 683,258 | $ | 27,771 | $ | 221,043 | $ | 4,486,256 | |||||||||||||||||||||||||||
John G. Cox |
2015 | $ | 674,753 | | $ | 3,559,612 | $ | 258,348 | $ | 144,138 | $ | 340,997 | $ | 4,977,848 | ||||||||||||||||||||||||||
EVP, Pharmaceutical |
2014 | $ | 609,508 | | $ | 2,820,174 | $ | 709,086 | $ | 3,818 | $ | 320,831 | $ | 4,463,417 | ||||||||||||||||||||||||||
Operations and Technology |
2013 | $ | 625,648 | | $ | 2,247,885 | $ | 591,273 | $ | 5,730 | $ | 201,061 | $ | 3,671,597 | ||||||||||||||||||||||||||
Susan H. Alexander(6) |
2015 | $ | 697,721 | | $ | 2,795,055 | $ | 266,069 | $ | 112,406 | $ | 296,052 | $ | 4,167,303 | ||||||||||||||||||||||||||
EVP, Chief Legal Officer and |
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Kenneth A. DiPietro(6) |
2015 | $ | 648,023 | | $ | 2,795,055 | $ | 247,117 | $ | 12,081 | $ | 287,621 | $ | 3,989,897 | ||||||||||||||||||||||||||
EVP, Human Resources |
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Douglas E. Williams(7) |
2015 | $ | 528,401 | | $ | 4,067,911 | $ | | | $ | 351,338 | $ | 4,947,650 | |||||||||||||||||||||||||||
Former EVP, Research |
2014 | $ | 739,112 | | $ | 3,078,158 | $ | 859,413 | | $ | 370,365 | $ | 5,047,048 | |||||||||||||||||||||||||||
and Development |
2013 | $ | 766,831 | | $ | 3,575,514 | $ | 720,036 | | $ | 184,017 | $ | 5,246,398 | |||||||||||||||||||||||||||
Stuart A. Kingsley(8) |
2015 | $ | 723,469 | | $ | 3,049,205 | $ | 277,416 | | $ | 272,216 | $ | 4,322,306 | |||||||||||||||||||||||||||
Former EVP, Global |
2014 | $ | 648,503 | | $ | 2,563,871 | $ | 753,256 | | $ | 220,875 | $ | 4,186,505 | |||||||||||||||||||||||||||
Operations |
2013 | $ | 675,129 | | $ | 2,247,885 | $ | 637,164 | | $ | 159,764 | $ | 3,719,942 |
Notes to the Summary Compensation Table
(1) | No discretionary bonuses were paid to any NEO during these years. All cash bonuses were based on achievement of performance criteria under our annual bonus plan, which amounts are disclosed in column (f). |
(2) | The amounts reflect the grant date fair value computed in accordance with FASB ASC Topic 718 for MSUs and CSPUs granted during 2015, 2014 and 2013, excluding the effect of estimated forfeitures. The fair value for MSU grants are estimated as of the date of grant using a lattice model with a Monte Carlo simulation. Assumptions used in this calculation are included on page F-42 in footnote 15 of our 2015 Annual Report on Form 10-K. The MSU and CSPU grants are estimated based on target performance. The table below shows the target and maximum payouts possible for the 2015, 2014 and 2013 MSU and CSPU awards based on the value at the date of grant and the payout ranges. |
2015 | 2014 | 2013 | ||||||||||||||||||||||||||||
Executive Officer | Target Payout |
Maximum Payout |
Target Payout |
Maximum Payout |
Target Payout |
Maximum Payout | ||||||||||||||||||||||||
Dr. Scangos |
$ | 13,015,232 | $ | 26,030,464 | $ | 12,120,939 | $ | 24,241,878 | $ | 9,195,217 | $ | 16,042,945 | ||||||||||||||||||
Mr. Clancy |
$ | 2,543,374 | $ | 5,086,749 | $ | 2,824,497 | $ | 5,648,994 | $ | 2,808,961 | $ | 4,900,886 | ||||||||||||||||||
Mr. Cox |
$ | 3,559,612 | $ | 7,119,225 | $ | 2,820,174 | $ | 5,640,348 | $ | 2,247,885 | $ | 3,921,949 | ||||||||||||||||||
Ms. Alexander |
$ | 2,795,055 | $ | 5,590,110 | | | | | ||||||||||||||||||||||
Mr. DiPietro |
$ | 2,795,055 | $ | 5,590,110 | | | | | ||||||||||||||||||||||
Dr. Williams |
$ | 4,067,911 | $ | 8,135,822 | $ | 3,078,158 | $ | 6,156,317 | $ | 3,575,514 | $ | 6,238,088 | ||||||||||||||||||
Mr. Kingsley |
$ | 3,049,205 | $ | 6,098,409 | $ | 2,563,871 | $ | 5,127,743 | $ | 2,247,885 | $ | 3,921,949 |
(3) | The amounts in column (f) reflect actual bonuses paid under our annual bonus plan. |
(4) | The amounts in column (g) reflect earnings in the SSP that are in excess of 120% of the applicable federal long-term rate. The federal long-term rates applied in this calculation are 3.16%, 4.11%, and 2.74% for 2015, 2014 and 2013, respectively. A description of the SSP is presented in the narrative preceding the 2015 Non-Qualified Deferred Compensation Table. |
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(5) | The amounts in column (h) for 2015 reflect the following: |
Executive Officer | Company Matching Contribution to 401(k) Plan Account |
Company Contribution to SSP Account |
Personal Financial and Tax Planning Reimbursement(9) |
Value of Company- Paid Life Insurance Premiums | ||||||||||||||||
Dr. Scangos |
$ | 15,900 | $ | 937,864 | | $ | 954 | |||||||||||||
Mr. Clancy |
$ | 15,900 | $ | 314,876 | | $ | 1,340 | |||||||||||||
Mr. Cox |
$ | 15,900 | $ | 308,927 | $ | 15,000 | $ | 1,170 | ||||||||||||
Ms. Alexander |
$ | 15,900 | $ | 272,137 | $ | 6,775 | $ | 1,240 | ||||||||||||
Mr. DiPietro |
$ | 15,900 | $ | 263,069 | $ | 7,500 | $ | 1,152 | ||||||||||||
Dr. Williams |
$ | 15,900 | $ | 334,610 | | $ | 827 | |||||||||||||
Mr. Kingsley |
| $ | 270,972 | | $ | 1,243 |
(6) | Neither Ms. Alexander nor Mr. DiPietro were named executive officers during 2013 or 2014. Accordingly, no compensation information is provided for those years. |
(7) | Dr. Williams separated from the Company on August 3, 2015 and received no severance or other payments in connection with such separation. |
(8) | Mr. Kingsley separated from the Company on February 29, 2016. |
(9) | Dr. Scangos is not eligible to participate in our personal financial and tax planning reimbursement program. The amount for Mr. Cox includes the 2015 benefit of $7,500 and reimbursement during 2015 of the 2014 benefit of $7,500. The amount for Ms. Alexander includes the 2015 benefit of $3,510 and reimbursement during 2015 of the 2014 benefit of $3,265. |
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2015 Grants of Plan-Based Awards
The following table shows additional information regarding all grants of plan-based awards made to our NEOs for the year ended December 31, 2015.
