UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DCD.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment (Amendment No. )
Filed by the Registrant x Filed by a Party other than the Registrant o
Check the appropriate box:
| Filed by the Registrant | ☐ | Filed by a Party other than the Registrant |
CHECK THE APPROPRIATE BOX: | ||
☐ | Preliminary Proxy Statement |
| Confidential, |
| Definitive Proxy Statement |
| Definitive Additional Materials |
| Soliciting Material |
BioMarin Pharmaceutical 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):
| |||
☑ | 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 |
| 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 |
| 1) Amount previously paid: |
| 2) Form, Schedule or Registration Statement No.: | ||
3) Filing Party: | |||
4) Date Filed: |
TIME AND DATE | ||
LOCATION |
|
|
|
|
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 6, 2016
Dear Stockholder:Stockholder of BioMarin:
You are cordially invited to attend the Annual Meeting of the Stockholders (the Annual Meeting) of BioMarin Pharmaceutical Inc., a Delaware corporation (we, us, BioMarin or the Company). The Annual Meeting will be held on Monday, June 6, 2016Wednesday, May 27, 2020 at 9:00 a.m. (Pacific Daylight Time), via a live audio webcast* at the Company’s offices in the Tamalpais Room, 750 Lindaro Street, San Rafael, CA 94901www.virtualshareholdermeeting.com/BMRN2020for the following purposes:
ITEMS OF BUSINESS
1. |
| To elect the |
2. |
|
|
| To ratify the selection of KPMG LLP as the independent registered public accounting firm for BioMarin for the fiscal year ending December 31, |
3. | To approve, on an advisory basis, the compensation of the Company’s Named Executive Officers as disclosed in the Proxy Statement; and |
4. |
|
| To conduct any other business properly brought before the Annual Meeting. |
These items of business are more fully described in the Proxy Statement.
The record date for Instructions on how to participate in the Annual Meeting is and demonstrate proof of stock ownership will be posted atwww.virtualshareholdermeeting.com/BMRN2020two weeks prior to the date of the Annual Meeting. The webcast of the Annual Meeting will be archived for one year after the date of the Annual Meeting atwww.virtualshareholdermeeting.com/BMRN2020.
RECORD DATE
Monday, April 11, 2016 (the Record Date). March 30, 2020
Voting Whether or not you expect to attend the Annual Meeting, please vote in advance of the meeting using one of the following methods. TELEPHONE INTERNET MAIL |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on May 27, 2020 at 9:00 a.m. via a live audio webcast* at www.virtualshareholdermeeting.com/BMRN2020 |
The Proxy Statement, annual report and letter to stockholders are available at:www.proxyvote.com. If you have any questions or need assistance in voting your shares, please call the following firm, which is assisting the Company in the solicitation of proxies: Innisfree M&A Incorporated |
Only stockholders of record at the close of business on the Record Date may vote at the Annual Meeting or any adjournment thereof. A complete list of such stockholders will be available for examination by any stockholder for any purpose germane to the Annual Meeting during ordinary business hours at the Company’s principal executive offices at 770 Lindaro Street, San Rafael, CA 94901 https://investors.biomarin.comfor a period of 10 days before the Annual Meeting.
Important Notice RegardingBy Order of the AvailabilityBoard of Proxy Materials for the Annual Meeting to be held on
June 6, 2016 at 9:00 a.m.
at the DirectorsCompany’s offices in the Tamalpais Room, 750 Lindaro Street, G. Eric Davis
Executive Vice President, General Counsel and Secretary
San Rafael, CA 94901California
April 14, 2020
* | We are monitoring the situation regarding the coronavirus or COVID-19, and are planning for the possibility that the Annual Meeting may be held in person at the Company’s offices in the Morning Glory Conference Room, 750 Lindaro Street, San Rafael, CA 94901. If we take this step, we will announce the decision to do so in advance, and details on how to attend in person will be available athttps://investors.biomarin.com. |
www.biomarin.com | 3 |
The Proxy Statement and annual report to stockholders are available at: www.proxyvote.com.
If you have any questions or need assistance in voting your shares, please call the following firm, which is assisting the Company in the solicitationTable of proxies:Contents
Morrow & Co., LLC
470 West Avenue
Stamford, CT 06902
1-800-607-0088
3 | Stockholders | |
5 |
| |
| ||
15 |
|
April 25, 2016
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD MAILED TO YOU, OR VOTE OVER THE TELEPHONE OR INTERNET AS INSTRUCTED IN THESE MATERIALS, AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING. EVEN IF YOU HAVE VOTED BY PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE ANNUAL MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE ANNUAL MEETING, YOU MUST OBTAIN A PROXY ISSUED IN YOUR NAME FROM THAT RECORD HOLDER IN ORDER TO BE ENTITLED TO VOTE IN PERSON AT THE ANNUAL MEETING.
4 | 2020 Proxy Statement |
Table of ContentsBioMarin Pharmaceutical Inc.
770 Lindaro StreetProxy Overview
San Rafael, CA 94901
PROXY STATEMENT
FOR THE 2016 ANNUAL MEETING OF STOCKHOLDERS
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Why did I receive a one-page noticeThis overview highlights certain information contained elsewhere in this Proxy Statement and does not contain all of the mailinformation that you should consider. You should read the entire Proxy Statement carefully before voting. For more complete information regarding our business and 2019 performance, please review our Annual Report on Form 10-K for the Internet availability of proxy materials instead of a full set of proxy materials?
Pursuant to rules adopted byyear ended December 31, 2019 as filed with the Securities and Exchange Commission (the SEC), we have elected on February 27, 2020.
Meeting and Voting Information
|
| You are cordially invited to attend the meeting virtually via the internet.* Whether or not you expect to attend the meeting, please vote as soon as possible. Please see “Questions and Answers about These Proxy Materials and Voting— How Do I Vote?” beginning on page 85below. |
* | We are monitoring the situation regarding the coronavirus or COVID-19, and are planning for the possibility that the Annual Meeting may be held in person at the Company’s offices in the Morning Glory Conference Room, 750 Lindaro Street, San Rafael, CA 94901. If we take this step, we will announce the decision to do so in advance, and details on how to attend in person will be available athttps://investors.biomarin.com. |
We intend to provide access to our proxy materials over the Internet. Accordingly, we are sending an Importantmail a Notice Regarding the Availability of Proxy Materials (the Proxy Availability Notice) to our stockholders of record. All stockholders will have the ability to access the proxy materials on the website referred to in the Proxy Availability Notice free of charge or request to receive a printed set of the proxy materials for the Annual Meeting. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Proxy Availability Notice.
We intend to mail the Proxy Availability Notice on or about April 25, 201614, 2020 to all stockholders of record entitled to vote at the Annual Meeting. We expect that this Proxy Statement and the other proxy materials will be available to stockholders on or about April 25, 2016.14, 2020.
What does it mean if I receiveBusiness Overview
BioMarin is a global biotechnology company that develops and commercializes innovative therapies for people with serious and life-threatening rare diseases and medical conditions. We select product candidates for diseases and conditions that represent a significant unmet medical need, have well-understood biology and provide an opportunity to be first-to-market or offer a significant benefit over existing products. Our therapy portfolio consists of six commercial products and multiple clinical and pre-clinical product candidates. Our commercial products are:
Aldurazyme (laronidase) for Mucopolysaccharidosis I | Brineura (cerliponase alfa) for late infantile neuronal ceroid lipofuscinosis type 2 | Kuvan (sapropterin dihydrochloride) for phenylketonuria (PKU) |
Naglazyme (galsulfase) for Mucopolysaccharidosis VI | Palynziq (pegvaliase-pqpz) for PKU | Vimizim (elosulfase alpha) for Mucopolysaccharidosis IV Type A |
www.biomarin.com | 5 |
Proxy Overview |
We continue to invest in our clinical and pre-clinical product pipeline by committing significant resources to research and development programs and business development opportunities within our areas of scientific, manufacturing and technical expertise. We are conducting clinical trials on several product candidates for the treatment of various diseases.
Our major product candidates in development include:
Valoctocogene roxaparvovec:a factor VIII gene therapy product candidate, for the treatment of severe hemophilia A | Vosoritide:a peptide therapeutic product candidate for the treatment of achondroplasia, the leading cause of dwarfism | BMN 307:a gene therapy product candidate, for the treatment of PKU | BMN 331:a gene therapy product candidate, for the treatment of hereditary angioedema |
We are conducting or planning to conduct preclinical development of several other product candidates for genetic and other metabolic diseases.
Director Nominees
The following table provides summary information about each nominee for director as of March 6, 2020, each of whom is a continuing director. See pages 16 to 21 for more than one Proxy Availability Notice?information.
Name | Age | Director Since | Occupation | Independent | ||||
Jean-Jacques Bienaimé | 66 | May 2005 | Chairman and Chief Executive Officer, BioMarin Pharmaceutical Inc. | No | ||||
Elizabeth McKee Anderson | 62 | July 2019 | Director, Bavarian Nordic A/S; Director, Insmed, Inc.; Director, Revolution Medicines, Inc. | Yes | ||||
Willard Dere, M.D. | 66 | July 2016 | Professor of Internal Medicine, B. Lue and Hope S. Bettilyon Presidential Endowed Chair in Internal Medicine for Diabetes Research, Executive Director of Personalized Health, and Co-Principal Investigator of the Center for Clinical & Translational Science at the University of Utah Health Sciences Center | Yes | ||||
Michael Grey | 67 | December 2005 | Chairman, Mirum Pharmaceuticals, Inc.; Director, Horizon Pharma, plc; Director, Mirati Therapeutics Inc. | Yes | ||||
Elaine J. Heron, Ph.D. | 72 | July 2002 | Director, Amplyx Pharmaceuticals, Inc.; Director, Palvella Therapeutics; Director, Dropworks, Inc. | Yes | ||||
Robert J. Hombach | 53 | September 2017 | Former Executive Vice President, Chief Financial Officer & Chief Operations Officer, Baxalta Inc.; Director, CarMax, Inc.; Director, Aptinyx Inc. | Yes | ||||
V. Bryan Lawlis, Ph.D. | 68 | June 2007 | Director, Aeglea BioTherapeutics, Inc.; Director, Coherus Biosciences, Inc.; Director, Geron Corporation | Yes | ||||
Richard A. Meier | 60 | December 2006 | Executive Vice President and Chief Financial Officer, Intersect ENT, Inc.; Partner, AtlasRock&Co | Yes | ||||
David E.I. Pyott, M.D. (Hon.) | 66 | January 2016 | Lead Director, Avery Dennison Corporation; Director, Alynlam Pharmaceuticals, Inc.; Supervisory Board Member, Royal Philips in the Netherlands | Yes | ||||
Dennis J. Slamon, M.D., Ph.D. | 71 | March 2014 | Professor of Medicine, UCLA Department of Medicine; Director, Clinical/Translational Research at UCLA’s Jonsson Comprehensive Cancer Center; Director, Revlon/ UCLA Women’s Cancer Research Program | Yes |
6 | 2020 Proxy Statement |
Proxy Overview |
Director Nominee Dashboard
If you receive more than one Proxy Availability Notice, your shares may be registered in more than one name or in different accounts. Please followWe examine the voting instructions on each Proxy Availability Noticeexperience and expertise of our Board as a whole to ensure alignment between the abilities and expertise of our Board and our strategic priorities and long-range plan, emphasizing, among other things, skills and experience in leadership of large, complex organizations, particularly in related industries; sales and marketing of biotechnology and pharmaceutical products; manufacturing of biotechnology and small molecule drug products; research and development of drug products, including managing and conducting clinical trials and the drug regulatory approval processes; medicine; finance and accounting; capital markets; business development; intellectual property; and information technology. All of our director nominees exhibit high integrity, sound business judgment, innovative thinking, collegiality and a knowledge of corporate governance requirements and practices, and our director nominees as a whole bring a balance of relevant skills and experience to our boardroom, including those listed below:
DIRECTOR NOMINEE SKILLS AND EXPERIENCE
Research & Development | ||||||||||||
Management of Biotechnology and Pharmaceutical Organizations | ||||||||||||
Clinical Trial Research | ||||||||||||
U.S. & International Drug Regulatory Processes | ||||||||||||
Compensation and Corporate Governance Matters | ||||||||||||
Finance & Accounting | ||||||||||||
Manufacturing of Biotechnology & Small Molecule Drug Products | ||||||||||||
Business Development & Sales & Marketing |
www.biomarin.com | 7 |
Proxy Overview |
Our Board is substantially independent and has a mix of relatively new and longer-tenured directors. The charts below show the makeup of director nominees by various characteristics as of March 6, 2020:
DIRECTOR AGE | DIRECTOR TENURE | DIRECTOR INDEPENDENCE | ||
Average age:65.6 years | Average tenure:9.0 years |
Corporate Governance Overview
We are committed to exercising good corporate governance and continuously review our practices. We believe that allgood governance promotes the long-term interests of your sharesour stockholders and strengthens Board and management accountability. The highlights of our corporate governance practices include the following:
Stockholder Rights and Accountability ●Proxy access bylaw (3% holder for three years) ●Plurality voting in the election of directors in uncontested elections with director resignation policy Board Independence ●All of our current directors and nominees for director are independent, other than our Chairman and CEO ●Regular executive sessions of the Independent Directors ●100% independent committee members ●Lead Independent Director with clearly delineated duties and robust authority ●Board and committees may engage outside advisors independently of management Stock Ownership by Directors and Executives ●Stock ownership guidelines for directors and executive officers helps to align their interests with stockholder interests ●Prohibit short sales, transactions in put or call options, hedging transactions, or other inherently speculative transactions in our stock or engaging in margin activities (see the section of this Proxy Statement titled, “Stock Ownership Information – Anti-Hedging and Anti-Pledging Policy” for details) Robust Compensation-Setting Process ●Independent compensation consultant reporting directly to the compensation committee ●Policy for recoupment of incentive compensation (Clawback Policy) ●Annual advisory approval of executive compensation Board Practices ●Commitment to diversity of Board in terms of specific skills and characteristics (including expertise, race, ethnicity, and gender), including adoption of a formal policy to consider women and minority candidates for all open Board positions ●Annual Board and committee self-evaluations ●Risk oversight by the full Board and committees ●Corporate Governance Principles and robust Global Code of Conduct and Business Ethics ●Financial Authority Policy, under which the Board must approve spend over a specified dollar threshold |
8 | 2020 Proxy Statement |
Proxy Overview |
Stockholder Engagement
We regularly engage with our stockholders through open dialogue and direct individual communication on topics related to our business, financial performance, corporate governance and compensation. Stockholder feedback is important, and the information we glean from these engagements is highly valued. In particular, our stockholders’ views and opinions on our executive compensation practices are voted.extremely important to us. As stewards of good corporate governance, our Compensation Committee evaluates the design of our executive compensation program based on market conditions, stockholder views and other governance considerations.
How do I attendStockholder Outreach in 2019
In 2019, we continued our active engagement efforts to ensure stockholder interests were incorporated into our planning process for corporate governance practices and the Annual Meeting?
The Annual Meeting will be2020 executive compensation program. Our outreach in 2019 included many of our top stockholders, representing holders of almost 60% of our outstanding common stock held on Monday, June 6, 2016 at 9:00 a.m. (Pacific Daylight Time), at the Company’s offices in the Tamalpais Room, 750 Lindaro Street, San Rafael, CA 94901. You may contact Investor Relations at IR@bmrn.com to obtain directions to the Annual Meeting. Information on how to vote in person at the Annual Meeting is discussed below. If you plan to attend the Annual Meeting, please note that attendance will be limited toby our top 20 stockholders and nearly 40% of our outstanding common stock held by all stockholders as of the Record Date. Each stockholder may be asked to present valid photo identification, such as a driver’s licenseWe requested calls or passport. Stockholders holdingmeetings with all of the stockholders we contacted. We then held calls or meetings with all those stockholders that responded. Our outreach in 2019 followed our extensive outreach efforts in 2018, during which we reached holders of 63% of our outstanding common stock in brokerage accounts or by a bank or other nominee may be required to show a brokerage statement or account statement reflecting stock ownership as of the Record Date. Cameras, recording devices,Date for the 2018 Annual Meeting of Stockholders.
Compensation and Corporate Governance Changes
During our stockholder outreach efforts in 2019 and 2018 we sought feedback on our executive compensation program and also discussed a number of other electronic devices will not be permitted attopics, including corporate governance matters like Board diversity. Our Lead Independent Director, Richard A. Meier, participated in nearly all of the Annual Meeting.
Who cancalls with our stockholders, and feedback from these discussions was relayed to the Compensation Committee and full Board. After the disappointing outcome of our “say-on-pay” vote at the Annual Meeting?
Only stockholders of record at the close of business on April 11, 2016, the Record Date, will be entitled to vote at the Annual Meeting. On the Record Date, there were 162,292,817 shares of common stock outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your Name
If on April 11, 2016 your shares were registered directly in your name with BioMarin’s transfer agent, Computershare Inc., then you are a stockholder of record. As a stockholder of record, you may vote in person at theour 2018 Annual Meeting or voteof Stockholders, we made extensive changes to our executive compensation program in 2019. We believe that the compensation changes we made in 2019 addressed many of the concerns raised by proxy. Whether or not you planstockholders. We were pleased that our 2019 say-on-pay proposal received support from 83% of the votes cast, a significant increase from 56% in 2018. In 2020, we have continued to attend the Annual Meeting,make changes to our executive compensation program to further align pay and performance and address feedback from stockholders. How we urge youchanged our executive compensation and governance practices in direct response to vote by proxy over the telephone, or on the Internet as instructed below, or complete, date, sign and return the proxy card mailed to you to ensure your votewhat we heard from our stockholders is counted.described below:
Solution:We rapidly increased the proportion of performance-based restricted stock units (RSUs) as a percentage of total long-term equity compensation, from 30% in 2018 to 50% in 2019. ●Effective date: March 2019 ●The allocation of equity awards changed between 2018 and 2019 as follows: |
2018 | 2019 |
Feedback Addressed | Purpose of Change |
More of long-term compensation should be performance-based, rather than time-based. | Further tie compensation to performance of the Company. |
www.biomarin.com | 9 |
Beneficial Owner: Shares Registered in the NameTable of a Broker, Bank or Other NomineeContents
Proxy Overview |
Solution:100% of performance-based RSUs will be earned based on metrics other than revenue. ●Effective Date: March 2020 ●Instead of performance-based RSUs being earned based on revenue achievement (which was the case for 100% of such grants in 2018 and 50% in 2019), awards will be earned based on other metrics, as shown below: |
If on April 11, 2016 your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and the Proxy Availability Notice is being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker, bank or other nominee regarding how to vote the shares in your account. You are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the Annual Meeting unless you request and obtain a valid proxy from your broker, bank or other nominee.
What am I voting on?
There are four matters scheduled for a vote:
Feedback Addressed ●Realized compensation has not always closely correlated to stockholder experience. ●Revenue determines a large proportion of short-term performance-based compensation (30% weight in 2019 annual cash incentive program), so revenue should not also determine long-term performance-based compensation. | Purpose of Change ●More closely align realized compensation with stockholder return. ●Further focus management on goals in addition to revenue growth that also drive stockholder value. |
Solution:The metrics underlying 100% of performance-based RSUs will be measured using a three-year period. ●Effective Date: March 2020 ●Instead of a gradual phase-in, the transition from using one-year performance periods over which performance-based RSUs are earned to three-year performance periods was accelerated and completed in only two years, as shown below: |
Feedback Addressed More of the performance-based compensation should be earned over a longer period. |
Further incentivize long-term performance and tie compensation to achievement of long-term goals; encourage retention of key employees. |
Solution:We included more information in our proxy statements regarding the annual cash incentive program. ●Effective Date: April 2019 ●We provided significantly more details regarding the development goals for each clinical and pre-clinical program underlying the annual cash incentive program than in proxy statements filed before 2019. | |
Feedback Addressed More details should be provided regarding the development goals underlying the annual cash incentive program. |
Increase transparency in determining amounts earned under the annual cash incentive program and explain the philosophy behind the program’s design. |
10 | 2020 Proxy Statement |
Proxy Overview |
Solution:We amended our Corporate Governance Principles to formalize the current practice of considering women and minority candidates for all open Board positions. ●Effective Date: September 2018 | |
Feedback Addressed We should take steps to improve the diversity of our Board. | Purpose of Change Formalize the current policy intended to create a Board with the diversity of skills, experience, and characteristics necessary for the optimal functioning of the Board. |
Executive Compensation Highlights
We designed our executive compensation program to attract, motivate and retain the executive talent necessary to advance our business of developing and commercializing innovative therapies for people with serious and life-threatening rare diseases and medical conditions and to increase stockholder value. Our compensation program is aligned with our business strategy and priorities, encourages executive officers to work for meaningful stockholder returns and reflects a pay-for-performance philosophy. It does not encourage our executive officers to assume excessive risks or result in excessive pay levels. We achieve our pay objectives by providing short-term cash bonuses tied to our annual financial and development goals and by granting long-term equity awards, including performance-based RSUs tied to relative stock performance over a three-year period, and starting in 2020, performance-based RSUs that are also tied to non-GAAP Income and achievement of strategic corporate goals over a three-year period.
Our Executive Compensation Practices
Our executive compensation policies and practices reinforce our pay-for-performance philosophy and align with sound governance principles.
What We Do | ||
●Design executive compensation to align pay with performance ●Balance short- and long-term incentive compensation to incentivize achievement of short- and long-term business goals ●Reward performance by making a majority of executive compensation “at-risk” ●Retain independent compensation consultant reporting directly to the Compensation Committee ●Require executive officers and directors to meet stock ownership guidelines ●Provide stockholders an annual say-on-pay vote and solicit feedback on our compensation programs from stockholders ●Prohibit short sales, transactions in put or call options, hedging transactions or other inherently speculative transactions in our stock or engaging in margin activities (see the section of this Proxy Statement titled,“Stock Ownership Information – Anti-Hedging and Anti-Pledging Policy” for details) ●Maintain a policy on recoupment of incentive compensation | ||
What We Don’t Do | ||
●No repricing of underwater stock options without prior stockholder approval ●No excessive perquisites ●No guaranteed bonuses or base salary increases ●No tax gross-ups on severance or change in control benefits | ||
www.biomarin.com | 11 |
Proxy Overview |
Our Named Executive Officer (NEO) Fiscal Year 2019 Pay
Increasing NEO Performance-Based Equity Awards
In 2019, the revenue goal payout for the annual cash incentive program was based on an accelerated scale, as in 2018, to emphasize the importance of revenue growth to the Company, to recognize the difficulty in exceeding the sales revenue goal and to be consistent with many of our peers. To incentivize cost control, progress toward GAAP profitability, and increased non-GAAP profitability, the research and development (R&D) expense and sales, general and administrative (SG&A) expense goal payout was based on an accelerated scale instead of the traditional sliding scale used prior to 2017. Also, we continued to align the performance-based equity element of compensation of our Named Executive Officers (NEOs) with stockholder experience by granting performance-based RSUs tied to total shareholder return.