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) |
Estimated Future Payouts |
All Other Stock Awards: Number of Shares or Units (#) (i) |
Grant Date Fair Value of Stock Awards(2) (j) |
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Name (a) |
Grant Date (b) |
Notes | Threshold (c) |
Target (d) |
Maximum (e) |
Threshold (f) |
Target (g) |
Maximum (h) |
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George A. Scangos |
02/23/2015 | (3) | | | | 6,638 | 13,275 | 26,550 | | $ | 6,614,826 | |||||||||||||||||||||||||
02/23/2015 | (4) | | | | 7,833 | 15,665 | 31,330 | | $ | 6,400,406 | ||||||||||||||||||||||||||
02/23/2015 | (5) | $ | 525,000 | $ | 2,100,000 | $ | 4,725,000 | | | | | | ||||||||||||||||||||||||
Paul J. Clancy |
02/23/2015 | (3) | | | | 1,298 | 2,595 | 5,190 | | $ | 1,293,120 | |||||||||||||||||||||||||
02/23/2015 | (4) | | | | 1,530 | 3,060 | 6,120 | | $ | 1,250,255 | ||||||||||||||||||||||||||
02/23/2015 | (5) | $ | 126,513 | $ | 506,053 | $ | 1,138,619 | | | | | | ||||||||||||||||||||||||
John G. Cox |
02/23/2015 | (3) | | | | 1,815 | 3,630 | 7,260 | | $ | 1,808,847 | |||||||||||||||||||||||||
02/23/2015 | (4) | | | | 2,143 | 4,285 | 8,570 | | $ | 1,750,765 | ||||||||||||||||||||||||||
02/23/2015 | (5) | $114,821 | $459,285 | $1,033,391 | | | | | | |||||||||||||||||||||||||||
Susan H. Alexander |
02/23/2015 | (3) | | | | 1,425 | 2,850 | 5,700 | | $ | 1,420,184 | |||||||||||||||||||||||||
02/23/2015 | (4) | | | | 1,683 | 3,365 | 6,730 | | $ | 1,374,872 | ||||||||||||||||||||||||||
02/23/2015 | (5) | $118,253 | $473,011 | $1,064,275 | | | | | | |||||||||||||||||||||||||||
Kenneth A. DiPietro |
02/23/2015 | (3) | | | | 1,425 | 2,850 | 5,700 | | $ | 1,420,184 | |||||||||||||||||||||||||
02/23/2015 | (4) | | | | 1,683 | 3,365 | 6,730 | | $ | 1,374,872 | ||||||||||||||||||||||||||
02/23/2015 | (5) | $109,830 | $439,319 | $988,468 | | | | | | |||||||||||||||||||||||||||
Douglas E. Williams(6) |
02/23/2015 | (3) | | | | 2,075 | 4,150 | 8,300 | | $ | 2,067,912 | |||||||||||||||||||||||||
02/23/2015 | (4) | | | | 2,448 | 4,895 | 9,790 | | $ | 1,999,999 | ||||||||||||||||||||||||||
02/23/2015 | | | | | | | | | ||||||||||||||||||||||||||||
Stuart A. Kingsley |
02/23/2015 | (3) | | | | 1,555 | 3,110 | 6,220 | | $ | 1,549,716 | |||||||||||||||||||||||||
02/23/2015 | (4) | | | | 1,835 | 3,670 | 7,340 | | $ | 1,499,489 | ||||||||||||||||||||||||||
02/23/2015 | (5) | $ | 123,296 | $ | 493,184 | $ | 1,109,664 | | | | | |
Notes to the 2015 Grants of Plan-Based Awards Table
(1) | Reflects the estimated future payouts of awards granted in 2015 under our annual bonus plan and our long-term incentive program for each NEO as of the grant date. |
(2) | Represents the grant date value as determined in accordance with FASB Topic 718. The fair value for MSU grants is estimated as of the date of grant using a lattice model with a Monte Carlo simulation. Assumptions used in this calculation are included on page F-42 in footnote 15 of our 2015 Annual Report on Form 10-K. The grant date fair value of CSPUs was determined by multiplying the target award by the fair market value of the Companys common stock on the grant date. |
(3) | These amounts relate to the annual grant of MSUs. These are performance-based restricted stock units tied to the growth in our stock price between the grant date and each of three annual vesting dates. The number of MSUs earned is determined on each vesting date. Columns (f), (g), and (h) represent the number of MSUs that can be earned based on performance at the threshold level of 50%, target level of 100%, and the maximum level of 200%, respectively. The award becomes eligible to vest ratably over three years. |
(4) | These amounts relate to the annual grant of CSPUs. These are performance-based restricted stock units tied to our 2015 financial performance and subsequently subject to time-based vesting. The number of CSPUs earned is determined in early 2016 based on actual 2015 revenue, earnings per share and free cash flow performance versus target. Earned CSPUs will vest ratably over three years. These awards are settled in cash or stock at the discretion of the Compensation Committee upon the vesting date based on the 30-day average of our then-current stock price. Columns (f), (g), and (h) represent the number of CSPUs earned if the Company performance multiplier were 50%, 100% and 200%, respectively. |
(5) | These amounts relate to the 2015 annual bonus plan. The amounts shown in column (d) represent the 2015 target payout amount based on the target percentage applied to each NEOs base salary as of December 31, 2015. For 2015, the bonus targets were 140% of salary for Dr. Scangos, and 70% of salary for all other NEOs. In 2015, because the individual performance multiplier was the same as the Company performance multiplier under the 2015 annual bonus plan, the amounts in column (c), (d) and (e) represent a payment as if the Company performance multiplier and the individual performance multiplier were each 50%, 100% and 150%, respectively. Actual amounts paid to each NEO under this plan are included in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table. |
(6) | As a result of Dr. Williams separation from the Company, the 2015 long-term incentive grants previously awarded to him were forfeited, and he was not eligible to receive an annual bonus. |
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Outstanding Equity Awards at 2015 Fiscal Year-End
The following table summarizes the equity awards that were outstanding as of December 31, 2015 for each of our NEOs.
Option Awards(1) | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity Incentive Plan Awards |
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Option (e) |
Option (f) |
Number (g) |
Market (h) |
Number of Unearned Shares or Units That Have Not Vested(4) (i) |
Market Value of Unearned Shares or Units That Have Not Vested(3) (j) |
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Number of Securities Underlying Unexercised Options |
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Grant (b) |
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(a) | Exercisable (c) |
Unexercisable (d) |
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George A. Scangos |
2/9/2012 | | | | | | | 11,274 | $3,453,790 | |||||||||||||||||||||||||||
2/12/2013 | | | | | 14,145 | $4,333,174 | | | ||||||||||||||||||||||||||||
2/12/2013 | | | | | | | 18,380 | $5,630,560 | ||||||||||||||||||||||||||||
2/12/2014 | | | | | 21,310 | $6,528,242 | | | ||||||||||||||||||||||||||||
2/12/2014 | | | | | | | 10,498 | $3,216,062 | ||||||||||||||||||||||||||||
2/23/2015 | | | | | 12,532 | $3,839,178 | | | ||||||||||||||||||||||||||||
2/23/2015 | | | | | | | 13,275 | $4,066,796 | ||||||||||||||||||||||||||||
Paul J. Clancy |
2/8/2012 | | | | | | | 3,194 | $ 978,329 | |||||||||||||||||||||||||||
2/12/2013 | | | | | 4,321 | $1,323,800 | | | ||||||||||||||||||||||||||||
2/12/2013 | | | | | | | 5,615 | $1,720,002 | ||||||||||||||||||||||||||||
2/12/2014 | | | | | 4,965 | $1,520,951 | | | ||||||||||||||||||||||||||||
2/12/2014 | | | | | | | 2,447 | $ 749,638 | ||||||||||||||||||||||||||||
2/23/2015 | | | | | 2,448 | $ 749,945 | | | ||||||||||||||||||||||||||||
2/23/2015 | | | | | | | 2,595 | $ 794,978 | ||||||||||||||||||||||||||||
John G. Cox |
2/12/2008 | 2,892 | | $60.56 | 2/11/2018 | | | | | |||||||||||||||||||||||||||
2/24/2009 | 7,588 | | $49.65 | 2/23/2019 | | | | | ||||||||||||||||||||||||||||
2/8/2012 | | | | | | | 4,026 | $1,233,365 | ||||||||||||||||||||||||||||
2/12/2013 | | | | | 3,459 | $1,059,518 | | | ||||||||||||||||||||||||||||
2/12/2013 | | | | | | | 4,494 | $1,376,737 | ||||||||||||||||||||||||||||
2/12/2014 | | | | | 4,965 | $1,520,951 | | | ||||||||||||||||||||||||||||
2/12/2014 | | | | | | | 2,447 | $ 749,638 | ||||||||||||||||||||||||||||
2/23/2015 | | | | | 3,428 | $1,050,168 | | | ||||||||||||||||||||||||||||
2/23/2015 | | | | | | | 3,630 | $1,112,051 | ||||||||||||||||||||||||||||
Susan H. Alexander |
2/24/2009 | 6,250 | | $49.65 | 2/23/2019 | | | | | |||||||||||||||||||||||||||
2/8/2012 | | | | | | | 2,498 | $ 765,109 | ||||||||||||||||||||||||||||
2/12/2013 | | | | | 3,299 | $1,010,771 | | | ||||||||||||||||||||||||||||
2/12/2013 | | | | | | | 4,289 | $1,313,782 | ||||||||||||||||||||||||||||
2/12/2014 | | | | | 5,420 | $1,660,340 | | | ||||||||||||||||||||||||||||
2/12/2014 | | | | | | | 2,671 | $ 818,261 | ||||||||||||||||||||||||||||
2/23/2015 | | | | | 2,692 | $ 824,694 | | | ||||||||||||||||||||||||||||
2/23/2015 | | | | | | | 2,850 | $ 873,098 | ||||||||||||||||||||||||||||
Kenneth A. DiPietro |
2/1/2012 | | | | | | | 2,466 | $ 755,459 | |||||||||||||||||||||||||||
2/12/2013 | | | | | 3,459 | $1,059,518 | | | ||||||||||||||||||||||||||||
2/12/2013 | | | | | | | 4,494 | $1,376,737 | ||||||||||||||||||||||||||||
2/12/2014 | | | | | 5,058 | $1,549,365 | | | ||||||||||||||||||||||||||||
2/12/2014 | | | | | | | 2,491 | $ 763,118 | ||||||||||||||||||||||||||||
2/23/2015 | | | | | 2,692 | $ 824,694 | | | ||||||||||||||||||||||||||||
2/23/2015 | | | | | | | 2,850 | $ 873,098 | ||||||||||||||||||||||||||||
Douglas E. Williams(5) |
| | | | | | | | ||||||||||||||||||||||||||||
Stuart A. Kingsley |
2/8/2012 | | | | | | | 2,639 | $ 808,304 | |||||||||||||||||||||||||||
2/12/2013 | | | | | 3,459 | $1,059,518 | | | ||||||||||||||||||||||||||||
2/12/2013 | | | | | | | 4,494 | $1,376,737 | ||||||||||||||||||||||||||||
2/12/2014 | | | | | 4,515 | $1,383,170 | | | ||||||||||||||||||||||||||||
2/12/2014 | | | | | | | 2,224 | $ 681,322 | ||||||||||||||||||||||||||||
2/23/2015 | | | | | 2,936 | $ 899,444 | | | ||||||||||||||||||||||||||||
2/23/2015 | | | | | | | 3,110 | $ 952,749 |
Notes to the Outstanding Equity Awards at 2015 Fiscal Year End Table
(1) | All stock options were granted with a ten-year term. Stock options vest 25% on each of the first four anniversaries of the grant date. It has not been the Companys practice to cash out stock options having an exercise price greater than the market price (i.e., underwater options). |
(2) | CSPUs were granted in 2015, 2014 and 2013. Numbers reflect the number of CSPUs earned and eligible to vest based on our financial performance for each of 2015, 2014 and 2013, but that have not satisfied the service-based vesting requirement as of December 31, 2015. CSPUs that have been earned upon satisfaction of the performance conditions vest ratably over three years from the grant date. The cash payout for these awards will be based on our 60-day average stock price at vesting for awards granted prior to 2014 and the 30-day average stock price at vesting for awards granted in 2014 and 2015. |