We work with our compensation consultant throughout each year to stay at the forefront of pay and governance trends and best practices. In 2019, we continued our move to enhance the link between pay and performance by increasing the proportion of performance-based equity we grant from 30% to 50% of the total equity grants for our NEOs, as shown in the graph below. We accelerated full implementation of this change by one year in response to feedback received from our stockholders and to stay at the forefront of the trend toward increasing performance-based equity compensation as compared to our peer companies.
2014 TO 2019: INCREASING NEO PERFORMANCE-BASED EQUITY AWARDS
12 | 2020 Proxy Statement |
Proxy Overview |
NEOs’ Total Compensation Mix
The following charts show the breakdown of reported fiscal 2019 total compensation for our Chief Executive Officer (CEO),Mr. Bienaimé, and other NEOs as a group. These charts illustrate the predominance of performance-based components in our executive compensation program (58% for our CEO and 50% for the other NEOs). We believe these components provide a compensation package that helps to attract and retain qualified individuals to serve as executive officers and also links individual compensation to Company performance. This target pay mix focuses the efforts of our NEOs and other executive officers on the achievement of both our short- and long-term objectives and aligns the interests of our executive officers with those of our stockholders.
CEO TOTAL COMPENSATION MIX IN 2019(1) | ||
|
| |
(1) | Each percentage is calculated as a percentage of |
(2) | Percentages calculated based on sum of all other NEOs’ compensation. |
www.biomarin.com |
|
|
Proxy Overview |
Summary of Stockholder Voting Matters and Board Recommendations
For the reasons set forth below and in the rest of this Proxy Statement, our Board of Directors of the Company (the Board) of KPMG LLP (KPMG) as the Company’s independent registered public accounting firm for its fiscal year ending December 31, 2016; and
|
|
What if another matter is properly brought before the Annual Meeting?
The Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons named in the accompanying proxy will vote on those matters in accordance with their best judgment.
What is the Board’s voting recommendation?
The Board recommends that you vote your shares:
|
|
|
|
|
|
|
|
How do I vote?
With regard to the election of directors, you may vote “For” all the nominees named below for director to hold office until the Board or you may “Withhold” your vote for all the nominees or any individual nominee you specify. For2021 Annual Meeting of Stockholders and “FOR” each of the other matters to be voted on, you may vote “For” or “Against” or abstain from voting.proposals.
The procedures for voting depend on whether your shares are registered in your name or are held by a bank, broker or other nominee:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote in person at the Annual Meeting, vote by proxy over the telephone, vote by proxy through the Internet, or vote by proxy using a proxy card that you may request or that we may elect to deliver at a later time. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the Annual Meeting and vote in person even if you have already voted by proxy.
|
|
|
|
|
|
|
|
Beneficial Owner: Shares Registered in the Name of Broker, Bank or Other Nominee
If you are a beneficial owner of shares registered in the name of your broker, bank, or other nominee, you should have received a Proxy Availability Notice containing voting instructions from that organization rather than from BioMarin. Simply follow the voting instructions in the Proxy Availability Notice to ensure that your vote is counted. To vote in person at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other nominee. Follow the instructions from your broker, bank or other nominee included with these proxy materials, or contact your broker, bank or other nominee to request a proxy form.
|
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock you own as of April 11, 2016, the Record Date.
What if I return a proxy card or otherwise vote but do not make specific choices?
If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable, “For” the election of all eight nominees for director, “For” the advisory approval of executive compensation of the NEOs, “For” the ratification of KPMG as the Company’s independent registered public accounting firm and “Against” the stockholder proposal requesting that BioMarin issue a sustainability report describing BioMarin’s environmental, social and governance performance. If any other matter is properly presented at the Annual Meeting, your proxy holder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.
Will my vote be kept confidential?
Proxies, ballots and voting tabulations are handled on a confidential basis to protect your voting privacy. This information will not be disclosed, except as required by law.
Who is paying for this proxy solicitation?Directors
The accompanying proxy is solicited on behalf of the Board for use at the Annual Meeting. Accordingly, the Company will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees and Morrow & Co., LLC may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees of the Company will not be paid any additional compensation for soliciting proxies, but Morrow & Co., LLC will be paid its customary fee of approximately $7,500 plus out-of-pocket expenses if it solicits proxies. We may also reimburse brokerage firms, banks and other nominees for the cost of forwarding proxy materials to beneficial owners.
Can I change my vote after submitting my proxy?
Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:
|
|
|
|
|
|
|
|
Your most current proxy card or telephone or Internet proxy is the one that is counted, so long as it is provided within the applicable deadline. If your shares are held by your broker, banker or other nominee, you should follow the instructions provided by your broker, bank or other nominee.
When are stockholder proposals for inclusion in our proxy statement for next year’s Annual Meeting due?
Stockholders wishing to present proposals for inclusion in our proxy statement for the 2017 Annual Meeting pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the Exchange Act), must submit their proposals so that they are received by us at our principal executive offices no later than December 26, 2016. However, if our 2017 Annual Meeting is not held between May 7, 2017 and July 6, 2017, then the deadline will be a reasonable time prior to the time that we begin to print and mail our proxy materials. Proposals for inclusion in our proxy statement for the 2017 Annual Meeting should be sent to the Company’s Secretary at BioMarin Pharmaceutical Inc., Attention: G. Eric Davis, 770 Lindaro Street, San Rafael, CA 94901.
When are other proposals and stockholder nominations for next year’s Annual Meeting due?
With respect to proposals and nominations not to be included in our proxy statement pursuant to Rule 14a-8 of the Exchange Act, our Bylaws provide that stockholders who wish to nominate a director or propose other business to be brought before the stockholders at the Annual Meeting must notify our Secretary by a written notice, which notice must be received at our principal executive offices not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding year’s Annual Meeting of stockholders.
For the 2017 Annual Meeting, stockholders wishing to present nominations for director or proposals for consideration under these provisions of our Bylaws must submit their nominations or proposals so that they are received at our principal executive offices not earlier than February 6, 2017 and not later than March 8, 2017 in order to be considered. In the event that the 2017 Annual Meeting is to be held on a date that is not within 25 days before or 60 days after June 6, 2017, then a stockholder’s notice must be received by the Secretary no later than the close of business on the 10th day following the day on which notice of the date of the 2017 Annual Meeting was mailed or the day we make a public announcement of the date of the 2017 Annual Meeting, whichever first occurs.
In addition, with respect to nominations for directors, if the number of directors to be elected at the 2017 Annual Meeting is increased effective at the 2017 Annual Meeting and there is no public announcement by us for the additional directorships at least 100 days prior to June 6, 2017, a stockholder’s notice will also be considered timely, but only with respect to nominees for the additional directorships, if it is delivered to our Secretary at our principal executive offices not later than the close of business on the 10th day following the day on which such public announcement is first made by us.
Nominations or proposals should be sent in writing to the Company’s Secretary at BioMarin Pharmaceutical Inc., Attention: G. Eric Davis, 770 Lindaro Street, San Rafael, CA 94901. A stockholder’s notice to nominate a director or bring any other business before the 2016 Annual Meeting or the 2017 Annual Meeting must set forth certain information, which is specified in our Bylaws. A complete copy of our Bylaws may be found in the Corporate Governance section of the Investors section of our website at www.bmrn.com.
How are votes counted?
Votes will be counted by the inspector of election appointed for the Annual Meeting, who will separately count, “For”, “Withhold” and broker non-votes for the proposal to elect directors, and with respect to other proposals, votes “For”, “Against”, “Abstain” and broker non-votes.
What are “broker non-votes”?
Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker, bank or other nominee holding the shares as to how to vote. Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker, bank or other nominee holding the shares. If the beneficial owner does not provide voting instructions, the broker, bank or other nominee can still vote the shares with respect to matters that are considered to be “routine,” but cannot vote the shares with respect to “non-routine” matters. Under the rules and interpretations of the New York Stock Exchange (the NYSE), which generally apply to all brokers, bank or other nominees, on voting matters characterized by the NYSE as “routine,” NYSE member firms have the discretionary authority to vote shares for which their customers do not provide voting instructions. On non-routine proposals, such “uninstructed shares” may not be voted by member firms. Only the proposal to ratify the selection of our independent registered public accounting firm is considered a “routine” matter for this purpose and brokers, banks or other nominees generally have discretionary voting power with respect to such proposal.
What is the effect of abstentions and broker non-votes?
Abstentions : Under Delaware law (under which BioMarin is incorporated), abstentions are counted as shares present and entitled to vote at the Annual Meeting, and therefore counted as present for the purpose of determining whether a quorum is present, but they are not counted as shares cast. Our Amended and Restated Bylaws provide that a stockholder action (other than the election of directors) shall be decided by the vote of the holders of a majority of the total number of votes of the Company’s capital stock cast on the matter. Therefore, abstentions will have no effect on Proposal No. 2—Advisory Vote on Executive Compensation, Proposal No. 3—Ratification of Independent Registered Public Accounting Firm or Proposal No. 4—Stockholder Proposal Requesting that BioMarin Issue a Sustainability Report Describing BioMarin’s Environmental, Social and Governance Performance.
Broker Non-Votes : A “broker non-vote” occurs when a broker, bank or other nominee holding your shares in street name does not vote on a particular matter because you did not provide the broker, bank or other nominee voting instructions and the broker, bank or other nominee lacks discretionary voting authority to vote the shares because the matter is considered “non-routine” under the NYSE rules. The “non-routine” matters on the agenda for the Annual Meeting include Proposa1 No. 1—Election of Directors, Proposal No. 2—Advisory Vote on Executive Compensation and Proposal No. 4—Stockholder Proposal Requesting that BioMarin Issue a Sustainability Report Describing BioMarin’s Environmental, Social and Governance Performance.
Broker non-votes will be counted as present at the Annual Meeting for the purpose of determining whether a quorum is present at the Annual Meeting. However, because broker non-votes are not considered under Delaware law to be votes cast, they will have no effect on the outcome of the vote on: Proposa1 No. 1—Election of Directors, Proposal No. 2—Advisory Vote on Executive Compensation or Proposal No. 4—Stockholder Proposal Requesting that BioMarin Issue a Sustainability Report Describing BioMarin’s Environmental, Social and Governance Performance. As a result, if you hold your shares in street name and you do not instruct your broker, bank or other nominee how to vote your shares in the election of directors, the advisory vote related to the approval of our executive compensation program or the stockholder proposal requesting sustainability reporting, no votes will be cast on your behalf on these proposals. Therefore, it is critical that you indicate your vote on these proposals if you want your vote to be counted. The proposal to ratify the selection of KPMG as our independent registered public accounting firm for the fiscal year ending December 31, 2016 should be considered a “routine” matter. Therefore, your broker, bank or other nominee will be able to vote on Proposal No. 3—Ratification of Independent Registered Public Accounting Firm even if it does not receive instructions from you, so long as it holds your shares in its name.
How many votes are needed to approve each proposal?
|
|
| ||
|
|
| ||
|
|
| ||
|
|
| ||
|
|
|
A “Plurality,” with regard to the election of directors, means that the eight nominees who receive the most “For”required to elect each nominee:The ten nominees who receive the most “FOR” votes cast by the holders of shares either present in person or represented by proxy and entitled to vote will be elected to our Board. A “Majority Cast,” with regard to the amendment to the advisory vote on executive compensation, the ratification of our independent registered public accounting firm and the stockholder proposal requesting that BioMarin issue a sustainability report describing BioMarin’s environmental, social and governance performance, means that a majority of the votes cast on the proposal are voted “For” the proposal.
Accordingly:
|
For more information, see Proposal No. | We are asking our stockholders to vote “FOR” each of the ten nominees for director to serve until the next Annual Meeting and until their successors are duly elected and qualified. Detailed information about each nominee’s background and experience can be Each of the We have a policy that provides that any director nominee |
Proposal No. Two |
Ratification of the |
The Board of Directors recommends a vote “FOR” this proposal. |
|
For more information, see Proposal No. | The Board and the |
|
|
Proposal No. |
Non-Binding Advisory Vote on Executive Compensation | ||
The Board of |
|
For more information, see Proposal No. | We are asking our stockholders for advisory approval of the compensation of our NEOs as disclosed in this Proxy Statement. Our executive compensation program is aligned with our business strategy and priorities and encourages executive officers to work for meaningful stockholder |
14 | 2020 Proxy Statement |
What is the quorum requirement?Table of Contents
A quorumProposal No. One: Election of stockholders is necessary to hold a valid stockholder meeting. A quorum will be present if stockholders holding at least a majorityDirectors
Each of the outstanding shares entitledten nominees for director listed below is currently a director of the Company and, except for Ms. Anderson, who was appointed to vote are presentthe Board after the 2019 Annual Meeting of Stockholders, was previously elected by the stockholders. Regarding Ms. Anderson’s appointment, in person or represented2019, a third-party search firm provided the CGN Committee with a slate of potential candidates for consideration, which included Ms. Anderson. After reviewing the potential candidates, the CGN Committee selected Ms. Anderson from the list provided by proxy at the Annual Meeting. Onthird-party search firm, performed further evaluation of her particular experience, qualifications, attributes and skills, and then recommended her appointment to the Record Date, there were 162,292,817 shares outstanding and entitled to vote. Thus,Board. All of the holders of at least 81,146,409 shares must be present in person or represented by proxycurrent directors, except Dr. Lewis who was not nominated for re-election at the Annual Meeting, have been recommended by the CGN Committee to have a quorum.
Your shares will be counted towards the quorum only if you submit a valid proxy by mail, over the phone or through the Internet (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, then the holders entitled to vote thereat, presentBoard for re-election as our directors at the Annual Meeting, in person or represented by proxy, by a majority of the votes cast, may adjourn the meeting to another date. At any adjourned Annual Meeting at which a quorum is present, any business may be transacted that might have been transacted at the Annual Meeting as originally notified. If the adjournment is for more than 30 days, or if after that adjournment a new record date is fixed for the adjourned Annual Meeting, a notice of the adjourned Annual Meeting shall be given to each stockholder of record entitled to vote at the adjourned Annual Meeting.
How can I find out the results of the voting at the Annual Meeting?
Preliminary voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a current report on Form 8-K that we expect to file with the SEC within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Form 8-K with the SEC within four business days after the Annual Meeting, we intend to file a Form 8-K to publish the preliminary results within four business days after the Annual Meeting and file an additional Form 8-K to publish the final results within four business days after the final results are known to us.
If you have any questions or need assistance in voting your shares, please call the following firm, which is assisting the Company in the solicitation of proxies:
Morrow & Co., LLC
470 West Avenue
Stamford, CT 06902
1-800-607-0088
PROPOSAL NO. ONE: ELECTION OF DIRECTORS
The Board currently consists of nine directors. Pierre Lapalme is not seeking re-election, and his Board service will end on the date of the Annual Meeting. There are eight nominees for election to the Board this year.has approved such recommendations. Each director nominee to be elected and qualified will hold office until the next Annual Meeting of stockholdersStockholders and until his or her successor is duly elected and qualified, or, if sooner, until the director’s death, resignation or removal. Each
Because Dr. Lewis was not nominated for re-election at the Annual Meeting, there are fewer nominees than the authorized number of directors (currently 11). The Board has resolved that upon the expiration of Dr. Lewis’s term at the Annual Meeting, the authorized number of directors shall be reduced to ten. Proxies cannot be voted for a greater number of persons than the number of nominees listed below is currently a director of the Company. Each of the director nominees was previously elected by the stockholders, except for David Pyott who was appointed to the Board by the other directorsnamed in January 2016. this Proxy Statement.
Directors are elected by a plurality of the votes of the holders of shares present in person or represented by proxy and entitled to vote on the election of directors. The eightten nominees receiving the highest number of affirmative votes will be elected; provided, that, pursuantelected.
Pursuant to our Corporate Governance Principles (which are available in the Corporate Governance section of the Investors section of our website atwww.bmrn.com), any director nominee for director who receives a greater number of votes “withheld” from his or her election than votes “for” his or her election in an uncontested election at a stockholder’sstockholders’ meeting should promptly tender his or her resignation to the ChairmanChair of the Board following certification of the stockholder vote. The CGN Committee will then make a recommendation to the Board regarding the appropriate response to such an offer of resignation and the Board will then deliberate and vote on such recommendation.
www.biomarin.com | 15 |
Proposal No. One: Election of Directors |
The names and ages of the ten nominees for director, their occupation(s), length of service with the Company and Board Committeecommittee memberships are set forth in the table below. A brief biography of each nominee is also set forth below, which includes information, as of the date of this Proxy Statement,March 6, 2020, regarding specific and particular experience, qualifications, attributes or skills of each nominee that led the Corporate Governance & NominatingCGN Committee (the CGN Committee)and the Board to believe that the nominee should continue to serve on the Board:Board.
Name and Age | Director Since | Occupation | Committee Memberships | |||||||||||||||
Jean-Jacques Bienaimé, 66 Chair of the Board | May 2005 | Chairman and Chief Executive Officer, BioMarin Pharmaceutical Inc. | ||||||||||||||||
Elizabeth McKee Anderson, 62 | July 2019 |
| ||||||||||||||||
|
| Director, |
|
|
|
|
|
| ||||||||||
| July 2016 |
|
|
|
|
|
|
|
| |||||||||
Michael Grey, 67 |
| December 2005 |
|
|
|
| ||||||||||||
Elaine J. Heron, Ph.D., 72 |
| July 2002 | Director, Amplyx Pharmaceuticals, Inc.; Director, Palvella Therapeutics; Director Dropworks, Inc. |
|
|
|
| |||||||||||
Robert J. Hombach, 53 | September 2017 | Former Executive Vice President, Chief Financial Officer & Chief Operations Officer, Baxalta Inc.; Director, CarMax, Inc.; Director, Aptinyx Inc. | ||||||||||||||||
V. Bryan Lawlis, Ph.D., 68 |
| June 2007 |
|
|
|
| ||||||||||||
|
|
|
|
|
|
| ||||||||||||
Richard A. Meier, |
| December 2006 |
|
|
| |||||||||||||
David E.I. Pyott, M.D. (Hon.), 66 |
| January 2016 | Lead Director, Avery Dennison Corporation; Director, Alynlam Pharmaceuticals, Inc.; Supervisory Board Member, Royal Philips in the Netherlands |
|
|
| ||||||||||||
Dennis J. Slamon, M.D., Ph.D., 71 |
| March 2014 | Professor of Medicine, UCLA Department of Medicine; Director, Clinical/Translational |
|
|
|
AC | Audit Committee
| CGN | Corporate Governance & Nominating Committee | Member | Financial Expert | ||
CC | Compensation Committee | S&T | Science & Technology Committee | Committee Chair | Independent |
16 | 2020 Proxy Statement |
Proposal No. One: Election of Directors |
|
|
|
| |
Chairman & Chief Executive Officer, BioMarin Pharmaceutical Inc. | The Board has nominated Mr. Bienaimé for his intimate knowledge of our business and extensive experience in the management of biotechnology organizations, business development, and sales and marketing of both biotechnology and pharmaceutical products. |
|
|
|
|
Jean-Jacques Bienaimé joined our Board in May 2005, at the same time that he became our Chief Executive Officer, and was named Chair of the Board in June 2015. From November 2002 to April 2005, Mr. Bienaimé served as Chairman, Chief Executive Officer, and President of Genencor, a biotechnology company focused on industrial bioproducts and targeted cancer biotherapeutics. From 1998 to late 2002, Mr. Bienaimé served as Chairman, Chief Executive Officer and President of Sangstat Medical Corporation, an immunology-focused biotechnology company, becoming President in 1998 and Chief Executive Officer in 1999. From 1992 to 1998, Mr. Bienaimé held several senior management positions at Rhône-Poulenc Rorer Pharmaceuticals (now Sanofi-Aventis), culminating in the position of Senior Vice President of Worldwide Marketing and Business Development. Earlier in his career, Mr. Bienaimé worked at Genentech, Inc. where he was involved in the launch of tissue plasminogen activator (t-PA) for the treatment of heart attacks. Mr. Bienaimé currently serves on the boardsboard of Incyte Corporation, a public pharmaceuticalbiotechnology company, and he is a member of the boards of Biotechnology Innovation Organization (BIO) and Pharmaceutical Research and Manufacturers of America (PhRMA), both industry trade associations. From 2013 to 2018, Mr. Bienaimé served on the board of Vital Therapies, Inc., a public biotechnologybiopharmaceutical company as well as the Health Section Governing Board of The Biotechnology Innovation Organization (formerly known as The Biotechnology Industry Organization), an industry trade association. Mr. Bienaimé previously served on the board of directors of two public companies during the past five years: Portola Pharmaceuticals,until it was merged into Immunic, Inc. (from 2011 to 2014) and InterMune, Inc. (from 2012 to 2014).in April 2019. Mr. Bienaimé received an M.B.A. from the Wharton School at the University of Pennsylvania and a degree in economics from the École Supérieure de Commerce de Paris.
The Board has nominated Mr. Bienaimé for his intimate knowledge of our business
ELIZABETH McKEE ANDERSON | Age:62 | Director Since:July 2019 | ||
Former Worldwide Vice President, Infectious Diseases and Vaccines, Janssen Pharmaceuticals, Inc.; Director, Bavarian Nordic A/S; Director, Insmed, Inc.; Director, Revolution Medicines, Inc. | The Board has nominated Ms. Anderson for her extensive experience in managing large biotechnology and pharmaceutical organizations, compensation and corporate governance matters, finance and accounting, and sales and marketing of both biotechnology and pharmaceutical products. |
Elizabeth McKee Anderson joined our Board in July 2019. Ms. Anderson held various senior leadership positions at Johnson & Johnson between 2003 and her retirement in 2014. She most recently served as Worldwide Vice President, Infectious Disease and Vaccines for Janssen Pharmaceuticals, a Johnson & Johnson company, where she directed the commercial development of an extensive portfolio of antivirals and vaccines with responsibility for global strategic marketing, market access, and global analytics for that division. Prior to Johnson & Johnson, Ms. Anderson served as the Vice President and General Manager of Wyeth Lederle Vaccines from 1997 to 2002. She also previously worked at Rhone Poulenc Rorer and the American Red Cross. Ms. Anderson currently serves on the boards of Bavarian Nordic A/S, Insmed, Inc. and Revolution Medicines, Inc., public biopharmaceutical companies, and she formerly served on the board of Huntsworth PLC, a public healthcare and communications company, through December 31, 2019. She also serves on the boards of Aro Biotherapeutics Company and Context Therapeutics, Inc., private biopharmaceutical companies, is a member of the Board of Trustees of the Wistar Institute, a non-profit biomedical research organization, and is the Principal of PureSight Advisory, LLC. She holds a Bachelor of Science in Engineering from Rutgers University and a Master of Business Administration from Loyola University Maryland.
www.biomarin.com | 17 |
Proposal No. One: Election of Directors |
WILLARD DERE, M.D. | Age:66 | Director Since:July 2016 | ||
Professor of Internal Medicine, B. Lue and Hope S. Bettilyon Presidential Endowed Chair in Internal Medicine for Diabetes Research, Executive Director of Personalized Health, and Co-Principal Investigator of the Center for Clinical & Translational Science at the University of Utah Health Sciences Center | The Board has nominated Dr. Dere for his extensive experience in managing biotechnology and pharmaceutical organizations, clinical trial research as well as research and development in translating basic science discoveries into new clinical therapies and novel drug strategies. |
Willard Dere, M.D., joined our Board in July 2016. Since November 2014, he has served as the Professor of Internal Medicine, B. Lue and Hope S. Bettilyon Presidential Endowed Chair in Internal Medicine for Diabetes Research, Executive Director of Personalized Health, and Co-Principal Investigator of the Center for Clinical & Translational Science at the University of Utah Health Sciences Center. He also serves as the Associate Vice President for Research of Health Sciences at the University of Utah Health Sciences Center. Prior to re-joining academia in November 2014, Dr. Dere was in the managementbiopharmaceutical industry for 25 years. From 2003 until his retirement in 2014, Dr. Dere held multiple roles at Amgen, Inc., a biotechnology company, including serving as head of biotechnology organizations, businessglobal development and saleseither the international or corporate chief medical officer from December 2004 to October 2014. He began his career at Eli Lilly in 1989, and marketingheld a number of different global roles in clinical pharmacology, regulatory affairs, and both biotechnologyearly-stage translational, and pharmaceutical products.late-stage clinical research. He currently serves on the boards of three public biopharmaceutical companies: Mersana Therapeutics, Inc., Radius Health, Inc., and Seres Therapeutics, Inc., and in December 2017 he concluded his board service at Ocera Therapeutics, Inc., a public biopharmaceutical company, before its acquisition by Mallinckrodt PLC. Since 2014, he has served on the scientific advisory board of the California Institute of Regenerative Medicine. Dr. Dere received a B.A. and an M.D. from the University of California, Davis. He trained in internal medicine at the University of Utah and in endocrinology/metabolism at the University of California at San Francisco.
MICHAEL GREY | Age:67 | Director Since:December 2005 | ||
Executive Chairman, Amplyx Pharmaceuticals, Inc.; Chairman, Mirum Pharmaceuticals, Inc.; Executive Chairman, Reneo Pharmaceuticals, Inc.; Executive Chairman, Spruce Biosciences, Inc.; Chairman Curzion Pharmaceuticals Inc. | The Board has nominated Mr. Grey for his extensive experience in managing biotechnology and pharmaceutical organizations, business development, compensation matters and finance and accounting. |
Michael Grey joined our Board in December 2005 and serves as the Chair of the Compensation Committee. Mr. Grey currently serves as President and Chief Executive OfficerChairman of Amplyx Pharmaceuticals, Inc., a private biopharmaceutical company, a position he has held since October 2015,December 2016, and previously served as President and Chief Executive Officer andof Amplyx from October 2015 to December 2016. Mr. Grey also currently serves as Executive Chairman of Reneo Pharmaceuticals, Inc., a private biopharmaceutical company, a position he has held since January 2018, and previously served as Chief Executive Officer from October 2014.2014 to December 2017. He previously served as President and Chief Executive Officer of Lumena Pharmaceuticals, Inc., a privately-heldprivate biotechnology company, from February 2011 until it was acquired by Shire plc in May 2014. He has also served as a Venture Partner with Pappas Ventures, a life sciences venture capital firm, since January 2010. Between January and September 2009, he served as President and Chief Executive Officer of Auspex Pharmaceuticals, Inc., a private biotechnology company. From January 2005 until its acquisition in August 2008, Mr. Grey was President and Chief Executive Officer of SGX Pharmaceuticals, Inc., a public biotechnology company, where he previously served as President from June 2003 to January 2005 and as Chief Business Officer from April 2001 until June 2003. Prior to joining SGX Pharmaceuticals, Inc., Mr. Grey acted as President, Chief Executive Officer and Boardboard member of Trega Biosciences, Inc., a biotechnology company. From November 1994 to August 1998, Mr. Grey was the President of BioChem Therapeutic, Inc., the pharmaceutical operating division of BioChem Pharma, Inc. During 1994, Mr. Grey served as President and Chief Operating Officer for Ansan, Inc., a pharmaceutical company. From 1974 to 1993, he served in various roles with Glaxo, Inc. and Glaxo Holdings, plc, culminating in the position of Vice President, Corporate Development. Mr. Grey is currently Chairman of the Board at Mirum Pharmaceuticals, Inc., a public biopharmaceutical company he founded in 2018. Mr. Grey is currently Chairman of the Board at Curzion Pharmaceuticals, Inc., a private biopharmaceutical company he founded in 2019, a director ofat Horizon Pharma, plc a publicly traded pharmaceutical company,and Mirati Therapeutics a publicly traded biopharmaceutical company,Inc., public pharmaceutical companies, and threeExecutive Chairman of Spruce Biosciences, Inc. a private healthcare companies: Balance Therapeutics, Inc., Biothera Pharmaceutical Inc. and Ziarco Group Ltd. Mr. Grey previously served on the board of directors of one public company during the past five years: Achillion Pharmaceuticals, Inc. (from 2001 to 2010).company. He received a B.Sc. in chemistry from the University of Nottingham, United Kingdom.
18 | 2020 Proxy Statement |
The Board has nominated Mr. Grey for his extensive experience in managing biotechnology and pharmaceutical organizations, business development, compensation matters and finance and accounting.
Proposal No. One: Election of Directors |
ELAINE J. HERON, PH.D. | Age:72 | Director Since:July 2002 | ||
Director, Amplyx Pharmaceuticals, Inc.; Director, Palvella Therapeutics, Inc.; Director, Dropworks, Inc. | The Board has nominated Dr. Heron for her extensive experience in life science sales and marketing, finance and accounting, corporate governance matters and research and development. |
Elaine J. Heron, Ph.D., joined our Board in July 2002 and serves as the Chair of the CGNCorporate Governance and Nominating Committee. Dr. Heron served as Chair and Chief Executive Officer of Amplyx Pharmaceuticals, Inc., a private early stage drug development company, from February 2009 until October 2015, and she continues to serve as a member of that Company’s boardcompany’s board. She is also a director of directors.Dropworks, Inc., a private biotechnology tools company, Palvella Therapeutics, Inc., a private clinical-stage therapeutics company, and Visgenx, Inc., a private early stage therapeutics company. From July 2001 to October 2008, Dr. Heron was Chair and Chief Executive Officer of Labcyte Inc., a private biotechnology company. Before joining Labcyte Inc., she spent six years in positions of increasing responsibility at the Applied Biosystems Group of Applera Corporation, a biotechnology company, including the position of General Manager and Vice President of Sales and Marketing. Dr. Heron earned a B.S. in chemistry with highest distinction and a Ph.D. in analytical biochemistry from Purdue University and an M.B.A. from Pepperdine University.
ROBERT J. HOMBACH | Age:53 | Director Since:September 2017 | ||
Former Executive Vice President, Chief Financial Officer & Chief Operations Officer, Baxalta Inc.; Director, CarMax, Inc.; Director, Aptinyx Inc. | The Board has nominated Mr. Hombach for his extensive experience in finance and accounting, capital markets and managing large biotechnology and pharmaceutical organizations. |
Robert J. Hombach joined our Board in September 2017 and currently serves as the Chair of the Audit Committee. He served as Executive Vice President, Chief Financial Officer and Chief Operations Officer of Baxalta Inc., a public biopharmaceutical company spun out in June 2015 from Baxter International Inc., a public pharmaceutical company, until it was acquired by Shire PLC in June 2016. He served as Corporate Vice President and Chief Financial Officer of Baxter from July 2010 until the spin-off in June 2015. From 2007 to 2011, he also served as Treasurer of Baxter and from 2004 to 2007, he was Vice President of Finance, Europe, Middle East and Africa. Prior to that, he served in a number of finance positions of increasing responsibility in the corporate planning, manufacturing, operations and treasury areas at Baxter. Mr. Hombach currently serves on the boards of Aptinyx Inc., a public biopharmaceutical company, and CarMax, Inc., a public company. Previously, he served on the board of Naurex, Inc., a private pharmaceutical company acquired by Allergan in 2015. Mr. Hombach earned an M.B.A. from Northwestern University’s J.L. Kellogg Graduate School of Management, and a B.S. in Finance cum laude from the University of Colorado.
www.biomarin.com | 19 |
Proposal No. One: Election of Directors |
| Age:68 | Director Since:June 2007 | ||
Director, Aeglea BioTherapeutics, Inc.; Director, Coherus Biosciences, Inc.; Director, Geron Corporation | The Board has nominated Dr. Lawlis for his extensive experience in manufacturing biotechnology and other pharmaceutical products, research and development of drug products and managing and conducting clinical trials and drug regulatory processes. |
Bryan Lawlis, Ph.D., joined our Board in June 2007. SinceFrom August 2011 to September 2017 he has served as the President and Chief Executive Officer of Itero Biopharmaceuticals, LLC, a privately held limited liabilityprivate holding company that has held the assets of Itero Biopharmaceuticals, Inc., a private biotechnology company. Dr. Lawlis co-founded and served as President and Chief Executive Officer of Itero Biopharmaceuticals, Inc. from 2006 until it discontinued operations in August 2011. Dr. Lawlis served as President and Chief Executive Officer of Aradigm Corporation, a pharmaceutical company, from August 2004 to August 2006, and served on its board of directors from February 2005 to August 2006, continuing in both capacities until August 2006. Dr. Lawlis previously served as Aradigm Corporation’sAradigm’s President and ChiefOperating Officer from June 2003 to August 2004 and its Chief Operating Officer from November 2001 to June 2003. Prior to his time at Aradigm, Dr. Lawlis co-founded Covance Biotechnology Services, a contract biopharmaceuticalmanufacturing operation, and served as its President and Chief Executive Officer from 1996 to 1999, and served as its Chairman from 1999 to 2001, when it was sold to Diosynth RTP, Inc., a division of Akzo Nobel, NV. From 1981 to 1996, Dr. Lawlis was employed at Genencor, Inc., a biotechnology company, and Genentech, Inc. His last position at Genentech, Inc. was Vice President of Process Sciences. In addition, Dr. Lawlis holds board positionsserves on four privately held companies: AbSci, LLC, Itero Biopharmaceuticals, LLC, Reform Biologics LLC and Sutro Biopharma, Inc. Dr. Lawlis was appointed to the boardboards of Geron Corporation, athree public biopharmaceutical company, in March 2012,companies: Aeglea BioTherapeutics, Inc., Coherus Biosciences, Inc. and Geron Corporation. He previously served on the board of KaloBios Pharmaceuticals,Sutro Biopharma, Inc., a public biopharmaceutical company, from August 2013January 2004 until September 2014.June 2019. Dr. Lawlis has served as a member of theholds board of directors of Coherus Biosciences, Inc., a public biotechnology company, since October 2014,positions at two private companies, AbSci, LLC and Reform Biologics LLC, and he has acted as the chairman of the scientific advisory board for Coherus Biosciences, Inc. since November 2012. Since October 2015, Dr. Lawlis has servedserves as an advisor to Phoenix Venture Partners, a venture capital firm focusing on manufacturing technologies and material sciences technologies. Dr. Lawlis holds a B.A. in microbiology from the University of Texas at Austin, and a Ph.D. in Biochemistry from Washington State University.
RICHARD A. MEIER | Age:60 | Director Since:December 2006 | ||
Executive Vice President and Chief Financial Officer, Intersect ENT, Inc.; Partner, AtlasRock&Co. | The Board has nominated Mr. Meier for his extensive experience in finance and accounting, capital markets, managing large organizations in the healthcare field and information technology. |
The Board has nominated Dr. Lawlis for his extensive experience in manufacturing biotechnology and other pharmaceutical products, research and development of drug products and managing and conducting clinical trials and drug regulatory processes.
Alan J. Lewis, Ph.D., joined our Board in June 2005 and serves as the Chair of the Science and Technology Committee. Since March 2015, Dr. Lewis has served as Chief Executive Officer of DiaVacs, Inc., a private biotechnology company, where he also serves as director. From October 2012 to March 2014, Dr. Lewis served as Chief Executive Officer and Director of Medistem, Inc. From November 2011 to October 2012, Dr. Lewis served as a consultant to Medistem, Inc., a public biotechnology company, and the California Institute for Regenerative Medicine. From July 2010 to November 2011, Dr. Lewis served as President, Chief Executive Officer and Director of Ambit Biosciences, a private biotechnology company. From January 2009 to June 2010, Dr. Lewis served as President and Chief Executive Officer of The Juvenile Diabetes Research Foundation. From February 2006 until December 2008, Dr. Lewis was the President and Chief Executive Officer of Novocell, Inc., a privately held regenerative disease biotechnology company focused on stem cell therapy. Prior to joining Novocell Inc., starting in 2000, he was President of Celgene Signal Research, a wholly-owned subsidiary of the Celgene Corporation, a pharmaceutical company. From February 1994 to August 2000, he was the President and Chief Executive Officer of Signal Pharmaceuticals, Inc., where he guided the company to its successful acquisition by Celgene Corporation. From 1979 to 1994, Dr. Lewis held a number of positions at Wyeth-Ayerst Research and its predecessor, Wyeth Laboratories, Inc., including Vice President of Research at Wyeth-Ayerst Research. Dr. Lewis has published over 120 full manuscripts and has written and edited seven books. Dr. Lewis was a Research Associate at Yale University from 1972 to 1973. In December 2015 Dr. Lewis was appointed to the board of Assembly Biosences Inc., a public biotechnology company. Dr. Lewis currently serves as Chairman of the Board of Cellastra Inc., a private biotechnology company, and director of four other private biotechnology companies, Batu Biologics, Capella Therapeutics, Habit DX and Targazyme, Inc. Dr. Lewis received a B.Sc. in physiology and biochemistry from Southampton University, Southampton, Hampshire, United Kingdom, and a Ph.D. in pharmacology from the University of Wales, Cardiff, United Kingdom.
The Board has nominated Dr. Lewis for his extensive experience in managing biotechnology and pharmaceutical organizations, research and development, finance, compensation and corporate governance matters.
Richard A. Meier joined our Board in December 2006 and serves as the Chair of the Audit Committee and has served as our Lead Independent Director since June 2015. In March of 2013,Since November 2019, Mr. Meier joinedhas served as Executive Vice President and Chief Financial Officer of Intersect ENT, Inc., a public medical technology company. Mr. Meier served as President-International and Executive Vice President and Chief Financial Officer of Owens & Minor, Inc., a global healthcare services company, asfrom July 2015 to July 2018, and was Executive Vice President and Chief Financial Officer and was promotedof Owens & Minor, Inc. from March 2013 to President-International and Executive Vice President and Chief Financial Officer, as of July 2015. From January 2010 through March 2012,Prior to joining Owens & Minor, Mr. Meier was an Executive Vice President and Chief Financial Officer at TeleFlex, Incorporated, a global medical device company. From November 2007 to May 2009,company from January 2010 through March 2012. Mr. Meier served as President and Chief Operating Officer of Advanced Medical Optics, a global ophthalmic medical device company that was acquired by Abbott in February 2009, from November 2007 to May 2009. BetweenBeginning in April 2002 andthrough November 2007, Mr. Meier served continuously as Advanced Medical Optics’ Chief Financial Officer, whileserving in a variety of additional senior operating roles.roles including Chief Operating Officer. Prior to joining Advanced Medical Optics, Mr. Meierwas the Executive Vice President and Chief Financial Officer of Bausch Health Companies, Inc. (BHC) (formerly Valeant Pharmaceuticals, Inc. (formerlyand ICN Pharmaceuticals, Inc.), from October1999 to April 2002, and Senior Vice President & Treasurer from May 1998 to October 1999. Before joining Valeant Pharmaceuticals,BHC, Mr. Meier was an executive with the investment banking firm of Schroder & Co. Inc. in New York, from 1996. Prior to Mr. Meier’s experience at Schroder & Co., he held various financial and banking positions at Salomon Smith Barney, Manufacturers Hanover Corporation, Australian Capital Equity, and Greyhound Lines, Inc. Mr. Meier is alsoa member of the Supervisory Board of Syntellix AG, a private medical technology company, and he was a Director of Staar Surgical Inc., an ophthalmic medical device company, sincefrom 2009 through June 2016, where he currently servesalso served on both the Governance, Compensation and Audit Committees. Mr. Meier holds a B.A. in economics from Princeton University.
20 | 2020 Proxy Statement |
The Board has nominated Mr. Meier for his extensive experience in finance and accounting, capital markets, managing large organizations in the healthcare field and information technology.
Proposal No. One: Election of Directors |
DAVID E.I. PYOTT, M.D. (HON.) | Age:66 | Director Since:January 2016 | ||
Lead Director, Avery Dennison Corporation; Director, Alynlam Pharmaceuticals, Inc.; Supervisory Board Member, Royal Philips in the Netherlands | The Board has nominated Dr. Pyott for his extensive experience in managing global multi-specialty healthcare companies and marketing, research and development, international regulatory requirements and business development in the pharmaceutical and biotechnology industry. |
David E.I. Pyott, M.D. (Hon.), joined our Board in January 2016. From 1998 to March 2015, Mr.Dr. Pyott served as Chief Executive Officer of Allergan, plc,Inc., a global pharmaceutical company. Prior to Allergan, Mr.Dr. Pyott served as the Head of the Novartis Nutrition Division and as a member of the Executive Committee of Switzerland-based Novartis AG. Mr.Dr. Pyott is Lead Director and a member of the board of directors of Avery Dennison Corporation, a public global labeling and packaging materials company,company. He also serves on the board of directors of Alnylam Pharmaceuticals, Inc., a public biotechnology company and is a member of the Supervisory Board of Royal Philips in the Netherlands, a public diversified health and wellnesstechnology company. Dr. Pyott serves as Chairman of Bioniz Therapeutics, Inc., a private biotechnology company. He is a memberDeputy Chairman of the Governing Board of the London Business School, is a member of the Board of Trustees of the California Institute of Technology, President of the International Council of Ophthalmology Foundation and a member of the Advisory Boardadvisory board of the Foundation of the American Academy of Ophthalmology. Mr.Dr. Pyott holds a Diploma in International and European Law from the Europa Institute at the University of Amsterdam, an Honorary Degree in Medicine and a Master of Arts degree from the University of Edinburgh, and a Master of Business Administration degree from the London Business School.
The Board has nominated Mr. Pyott for his extensive experience in managing global multi-specialty healthcare companies and marketing, research and development, international regulatory requirements and business development in the pharmaceutical and biotechnology industry.
DENNIS J. SLAMON, M.D., PH.D. | Age:71 | Director Since:March 2014 | ||
Professor of Medicine, UCLA Department of Medicine; Director, Clinical/Translational Research at UCLA’s Jonsson Comprehensive Cancer Center; Director, Revlon/UCLA Women’s Cancer Research Program | The Board has nominated Dr. Slamon for his extensive experience in clinical trial research, personalized medicine, hematology and oncology studies as well as research and development in translating basic science discoveries into new clinical therapies and novel drug strategies. |
Dennis J. Slamon, M.D., Ph.D., joined our Board in March 2014. Dr. Slamon has served as director of Clinical/Translational Research at UCLA’s Jonsson Comprehensive Cancer Center since June 1995 and has served as leader of the Revlon/UCLA Women’s Cancer Research Program at UCLA since its establishment in 1991. Since May 1996, Dr. Slamon has been a professor of medicine and Chief of the Division of Hematology/Oncology in the UCLA Department of Medicine and executive vice chair for research for UCLA’s Department of Medicine. He also serves as director of the medical advisory board for the National Colorectal Cancer Research Alliance, a research and fund-raising organization that promotes advances in the treatment of colorectal cancer, and he is member of the board of directors of Translational Research in Oncology, a global, non-profit, academic clinical research organization. A 1970 B.A. honors graduate in biology from Washington & Jefferson College and a 1975 graduate of the University of Chicago’sChicago Pritzker School of Medicine, Dr. Slamon earned his Ph.D. in cell biology that same year. He completed his internship and residency at the University of Chicago Hospitals and Clinics, becoming chief resident in 1978. One year later, he became a fellow in the Division of Hematology/Oncology at UCLA where he currently serves on the faculty of medicine.
The Board has nominated Dr. Slamon for his extensive experience in clinical trial research, personalized medicine, hematology and oncology studies as well as research and development in translating basic science discoveries into new clinical therapies and novel drug strategies.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH NAMED NOMINEE.