45 |
5 | Executive Compensation Matters (continued) |
(3) | The market value of awards is based on the closing price of our stock on December 31, 2015 ($306.35), as reported by the NASDAQ Global Select Market. |
(4) | MSUs were granted in 2015, 2014, 2013 and 2012. These are performance-based restricted stock units tied to the growth in our stock price between the dates of grant and vesting. MSUs are eligible to vest ratably over four years for grants made prior to 2014, and three years for grants made in 2014 and 2015. The numbers and values shown in columns (i) and (j), respectively, reflect maximum performance results for MSUs granted in 2012 and 2013 and target performance results for MSUs granted in 2014 and 2015 based on the prior years performance in each case. |
(5) | Dr. Williams held no awards at December 31, 2015. |
2015 Option Exercises and Stock Vested
Our executive officers must use pre-established trading plans to sell shares of Biogen stock. Trading plans may only be entered into when the executive is not in possession of material non-public information about the Company, and we require a waiting period following the establishment of a trading plan before any trades may be executed. Our policy is designed to provide safeguards that will allow our executives an opportunity to realize the value intended by the Company in granting equity-based LTI awards.
Our NEOs are also subject to the share ownership guidelines described above in the subsection titled Share Ownership Guidelines.
The following table shows information regarding option exercises and vesting of stock awards for each NEO during the year ended December 31, 2015.
Option Awards | Stock Awards | |||||||||
Name | Number of Shares Acquired on Exercise |
Value Realized Upon Exercise |
Number of Shares Acquired on Vesting(1) |
Value Realized on Vesting(2) | ||||||
George A. Scangos |
| | 84,703 | $32,317,140 | ||||||
Paul J. Clancy |
| | 23,150 | $ 8,784,029 | ||||||
John G. Cox |
5,066 | $1,941,367 | 23,647 | $ 8,974,656 | ||||||
Susan H. Alexander |
| | 19,446 | $ 7,385,016 | ||||||
Kenneth A. DiPietro |
| | 15,430 | $ 5,738,034 | ||||||
Douglas E. Williams |
| | 26,562 | $10,029,868 | ||||||
Stuart A. Kingsley |
| | 17,221 | $ 6,500,050 |
Notes to the 2015 Option Exercises and Stock Vested Table
(1) | The number of actual shares of our common stock acquired on vesting after shares were withheld to pay the minimum withholding of taxes were as follows: |
Net Shares Acquired(3) | ||
Dr. Scangos |
29,906 | |
Mr. Clancy |
6,802 | |
Mr. Cox |
6,944 | |
Ms. Alexander |
5,740 | |
Mr. DiPietro |
3,647 | |
Dr. Williams |
7,682 | |
Mr. Kingsley |
4,621 |
(2) | The value realized for MSUs and RSUs are calculated by multiplying the closing price of a share of our common stock on the vesting date by the total number of shares that vested on such date. The value realized for CSPUs is calculated using the 60-day average closing price of the common stock of the Company through the vesting date for grants made prior to 2014 and the 30-day average for grants made in 2015 and 2014. |
(3) | MSUs were settled in shares of our common stock. CSPUs were settled in cash for all NEOs, other than Dr. Scangos, in which case a portion of his CSPUs were settled in shares of our common stock. For Dr. Scangos in 2015, the Compensation Committee exercised its discretion to settle Dr. Scangos 2014 CSPUs in shares of our common stock; the net shares acquired by Dr. Scangos reflected in the table above represent 24,538 MSUs and 5,368 CSPUs settled in shares. |
46 |
5 | Executive Compensation Matters (continued) |
Name | Executive Contributions in Last Fiscal Year(1) |
Company Contributions in Last Fiscal Year(2) |
Aggregate Earnings in Last Fiscal Year(3) |
Aggregate Distributions in Last Fiscal Year |
Aggregate Balance at Last Fiscal Year-End(4) | |||||||||||||||||||||||||
George A. Scangos |
$ | 1,368,040 | $937,864 | $ | 522,645 | | $ | 10,012,112 | ||||||||||||||||||||||
Paul J. Clancy |
| $314,876 | $ | 88,520 | | $ | 1,568,334 | |||||||||||||||||||||||
John G. Cox |
$ | 3,030,054 | $308,927 | $ | 249,837 | | $ | 12,357,852 | ||||||||||||||||||||||
Susan H. Alexander |
$ | 733,687 | $272,137 | $ | 228,634 | | $ | 4,141,026 | ||||||||||||||||||||||
Kenneth A. DiPietro |
| $263,069 | $ | 25,557 | | $ | 563,644 | |||||||||||||||||||||||
Douglas E. Williams |
| $334,610 | $ | 756 | | $ | 970,484 | |||||||||||||||||||||||
Stuart A. Kingsley |
| $270,972 | $ | 613 | | $ | 802,323 |
Notes to the 2015 Non-Qualified Deferred Compensation Table
(1) | The amounts in this column are also included in columns (c), (e) and (f) of the Summary Compensation Table as non-qualified deferral of salary, non-qualified deferral of CSPU payments and non-qualified deferral of payments under the annual bonus plan, respectively. |
47 |
5 | Executive Compensation Matters (continued) |
(2) | The amounts in this column are also included in column (h) of the Summary Compensation Table for 2015 as Company contributions to the SSP. |