INFORMATION REGARDING THE BOARD OF Director IndependenceDIRECTORS AND CORPORATE GOVERNANCE
This section describes key corporate governance guidelines and practices that we have adopted. Complete copies of our Corporate Governance Principles, the charters of the committees of the Board and our Global Code of Conduct and Business Ethics described below may be found in the Corporate Governance section of the Investors section of our website at www.bmrn.com. Alternatively, you can request a copy of any of these documents free of charge by writing to: G. Eric Davis, Executive Vice President, General Counsel and Secretary, c/o BioMarin Pharmaceutical Inc., 770 Lindaro Street, San Rafael, CA 94901. Information on our website is not incorporated by reference in this Proxy Statement.
Independence of the Board of Directors
The Board has affirmatively determined that, except for Mr. Bienaimé, all of our current directors are independent within the meaning of the applicable NASDAQ listing standards of The Nasdaq Stock Market LLC (Nasdaq) and relevant securities and other laws, rules and regulations regarding the definition of “independent” (the Independent Directors). There are no family relationships between any directorof our directors and any of our executive officers.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE NAMED IN PROPOSAL NO. ONE. |
www.biomarin.com | 21 |
The Board believes that it is important to retain the flexibility to allocate the responsibilitiesTable of the offices of Chair of the Board (Chair) and Chief Executive Officer in any manner that it determines to be in the best interests of the Company. Accordingly, our Corporate Governance Principles specifically reserve for the Board the right to vest the responsibilities of Chair and Chief Executive Officer in the same individual. The Board reviews its leadership structure periodically as part of its annual self-assessment process. In addition, the Board continues to monitor developments in corporate governance as well as the approaches our peers undertake.Contents
Beginning in August 2004 the Board determined to separate the roles of Chair and Chief Executive Officer and appointed Pierre Lapalme, an Independent Director, as Chair. In January 2015, Mr. Lapalme notified the Company that he had elected to step down as Chair following the 2015 Annual Meeting. Following Mr. Lapalme’s decision, the Board conducted a careful review of its leadership structure in light of the composition of the Board, the Company’s size, the nature of the Company’s business, the regulatory framework under which the Company operates, and other relevant factors, and elected to revise the organizational structure of the Board and the Company. To better align the operational leadership of the Company, the Board determined that recombining the Chair and Chief Executive Officer positions under the leadership of Jean-Jacques Bienaimé would be in the best interests of the Company and its stockholders. This determination was based on the Board’s strong belief that, as the individual with primary responsibility for managing the Company’s day-to-day operations and with extensive knowledge and understanding of the Company, combining the roles of Chair and Chief Executive Officer in Mr. Bienaimé creates a clear line of authority that promotes decisive and effective leadership, both within and outside the Company. In making this judgment, the Board took into account its evaluation of Mr. Bienaimé’s performance as Chief Executive Officer and as a current member of the Board, his positive relationship with the other directors, his vast expertise in the biopharmaceutical industry and proven track record of successful leadership, and the strategic perspective he would bring to the role of Chair. Mr. Bienaimé assumed the role of Chair effective on Mr. Lapalme stepping down as Chair after the 2015 Annual Meeting. The Chair is responsible for:
|
|
|
|
|
|
|
|
|
|
The Board recognizes the importance of having a Board structure that will continue to promote the appropriate exercise of independent judgment by the Board. In connection with the decision to recombine the roles of Chair and Chief Executive Officer under Mr. Bienaimé, the Board also created the position of Lead Independent Director to serve as a liaison between the Chief Executive Officer and the Independent Directors, and to facilitate discussions and deliberation among the Independent Directors in fulfilling their oversight responsibilities for the Company.
The Lead IndependentIdentifying and Evaluating Candidates for Director coordinates the activities of the other independent Directors and performs such other duties and responsibilities as the Board may determine. The Lead Independent Director Charter can be found in the Corporate Governance section of the Investors section of our website at www.bmrn.com. Information on our website is not incorporated by reference in this Proxy Statement. As outlined in the Lead Independent Director Charter, the Lead Independent Director is responsible for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Lead Independent Director Charter also grants the Lead Independent Director the authority to:
|
|
|
|
|
|
The Lead Independent Director is elected annually by a majority vote of the Independent Directors if the offices of Chair and Chief Executive Officer are held by the same person. The Independent Directors have determined that Richard A. Meier will continue to serve as the Lead Independent Director.
The Board, including each of its committees, also has complete and open access to any member of the Company’s management and the authority to retain independent advisors as the Board or such committee deems appropriate. In addition, all members of the Audit Committee, the CGN Committee and the Compensation Committee are Independent Directors, and the committee chairs have authority to hold executive sessions without management and non-Independent Directors present.
Role of the Board in Risk Oversight
The Board is actively involved in the oversight of risks that could affect us. This oversight is conducted primarily through committees of the Board, particularly the Audit Committee and the CGN Committee, but the full Board has retained responsibility for general oversight of risks. The Board satisfies this responsibility through full reports by each committee chair regarding the committee’s considerations and actions, as well as through regular reports directly from officers responsible for oversight of particular risks.
Meetings of the Board of Directors
The Board oversees our business. It establishes overall policies and standards and reviews the performance of management. During the fiscal year ended December 31, 2015, the Board held 12 meetings and took action by unanimous written consent on two occasions. Each Board member attended 75% or more of the aggregate meetings of the Board and of the committees, on which he or she served, held during the period for which he or she was a director or committee member. Applicable NASDAQ listing standards require that the Independent Directors meet from time to time in executive session. In fiscal 2015, our Independent Directors met in regularly scheduled executive sessions at which only Independent Directors were present. It is our policy to request that all Board members attend the Annual Meeting of stockholders. However, we also recognize that personal attendance by all directors is not always possible. Nine of the ten directors serving at the time of the 2015 Annual Meeting of Stockholders attended such meeting.
Information Regarding Committees of the Board of Directors
The Board has a number of committees that perform certain functions for the Board. The current committees of the Board are the Audit Committee, the Compensation Committee, the CGN Committee uses a variety of methods for identifying and the Science and Technology Committee. Below is a description of each committee of the Board. Each of the committees has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities.evaluating nominees for director. The Board has determined that each member of each committee meets the applicable NASDAQ listing standards and relevant securities and other laws, rules and regulations regarding “independence” and that each member is free of any relationship that would impair his or her individual exercise of independent judgment with regard to our Company.
The Board has a separately designated standing Audit Committee established in accordance with Section 3(a)(58) of the Exchange Act. The Audit Committee is responsible for overseeing our accounting and financial reporting processes and the audit of our financial statements, including reviewing (i) financial information, (ii) our systems of internal accounting and financial controls, (iii) the annual independent audit of our financial statements and (iv) the qualifications, independence and performance of our independent outside auditors for the purpose of preparing or issuing an audit report or performing other audit, review and attest services. Among other duties and responsibilities, the Audit Committee:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Audit Committee is currently composed of four directors: Mr. Meier (Chair), Dr. Heron, Mr. Lapalme and Dr. Lawlis. The Board annually reviews the NASDAQ listing standards’ definition of independence for Audit Committee members and has determined that all members of our Audit Committee are independent (as independence is currently defined in NASDAQ Listing Rules 5605(c)(2)(A)(i) and (ii)). The Board has determined that Mr. Meier qualifies as an “audit committee financial expert,” as defined in applicable SEC rules. The Board made a qualitative assessment of Mr. Meier’s level of knowledge and experience based on a number of factors, including his experience as the Chief Financial Officer of several public companies and his finance and investment banking experiences. In making that determination, the Board relied on the past business experience of Mr. Meier. Please see the description of the business experience for Mr. Meier under the heading “Nominees for Director”. In 2015, the Audit Committee met nine times.
The Audit Committee is governed by a written charter adopted by the Board, which was last amended in February 2016. The Audit Committee charter can be found in the Corporate Governance section of the Investors section of our website at www.bmrn.com. Information on our website is not incorporated by reference in this Proxy Statement. The charter of the Audit Committee grants the Audit Committee full access to all of our books, records, facilities and personnel, as well as authority to obtain, at our expense, advice and assistance from internal and external legal, accounting or other advisors and consultants and other external resources that the Audit Committee considers necessary or appropriate in the performance of its duties.
As required by its charter, the Audit Committee conducts a self-evaluation at least annually. The Audit Committee also periodically reviews and assesses the adequacy of its charter, including the Audit Committee’s role and responsibilities, and recommends any proposed changes to the Board for its consideration.
Report of the Audit Committee of the Board of Directors (1)
The Audit Committee has reviewed and discussed the audited financial statements of the Company with management of the Company. In addition, the Audit Committee has discussed with KPMG the matters required to be discussed by Auditing Standard No. 16, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (PCAOB). The Audit Committee has received from KPMG the written disclosures and the letter required by applicable requirements of the PCAOB regarding KPMG’s communications with the Audit Committee concerning independence and has discussed with KPMG the independence of KPMG from the Company and its management. Based on the foregoing, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2015.
Respectfully submitted on March 17, 2016 by the members of the Audit Committee of the Board of Directors:
Richard A. Meier, Chair
Elaine J. Heron, Ph.D.
Pierre Lapalme
V. Bryan Lawlis, Ph.D.
|
|
The Compensation Committee is responsible for (i) reviewing and recommending to the Board changes to the compensation of our Chief Executive Officer and executives who report directly to the Chief Executive Officer, (ii) assisting the Board in its oversight of the development, implementation and effectiveness of our policies and strategies relating to our human resources function, (iii) overseeing our incentive compensation plans and equity-based plans, and (iv) preparing any report on executive compensation required by applicable rules and regulations. Among other duties and responsibilities, the Compensation Committee:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Compensation Committee is currently composed of three directors: Mr. Grey (Chair), Dr. Lewis and Mr. Pyott. The Board has determined that all members of our Compensation Committee are independent (as independence is currently defined in NASDAQ Listing Rule 5605(a)(2)). During 2015, the Compensation Committee met seven times.
The Compensation Committee is governed by a written charter adopted by the Board, which was last amended in March 2014. The Compensation Committee charter can be found in the Corporate Governance section of the Investors section of our website at www.bmrn.com. Information on our website is not incorporated by reference in this Proxy Statement. The charter of the Compensation Committee grants the Compensation Committee full access to all of our books, records, facilities and personnel, as well as authority to obtain, at our expense, advice and assistance from internal and external legal, accounting or other advisors and consultants and other external resources that the Compensation Committee considers necessary or appropriate in the performance of its duties. In particular, the Compensation Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive and director compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. Information regarding consultants engaged by the Compensation Committee is provided in the “Compensation Discussion and Analysis” section of this Proxy Statement.
Under the Compensation Committee charter, the Compensation Committee may, in its discretion, delegate its duties to a subcommittee or to the Chair of the Compensation Committee.
As required by its charter, the Compensation Committee conducts a self-evaluation at least annually. The Compensation Committee also periodically reviews and assesses the adequacy of its charter, including the Compensation Committee’s role and responsibilities, and recommends any proposed changes to the Board for its consideration.
The performance and compensation process and specific determinations of the Compensation Committee with respect to executive compensation for 2015 and certain elements of compensation for 2015 are described in greater detail in the “Compensation Discussion and Analysis” section of this Proxy Statement.
Compensation Committee Processes and Procedures
The implementation of our compensation philosophy is carried out under the supervision of the Compensation Committee. The Compensation Committee charter requires that the Compensation Committee meet when deemed necessary or desirable by the Committee or its Chair, generally at least two times per year. The agenda for each meeting is usually developed by the Chair of the CompensationCGN Committee, in consultation with our Chief Executive Officer, the head of Human Resources, our General CounselChair and the Compensation Committee’s independent advisor, Willis Towers Watson. The Compensation Committee meetsLead Independent Director, regularly in executive session. However, Mr. Bienaimé, our Chief Executive Officer, Mr. Davis, our Executive Vice President, General Counsel and Secretary, and Mr. Richard Ranieri, our Executive Vice President, Human Resources and Corporate Affairs, in addition to Willis Towers Watson, regularly attend portions of the Compensation Committee meetings for the purpose of providing analysis and information to assist the Compensation Committee with its recommendations on various human resources and compensation matters. These officers generally do not participate in the executive sessions of the Compensation Committee.
Since February 2014 the Compensation Committee has engaged Towers Watson (now known as Willis Towers Watson following a merger on January 4, 2016) as an independent adviser to the Compensation Committee (the Compensation Consultant). The Compensation Consultant conducted analysis and provided advice on, among other things, the appropriate peer group, executive compensation for our Chief Executive Officer and other executive officers, equity compensation, and compensation trends in the biotechnology industry. The Compensation Consultant reports directly to the Compensation Committee, which retains sole authority to direct the work of and engage the Compensation Consultant. As part of its analysis, the Compensation Consultant collects and analyzes compensation information from a comparative group of biotechnology companies or “peer group” approved by the Compensation Committee. The Compensation Committee evaluates the criteria used in establishing the peer group at least annually, to ensure that it appropriately represents the companies competing with us to attract and retain talent. The Compensation Committee seeks input from management in addition to the Compensation Consultant to ensure the peer group is consistent with our current business model. The peer group used for 2015 is discussed in the “Compensation Discussion and Analysis” section of this Proxy Statement.
In January 2016, the Compensation Consultant affirmed to the Compensation Committee that it provided no other services to BioMarin during fiscal and calendar year 2015, that the total fees paid to it by BioMarin do not represent a significant concentration of its consolidated revenues for any of its most recent three fiscal years, that it had policies and procedures in place to prevent conflicts of interest from arising, that it was not aware of any business or personal relationships between the members of the regular members of the Compensation Consultant’s executive compensation team and any member of the Compensation Committee, that no regular members of the Compensation Consultant’s executive compensation team serving BioMarin owns any stock of BioMarin (other than perhaps investments in mutual funds or other funds that are managed without the member’s input ), and that it is not aware of any business or personal relationships between the Compensation Consultant or the regular members of the Compensation Consultant’s executive compensation team and any of the Company’s NEOs.
Compensation Committee Interlocks and Insider Participation
No member of our Compensation Committee has ever been an executive officer or employee of us or any of our subsidiaries. None of our executive officers currently serves, or has served during the last completed fiscal year, on the compensation committee or board of directors of any other entity that has one or more executive officers serving as a member of our Board or Compensation Committee. During 2015, no members of our Compensation Committee had any relationships requiring disclosure by us under the SEC’s rules requiring disclosure of certain relationships and related party transactions.
Compensation Committee Report (1)
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained herein with management, and based on such review and discussions, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated into BioMarin’s Annual Report on Form 10-K for the year ended December 31, 2015.
Respectfully submitted on April 11, 2016 by the members of the Compensation Committee of the Board of Directors:
Michael Grey, Chair
Alan J. Lewis, Ph.D.
David Pyott
|
|
Corporate Governance and Nominating Committee
The CGN Committee is responsible for (i) overseeing the composition of the Board to ensure that qualified individuals meeting the criteria of applicable rules and regulations serve as members of the Board and its committees, (ii) overseeing the development and implementation of corporate governance principles, policies, codes of conduct and codes of ethics relating to the operation of the Board and its committees, (iii) making recommendations to the Board regarding such corporate governance issues and (iv) keeping informed on issues related to corporate responsibility. Among other duties and responsibilities, the CGN Committee:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A detailed discussion of the CGN Committee’s procedures for recommending candidates for election as a director appears below under the caption Procedures of the Corporate Governance and Nominating Committee.
The CGN Committee is composed of four directors, each of whom is “independent” under the listing standards of NASDAQ. The members of the CGN Committee are Dr. Heron (Chair), Mr. Lapalme, Mr. Pyott and Dr. Slamon. The CGN Committee met four times during 2015.
The CGN Committee is governed by a written charter adopted by the Board, which was last amended in October 2014. The CGN Committee Charter can be found in the Corporate Governance section of the Investors section of our website at www.bmrn.com. The CGN Committee charter complies with the guidelines established by NASDAQ. Our Corporate Governance Guidelines can also be found in the Corporate Governance section of the Investors section of our website at www.bmrn.com. Information on our website is not incorporated by reference in this Proxy Statement. The charter of the CGN Committee grants the CGN Committee full access to all of our books, records, facilities and personnel, as well as authority to obtain, at our expense, advice and assistance from internal and external legal, accounting or other advisors and consultants and other external resources that the CGN Committee considers necessary or appropriate in the performance of its duties.
As required by its charter, the CGN Committee conducts a self-evaluation at least annually. The CGN Committee also periodically reviews and assesses the adequacy of its charter, including the CGN Committee’s role and responsibilities, and recommends any proposed changes to the Board for its consideration.
Procedures of the Corporate Governance and Nominating Committee
In connection with nominating directors for election at the Annual Meeting and periodically throughout the year, the CGN Committee considers the composition of the Board and each committee of the Board to evaluate its effectiveness and whether or not changes should be considered to either the Board or any of the committees. In supportThe full Board annually determines the diversity of this process,specific skills and characteristics that could improve the overall quality and ability of the Board to carry out its oversight of the Company and other functions.
In September 2018, the Board formalized its long-standing practice of considering women and minority candidates for open director positions by amending the Corporate Governance Principles to require that: | |
● | the Board consider the diversity of specific skills and characteristics (including, without limitation, areas of expertise, race, ethnicity and gender) necessary for the optimal functioning of the Board over both the short and long term; and |
● | the CGN Committee, and any search firm that it engages include, women and minority candidates in the pool from which the Board selects candidates for director. |
The Board has determined that the Board as a whole must have the right diversity, mix of characteristics and skills for the optimal functioning of the Board in its oversight of our Company. The Board believes that it should be composed of persons with skills and experience in areas such as:
|
|
|
|
|
|
|
|
|
|
| ●finance and accounting; ●manufacturing biotechnology and other pharmaceutical products; ●U.S. and international drug regulatory processes; ●intellectual property matters; ●compensation and corporate governance matters; and ●research and development. |
|
|
|
|
|
|
|
|
As part of our Board’s periodic self-assessment process, the CGN Committee implemented a process that requires the full Board to annually determine the diversity of specific skills and characteristics necessary for the optimal functioning of the Board over both the short and long term. Although our Board does not have a formal diversity policy, when evaluating director nominees or the possible addition of new directors, the CGN Committee considers the skill areas currently represented on the Board, as well as recommendations regarding skills that could improve the overall quality and ability of the Board to carry out its oversight of the Company and other functions.
Once the CGN Committee and the Board determine that it is appropriate to nominate a new director, either as a replacement or as a new director, the CGN Committee uses a flexible set of procedures infor selecting individual director candidates. The CGN Committee utilizes general guidelines that allow it to adjust the process to best satisfy the objectives it is attempting to accomplish in any director search. The first step in the general process is to identify the type of candidate the CGN Committee may desire for a particular opening, including establishing the specific target skill areas, experiences and backgrounds that are to be the focus of the director search. Once the target characteristics are identified, the CGN Committee determines the best method for finding a candidate who satisfies the specified criteria. The CGN Committee may consider candidates recommended by management, by the members of the CGN Committee, the Board, and stockholders, or the CGN Committee may engage a third party to conduct a search for possible candidates. In considering candidates submitted by stockholders, the CGN Committee will take into consideration the needs of the Board and the qualifications of the candidate.
In order Any stockholder recommendations submitted for a stockholder to have a candidate consideredconsideration by the CGN Committee a stockholder should submit a written recommendation that includes: (i) the name and record addressinclude verification of the stockholder (and beneficial owner, if any, on whose behalf the nomination is made) and evidencestatus of the stockholder’s and beneficial owner’s ownership of our stock, includingperson submitting the number of shares ownedrecommendation and the length of time of ownership; (ii) a description of any agreement, arrangement or understanding with respect to the nomination between or among such stockholder and/or such beneficial ownerrecommended candidate’s name and affiliates or others acting together; (iii) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions,qualifications for Board membership and borrowed or loaned shares) that has been entered into as of the date of the stockholder’s notice by, or on behalf of, such stockholder and/or such beneficial owners; (iv) a representation that the stockholder and/or any beneficial owner intends to appear in person or by proxy at the meeting to nominate the persons named in its notice; (v) whether the stockholder or any beneficial owner intends or is part of a group that intends to deliver a proxy statement and/or form of proxy to holders of at least the percentage of our outstanding capital stock required to elect the nominee and/or otherwise to solicit proxies from stockholders in support of such nomination; and (vi) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitation of proxies for election of directors pursuant to Section 14 of the Exchange Act. With respect to each person whom the stockholder proposes to nominate for election as a director, the stockholder must include (1) the name, age, business address and residence address of the director candidate, (2) the candidate’s resume or a listing of his or her qualifications to be a director (including principal occupation or employment), (3) the class or series and number of shares of stock which are owned beneficially or of record by the candidate, and (4) any other information relating to the candidate that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitation of proxies for election of directors pursuant to Section 14 of the Exchange Act. The notice must also be accompanied by a written consent of each proposed nominee to being named as a nominee if selected by the CGN Committee and nominated by the Board. Stockholder recommendations should be addressed to the CGN Committee in care of our SecretaryBoard, at the address set forth under the “Stockholder Communications with the Board of Directors” section of this Proxy Statement.105 Digital Drive, Novato, CA 94949, c/o G. Eric Davis, Executive Vice President, General Counsel and Secretary.
Once candidates are identified, the CGN Committee conducts an evaluation of qualified candidates. The evaluation generally includes interviews andas well as background and reference checks. There is no difference in the evaluation process offor a candidate recommended by a stockholder as compared to the evaluation process offor a candidate identified by any of the other means described above. While the CGN Committee has not established specific minimum criteria for a candidate, it has established important factors to consider in evaluating a candidate. These factors include: strength of character, mature judgment, business understanding, experience with the pharmaceutical and/or biotechnology industries, availability and level of interest, capacity to devote time to Board activities, career specialization, relevant technical skills, diversity, and the extent to which the candidate would fill a present need on the Board.
If the CGN Committee determines that a candidate should be nominated as a candidate for election to the Board, the candidate’s nomination is then recommended to the full Board, and the directors may in turn conduct their own review to the extent they deem appropriate. When the Board has agreed upon a candidate, such candidate is recommended to the stockholders for election at an Annual Meeting of stockholdersStockholders or appointed as a director by a vote of the Board as appropriate.