(3) | Earnings in excess of 120% of the applicable federal long-term rate are reported in column (g) of the Summary Compensation Table for 2015 for Dr. Scangos ($184,724), Mr. Clancy ($45,960), Mr. Cox ($144,138), Ms. Alexander ($112,406), and Mr. DiPietro ($12,081). |
(4) | The following table lists the compensation deferrals during 2014 and 2013 by the NEOs, as reported, where applicable, in the proxy statement for our 2015 and 2014 annual meeting of stockholders. |
Amounts Previously Reported as Deferred | ||||||
Name | 2014 | 2013 | ||||
George A. Scangos |
$ | 1,205,644 | $1,285,526 | |||
John G. Cox |
$ | 4,313,520 | $1,867,261 |
This column also includes Company contributions and compensation earned and deferred in prior years, which was disclosed in our prior proxy statements where applicable, together with earnings on these amounts. |
48 |
5 | Executive Compensation Matters (continued) |
49 |
5 | Executive Compensation Matters (continued) |
50 |
5 | Executive Compensation Matters (continued) |
Potential Post-Termination Payments Table
The following table summarizes the potential payments to each NEO under various termination events. The table assumes that the event occurred on December 31, 2015, and the calculations use the closing price of our common stock as reported by the NASDAQ Global Select Market on December 31, 2015, which was $306.35 per share.
Name and Payment Elements(1) (a) |
Retirement(2) (b) |
Involuntary by the Not Following a Corporate |
Employment Action Following a Corporate Transaction or Change in Control (d) |
|||||||||
George A. Scangos |
||||||||||||
Severance |
| $ 7,200,000 | $ 7,200,000 | |||||||||
Performance-based Restricted Stock Units(3) |
$29,925,489 | $29,925,489 | $29,925,489 | |||||||||
Medical, Dental and Vision |
| $ 25,581 | $ 25,581 | |||||||||
Outplacement(4) |
| $ 38,000 | $ 38,000 | |||||||||
Total |
$29,925,489 | $37,189,070 | $37,189,070 | |||||||||
Paul J. Clancy |
||||||||||||
Severance |
| $ 2,150,724 | $ 2,457,971 | |||||||||
Performance-based Restricted Stock Units |
| | $ 7,608,948 | |||||||||
Medical, Dental and Vision |
| $ 32,259 | $ 36,867 | |||||||||
Outplacement(4) |
| $ 38,000 | $ 38,000 | |||||||||
280G Tax Gross-Up(5) |
| | | |||||||||
Total |
| $ 2,220,983 | $10,141,786 | |||||||||
John G. Cox |
||||||||||||
Severance |
| $ 1,951,959 | $ 2,230,811 | |||||||||
Performance-based Restricted Stock Units |
| | $ 7,795,855 | |||||||||
Medical, Dental and Vision |
| $ 32,259 | $ 36,867 | |||||||||
Outplacement(4) |
| $ 38,000 | $ 38,000 | |||||||||
280G Tax Gross-Up(5) |
| | | |||||||||
Total |
| $ 2,022,218 | $10,101,533 | |||||||||
Susan H. Alexander |
||||||||||||
Severance |
| $ 2,010,296 | $ 2,297,482 | |||||||||
Performance-based Restricted Stock Units |
| | $ 7,015,112 | |||||||||
Medical, Dental and Vision |
| $ 32,259 | $ 36,867 | |||||||||
Outplacement(4) |
| $ 38,000 | $ 38,000 | |||||||||
280G Tax Gross-Up(5) |
| | | |||||||||
Total |
| $ 2,080,555 | $ 9,387,461 | |||||||||
Kenneth A. DiPietro |
||||||||||||
Severance |
| $ 1,600,376 | $ 2,133,835 | |||||||||
Performance-based Restricted Stock Units |
| | $ 6,953,505 | |||||||||
Medical, Dental and Vision |
| $ 29,302 | $ 39,070 | |||||||||
Outplacement(4) |
| $ 38,000 | $ 38,000 | |||||||||
Total |
| $ 1,667,678 | $ 9,164,410 | |||||||||
Douglas E. Williams(6) |
| | ||||||||||
Stuart A. Kingsley(7) |
||||||||||||
Severance |
| $ 2,096,031 | $ 2,395,464 | |||||||||
Performance-based Restricted Stock Units |
| | $ 6,896,846 | |||||||||
Medical, Dental and Vision |
| $ 31,570 | $ 36,080 | |||||||||
Outplacement(4) |
| $ 38,000 | $ 38,000 | |||||||||
Total |
| $ 2,165,601 | $ 9,366,390 |
Notes to the Potential Post-Termination Payments Table
(1) | In the event of an executives death or disability, all outstanding awards under the Companys long-term incentive program will vest in full. The value of such accelerated awards for all NEOs other than Dr. Scangos would be the same amount as shown in column (d) for such NEO (based on actual performance estimated as of December 31, 2015). The value of Dr. Scangos accelerated awards would be $28,999,480, which, pursuant to his employment agreement, is calculated at the target level of performance. |
(2) | As of December 31, 2015, Dr. Scangos was the only NEO eligible for potential payments upon retirement. Under Dr. Scangos employment agreement, upon retirement, all of his outstanding awards under the Companys long-term incentive program will continue to vest as if he had remained employed by the Company for the duration of the vesting period, subject to the achievement of any applicable performance criteria, and all awards that require exercise by him will remain exercisable until the earlier of three years after retirement or the original expiration date. The amount for Dr. Scangos in column (b) assumes the value of all unvested awards based on actual performance estimated as of December 31, 2015. The actual value that will be earned, if any, will not be known until the end of the applicable performance period. |
(3) | Under Dr. Scangos employment agreement, in the case of an involuntary employment action, all of his outstanding awards under the Companys long-term incentive program will continue to vest as if he remained employed by the Company for the duration of the vesting period, subject to the achievement of any applicable performance criteria, and all awards that require exercise by him will remain exercisable until three years after his involuntary employment action. The amount for Dr. Scangos in columns (c) and (d) assumes the value of all unvested awards based on actual performance estimated as of December 31, 2015. The actual value that will be earned, if any, will not be known until the end of the applicable performance period. |
51 |
5 | Executive Compensation Matters (continued) |
(4) | The NEOs are also provided executive-level outplacement services at a cost of $38,000 at the executive vice president level. |
(5) | The payments for Mr. Clancy, Mr. Cox, and Ms. Alexander upon a corporate transaction or a corporate change in control at December 31, 2015 would not be subject to an excise tax. |
(6) | Dr. Williams voluntarily separated from the Company on August 3, 2015 and did not receive any severance benefits. As of December 31, 2015, he was not entitled to any termination benefits from the Company. |
(7) | Mr. Kingsley separated from the Company on February 29, 2016, at which time the Company agreed to provide him the payments in column (c). |
52 |
6 | Additional Information |
The following table and accompanying notes provide information about the beneficial ownership of our common stock by:
| each stockholder known by us to be the beneficial owner of more than 5% of our common stock; |
| each of our named executive officers (listed in the Summary Compensation Table); |
| each of our directors and nominees for director; and |
| all of our directors and executive officers as a group. |
Except as otherwise noted, the persons identified have sole voting and investment power with respect to the shares of our common stock beneficially owned. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting and investment power with respect to the shares. Except as otherwise noted, the information below is as of April 5, 2016 (Ownership Date).
Name | Shares Owned (1) |
Shares Subject to Options and Stock Units (2) |
Total Number of Shares Beneficially Owned |
Percentage of Outstanding Shares (3) | ||||||||||||||||
BlackRock, Inc. (4) 55 East 52nd Street New York, NY 10022 |
16,712,457 | | 16,712,457 | 7.63 | % | |||||||||||||||
PRIMECAP Management Company (5) 225 South Lake Avenue Suite 400 Pasadena, CA 91101 |
15,810,625 | | 15,810,625 | 7.22 | % | |||||||||||||||
The Vanguard Group (6) 100 Vanguard Boulevard Malvern, PA 19355 |
13,228,502 | | 13,228,502 | 6.04 | % | |||||||||||||||
FMR LLC (7) 245 Summer Street Boston, MA 02110 |
12,925,994 | | 12,925,994 | 5.90 | % | |||||||||||||||
Susan H. Alexander |
31,840 | 6,250 | 38,090 | * | ||||||||||||||||
Paul J. Clancy |
26,870 | | 26,870 | * | ||||||||||||||||
John G. Cox |
30,601 | 10,480 | 41,081 | * | ||||||||||||||||
Alexander J. Denner (8) |
317,195 | | 317,195 | * | ||||||||||||||||
Kenneth A. DiPietro |
3,937 | | 3,937 | * | ||||||||||||||||
Caroline D. Dorsa |
15,338 | 27,570 | 42,908 | * | ||||||||||||||||
Stuart A. Kingsley |
12,163 | | 12,163 | * | ||||||||||||||||
Nancy L. Leaming |
7,229 | | 7,229 | * | ||||||||||||||||
Richard C. Mulligan |
7,195 | | 7,195 | * | ||||||||||||||||
Robert W. Pangia |
14,873 | 17,125 | 31,998 | * | ||||||||||||||||
Stelios Papadopoulos (9) |
25,540 | | 25,540 | * | ||||||||||||||||
Brian S. Posner |
4,580 | | 4,580 | * | ||||||||||||||||
Eric K. Rowinsky |
11,310 | | 11,310 | * | ||||||||||||||||
George A. Scangos (10) |
71,190 | | 71,190 | * | ||||||||||||||||
Lynn Schenk (11) |
7,295 | | 7,295 | * | ||||||||||||||||
Stephen A. Sherwin |
4,150 | 12,000 | 16,150 | * | ||||||||||||||||
Douglas Williams |
11,817 | | 11,817 | * | ||||||||||||||||
Executive officers and directors as a group (22 persons) (12)(13) |
615,237 | 77,385 | 692,622 | * |
* | Represents beneficial ownership of less than 1% of our outstanding shares of common stock. |
(1) | The shares described as owned are shares of our common stock directly or indirectly owned by each listed person. |
(2) | Includes options that are or will become exercisable and restricted stock units that will vest within 60 days of the Ownership Date. |
53 |
6 | Additional Information (continued) |
(3) | The calculation of percentages is based upon 219,051,301 shares outstanding on the Ownership Date, plus for each of the individuals listed above the shares subject to options and restricted stock units reflected in the column under the heading Shares Subject to Options and Restricted Stock Units. |
(4) | Based solely on information as of December 31, 2015 contained in a Schedule 13G/A filed with the SEC by BlackRock, Inc. on February 10, 2016, which also indicates that it has sole voting power with respect to 14,501,480 shares and sole dispositive power with respect to 16,712,457 shares. |
(5) | Based solely on information as of December 31, 2015 contained in a Schedule 13G/A filed with the SEC by PRIMECAP Management Company on February 12, 2016, which also indicates that it has sole voting power over 1,707,399 shares and sole dispositive power over 15,810,625 shares. |
(6) | Based solely on information as of December 31, 2015 contained in a Schedule 13G/A filed with the SEC by The Vanguard Group on February 10, 2016, which also indicates that it has sole voting power with respect to 419,533 shares, sole dispositive power with respect to 12,783,069 shares, shared voting power with respect to 23,400 shares and shared dispositive power with respect to 445,433 shares. |