22 | 2020 Proxy Statement |
Proposal No. One: Election of Directors |
In addition, our Amended and Restated Bylaws (Bylaws), permit stockholders to nominate directors (i) for inclusion in our proxy materials and consideration at an Annual Meeting of Stockholders pursuant to our proxy access bylaw and (ii) for consideration at an Annual Meeting of Stockholders without being included in our proxy materials. For a description of the process for nominating directors in accordance with our Bylaws, see the section of this Proxy Statement titled,“Additional Information–Questions and Answers about these Proxy Materials and Voting,”including the information under the headings, “How can I recommend a director nominee for consideration by the CGN Committee?” and “When are other proposals and director nominations for next year’s Annual Meeting due?”
The Board’s Roles and Responsibilities
This section describes key corporate governance guidelines and practices that we have adopted. Complete copies of our Corporate Governance Principles, the charters of the committees of the Board and our Global Code of Conduct and Business Ethics described below may be found in the Corporate Governance section of the Investors section of our website atwww.bmrn.com. Alternatively, you can request a copy of any of these documents free of charge by writing to: G. Eric Davis, Executive Vice President, General Counsel and Secretary, c/o BioMarin Pharmaceutical Inc., 105 Digital Drive, Novato, CA 94949. Information on our website is NOT incorporated by reference in this Proxy Statement.
Board Leadership Structure
The Board believes that it is important to retain the flexibility to allocate the responsibilities of the offices of Chair of the Board (Chair) and Chief Executive Officer in any manner that it determines to be in the best interests of the Company and its stockholders. Accordingly, our Corporate Governance Principles specifically reserve for the Board the right to vest the responsibilities of Chair and Chief Executive Officer in the same individual. The Board reviews its leadership structure periodically as part of its annual self-assessment process. In addition, the Board continues to monitor developments in corporate governance as well as the approaches of our peers.
Following a careful review of its leadership structure in light of the composition of the Board, the Company’s size, the nature of the Company’s business, the regulatory framework under which the Company operates, and other relevant factors, and to better align the operational leadership of the Company, in 2015 the Board determined that combining the Chair and Chief Executive Officer positions under the leadership of Jean-Jacques Bienaimé would be in the best interests of the Company and its stockholders. This determination was based on the Board’s strong belief that, as the individual with primary responsibility for managing the Company’s day-to-day operations and with extensive knowledge and understanding of the Company, combining the roles of Chair and Chief Executive Officer in Mr. Bienaimé creates a clear line of authority that promotes decisive and effective leadership, both within and outside the Company. In making this judgment, the Board took into account its evaluation of Mr. Bienaimé’s performance as Chief Executive Officer and as a current member of the Board, his positive relationship with the other directors, excepthis vast expertise in the biopharmaceutical industry and proven track record of successful leadership, and the strategic perspective he would bring to the role of Chair.Mr. Bienaimé assumed the role of Chair effective immediately following the 2015 Annual Meeting.
TheChairis responsible for: | |
● | calling meetings of the Board; |
● | presiding at meetings of the Board; |
● | approving Board meeting schedules and meeting agendas, in consultation with the Lead Independent Director; |
● | approving Board meeting materials, in consultation with the Lead Independent Director; and |
● | being available for consultation with major stockholders. |
The Board recognizes the importance of having a Board structure that will continue to promote the appropriate exercise of independent judgment by the Board. In connection with the decision to combine the roles of Chair and Chief Executive Officer under Mr. Lapalme, whoBienaimé, the Board also created the position of Lead Independent Director to serve as a liaison between the Chief Executive Officer and the Independent Directors, and to facilitate discussions and deliberation among the Independent Directors in fulfilling their oversight responsibilities for the Company.
www.biomarin.com | 23 |
Proposal No. One: Election of Directors |
The Lead Independent Director coordinates the activities of the other Independent Directors and performs such other duties and responsibilities as the Board may determine. The Lead Independent Director Charter can be found in the Corporate Governance section of the Investors section of our website atwww.bmrn.com. Information on our website is not seeking re-electionNOT incorporated by reference in this Proxy Statement.
As outlined in the Lead Independent Director Charter, theLead Independent Directoris responsible for: | |
● | presiding at all meetings of the Board at which the Chair is not present, including executive sessions of the Independent Directors; |
● | serving as the principal liaison between the Chair and the Independent Directors; |
● | approving meeting agendas for the Board, in consultation with the Chair; |
● | approving the frequency of Board meetings and meeting schedules in consultation with the Chair, assuring there is sufficient time for discussion of all agenda items; |
● | working in collaboration with the CGN Committee and the Chair to recommend selection for the membership and chair position for each Board committee; |
● | interviewing, along with the chair of the CGN Committee, all director candidates and making recommendations to the CGN Committee; |
● | being available, when appropriate, for consultation and direct communication with stockholders; and |
● | on an annual basis, in consultation with the Independent Directors, reviewing the Lead Independent Director Charter and recommending to the Board for approval any modifications or changes. |
The Lead Independent Director Charter also grants the Lead Independent Director the authority to: | |
● | call meetings of the Independent Directors or meetings of the Board; |
● | retain outside advisors and consultants who report directly to the Board on Board-wide issues; and |
● | select, retain and consult with outside counsel and other advisors as the Lead Independent Director deems appropriate, at the Company’s sole expense. |
The Lead Independent Director is elected annually by a majority vote of the Independent Directors if the offices of Chair and Chief Executive Officer are held by the same person. In 2019, the Independent Directors determined that Richard A. Meier will continue to serve as the Lead Independent Director.
The Board, including each of its committees, also has complete and open access to any member of the Company’s management and the authority to retain independent advisors as the Board or such committee deems appropriate. In addition, all members of the Audit Committee, the CGN Committee, the Compensation Committee and the Science and Technology Committee are Independent Directors, and the committee chairs have authority to hold executive sessions without management and non-Independent Directors present.
Role of the Board in Risk Oversight
The Board is actively involved in the oversight of risks that could affect us. This oversight is conducted primarily through committees of the Board, but the full Board has retained responsibility for general oversight of risks. The Audit Committee is responsible for reviewing legal proceedings, litigation contingencies and other risks and exposures that could materially affect our financial statements and meets periodically with management to review our major financial risk exposures and the steps management has taken to monitor and control such exposures. The CGN Committee oversees and evaluates compliance by the Board and management with our Corporate Governance Principles, Global Code of Conduct and Business Ethics and Corporate Compliance and Ethics Program and reviews the Company’s risk management procedures for those areas deemed appropriate by the CGN Committee. The Compensation Committee reviews our incentive compensation arrangements to determine whether they encourage excessive risk taking, reviews and discusses at least annually the relationship between our risk management policies and practices and compensation, evaluates compensation policies and practices that could mitigate any such risk. The Board satisfies this responsibility through full reports by each committee chair regarding such committee’s considerations and actions, as well as through regular reports directly from officers responsible for oversight of particular risks.
24 | 2020 Proxy Statement |
Proposal No. One: Election of Directors |
Talent Management Succession Planning
Our Board regularly reviews short- and long-term succession plans for the Chief Executive Officer and for other senior management positions. Our executive leadership conducts annual performance assessments that include succession plans for each of our senior management positions. These succession plans are reviewed and approved by our Chief Executive Officer and the details of these succession plans, including potential successors of our executive officers are presented to the full Board.
Stockholder Communications with the Board of Directors
Our relationship with our stockholders is an important part of our corporate governance program. Engaging with our stockholders helps us to understand how they view us, to set goals and expectations for our performance, and to identify emerging issues that may affect our strategies, corporate governance, compensation practices or other aspects of our operations. Our stockholder and investor outreach includes investor road shows, analyst meetings, and investor conferences and meetings. Last year we hosted an investor day that stockholders were able to listen to via our website. We also communicate with stockholders and other stakeholders through various media, including our annual report and SEC filings, proxy statement, news releases, and our website. Our conference calls for quarterly earnings releases are open to all. These calls are available in real time and as archived webcasts on our website for a period of time. We also seek stockholder views on governance and other matters throughout the year, concentrating our efforts on our largest stockholders.
We continue to engage constructively with stockholders, and in recent years management has reached out to a large number of our top non-affiliated stockholders annually. For details regarding our stockholder outreach efforts specific to 2019, please see the“Proxy Overview—Stockholder Engagement”and“Compensation Discussion and Analysis — Recent Say-on-Pay Vote and Stockholder Feedback”sections of this Proxy Statement.
The Board has adopted a process for stockholders and others to send communications to the Board have been recommendedor any director. All such communications should be sent by mail addressed to the Board or any particular director at 105 Digital Drive, Novato, CA 94949, c/o G. Eric Davis, Executive Vice President, General Counsel and Secretary. All communications received by Mr. Davis will be sent directly to the Board or any particular director to whom such communication was addressed.
Committees of the Board of Directors
The Board has a number of committees that perform certain functions for the Board. The standing committees of the Board that meet regularly are the Audit Committee, the Compensation Committee, the CGN Committee and the Science and Technology Committee. Below is a description of each standing committee of the Board. Each of the committees has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities. The Board has determined that each member of each committee meets the applicable Nasdaq listing standards and relevant securities and other laws, rules and regulations regarding “independence” and that each member is free of any relationship that would impair his or her individual exercise of independent judgment with regard to our Company.
AUDIT COMMITTEE Chair:Robert J. Hombach Members:Elizabeth McKee Anderson, Elaine J. Heron, Ph.D., V. Bryan Lawlis, Ph.D. Meetings Held in 2019:7 |
The Board has a separately designated standing Audit Committee established in accordance with the rules of the SEC and Nasdaq. The Audit Committee is responsible for overseeing our accounting and financial reporting processes, internal control and risk management systems, internal and external audit functions and the audit of our financial statements, including reviewing:
● | financial information; |
● | our systems of internal accounting and financial controls; |
● | the annual independent audit of our financial statements; and |
● | the qualifications, independence and performance of our independent outside auditors for the purpose of preparing or issuing an audit report or performing other audit, review and attest services. |
www.biomarin.com | 25 |
Proposal No. One: Election of Directors |
Among other duties and responsibilities, the Audit Committee:
● | reviews and discusses with management and the independent auditors our annual and quarterly financial statements, and as appropriate, our disclosures contained under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our periodic reports to be filed with the SEC, earnings press releases and the substance of the financial information and earnings guidance provided to analysts and ratings agencies; |
● | determines whether to recommend to the Board inclusion of the audited financial statements in our Form 10-K filing; |
● | at the completion of the annual audit, reviews with management and the independent auditors the independent auditors’ audit and its report on the financial statements and internal control over financial reporting, comments and recommendations of the independent auditors, any significant changes in the auditors’ initial audit plan, and other matters related to the audit; |
● | reviews legal proceedings, litigation contingencies and other risks and exposures that could materially affect the financial statements and meets periodically with management to review our major financial risk exposures and the steps management has taken to monitor and control such exposures; |
● | reviews the independence of our auditors and appoints and, where appropriate, replaces our independent auditors; |
● | approves all arrangements and fees for work, including all audit, review and attest services and non-audit services, to be performed by the independent auditor’s firm prior to the commencement of the engagement; |
● | reviews with the independent auditors and, if appropriate, management, any management or internal control letter issued or proposed to be issued by the independent auditors and management’s response to such letter; |
● | reviews with management and any registered public accounting firm engaged to perform review or attest services, any material conflicts or disagreements between management and such accounting firm regarding financial reporting, accounting practices or policies or other matters; |
● | reviews with the independent auditors that firm’s assessment of our financial staff (including internal audit) and the adequacy and effectiveness of the our financial and accounting internal controls; and |
● | establishes and oversees procedures for the receipt, retention and treatment of complaints we receive regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters. |
The Audit Committee is currently composed of four directors: Mr. Hombach (Chair), Ms. Anderson, Dr. Heron and Dr. Lawlis. The Board annually reviews the Nasdaq listing standards’ definition of independence for Audit Committee members and has determined that all members of our Audit Committee are independent (as independence is currently defined in Nasdaq Listing Rules 5605(c)(2)(A)(i) and (ii)). The Board has determined that Mr. Hombach qualifies as an “audit committee financial expert,” as defined in applicable SEC rules. The Board made a qualitative assessment of Mr. Hombach’s level of knowledge and experience based on a number of factors, including his prior experience as the Chief Financial Officer of public companies and his experience and education in finance. In making this determination with respect to Mr. Hombach, the Board relied on his past business experience. Please see the description of the business experience for Mr. Hombach under the heading“Nominees for Director.”
The Audit Committee is governed by a written charter adopted by the CGNBoard, which was last amended in February 2016. The Audit Committee charter can be found in the Corporate Governance section of the Investors section of our website atwww.bmrn.com. Information on our website is NOT incorporated by reference in this Proxy Statement. The charter of the Audit Committee grants the Audit Committee full access to all of our books, records, facilities and personnel, as well as authority to obtain, at our expense, advice and assistance from internal and external legal, accounting or other advisors and consultants and other external resources that the Audit Committee considers necessary or appropriate in the performance of its duties.
As required by its charter, the Audit Committee conducts a self-evaluation at least annually. The Audit Committee also periodically reviews and assesses the adequacy of its charter, including the Audit Committee’s role and responsibilities, and recommends any proposed changes to the Board for re-election as our directorsits consideration.
26 | 2020 Proxy Statement |
Proposal No. One: Election of Directors |
COMPENSATION COMMITTEE Chair:Michael Grey Members:Robert J. Hombach, Alan J. Lewis, Ph.D., David E.I. Pyott, M.D. (Hon.) Meetings Held in 2019:6 |
The Compensation Committee is responsible for:
● | reviewing and recommending to the Board changes to the compensation of our Chief Executive Officer and approving the compensation for executives who report directly to the Chief Executive Officer; |
● | assisting the Board in its oversight of the development, implementation and effectiveness of our policies and strategies relating to our human resources function; |
● | overseeing our incentive compensation plans and equity-based plans; and |
● | preparing any report on executive compensation required by applicable rules and regulations. |
Among other duties and responsibilities, the Compensation Committee:
● | makes recommendations to the Board as to our general compensation philosophy and oversees the development and implementation of compensation programs (including salary, long-term incentives, bonuses, perquisites, equity incentives, severance arrangements, change of control related arrangements and other related benefits and benefit plans); |
● | makes recommendations to the Board regarding corporate performance goals and objectives relevant to the compensation of the Chief Executive Officer and sets performance goals and objectives relevant to the compensation of executives who report directly to the Chief Executive Officer and other senior management, and the type and amount of compensation (including any new compensation programs); |
● | evaluates, at least annually, the performance of the Chief Executive Officer relative to Board-approved goals and objectives, and recommends to the Board the Chief Executive Officer’s compensation and other terms of his or her employment based on this evaluation, and approves the compensation of executives who report directly to the Chief Executive Officer; |
● | considers the results of the most recent say-on-pay vote in reviewing and making recommendations to the Board with respect to our incentive compensation plans and equity-based plans; |
● | reviews material compensation programs applicable to our employees generally; |
● | reviews and makes recommendations to the Board regarding compensation for non-employee members of the Board; |
● | oversees all incentive compensation plans and equity-based plans and discharges any responsibilities imposed on the Committee by these plans; |
● | discusses with management periodically, as it deems appropriate, reports from management regarding the development, implementation and effectiveness of our policies and strategies relating to its human resources function and our regulatory compliance with respect to compensation matters; |
● | reviews and periodically approves the benefits and perquisites provided to the Chief Executive Officer and other senior management, as well as the employment, severance and change in control agreements relating to the Chief Executive Officer and other senior management; |
● | reviews our incentive compensation arrangements to determine whether they encourage excessive risk-taking, and reviews and discusses at least annually the relationship between our risk management policies and practices and compensation; |
● | reviews and recommends to the Board for approval the frequency with which we will conduct say-on-pay votes; and |
● | produces and provides to the Board an annual report of the Committee on executive compensation for inclusion in our annual proxy statement in accordance with applicable rules and regulations. |
The Compensation Committee is currently composed of four directors: Mr. Grey (Chair), Mr. Hombach, Dr. Lewis and Dr. Pyott. Dr. Lewis will be stepping down from the Compensation Committee on the date of the Annual Meeting andwhen his term as a director expires. The Board has determined that all members of our Compensation Committee are independent (as independence is currently defined in Nasdaq Listing Rule 5605(a)(2)).
www.biomarin.com | 27 |
Proposal No. One: Election of Directors |
The Compensation Committee is governed by a written charter adopted by the Board, which was last amended in June 2016. The Compensation Committee charter can be found in the Corporate Governance section of the Investors section of our website atwww.bmrn.com. Information on our website is NOT incorporated by reference in this Proxy Statement. The charter of the Compensation Committee grants the Compensation Committee full access to all of our books, records, facilities and personnel, as well as authority to obtain, at our expense, advice and assistance from internal and external legal, accounting or other advisors and consultants and other external resources that the Compensation Committee considers necessary or appropriate in the performance of its duties. In particular, the Compensation Committee has approved such recommendations.the sole authority to retain compensation consultants to assist in its evaluation of executive and director compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. Information regarding consultants engaged by the Compensation Committee is provided in the“Compensation Discussion and Analysis”section of this Proxy Statement.
ScienceUnder the Compensation Committee charter, the Compensation Committee may, in its discretion, delegate its duties to a subcommittee or to the Chair of the Compensation Committee.
As required by its charter, the Compensation Committee conducts a self-evaluation at least annually. The Compensation Committee also periodically reviews and Technologyassesses the adequacy of its charter, including the Compensation Committee’s role and responsibilities, and recommends any proposed changes to the Board for its consideration.
The performance and compensation process and specific determinations of the Compensation Committee with respect to executive compensation for 2019 and certain elements of compensation for 2019 are described in greater detail in the “Compensation Discussion and Analysis” section of this Proxy Statement.
Compensation Committee Interlocks and Insider Participation
During 2019, the Compensation Committee was composed of Mr. Grey (Chair), Mr. Hombach, Dr. Lewis and Dr. Pyott. No member of our Compensation Committee has ever been an executive officer or employee of us or any of our subsidiaries. None of our executive officers currently serves, or has served during the last completed fiscal year, on the compensation committee or Board of Directors of any other entity that has one or more executive officers serving as a member of our Board or Compensation Committee. During 2019, no members of our Compensation Committee had any relationships requiring disclosure by us under the SEC’s rules requiring disclosure of certain relationships and related party transactions.
CORPORATE GOVERNANCE AND NOMINATING COMMITTEE Chair:Elaine J. Heron, Ph.D. Members:Elizabeth McKee Anderson, Willard Dere, M.D., David E.I. Pyott, M.D. (Hon.) Meetings Held in 2019:5 |
The CGN Committee is responsible for:
● | overseeing the composition of the Board to ensure that qualified individuals meeting the criteria of applicable rules and regulations serve as members of the Board and its committees; |
● | overseeing the development and implementation of corporate governance principles, policies, codes of conduct and codes of ethics relating to the operation of the Board and its committees; |
● | making recommendations to the Board regarding such corporate governance issues; and |
● | keeping informed on issues related to corporate responsibility. |
Among other duties and responsibilities, the CGN Committee:
● | identifies, reviews and evaluates individuals qualified to serve on the Board consistent with criteria approved by the Board as vacancies arise and seeks out nominees to enhance the diversity, expertise and independence of the Board; |
● | considers and assesses the independence of directors, including whether a majority of the Board continue to be independent from management in both fact and appearance, as well as within the meaning prescribed by the listing standards of Nasdaq; |
● | recommends potential director nominees for selection by the Board; |
28 | 2020 Proxy Statement |
Proposal No. One: Election of Directors |
● | considers recommendations for Board nominees and proposals appropriately submitted by our stockholders; |
● | develops and recommends to the full Board corporate governance policies, requirements, criteria and procedures, including policies and procedures to facilitate stockholder communications with the Board; |
● | reviews related party transactions involving directors and executives for potential conflicts of interest and recommends courses of action as necessary; |
● | performs an annual evaluation of the Board and each committee of the Board; |
● | makes recommendations to the full Board concerning the appropriate size and needs of the Board, including regarding committees of the Board to be maintained or created and chairmanship and membership of the Board committees; |
● | at least annually, reviews and assesses our Corporate Governance Principles applicable to the Board and the Company and recommends to the Board from time to time any amendments to such principles; |
● | reviews and assesses our Global Code of Conduct and Business Ethics and Corporate Compliance and Ethics Program and recommends to the Board from time to time any amendments to such code and program; |
● | oversees and evaluates compliance by the Board and our management with our Corporate Governance Principles, Global Code of Conduct and Business Ethics and Corporate Compliance and Ethics Program |
● | reviews and approves all board memberships for a for-profit company, other commercial entity, or advisory board, for our Chief Executive Officer and other executive officers and directors, to assess whether such proposed membership creates or has the potential to create either a conflict of interest or an appearance of one |
● | implements, in conjunction with the Audit Committee, the internal audit function; |
● | establishes a toll-free telephone number for employees to anonymously report complaints relating to financial fraud, environmental hazards, illegal or unfair employment practices, and unethical behavior; |
● | reviews our risk management procedures for those areas deemed appropriate by the Committee; |
● | recommends guidelines to the Board for corporate succession planning as it relates to our Chief Executive Officer, if appropriate; and |
● | reviews and oversees related party transactions, as required by our Corporate Governance Principles. |
A detailed discussion of the CGN Committee’s procedures for recommending candidates for election as a director appears above under the caption“Identifying and Evaluating Candidates for Director.”
The CGN Committee is currently composed of four directors, each of whom is “independent” under the listing standards of Nasdaq. The members of the CGN Committee are Dr. Heron (Chair), Ms. Anderson, Dr. Dere and Dr. Pyott.
The CGN Committee is governed by a written charter adopted by the Board, which was last amended in December 2016. The CGN Committee Charter and our Corporate Governance Principles can be found in the Corporate Governance section of the Investors section of our website atwww.bmrn.com. Information on our website is NOT incorporated by reference in this Proxy Statement. The CGN Committee charter complies with the guidelines established by Nasdaq. The charter of the CGN Committee grants the CGN Committee full access to all of our books, records, facilities and personnel, as well as authority to obtain, at our expense, advice and assistance from internal and external legal, accounting or other advisors and consultants and other external resources that the CGN Committee considers necessary or appropriate in the performance of its duties.