(7) | Based solely on information as of December 31, 2015 contained in a Schedule 13G/A filed with the SEC by FMR LLC and Abigail P. Johnson on February 12, 2016, which also indicates that FMR LLC, and Abigail P. Johnson each have sole dispositive power over 12,925,994 shares and FMR LLC has sole voting power over 846,221 shares. |
(8) | Includes (i) 190,142 shares of common stock directly beneficially owned by Sarissa Capital Domestic Fund LP, a Delaware limited partnership (Sarissa Domestic); and (ii) 119,858 shares of common stock directly beneficially owned by Sarissa Capital Offshore Master Fund LP, a Cayman Islands limited partnership (Sarissa Offshore and, together with Sarissa Domestic, the Sarissa Funds). Sarissa Capital Management GP LLC, a Delaware limited liability company (Sarissa Capital GP), is the general partner of Sarissa Capital Management LP, a Delaware limited partnership (Sarissa Capital), the investment advisor to the Sarissa Funds. Alexander Denner is the Chief Investment Officer of Sarissa Capital and the managing member of Sarissa Capital GP. By virtue of the foregoing, Dr. Denner may be deemed to indirectly beneficially own the shares that the Sarissa Funds directly beneficially own. Dr. Denner disclaims beneficial ownership of such shares of Common Stock owned by the Sarissa Funds. |
(9) | Includes 10,000 shares held in limited liability companies of which Dr. Papadopoulos is the sole manager. |
(10) | Includes 10,756 shares held in trusts of which Dr. Scangos is a trustee. |
(11) | Includes 3,100 shares held in a trust of which Ms. Schenk is a trustee. |
(12) | Includes shares underlying market stock units that will vest within 60 days of the Ownership Date, assuming the maximum possible number of shares that are eligible for vesting on the vesting date. |
(13) | Includes 333,856 shares held indirectly by spouses or through trusts, funds or limited liability companies. |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act requires our executive officers, directors and greater than 10% stockholders to file initial reports of ownership and changes of ownership of our common stock. As a practical matter, we assist our directors and executive officers by monitoring transactions and completing and filing Section 16 forms on their behalf. Based solely on information provided to us by our directors and executive officers, we believe that during 2015 all such parties complied with all applicable filing requirements.
54 |
6 | Additional Information (continued) |
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
Our Code of Business Conduct (Values in Action), Corporate Governance Principles, Related Person Transaction Policy and Conflict of Interest Policy set forth our policies and procedures for the review and approval of transactions with related persons, including transactions that would be required to be disclosed in this Proxy Statement in accordance with SEC rules.
In circumstances where one of our directors or executive officers, or a family member, has a direct or indirect material interest in a transaction involving Biogen, our Corporate Governance Committee must review and approve all such proposed transactions or courses of dealing. In determining whether to approve or ratify a transaction with a related person, among the factors the Corporate Governance Committee may consider (as applicable) are:
| the business reasons for entering into the transaction; |
| the size of the transaction and the nature of the related persons interest in the transaction; |
| whether the transaction terms are as favorable to us as they would be to an unaffiliated third party; |
| whether the transaction terms are more favorable to the related person than they would be to an unaffiliated third party; |
| the availability of alternative sources for comparable products, services or other benefits; |
| whether the transaction would impair the independence or judgment of the related person in the performance of his or her duties to us; |
| for non-employee directors, whether the transaction would be consistent with NASDAQs requirements for independent directors; |
| whether the transaction is consistent with our Conflict of Interest Policy which prohibits related persons and others from having a financial interest in any competitor, customer, vendor or supplier of ours; |
| the related persons role in arranging the transaction; |
| the potential for the transaction to be viewed as representing or leading to an actual or apparent conflict of interest; and |
| any other factors that the Corporate Governance Committee deems appropriate. |
There are no relationships or transactions with related persons that are required to be disclosed in this Proxy Statement under SEC rules. Indeed, our Code of Business Conduct, which sets forth legal and ethical guidelines for all of our directors and employees, states that directors, executive officers and employees must avoid relationships or activities that might impair their ability to make objective and fair decisions while acting in their Company roles.