As required by its charter, the CGN Committee conducts a self-evaluation at least annually. The CGN Committee also periodically reviews and assesses the adequacy of its charter, including the CGN Committee’s role and responsibilities, and recommends any proposed changes to the Board for its consideration.
www.biomarin.com | 29 |
Proposal No. One: Election of Directors |
SCIENCE AND TECHNOLOGY COMMITTEE Chair:Willard Dere, M.D. Members:Michael Grey, Elaine J. Heron, Ph.D., V. Bryan Lawlis, Ph.D., Alan J. Lewis, Ph.D., Dennis J. Slamon, M.D., Ph.D. Meetings Held in 2019:1 |
The Science and Technology Committee is responsible for assisting the Board in overseeing our operations. Among other duties and responsibilities, the Science and Technology Committee:
● |
| reviews matters relating to scientific capabilities and programs and reports to the Board regarding such review in order to help facilitate the Board’s oversight of our scientific technology, intellectual property portfolio and strategy and help promote our effective decision-making on |
● |
| reviews and considers management’s decisions regarding the allocation, deployment, utilization of, and investment in our scientific assets; and |
● |
| reviews and considers management’s decisions regarding acquiring or divesting scientific technology or otherwise investing in research or development programs. |
The Science and Technology Committee is currently composed of fivesix directors: Dr. LewisDere (Chair), Mr. Grey, Dr. Heron, Dr. Lawlis, Dr. Lewis and Dr. Slamon. In 2015,Dr. Lewis will be stepping down from the Science and Technology Committee met five times.on the date of the Annual Meeting when his term as a director expires.
The Science and Technology Committee is governed by a written charter, which was adopted by the Board in December 2012. The Science and Technology Committee charter can be found in the Corporate Governance section of the Investors section of our website atwww.bmrn.com. Information on our website is notNOT incorporated by reference in this Proxy Statement. The charter of the Science and Technology Committee grants it the resources and authority to select, retain, terminate, and approve the fees and other retention terms of special counsel or other experts or consultants, as it deems appropriate in the performance of its duties and responsibilities.
As required by its charter, the Science and Technology Committee conducts a self-evaluation at least annually. The Science and Technology Committee also periodically reviews and assesses the adequacy of its charter, including the Science and Technology Committee’s role and responsibilities, and recommends any proposed changes to the Board for its consideration.
Stockholder Communications withBoard Processes
Meetings of the Board of Directors
Our relationship with our stockholders is an important part of our corporate governance program. Engaging with our stockholders helps us to understand how they view us, to set goals and expectations for our performance, and to identify emerging issues that may affect our strategies, corporate governance, compensation practices or other aspects of our operations. Our stockholder and investor outreach includes investor road shows, analyst meetings, and investor conferences and meetings. Last year we hosted an investor day which stockholders were able to listen to via our website. We also communicate with stockholders and other stakeholders through various media, including our annual report and SEC filings, proxy statement, news releases, and our website. Our conference calls for quarterly earnings releases are open to all. These calls are available in real time and as archived webcasts on our website for a period of time. We also seek stockholder views on governance and other matters throughout the year, concentrating our efforts on our largest stockholders.
In 2015, we continued our concerted effort to engage constructively with stockholders. Management reached out to all of our top thirty non-affiliated stockholders at least twice during 2015 and had discussions with the majority of our top 20 stockholders at least once per quarter. We found our outreach to be enlightening and extremely informative.
The Board has adopted a process for stockholdersoversees our business. It establishes overall policies and others to send communications tostandards and reviews the performance of management. During the fiscal year ended December 31, 2019, the Board held six meetings. Each Board member attended 75% or any director. All such communications should be sent by mail addressed tomore of the aggregate meetings of the Board and of the committees on which he or any particularshe served, held during the period for which he or she was a director or committee member, respectively.
Executive Sessions
Applicable Nasdaq listing standards require that the Independent Directors meet from time to time in executive session. In fiscal year 2019, our Independent Directors met in regularly scheduled executive sessions at 105 Digital Drive, Novato, CA 94949, c/o G. Eric Davis, Executive Vice President, General Counsel and Secretary.which only Independent Directors were present.
Attendance at Annual Meeting
It is our policy to request that all Board members attend the Annual Meeting of Stockholders. However, we also recognize that personal attendance by all directors is not always possible. All communications received by Mr. Davis will be sent directly toten of the ten directors serving at the time of the 2019 Annual Meeting of Stockholders attended such meeting.
30 | 2020 Proxy Statement |
Proposal No. One: Election of Directors |
Other Board or any particular director.Governance Information
Global Code of Conduct and Business Ethics
The Board has adoptedCGN Committee regularly reviews our Global Code of Conduct and Business Ethics, which is applicable to all employees and directors, including our Chief Executive Officer, Chief Financial Officer, other executive officers and senior financial personnel. A copy of our Global Code of Conduct and Business Ethics is available in the Corporate Governance section of the Investors section of our website atwww.bmrn.com. Information on our website is notNOT incorporated by reference in this Proxy Statement. If we make any substantive amendments to our Global Code of Conduct and Business Ethics or grant any waiver from a provision of our Global Code of Conduct and Business Ethics to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website in accordance with the requirements of Item 5.05 of Form 8-K.
DirectorTransactions with Related Persons, Promoters and Officer Stock Ownership GuidelinesCertain Control Persons
The CompensationSince January 1, 2019, there has not been nor is there currently proposed any transaction or series of similar transactions to which we or one or more of our subsidiaries were or are to be a party in which the amount involved exceeds $120,000 and in which any director, executive officer, holder of more than 5% of our common stock, or any member of the immediate family of any of the foregoing persons, had or will have a direct or indirect material interest other than compensation agreements and other arrangements, which are described elsewhere in this Proxy Statement.
Review, Approval, and Ratification of Transactions with Related Parties
Our CGN Committee has approved stockprimary responsibility for reviewing and approving in advance or ratifying all related party transactions. Additionally, on at least an annual basis, the Audit Committee also reviews all identified related party transactions. In conformance with SEC regulations, we define related persons to include our executive officers, our directors and nominees to become a director of our company, any person who is known to us to be the beneficial owner of more than 5% of any class of our voting securities, any immediate family member of any of the foregoing persons, and any firm, corporation or other entity in which any of the foregoing persons is employed, is a general partner or in which such person has a 5% or greater beneficial ownership guidelines forinterest.
We have several processes that we use to ensure that we identify and review all related party transactions. First, each executive officer is required to notify either our General Counsel or Chief Financial Officer of any potential transaction that could create a conflict of interest, and the General Counsel or Chief Financial Officer is required to notify the CGN Committee of the potential conflict. The directors, Chief Executive Officer, Chief Financial Officer and Executive or Senior Vice Presidents, who have been approved by the Board. Under these guidelines, executivesGeneral Counsel are expectedrequired to use the shares of common stock obtained on the exercise of stock options or vesting of restricted stock units (RSUs) received to establish significant level of direct ownership in BioMarin. Newly elected directors and newly appointed or hired officers have three years to comply with their specific stock ownership guidelines.
The following table summarizes the guidelines for our directors and NEOs as of December 31, 2015:
|
| |
|
| |
| ||
| ||
| ||
| ||
| ||
| ||
| ||
|
| |
| ||
|
| |
| ||
| ||
| ||
|
|
|
The following charts summarize our directors’ and NEOs’ compliance with the guidelines as of December 31, 2015:
Compliance with our stock ownership guidelines is based on shares (including shares held in trusts for which the individual is the trustee and in a deferral account and issuable to such individual pursuant to our Nonqualified Deferred Compensation Plan) and unvested service-based RSUs and unvested earned performance-based RSUs held by a director or officer as of December 31, 2015, but it does not include unvested, unearned performance-based RSUs or vested or unvested options. The value of stock owned is calculated using the closing price of our common stock on December 31, 2015 ($104.76). All of our directors and NEOs were in compliance with our stock ownership guidelines as of December 31, 2015.
The Compensation Committee believes these stock ownership guidelines are an important tool in aligning the interests of our executives with the long-term interests of our stockholders. Although the guidelines are not mandatory, the Compensation Committee will consider compliance with the guidelines in setting an officer’s compensation andnotify the CGN Committee will consider compliance with the guidelines when making decisions on nominating directors for re-election. See the “Compensation Discussion and Analysis” section of this Proxy Statement for more information regarding these guidelines.
Anti-Hedging and Anti-Pledging Policy
The Board has approved an anti-hedging and anti-pledging policy forany potential transaction that could create a conflict of interest. Second, each year, we require our directors and executive officers. Under this policy, allofficers to complete director and officer questionnaires identifying any transactions with us in which the executive officer or director or their family members have an interest.
The CGN Committee reviews related party transactions due to the potential for such transactions to create a conflict of interest. A conflict of interest occurs when an individual’s private interest interferes, or appears to interfere, with our interests. Our Board or its committees only approve a related party transaction if it is determined that a transaction is in the best interest of the stockholders or is at least not inconsistent with those interests. This includes situations where the Company may obtain products or services of a nature, quantity or quality, or on other terms, that are not readily available from alternative sources or when the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party.
These policies and procedures are included in our Corporate Governance Principles, which are available in the Corporate Governance section of the Investors section of our website atwww.bmrn.com. Information on our website is NOT incorporated by reference into this Proxy Statement.
Indebtedness of Directors and Executive Officers
We have a policy not to lend money to our directors or executive officers andor associates of any director or executive officer. None of our directors are prohibited from engaging in short-sales, transactions in put or call options, hedging transactionsexecutive officers or other inherently speculative transactions in BioMarin stockassociates of any director or engaging in excessive margin and other pledging activities.executive officer is or at any time since January 1, 2019 has been indebted to us.
www.biomarin.com | 31 |
Proposal No. One: Election of Directors |
Summary of Independent Director Compensation
Our directors play a critical role in guiding our strategic direction and overseeing the management of BioMarin. The many responsibilities and risks and the substantial time commitment of being a director require that we provide adequate compensation commensurate with our directors’ workload and opportunity costs. Independent Directors receive a combination of annual cash retainers restricted stock grants and stock optionRSU grants in amounts that correlate to their responsibilities and levels of Board participation, including service on Board committees. The Board reviews our Independent Director compensation levels and program design annually for competitiveness against the confirmed executive compensation peer group (for 2019, the “2019 Peer Group” as set forth in “Compensation Discussion and Analysis—Compensation Adjustments and Peer Group Process” below). To assist with the Board’s review, Mercer LLC, an independent compensation consultant (the Compensation Consultant), prepares a comprehensive annual assessment of our Independent Director compensation program. The assessment includes benchmarking director compensation against the same peer group used for executive compensation purposes, an update in recent trends in director compensation and a review of related corporate governance best practices. Specifically, in 2019, the Compensation Consultant assessed the competitiveness of our director pay program relative to the 2019 Peer Group using a “typical director” profile approach. For this, the Compensation Consultant assumed a “typical director” profile as a director who is a non-chair member of the Audit Committee and the Chair of the Compensation Committee. The Compensation Consultant reviewed our Board and Committee governance structure as well as the total compensation for our non-employee directors relative to members of the 2019 Peer Group. The Compensation Consultant noted that the total compensation for our “typical director” was positioned between the 2019 Peer Group’s 25th percentile and median. After reviewing and discussing the Compensation Consultant’s report, the Board determined to make the changes to the annual cash compensation payable to members of the Audit Committee and Science and Technology Committees and annual equity award as described, but otherwise maintain the existing director pay structure and levels.
Highlights
● | We provide an annual limit on non-employee director compensation under the terms of the 2017 Plan. |
● | To align our directors’ interests with those of our stockholders, the annual equity award granted to non-employee directors, which vests in full on the date immediately prior to the date of the Company’s next regular annual meeting of stockholders (approximately on the one-year anniversary of the grant date), makes up the vast majority of total director compensation. |
● | To discourage short-term risk taking, beginning in September 2017, the annual equity award granted to non-employee directors is made in RSUs only and no longer includes stock options. |
● | To align director compensation with the duration of Board service, in September 2017, we eliminated the initial equity award previously granted to all new directors. Instead, new directors receive an RSU grant on the same terms as the annual award made on the date of our Annual Meeting of Stockholders, pro-rated to the nearest quarter for the time the new director is expected to serve prior to our next Annual Meeting of Stockholders. |
● | The annual cash compensation that the Company pays to its non-employee directors is based on their positions on the Board or the committees of the Board, and the Company does not compensate Board members on a per meeting basis. |
● | Our only employee director, Mr. Bienaimé, receives no separate compensation for his service as a director or Chair. |
32 | 2020 Proxy Statement |
Proposal No. One: Election of Directors |
Cash Compensation
The following table is a summary of the annual cash compensation payable to the Independent Directors in 2015.2019. Each applicable line item is an additional element of compensation.
Director Position |
| Annual Cash Compensation (1) |
| |
All Independent Directors |
| $ | 55,000 |
|
Independent Chair of the Board |
| $ | 65,000 |
|
Lead Independent Director |
| $ | 65,000 |
|
Audit Committee Chair |
| $ | 25,000 |
|
Audit Committee (Non-Chair) |
| $ | 12,000 |
|
Compensation Committee Chair |
| $ | 20,000 |
|
Compensation Committee (Non-Chair) |
| $ | 10,000 |
|
Corporate Governance and Nominating Committee Chair |
| $ | 15,000 |
|
Corporate Governance and Nominating Committee (Non-Chair) |
| $ | 7,500 |
|
Science and Technology Committee Chair |
| $ | 15,000 |
|
Science and Technology Committee (Non-Chair) |
| $ | 7,500 |
|
Liaison to Scientific Advisory Board |
| $ | 8,000 |
|
Director Position | Annual Cash Compensation(1) | ||
All Independent Directors | $ | 65,000 | |
Independent Chair of the Board (if applicable)(2) | |||
(premium in addition to Independent Director membership retainer) | $ | 65,000 | |
Lead Independent Director | |||
(premium in addition to Independent Director membership retainer) | $ | 65,000 | |
Audit Committee Member | $ | 13,500 | |
Audit Committee Chair | |||
(premium in addition to committee membership retainer) | $ | 13,000 | |
Compensation Committee Member | $ | 10,000 | |
Compensation Committee Chair | |||
(premium in addition to committee membership retainer) | $ | 10,000 | |
Corporate Governance and Nominating Committee Member | $ | 8,750 | |
Corporate Governance and Nominating Committee Chair | |||
(premium in addition to committee membership retainer) | $ | 10,000 | |
Science and Technology Committee Member | $ | 10,000 | |
Science and Technology Committee Chair | |||
(premium in addition to committee membership retainer) | $ | 10,000 |
(1) | The annual cash compensation that the Company pays to its Board members, other than Mr. Bienaimé, is based on their positions on the Board or the committees of the Board, and the Company does not compensate the Board members on a per meeting basis. Except for the |
(2) | The Independent Chair of the Board line item was not applicable in 2019 because the roles of the Chair and Chief Executive Officer were combined under Mr. Bienaimé. |
Equity Compensation
The Board reviewed the director compensation program in 2015 and determined to transition from a “fixed share” equity grant approach to a “fixed value” equity grant approach to better manage the Board’s equity competitiveness. Under this newWe continued to use the “fixed value” approach for the 2019 director equity grant.
Annual Award
On the date of our Annual Meeting of Stockholders, each Independent Directorre-elected director is automatically granted an initial equity grantRSUs valued at $550,000,$400,000, based on the Black-Scholes model valuation using a three-month30-day trailing average closing price of our common stock, with such valuation allocated forty percent (40%) tostock. For RSUs and sixty percent (60%) to options to purchase shares of our common stock ongranted before February 2020, the date that such person first becomes an Independent Director. The shares of common stock subject to the initial option grant and the initial RSU grant vest annually over three years. On the date of our Annual Meeting of stockholders, each re-elected director is granted an additional equity grant valued at $325,000, based on the Black-Scholes model valuation using a three-month trailing average closing price of our common stock, with such valuation allocated forty percent (40%) to RSUs and sixty percent (60%) to options. The shares of common stock subject to the additional annual option grant and the additional annual RSUs vest in full on the one-year anniversary of the grant date, and for RSUs granted after February 2020, the shares of common stock subject to the RSUs vest in full on the date immediately prior to the date of the Company’s next regular annual meeting of stockholders (approximately on the one-year anniversary of the grant date), in both cases, subject to each respective director providing services to the Company through the vesting date. These
The annual award amounts and vesting schedules were approved by the Board in June 2015 and were modified by the Board in December 2016 to include the following changes from 2014:following: (i) the initial equity grant of 4,000 RSUs and 10,000 options has been replaced by an equity grant with a fixed valuation and formulaic allocation between RSUs and options;stock options to purchase shares of our common stock shifted from forty percent (40%) RSUs and sixty percent (60%) stock options to a 50%/50% split, and (ii) the additionalannual award equity grant value increased from $325,000 to $375,000. As a result of 2,100 RSUs and 6,600 options has been replaced by anthe Board’s annual review of the Independent Director compensation program as described above, in September 2017, the Board modified the annual equity grant with a fixed valuationto be awarded in RSUs only, eliminating the stock
www.biomarin.com | 33 |
Proposal No. One: Election of Directors |
option component, and formulaic allocation between RSUs and options; and (iii)in September 2019, the shares of common stock subjectBoard increased the annual award equity grant value from $375,000 to the option grants vest annually over three years instead of quarterly over three years.$400,000. The additional option grant or RSU grantannual equity award for a director who has served for less than a year is prorated to the nearest quarter. TheseThe stock options and RSUs continue to vest only while the director serves onprovides services to the Board.Company. The exercise price per share of each of thesethe stock options is 100% of the fair market value of a share of our common stock on the date of the grant of the stock option. These stock options have a term of 10 years.
In fiscal year 2015, 8,8002019, 44,360 RSUs and options to purchase, in the aggregate, 29,700 shares of common stock were awarded to the Independent Directors under our Amended and Restated 2006 Share Incentive2017 Plan (the 2006 Share Incentive Plan).in connection with annual awards to our directors. Our Board members are eligible to enroll in our Nonqualified Deferred Compensation Plan under which participants may elect to defer all or a portion of their fees and RSU awards otherwise payable to them, and thereby defer taxation of these deferred amounts until actual payment of the deferral amounts in future years. The following table below lists actual compensation paid to each of the directors during 20152019, other than Mr. Bienaimé, who is also an NEO. Mr. Bienaimé’s compensation is described under the “Executive Compensation” section of this Proxy Statement. Mr. Bienaimé received no additional compensation for serving on our Board in 2015.2019.
As a result of the Board’s annual review of the Independent Director Compensationcompensation program as described above, in 2015September 2017, we also eliminated the initial equity award for new directors, and now new directors receive only an RSU grant on the same terms as the annual award, pro-rated to the nearest quarter for the time the new director will serve prior to our next Annual Meeting of Stockholders. Prior to September 2017, each Independent Director was granted an initial equity grant valued at $550,000, based on the Black-Scholes model valuation using a three-month trailing average closing price of our common stock, with such valuation allocated forty percent (40%) to RSUs and sixty percent (60%) to stock options to purchase shares of our common stock on the date that such person first becomes an Independent Director. The shares of common stock subject to the initial stock option grant and the initial RSU grant vest annually over three years. The initial award amounts and vesting schedules were approved by the Board in June 2015.
2019 INDEPENDENT DIRECTOR COMPENSATION
Name |
| Fees Earned or Paid in Cash ($) (1) |
|
| Stock Awards ($) (2) |
|
| Option Awards ($) (3) |
|
| Total ($) |
| ||||
Kenneth M. Bate |
|
| 88,500 |
|
|
| 134,497 |
|
|
| 206,448 |
|
|
| 429,445 |
|
Michael Grey |
|
| 78,500 |
| (4) |
| 134,497 |
| (4) |
| 206,448 |
|
|
| 419,445 |
|
Elaine J. Heron, Ph.D. |
|
| 79,750 |
|
|
| 134,497 |
|
|
| 206,448 |
|
|
| 420,695 |
|
Pierre Lapalme |
|
| 97,250 |
|
|
| 134,497 |
|
|
| 206,448 |
|
|
| 438,195 |
|
V. Bryan Lawlis, Ph.D. |
|
| 74,500 |
|
|
| 134,497 |
|
|
| 206,448 |
|
|
| 415,445 |
|
Alan J. Lewis, Ph.D. |
|
| 80,000 |
|
|
| 134,497 |
| (4) |
| 206,448 |
|
|
| 420,945 |
|
Richard A. Meier |
|
| 103,750 |
|
|
| 134,497 |
| (4) |
| 206,448 |
|
|
| 444,695 |
|
Dennis J. Slamon, M.D., Ph.D. |
|
| 71,875 |
|
|
| 134,497 |
|
|
| 206,448 |
|
|
| 412,820 |
|
William D. Young |
|
| 80,000 |
|
|
| 134,497 |
|
|
| 206,448 |
|
|
| 420,945 |
|
Name | Fees Earned ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Total ($) | ||||||
Elizabeth McKee Anderson | 39,250 | 373,254 | – | 412,504 | ||||||
Willard Dere, M.D. | 83,125 | 371,145 | – | 454,270 | ||||||
Michael Grey | 94,375 | (4) | 371,145 | (4) | – | 465,520 | ||||
Elaine J. Heron, Ph.D. | 105,875 | 371,145 | (4) | – | 477,020 | |||||
Robert J. Hombach | 100,750 | 371,145 | – | 471,895 | ||||||
V. Bryan Lawlis, Ph.D. | 87,125 | 371,145 | – | 458,270 | ||||||
Alan J. Lewis, Ph.D. | 94,375 | 371,145 | – | 465,520 | ||||||
Richard A. Meier | 139,375 | 371,145 | – | 510,520 | ||||||
David E.I. Pyott, M.D. (Hon.) | 83,750 | 371,145 | – | 454,895 | ||||||
Dennis J. Slamon, M.D., Ph.D. | 83,125 | 371,145 | – | 454,270 |
(1) | Director fees are generally paid quarterly in arrears within four weeks after the close of a quarter. Accordingly, |
| 2020 Proxy Statement |
Proposal No. One: Election of Directors |
(2) | The amounts in this column reflect the aggregate grant date fair |
Name | RSU Awards | ||
Elizabeth McKee Anderson | 4,490 | ||
| Willard Dere, M.D. |
| |
| Michael Grey |
| |
|
| ||
Elaine J. Heron, Ph.D. |
| ||
| Robert J. Hombach |
| |
V. Bryan Lawlis, Ph.D. |
| ||
Alan J. Lewis, Ph.D. |
| ||
Richard A. Meier |
| ||
David E.I. Pyott, M.D. (Hon.) | 4,430 | ||
Dennis J. Slamon, M.D., Ph.D. |
| ||
|
|
Name | Stock Option Awards | |
| – |
|
| 14,790 |
|
Michael Grey | 43,750 |
|
Elaine J. Heron, Ph.D. | 49,697 |
|
| – |
|
V. Bryan Lawlis, Ph.D. | 55,000 |
|
Alan J. Lewis, Ph.D. | 36,250 |
|
Richard A. Meier | 51,250 |
|
David E.I. Pyott, M.D. (Hon.) | 13,230 | |
Dennis J. Slamon, M.D., Ph.D. | 24,300 |
|
|
|
(4) |
|
(5) | Ms. Anderson and Mr. Hombach joined the Board after the September 2017 Board action described above, so all of their equity awards have been made in RSUs only and they have not been granted any stock options. |
EQUITY COMPENSATION PLAN INFORMATION
The following table provides certain information with respect to all of BioMarin’s equity compensation plans as of December 31, 2015.
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) |
|
| Weighted average exercise price of outstanding options, warrants and rights(1) ($) (b) |
|
| Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) |
|
| |||
Equity compensation plans approved by stockholders |
| 12,817,225 |
| (2) |
| 44.09 |
|
|
| 13,543,293 |
| (4) |
Equity compensation plans not approved by stockholders |
| 517,400 |
| (3) |
| 60.53 |
|
|
| — |
|
|
Total |
| 13,334,625 |
|
|
| 44.50 |
|
|
| 13,543,293 |
|
|
|
| 35 |
|
|
|
|
Table of ContentsPROPOSAL NO. TWO: ADVISORY VOTE ON EXECUTIVE COMPENSATION
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act) and Section 14AProposal No. Two: Ratification of the Exchange Act, the Company’s stockholders are entitled to vote to approve, on an advisory basis (non-binding), the compensationSelection of the Company’s NEOs as disclosed in this Proxy Statement in accordance with the SEC rules (commonly known as the “say-on-pay” vote). This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Company’s NEOs and the philosophy, policies and practices described in this Proxy Statement. At the May 2011 Annual Meeting, consistent with the Company’s recommendation, a majority of the shares voted to recommend that the Company hold an annual advisory vote on the compensation of the NEOs. The Company has acted, and intends to continue to act, in accordance with the 2011 vote.
The compensation of the Company’s NEOs subject to the vote is disclosed in the “Compensation Discussion and Analysis” section of this Proxy Statement, the compensation tables, and the related narrative disclosure contained in this Proxy Statement. As discussed in these disclosures, the Company believes that its compensation philosophy is to provide competitive overall compensation that attracts and retains top performers. To achieve these goals, our compensation program is structured to:
|
|
|
|
|
|
Accordingly, the Board is asking the stockholders to indicate their supportIndependent Registered Public Accounting Firm for the compensation of the Company’s NEOs as described in this Proxy Statement by casting a non-binding advisory vote “FOR” the following resolution:
“RESOLVED, that the Company’s stockholders hereby approve, on an advisory basis, the compensation of the Company’s Named Executive Officers, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, compensation tables and narrative discussion and any related material.”
The “Compensation Discussion and Analysis” section of this Proxy Statement contains more details on the Company’s executive compensation and we urge you to read it carefully before casting your vote on this proposal. Because the vote is advisory, it is not binding on the Company, the Board or the Compensation Committee of the Board. Nevertheless, the views expressed by the stockholders, whether through this vote or otherwise, are important to our management, the Board and the Compensation Committee and our management, the Board and Compensation Committee all intend to consider the results of this vote in making determinations in the future regarding executive compensation arrangements and the Company’s executive compensation principles, policies and procedures.
Advisory approval of this proposal requires the vote of a majority of shares cast by the holders of shares present in person or represented by proxy and entitled to vote at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL NO. 2.
PROPOSAL NO. THREE: RATIFICATION OF THE SELECTION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR BIOMARINBioMarin
The Audit Committee has selected KPMG LLP (KPMG) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 20162020 and has further directed that management submit the selection of the independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. KPMG has served as our independent registered public accounting firm since June 11, 2002. Representatives of KPMG plan to attend the Annual Meeting and will be available to answer appropriate questions from stockholders and, although they do not expect to do so, they will have the opportunity to make a statement if they so desire.
Neither the Company’s Bylaws nor other governing documents or law require stockholder ratification of the selection of KPMG as the Company’s independent registered public accounting firm. However, the Board is submitting the selection of KPMG to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain KPMG. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interest of the Company and its stockholders.
Independent Registered Public Accounting Firm
The following is a summary of the fees and services provided by KPMG to the Company for fiscal years 20152019 and 2014.2018.
Description of Services Provided by KPMG LLP |
| Year Ended December 31, 2015 |
|
| Year Ended December 31, 2014 |
|
| ||
Audit Fees: |
| $ | 1,643,757 |
| (1) | $ | 1,437,286 |
| (1) |
Audit Related Fees : These services relate to assurance and related services reasonably related to the performance of the audit or review of financial statements not included in Audit Fees above. |
| $ | 214,000 |
| (2) | $ | 136,774 |
| (3) |
Tax Fees : These services relate to the preparation of federal, state and foreign tax returns and other filings, as well as to the area of tax strategy and minimizing Federal, state, local and foreign taxes. |
| $ | — |
|
| $ | 52,155 |
| (4) |
All Other Fees : |
| $ | 1,587 |
| (5) | $ | 1,722 |
| (5) |
Description of Services Provided by KPMG LLP | Year Ended December 31, 2019 | Year Ended December 31, 2018 | ||||||
Audit Fees: | $ | 1,931,887 | (1) | $ | 2,133,059 | (1) | ||
Audit Related Fees: These services relate to assurance and related services reasonably related to the performance of the audit or review of financial statements not included in Audit Fees above. | $ | 8,388 | (2) | $ | 15,000 | (2) | ||
Tax Fees: These services relate to the preparation of federal, state and foreign tax returns and other filings, as well as to the area of tax strategy and minimizing Federal, state, local and foreign taxes. | $ | 241,753 | (3) | $ | 73,184 | (3) | ||
All Other Fees: | $ | 37,806 | (4) | $ | 19,744 | (4) | ||
Total Fees: | $ | 2,219,834 | $ | 2,240,987 |
(1) | Includes fees for non-routine transactions and comfort letters. |
(2) | Reflects fees for assurance services related to a |
(3) |
|
| Reflects fees for tax |
(4) | Reflects fees for assurance services not reasonably related to the performance of the audit or review the Company’s financial statements and |
|
|
The Audit Committee has the sole authority to approve the scope of the audit and any audit-relatedaudit related services as well as all audit fees and terms. The Audit Committee must pre-approve any audit and non-audit services provided by our independent registered public accounting firm. The Audit Committee will not approve the engagement of the independent registered public accounting firm to perform any services that the independent registered public accounting firm would be prohibited from providing under applicable securities laws, NASDAQNasdaq requirements or Public Company Accounting Oversight Board (PCAOB) rules. In assessing whether to approve the use of our independent registered public accounting firm to provide permitted non-audit services, the Audit Committee strives to minimize relationships that could appear to impair the objectivity of our independent registered public accounting firm. The Audit Committee will approve permitted non-audit services by our independent registered public accounting firm only when it will be more effective or economical to have such services provided by our independent registered public accounting firm than by another firm.
36 | 2020 Proxy Statement |
Proposal No. Two: Ratification of the Selection of the Independent Registered Public Accounting Firm for BioMarin |
The Audit Committee annually reviews and pre-approves the statutory audit fees that can be provided byto the independent registered public accounting firm. Any proposed services exceeding pre-set levels or amounts will requirerequires separate pre-approval by the Audit Committee, although our Acting Chief Financial Officer and Chief Accounting Officer can approve up to an additional $100,000 in the aggregate per calendar year for categories of services that the Audit Committee has pre-approved.global statutory audits. In addition, any pre-approved services for which no pre-approved cost level has been set or which would exceed the pre-approved cost by an amount that would cause the aggregate $100,000 amount to be exceeded must be separately pre-approved by the Audit Committee.
The Audit Committee has delegated pre-approval authority to the Chair of the Audit Committee within the guidelines discussed above. The Chair of the Audit Committee is required to inform the Audit Committee of each pre-approval decision at the next regularly scheduled Audit Committee meeting.
All the services provided by KMPGKPMG during 20152019 were pre-approved in accordance with this policy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL NO. TWO. |
Report of the Audit Committee of the Board of Directors(1)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL NO. 3.
PROPOSAL NO. 4: A STOCKHOLDER PROPOSAL REQUESTING THAT BIOMARIN ISSUE A SUSTAINABILITY REPORT DESCRIBING BIOMARIN’S ENVIRONMENTAL, SOCIAL AND GOVERNANCE PERFORMANCE
A shareholderThe Audit Committee has informedreviewed and discussed the audited financial statements of the Company that he intends to present the non-binding proposal set forth below at the Annual Meeting. If the shareholder (or the shareholder’s qualified representative) is present at the Annual Meeting and properly submits the proposal for a vote, then the shareholder proposal will be voted upon at the Annual Meeting.
The Board has concluded that it cannot support this proposal for the reasons stated in the Board’s statement in oppositionwith management of the proposal, which is presented immediately followingCompany. In addition, the proposal and supporting statement.
The Company will promptly provideAudit Committee has discussed with KPMG the matters required to any shareholder the name, address and number of the Company’s voting securities heldbe discussed by Auditing Standard No. 1301,Communications with Audit Committees, as adopted by the person submitting this proposal upon receiving an oral orPCAOB. The Audit Committee has received from KPMG the written request to Investor Relations by telephone at (415) 455-7558, by email at IR@bmrn or by writing to Investor Relations, BioMarin Pharmaceutical Inc., 105 Digital Drive, Novato, CA 94949.
In accordance with federal securities laws, the shareholder proposal and supporting statement are presented below as submitted by the shareholder and are quoted verbatim. The Company disclaims all responsibility for the content of the proposaldisclosures and the supporting statement, including other sources referenced in the supporting statement.
SHAREHOLDER PROPOSAL AND SUPPORTING STATEMENT
|
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL NO. 4 FOR THE FOLLOWING REASONS:
We recognize the importance of environmental, social and governance (ESG) considerations and devote significant resources to environmental sustainability, focusing our efforts where they will have the greatest impact. We conduct our business in a socially responsible manner and in accordance with applicable ESG guidelines and we constantly review our operations to improve efficiency and reduce our environmental impact where appropriate. However, we believe that conducting a special review of ESG practices as requested by this proposal would be an inefficient use of our corporate resources. Further, we do not believe that separate reporting on these issues would provide meaningful benefits to our management or would provide sufficiently useful information to shareholders to justify its cost.
The proposal does not convey the burden on human resources or the considerable expense involved in preparing the report. We believe that to prepare and issue a formal report of the type sought by the proponent, who recommends it be prepared with reference to the Global Reporting Initiative G3 Sustainability Reporting Guidelines (the G3 Guidelines), would require significant time and expense (including the engagement of consultants with specialized expertise) and produce little added benefit to our shareholders. We believe that the G3 Guidelines are a voluminous, complex and vague reporting framework that would require a substantial investment of time and funds to evaluate and apply.
The proposed report would require BioMarin to greatly expand the variety of information we currently gather, analyze and disclose, significantly exceeding any requirements of the Securities and Exchange Commission, as well as additional disclosure requirements that have been or are expected to be enacted in accordancePCAOB regarding KPMG’s communications with the Dodd-Frank Wall Street ReformAudit Committee concerning independence and Consumer Protection Act. Thehas discussed with KPMG the independence of KPMG from the Company prefers,and its management. Based on the foregoing, the Audit Committee recommended to the Board that the audited financial statements be included in the exercise of our business judgment, to prudently allocate our resources and assets to the continued development of biopharmaceutical products for the benefit of our patients, to the enhancement of our business operations and to continue to support ESG initiatives that we believe will have the greatest impact, including those described below.
Additionally, we believe that the proponent’s claims that certain named competitors of the Company reportCompany’s Annual Report on ESG matters is an incomplete and unfair comparison. All of the companies the proponent cites in the proposal as providing sustainability reports—Johnson and Johnson, Pfizer, Abbott Laboratories—are many times larger than the Company. While certain of our largest competitors do report on their ESG related performance, the majority of our competitors do not. We compete against a multitude of publicly and privately held large and small companies around the world who do not report on ESG. Of the 13 companies included in our peer group for executive compensation purposes as disclosed in the “Compensation Discussion and Analysis” section of this Proxy Statement, we are only aware of one company that publishes a standalone ESG report, and the company is a significantly larger company than we are (measured by metrics such as revenue), and has significantly greater internal resources.
Although we do not believe that the reporting being suggested in this proposal would provide sufficient benefits to the Company or its stockholders to justify the costs, that should not be misunderstood as an indication that the Board or the Company are not focused on ESG issues. We agree that ESG-related matters are an important and worthwhile area of focus for the Company. We also believe in reporting our progress relating to our ESG initiatives on our Corporate and Social Responsibility section of the About Us section of our website at www.bmrn.com. In determining not to support the proposal, we are merely disagreeing with the requirement to undertake the costly and disruptive study proposed by the proponent and publish an ESG report that we do not believe offers meaningful benefits. This should not be interpreted as a lack of concern by the Board or the Company about ESG topics or implementing ESG-related practices, procedures or policies. In fact, we believe that our resources will be better devoted to continuing our commitment to ESG-related issues through continuation and expansion of the activities described below.
As described in the Corporate and Social Responsibility section of our website at www.bmrn.com, at BioMarin we demonstrate responsibility through the decisions we make every day as we perform our job duties. Our patients, customers, shareholders, and fellow employees depend on us to adhere to the highest standards of business ethics. Our personal and professional integrity contributes to fostering an ethical culture and ultimately, to our performance. We have a long history of dedication to responsible corporate citizenship, social responsibility and good governance practices and have devoted substantial resources to ESG initiatives, including in our facilities, as further highlighted below.
BioMarin is committed to conducting its operations and managing its products in a manner protective of the environment. In the course of BioMarin’s operations, chemical substances that are handled and used are regulated at the national, state, and local levels as hazardous substances or hazardous wastes. As such, BioMarin is required to comply with a wide range of requirements and is responsible for the proper handling and disposal of materials. BioMarin provides training and information pertaining to chemical substances, hazardous substances, and hazardous waste to facilitate a safe and healthy work environment and minimize any risks to Company operations. BioMarin is also engaged in a number of environmental initiatives at its corporate headquarters in San Rafael, California, its offices and manufacturing facilities. As just a few examples of our accomplishments that we believe have positively impacted the environmental footprint and overall sustainability of our business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our Board is responsible to the shareholders of the Company as a whole. In keeping with this mandate and for the reasons set forth above, we believe that preparing a sustainability report as requested by the proposal would not provide useful information to our shareholders and would not be an efficient use of our financial and human resources as the time and expense that would be incurred would divert personnel and resources from the Company’s business and operations, including the sustainability activities that such a report would be expected to highlight, and would not be in the best interests of the Company’s shareholders. As such, we urge our shareholders to vote against it.
Therefore, the Board believes that implementation of the proposal is unnecessary and not in the best interests of our Company and shareholders and recommends that the shareholders vote AGAINST it.
OTHER INFORMATION RELATED TO BIOMARIN, THE DIRECTORS AND EXECUTIVE OFFICERS
Security Ownership of Certain Beneficial Owners and Management
The table below sets forth certain information regarding the ownership of shares of our common stock as of March 18, 2016 (except as otherwise noted) by: (i) each current director and each nominee for director; (ii) each of the NEOs; (iii) all of our executive officers and directors as a group; and (iv) all those known by us to be beneficial owners of more than five percent of our common stock. Except as otherwise noted, the entities and individuals in this table have sole dispositive and voting power with respect to all the shares of our common stock beneficially owned by them, subject to community property laws, where applicable. The information with respect to each entity and individual specified was supplied or confirmed by such entity or individual or based upon statementsForm 10-K filed with the SEC. Except as otherwise indicated, the mailing addressSEC for each stockholder in the table below is c/o BioMarin Pharmaceutical Inc., 770 Lindaro St., San Rafael, CA 94901.
Name of Beneficial Owner |
| Number of Shares Beneficially Owned (1) |
|
| Number of Shares Subject To Options and Restricted Stock Units (2) |
|
| Total Number of Shares Beneficially Owned (3) |
|
| Percentage of Total Shares Outstanding (4) |
| ||||
Capital Research Global Investors (5) |
|
| 17,988,101 |
|
|
| — |
|
|
| 17,988,101 |
|
|
| 11.09% |
|
FMR LLC. (6) |
|
| 14,713,627 |
|
|
| — |
|
|
| 14,713,627 |
|
|
| 9.07% |
|
Sands Capital Management, LLC (7) |
|
| 11,637,466 |
|
|
| — |
|
|
| 11,637,466 |
|
|
| 7.17% |
|
The Vanguard Group (8) |
|
| 11,195,877 |
|
|
| — |
|
|
| 11,195,877 |
|
|
| 6.90% |
|
BlackRock, Inc. (9) |
|
| 9,333,617 |
|
|
| — |
|
|
| 9,333,617 |
|
|
| 5.75% |
|
Jean-Jacques Bienaimé |
|
| 247,231 |
| (10) |
| 2,200,241 |
| (11) |
| 2,447,472 |
|
|
| 1.49% |
|
Daniel Spiegelman |
|
| 44,374 |
|
|
| 75,610 |
|
|
| 119,984 |
|
| * |
| |
Jeff Ajer |
|
| 20,480 |
|
|
| 72,587 |
|
|
| 93,067 |
|
| * |
| |
Robert A. Baffi, Ph.D. |
|
| 113,645 |
| (12) |
| 256,035 |
|
|
| 369,680 |
|
| * |
| |
Henry J. Fuchs, M.D. |
|
| 57,922 |
|
|
| 261,028 |
|
|
| 318,950 |
|
| * |
| |
Michael Grey |
|
| 25,150 |
|
|
| 31,100 |
|
|
| 56,250 |
|
| * |
| |
Elaine J. Heron, Ph.D. |
|
| 34,525 |
|
|
| 38,600 |
|
|
| 73,125 |
|
| * |
| |
Pierre Lapalme |
|
| 31,650 |
|
|
| 96,100 |
|
|
| 127,750 |
|
| * |
| |
V. Bryan Lawlis, Ph.D. |
|
| 10,750 |
|
|
| 99,700 |
|
|
| 110,450 |
|
| * |
| |
Alan J. Lewis, Ph.D. |
|
| 16,400 |
|
|
| 31,100 |
|
|
| 47,500 |
|
| * |
| |
Richard A. Meier |
|
| 25,150 |
|
|
| 91,100 |
|
|
| 116,250 |
|
| * |
| |
David Pyott |
|
| — |
|
|
| — |
|
|
| — |
|
| * |
| |
Dennis J. Slamon, M.D., Ph.D. |
|
| 2,559 |
|
|
| 9,651 |
|
|
| 12,210 |
|
| * |
| |
All current executive officers and directors as a group (15 persons) |
|
| 682,912 |
|
|
| 3,460,501 |
|
|
| 4,143,413 |
|
|
| 2.50% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than 10% of a registered class of our equity securities to file reports of ownership and reports of changes in the ownership with the SEC. Executive officers, directors and greater than 10% stockholders are required by the SEC to furnish us with copies of all Section 16(a) filings they make.
To the best of our knowledge and based solely on a review of the copies of such reports furnished to us or written representation that no other reports were required, during the fiscal year ended December 31, 2015, all Section 16(a) filing requirements applicable to our officers, directors and greater than ten percent beneficial owners were complied with, except for2019.
Respectfully submitted on February 24, 2020 by the following:members of the Audit Committee of the Board of Directors:
Robert J. Hombach, Chair
Elizabeth McKee Anderson
Elaine J. Heron, Ph.D.
V. Bryan Lawlis, Ph.D.
(1) |
|
|
www.biomarin.com |
|
|
|
|
|
|
|
|
The following table sets forth certain information concerning our executive officers as of March 18, 2016.6, 2020.
Name | Age | Position with BioMarin | ||||
Jean-Jacques Bienaimé | 66 |
| Chief Executive Officer | |||
Jeff Ajer | 57 |
| Executive Vice President and Chief Commercial Officer | |||
Robert A. Baffi, Ph.D. | 64 |
|
| |||
G. Eric Davis | 49 |
| Executive Vice President, General Counsel and Secretary | |||
Henry J. Fuchs, M.D. | 62 |
| President of Worldwide Research & Development | |||
Brian R. Mueller |
| Senior Vice President, | ||||
|
|
| ||||
|
|
|
There are no family relationships between any of our directors and any of our executive officers. The biographical information for Mr. Bienaimé is set forth above under “Proposal No. One: Election of Directors – Nominees for Director.”
JEFF AJER Joined BioMarin in August 2005 Executive Vice President and Chief Commercial Officer |
Jeff Ajer joined BioMarin in August 2005 and currently serves as our Executive Vice President and Chief Commercial Officer. From October 2012 to January 2014, Mr. Ajer served as our Senior Vice President and Chief Commercial Officer. From April 2009 to October 2012, Mr. Ajer served as our Vice President, Commercial Operations, The Americas. Immediately priorAmericas, where he had responsibility for commercial operations throughout the Americas and led product marketing, reimbursement, and sales operations for BioMarin. Prior to joining BioMarin, Mr. Ajer served in various roles at Genzyme Corporation (Genzyme) beginning in November 2003 and lastly as Vice President, Global Transplant Operations at Genzyme Corporation.from December 2004 to August 2005. Mr. Ajer’s experience prior to Genzyme includes roles in sales, marketing and operations at SangStat Medical Corporation and ICN Pharmaceuticals.Pharmaceuticals, Inc. Mr. Ajer received both a B.S. in chemistry and an M.B.A. from the University of California, Irvine. Mr. Ajer is currently a director of Nektar Therapeutics, a public biopharmaceutical company.