55 |
6 | Additional Information (continued) |
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of December 31, 2015 about:
| the number of shares of common stock subject to issuance upon exercise of outstanding options and vesting of restricted stock units under plans adopted and assumed by us; |
| the weighted-average exercise price of outstanding options under plans adopted and assumed by us; and |
| the number of shares of common stock available for future issuance under our active plans: the 2008 Omnibus Equity Plan, the 2006 Non-Employee Directors Equity Plan and the 2015 Employee Stock Purchase Plan. |
Plan Category | Number of Securities (a) |
Weighted-average Exercise Price of (b) |
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column(a))(2) (c) | |||
Equity compensation plans approved by stockholders |
1,480,235 | $ 53.94 | 14,143,202 | |||
Equity compensation plans not approved by stockholders |
| | | |||
Total |
1,480,235 | $ 53.94 | 14,143,202 |
(1) | The weighted-average exercise price includes all outstanding stock options but does not include restricted stock units, which do not have an exercise price. If the restricted stock units were included in this calculation, the weighted average exercise price would be $3.89. The total number of restricted stock units included in column (a) is 1,373,381. |
(2) | Of these shares, (a) 7,287,069 remain available for future issuance under our 2008 Omnibus Equity Plan, (b) 734,308 remain available for future issuance under our 2006 Non-Employee Directors Equity Plan and (c) 6,121,826 remain available under our 2015 Employee Stock Purchase Plan. In addition to shares issuable upon the exercise of options or rights, the shares under the 2008 Omnibus Equity Plan and the 2006 Non-Employee Directors Equity Plan may also be issued other than upon such exercise. |
56 |
6 | Additional Information (continued) |
57 |
GAAP to Non-GAAP Reconciliation
Diluted Earnings Per Share and Net Income Attributable to Biogen Inc.
(Unaudited, $ in millions, except per share amounts)
FY 2014 | FY 2015 | |||||||||
GAAP diluted EPS |
$12.37 | $15.34 | ||||||||
Adjustment to net income attributable to Biogen Inc. (see below) |
$1.46 | $1.67 | ||||||||
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Non-GAAP diluted EPS |
$13.83 | $17.01 | ||||||||
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FY 2014 | FY 2015 | |||||||||
GAAP Net Income Attributable to Biogen Inc. |
$2,935 | $3,547 | ||||||||
Adjustments: |
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Amortization of acquired intangible assets |
473 | 365 | ||||||||
Stock option expense |
12 | | ||||||||
(Gain) loss on fair value remeasurement of contingent consideration |
(39 | ) | 31 | |||||||
Restructuring charges |
| 93 | ||||||||
Donation to Biogen Foundation |
35 | | ||||||||
Income tax effect related to reconciling items |
(135 | ) | (104 | ) | ||||||
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Non-GAAP Net Income Attributable to Biogen Inc. |
$3,281 | $3,932 | ||||||||
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A-1 |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E04866-P76729 KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
BIOGEN INC. |
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The Board recommends a vote FOR the following proposals: | ||||||||||||||||||||||||||||||
1. | Election of Directors. To elect the eleven director nominees numbered 1a through 1k to serve for a one-year term extending until the 2017 annual meeting of stockholders and their successors are duly elected and qualified. | For | Against | Abstain | For | Against |
Abstain |
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1a.
1b.
1c.
1d.
1e.
1f.
1g.
1h.
1i. |
Alexander J. Denner
Caroline D. Dorsa
Nancy L. Leaming
Richard C. Mulligan
Robert W. Pangia
Stelios Papadopoulos
Brian S. Posner
Eric K. Rowinsky
George A. Scangos |
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1j. | Lynn Schenk | ¨ | ¨ | ¨ | |||||||||||||||||||
1k. |
Stephen A. Sherwin |
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2. |
To ratify the selection of PricewaterhouseCoopers LLP as Biogen Inc.s independent registered public accounting firm for the fiscal year ending December 31, 2016. |
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3. |
Say on Pay - To approve an advisory vote on executive compensation. |
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4. |
To transact such other business as may be properly brought before the meeting and any adjournments or postponements thereof.
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. |
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The 2016 Notice and Proxy Statement and 2015 Annual Report with Form 10-K are available at:
www.proxyvote.com.
E04867-P76729
BIOGEN INC.
Annual Meeting of Stockholders
June 8, 2016, 9:00 AM, Eastern Daylight Time
This proxy is solicited by the Board of Directors
The undersigned hereby appoints George A. Scangos, Paul J. Clancy, and Susan H. Alexander, and each of them (with full power to act alone), as proxies of the undersigned with all the powers the undersigned would possess if present during the 2016 Annual Meeting, and with full power of substitution in each of them to appear, represent and vote all shares of common stock of Biogen Inc. which the undersigned would be entitled to vote at the 2016 Annual Meeting of Stockholders, to be held online at www.virtualshareholdermeeting.com/BIIB on Wednesday, June 8, 2016, at 9:00 a.m. Eastern Daylight Time, and at any adjournment or postponement thereof.
The shares represented by this proxy will be voted as directed herein. If no direction is indicated, such shares will be voted FOR the election of all of the director nominees listed in Proposal 1 and FOR Proposals 2 and 3. As to any other matter that may be properly brought before the meeting or any adjournment or postponement thereof, proxy holders will vote in accordance with their best judgment.
Continued and to be signed on reverse side