ROBERT A. BAFFI, Ph.D. Joined BioMarin in May 2000 President of Global Manufacturing and Technical Operations |
Robert A. Baffi, Ph.D.Ph.D., joined BioMarin in May 2000 and currently serves as our Executive Vice President of Global Manufacturing and Technical Operations, responsible for overseeing our manufacturing, process development, quality, and analytical chemistry departments. From December 2009 to June 2019, Dr. Baffi served as our Executive Vice President of Technical Operations and from 2000 to December 2009, Dr. Baffi served as our Senior Vice President of Technical Operations. Dr. Baffi served as a member of the board of directors of KaloBios Pharmaceuticals Inc. from November 2014 to November 2015. From 1986 to 2000, Dr. Baffi served in a number of increasingly responsible positions at Genentech, Inc., primarily in the functional area of quality control. Prior to Genentech, Dr. Baffi worked for Cooper BioMedical as a Research Scientist and at Becton Dickinson Research Center as a Post-Doctoral Fellow. Dr. Baffi has contributed to more than 20 regulatory submissions for product approval in the United States and Europe and to more than 50 regulatory submissions for investigational new drug testing. He currently serves on the board for the National Institute for Bioprocessing Research & Training. Dr. Baffi received a Ph.D., M. Phil and a B.S. in biochemistry from the City University of New York and an M.B.A. from Regis University.
38 | 2020 Proxy Statement |
Executive Officers |
G. ERIC DAVIS Joined BioMarin in March 2004 Executive Vice President, General Counsel and Secretary |
G. Eric Davis joined BioMarin in March 2004 and currently serves as our Executive Vice President, General Counsel and Secretary. From December 2005 to March 2016, Mr. Davis served as our Senior Vice President, General Counsel and Secretary and from 2004 to December 2005, Mr. Davis served as our Vice President, General Counsel and Secretary. From 2000 to 2004, Mr. Davis worked in the San Francisco office of Paul Hastings LLP (formerly Paul, Hastings, Janofsky & Walker LLP), where he served on the firm’s national securities practice committee. Mr. Davis has represented public and private companies and venture capital and investment banking firms in a wide range of corporate and securities matters, mergers and acquisitions, strategic alliance matters, and intellectual property-related business transactions. His experience involves a variety of industries, including biotechnology and life sciences. Mr. Davis received a B.A. in political economy from the University of California, Berkeley, and a J.D. from the University of San Francisco School of Law.
HENRY J. FUCHS, M.D., Joined BioMarin in March 2009 President of Worldwide Research & Development |
Henry J. Fuchs, M.D.M.D., joined BioMarin in March 2009 and currently serves as our President of Worldwide Research & Development. From December 2009 to October 2016, Dr. Fuchs served as our Executive Vice President and Chief Medical Officer. From March 2009 to December 2009, Dr. Fuchs served as our Senior Vice President and Chief Medical Officer. From September 2005 until December 2008, Dr. Fuchs served as Executive Vice President and Chief Medical Officer for Onyx Pharmaceuticals Inc., a biopharmaceutical company. Dr. Fuchs served as Chief Executive Officer of Ardea Biosciences, Inc. from January 2003 until June 2005. Dr. Fuchs first joined Ardea Biosciences, Inc. as Vice President, Clinical Affairs in October 1996 and was appointed President and Chief Operating Officer in November 2001. From 1987 to 1996, Dr. Fuchs held various positions at Genentech, Inc. where, among other responsibilities, he led the clinical program that resulted in the approval of Pulmozyme, a therapeutic for cystic fibrosis. Dr. Fuchs was also responsible for the Phase III development program that led to the approval of Herceptin to treat metastatic breast cancer. Dr. Fuchs received an M.D. degree from George Washington University and a B.A. degree in biochemical sciences from Harvard University. Dr. Fuchs is currently a director of Mirati Therapeutics, Inc., a public biopharmaceutical company, and was formerly on the board of Genomic Health, Inc., a public molecular diagnostics company. Dr. Fuchs was on the Board of Directors of Ardea Biosciences, Inc. from 1996company, until its acquisition by AstraZenaca PLCExact Sciences in 2012.November 2019.
BRIAN R. MUELLER Joined BioMarin in December 2002 Senior Vice President, Chief Accounting Officer and Acting Chief Financial Officer |
Brian R. Mueller joined BioMarin in December 2002 and currently serves as our GroupSenior Vice President Corporate Controller. Mr. Muellerand Acting Chief Financial Officer. Since March 2011 he has also served as our Chief Accounting Officer sinceOfficer. From August 2016 to January 2020, Mr. Mueller served as our Senior Vice President, Finance and from March 2011. From2014 to August 2016, Mr. Mueller served as our Group Vice President, Corporate Controller and from March 2009 to March 2014, Mr. Mueller served as our Vice President, Corporate Controller. Mr. Mueller is a member of the board of directors of Anthera Pharmaceuticals, Inc., a public biopharmaceutical company where he also servesserved as Chairman of the Audit Committee. Prior to joining BioMarin in 2002, Mr. Mueller worked for KPMG as a senior manager in the firm’s audit practice. Mr. Mueller joined KPMG after Arthur Andersen LLP ceased operations in June 2002, prior to which he spent seven years with Arthur Andersen LLP in the firm’s audit and business advisory services practice. Mr. Mueller received a B.S. in Accountancy from Northern Illinois University in DeKalb, Illinois, and is a member of the American Institute of Certified Public Accountants.
www.biomarin.com | 39 |
Daniel Spiegelman joined BioMarinProposal No. Three: Advisory Vote on Executive Compensation
The Company’s stockholders are entitled to vote to approve, on a non-binding advisory basis, the compensation of the Company’s NEOs as disclosed in May 2012this Proxy Statement in accordance with the Dodd-Frank Wall Street Reform and currently servesConsumer Protection Act (Dodd-Frank Act), Section 14A of the Exchange Act, and SEC rules (commonly known as the “say-on-pay” vote). This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Company’s NEOs and the philosophy, policies and practices described in this Proxy Statement. At the 2017 Annual Meeting, consistent with the Company’s recommendation, stockholders holding a majority of our Executive Vice Presidentshares voted to recommend that the Company hold an annual advisory vote on the compensation of the NEOs. The Company has acted in accordance with the 2017 vote by including this proposal and Chief Financial Officer. From May 2009 until May 2012, Mr. Spiegelman served as a consultantintends to continue to hold an annual advisory vote on NEO compensation.
The compensation of the Company’s NEOs subject to the vote is disclosed in the “Compensation Discussion and Analysis,” compensation tables, and related narrative disclosure contained in this Proxy Statement. The Company’s compensation philosophy is to provide strategiccompetitive overall compensation that attracts and retains top performers and aligns their interests with those of our stockholders. To achieve these goals, our compensation program is structured to:
● | provide total compensation and compensation elements that are competitive with companies with which we compete for talent; |
● | provide a mix of compensation that offers (i) a market competitive base salary, (ii) annual incentive compensation based on achieving defined corporate goals within 12 months, and (iii) the opportunity to share in the long-term growth of our company through equity compensation; and |
● | reward exceptional performance by individuals. |
Accordingly, the Board is asking the stockholders to indicate their support for the compensation of the Company’s NEOs as described in this Proxy Statement by casting a non-binding advisory vote “FOR” the following resolution:
“RESOLVED, that the Company’s stockholders hereby approve, on an advisory basis, the compensation of the Company’s Named Executive Officers, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC, including theCompensation Discussion and Analysis, compensation tables and narrative discussion and any related material.”
The “Compensation Discussion and Analysis” section of this Proxy Statement contains more details on the Company’s executive compensation; we urge you to read it carefully before casting your vote on this proposal. Because the vote is advisory, it is not binding on the Company, the Board or the Compensation Committee of the Board. Nevertheless, the views expressed by our stockholders, whether through this vote or otherwise, are important to our management, the Board and the Compensation Committee. Our management, the Board and Compensation Committee intend to consider the results of this vote in making decisions about executive compensation arrangements and the Company’s executive compensation principles, policies and procedures.
Advisory approval of this proposal requires support of a majority of votes cast by the holders of shares present in person or represented by proxy and entitled to vote at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL NO. THREE. |
40 | 2020 Proxy Statement |
Letter from our Compensation Committee
Dear BioMarin Pharmaceutical Inc. Stockholder:
We would like to thank you for your continued support of BioMarin. As directors and members of the Board’s Compensation Committee, we understand that we represent you, our stockholders, and we take our responsibilities very seriously. We continue to remain committed to developing an executive compensation program that attracts, motivates and retains key executives critical to the success of our business and the creation of long-term stockholder value. Our compensation program is structured to remain competitive with the companies with which we compete for talent, balance short- and long-term perspectives, reward exceptional individual and corporate performance and closely align the interests of our executives with those of our stockholders.
We are proud of BioMarin’s accomplishments in recent years, from both a financial managementand development perspective, and we believe our compensation program is designed to motivate our executives to continue the Company’s success. As in recent years, our revenues continued to climb in 2019, nearly doubling in five years from $890 million for fiscal year 2015 to over $1.7 billion for fiscal year 2019. We continued expanding our global commercial footprint with Palyzniq’s European approval in 2019, and our late-stage clinical product candidates like valoctocogene roxaparvovec for severe hemophilia A and vosoritide for achondroplasia recently achieved important regulatory and development milestones. Our development pipeline continues to produce earlier-stage, exciting potential therapies like two new gene therapies: BMN 307 for PKU and BMN 331 for hereditary angioedema, among others.
In 2019, we continued our active stockholder engagement efforts to ensure stockholder interests were incorporated into our planning process for the 2020 executive compensation program. Our outreach this past year followed our extensive outreach efforts in 2018, during which we sought to address concerns raised by stockholders after the disappointing outcome of our “say-on-pay” vote at our 2018 Annual Meeting of Stockholders. We believe the compensation changes we made in 2019 in direct response to stockholder feedback addressed many of the concerns raised by our investors, and we were pleased that our last say-on-pay proposal received support from 83% of the votes cast. In 2020, we continued to a portfoliomake changes to our executive compensation program to further align pay and performance and address feedback from stockholders. The changes we made for the 2019 and 2020 executive compensation programs are summarized below, and more complete descriptions are included in the section of publicthis Proxy Statement titled “Proxy Overview—Stockholder Engagement,” and private life science companies. From 1998in the “Compensation Discussion and Analysis” section that follows this letter.
● | Increased performance-based pay:We rapidly shifted the proportion of equity grants that are performance based. Starting with the equity grants made in March 2019, performance-based RSUs account for 50% of total long-term equity compensation, up from 30% in 2018. |
● | Enhanced alignment of pay and stockholder experience:Starting with the March 2019 grant, 50% of the performance-based RSUs are earned based on relative total shareholder return performance over a three-year period. Starting with the March 2020 grant, the other 50% of the performance-based RSUs will be earned based on other metrics intended to increase stockholder value: profitability (non-GAAP Income) and strategic corporate goals (product regulatory filings and approvals). |
● | Incentivized long-term stockholder value:Beginning with the March 2020 grant, 100% of performance-based RSUs will be earned based on the Company’s performance over a three-year period. |
We listened carefully to 2009, he served as Senior Vice Presidentyou, our investors, and Chief Financial Officerincorporated your feedback in the changes we made to executive compensation. We look forward to continuing the valuable dialogue with our stockholders, which informs our design of CV Therapeutics, Inc. where he was responsible for finance, accounting, investor relations, business development,an executive compensation program intended to drive BioMarin’s success and information systems. From 1991 to 1998, Mr. Spiegelman served in various roles at Genentech, Inc., most recently as Treasurer. He received a B.A. from Stanford University and an M.B.A. from the Stanford Graduate Schoolcreate long-term stockholder value.
Michael Grey | Robert J. Hombach | Alan J Lewis, Ph.D. | David E.I. Pyott, M.D. | |||
(Chair) | (Hon.) |
www.biomarin.com | 41 |
ContentsEXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The following Compensation Discussion and Analysis provides information about our 20152019 compensation program for our NEOs: the individuals who served as our principal executive officer, principal financial officer and three other most highly-compensated executive officers as of December 31, 2015, or the NEOs, each of whose2019. Each NEO’s compensation is set forth in the “Summary Compensation Table” and the other compensation tables included in this Proxy Statement. Our NEOs for fiscal year 2015 are2019 are:
● |
| Jean-Jacques Bienaimé, Chief Executive Officer; |
● |
| Daniel Spiegelman, Former Executive Vice President and Chief Financial |
● |
| Jeff Ajer, Executive Vice President and Chief Commercial Officer; |
● |
| Robert Baffi, |
● |
| Henry Fuchs, |
The Compensation Committee believes that our executive compensation program is appropriately designed and reasonable based on theto achieve our primary goal of providing appropriate incentives to attract and retain the executive talent necessary to advance our business of developing and commercializing innovative biopharmaceuticalstherapies for people with serious and life-threatening rare diseases and medical conditions and to increase shareholderstockholder value. The Compensation Committee also believes that our executive compensation program is responsibleappropriate in that it both encourages executive officers to work for meaningful stockholder return and reflects aour pay-for-performance philosophy, without encouraging our executive officers to assume excessive risks or resultingrisks.
2019 Business Highlights
In 2019, we achieved over $1.7 billion in excessive pay practices.
2015 was an outstanding year for BioMarin. In additiontotal revenues and reduced our GAAP Net Loss compared to 2018, while we concurrently made important advancements in our pipeline programs, the year featured extraordinary revenue growth, the strategic sale of our clinical oncology program to refocus on our core strengths, and the entering into of an agreement to acquire rights to phenylketonuria (PKU) treatments aimed toward globalizing BioMarin's leadership position in offering options to patients with PKU worldwide. programs.
Our key accomplishments in 20152019 included:
REVENUE | BIOMARIN-MARKETED PRODUCT SALES | |||
14% growth |
| |||
|
$1.704 billion in 2019 |
|
| Achieving 17% in revenue growth for products marketed by BioMarin(2), increasing from |
|
| |||
VALOCTOCOGENE ROXAPARVOVEC PROGRAM | DEVELOPMENT PIPELINE | |||
We submitted marketing applications for valoctocogene roxaparvovec, our |
priority review. |
|
|
|
|
In 2015, key product development accomplishments included the following:
|
|
|
| |||
PALYNZIQ APPROVAL AND EU LAUNCH | ||||
Following Palynziq’s approval and launch in the U.S. in 2018, the product was also approved by the European Commission in May 2019, and we began shipping Palynziq in the EU in the third quarter of 2019. |
(1) | On February 3, 2020, the Company announced that Mr. Spiegelman had stepped down as Executive Vice President and Chief Financial Officer, effective January 29, 2020. |
(2) | BioMarin-marketed product sales revenue is based on total net product revenue calculated in accordance with U.S. generally accepted accounting principles (U.S. GAAP), except that it excludes net product revenue attributable to Aldurazyme. (Revenue attributable to Aldurazyme is excluded because the product is commercialized by Genzyme Corporation (Genzyme), a wholly owned subsidiary of Sanofi S.A. (Sanofi), under a collaboration agreement with the Company. For further discussion regarding our collaboration with Genzyme, see “Major Commercial Products—Aldurazyme” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 27, 2020.) |
42 | 2020 Proxy Statement |
Executive Compensation |
Recent Say-on-Pay Vote and Stockholder Feedback
Our stockholders’ views and opinions on our executive compensation practices are extremely important to us. As a steward of good corporate governance, our Compensation Committee evaluates the design of our executive compensation program based on market conditions, stockholder views, and other governance considerations. We regularly engage with our stockholders through open dialogue and direct individual communication on topics related to the business, financial performance, corporate governance, and compensation of the Company. For details regarding our stockholder outreach efforts specific to 2019, please see the “Proxy Overview—Stockholder Engagement” section of this Proxy Statement. Stockholder feedback is important, and the information we glean from these engagements is highly valued. In recent years, the Compensation Committee considered this feedback in increasing the performance-based RSU component in the annual equity grants from 0% in 2014 to 50% of the total equity grant value in 2019 (up from 20%, 25%, 30% and 30% in 2015 through 2018, respectively).
As discussed elsewhere in this Proxy Statement, we sought feedback on our executive compensation program and made significant changes to our executive compensation program after the disappointing outcome of our “say-on-pay” vote at our 2018 Annual Meeting of Stockholders. We believe that the compensation changes we made in 2019 addressed many of the concerns raised by stockholders. We were pleased that our 2019 say-on-pay proposal received support from 83% of the votes cast, a significant increase from 56% in 2018. In 2020, we continued to make changes to our executive compensation program to further align pay and performance and address feedback from stockholders. How we changed our executive compensation and governance practices in direct response to what we heard from our stockholders over the past two years is described below:
Solution:We rapidly increased the proportion of performance-based restricted stock units (RSUs) as a percentage of total long-term equity compensation, from 30% in 2018 to 50% in 2019. |
● | Effective date: March 2019 |
● | The allocation of equity awards changed between 2018 and 2019 as follows: |
Feedback Addressed | Purpose of Change |
More of long-term compensation should be performance-based, rather than time-based. | Further tie compensation to performance of the Company. |
www.biomarin.com | 43 |
Executive Compensation |
Solution:100% of performance-based RSUs will be earned based on metrics other than revenue. |
● | Effective Date: March 2020 |
● | Instead of performance-based RSUs being earned based on revenue achievement (which was the case for 100% of such grants in 2018 and 50% in 2019), awards will be earned based on other metrics, as shown below: |
Feedback Addressed | Purpose of Change |
●Realized compensation has not always closely correlated to stockholder experience. ●Revenue determines a large proportion of short-term performance-based compensation (30% weight in 2019 annual cash incentive program), so revenue should not also determine long-term performance-based compensation. | ●More closely align realized compensation with stockholder return. ●Further focus management on goals in addition to revenue growth that also drive stockholder value. |
Solution:The metrics underlying 100% of performance-based RSUs will be measured using a three-year period. |
● | Effective Date: March 2020 |
● | Instead of a |
Feedback Addressed | Purpose of |
More of the performance-based compensation should be earned over a longer period. | Further incentivize long-term performance and tie compensation to achievement of long-term goals; encourage retention of key employees. |
Solution:We included more information in our proxy statements regarding the annual cash incentive program. |
● | Effective Date: April 2019 |
● | We provided significantly more details regarding the development goals for each clinical and pre-clinical program underlying the annual cash incentive program than in proxy statements filed before 2019. |
Feedback Addressed | Purpose of Change |
More details should be provided regarding the development goals underlying the annual cash incentive program. | Increase transparency in determining amounts earned under the annual cash incentive program and explain the philosophy behind the program’s design. |
44 | 2020 Proxy Statement |
Executive Compensation |
Highlights of Compensation Policies and Practices
Our Compensation Committee and Board have implemented compensation policies and practices designed to enhance governance of our executive compensation program and further our compensation objectives. These policies and practices include:
Annual Advisory Say-on-Pay Vote | Our Board elected to hold an annual advisory say-on-pay vote, consistent with the preference of our stockholders as | |
Compensation Committee Oversight; | The Compensation Committee regularly meets in executive sessions without management present. | |
Updated Equity Incentive Plan Features | Our 2017 Plan, which the stockholders approved at our 2017 Annual Meeting, contains a number of features that represent good corporate governance, including a limit on non-employee director compensation and restrictions on payment of dividends, among other stockholder-favorable features. | |
Independent Compensation Committee | The Compensation Committee is composed solely of Independent Directors. | |
Independent Compensation Consultant | The Compensation Committee has engaged an independent compensation consultant for advice on topics related to the Board and NEO compensation. The independent compensation consultant reports directly to the Compensation Committee, which has sole authority to direct the consultant’s work. | |
Policy Against Tax Gross-Ups | In March 2015, the Compensation Committee formally adopted a policy against granting tax gross-ups to executives going forward. In December 2016, our CEO voluntarily forfeited his right to income tax gross-up payments in connection with a change in control as provided in his then-current employment agreement. | |
Policy for Recoupment of Incentive | Our Policy for Recoupment of Incentive Compensation (Clawback Policy) provides for the | |
www.biomarin.com |
|
|
Executive Compensation |
Prohibition Against Hedging and Pledging of Securities | Our trading policy prohibits directors and employees from | |
Prohibition on Stock Option Repricing | Our equity incentive plans prohibit stock option repricing without stockholder approval. | |
Risk Management | Our executive compensation policies are structured to discourage inappropriate risk-taking by our executives. The “Compensation Risk Assessment” section below describes the Compensation Committee’s assessment that the risks arising from our company-wide compensation programs are reasonable and not likely to have a material adverse effect on BioMarin and that the programs are in | |
Securities Trading Policy | We maintain a comprehensive securities trading policy which provides, among other things, that our employees who possess material non-public information may not disclose, or trade while in possession of, such information or buy or sell our securities during any designated blackout period. Individuals classified as “Designated Insiders” (which include our NEOs) may not buy or sell our securities at any time without prior approval, except for sales under approved Rule 10b5-1 trading plans. | |
Stock Ownership Guidelines | We have established stock ownership guidelines for our executives to increase the link between the interests of executives and those of stockholders. | |
Transparent Equity Granting Process and Practices | The Compensation Committee grants equity awards annually to eligible employees according to a regular, pre-set schedule. |
Compensation Risk Assessment
We believe that risks arising from our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on the Company. In addition, the Compensation Committee believes that the mix and design of the elements of executive compensation do not encourage management to assume excessive risks.
The Compensation Committee, with the assistance of the Compensation Consultant, extensively reviewed the elements of executive compensation to determine whether any portion of executive compensation encouraged excessive risk taking and concluded:
● | significant weighting toward long-term incentive compensation discourages short-term risk taking; |
● | for most employees, base salary makes up a significant portion of compensation; |
● | the mix of short- and long-term compensation (base salary, annual cash incentive, equity grants) is consistent with |
● | goals are appropriately set to |
● | the |
● | stock ownership guidelines discourage excessive risk taking. |
Furthermore, as described later in this“Compensation Discussion and Analysis”section, compensation decisions include subjective considerations to moderate the effects that formulae or objective factors might have on excessive risk taking.
46 | 2020 Proxy Statement |
These and other recent accomplishments have contributed to the creationTable of significant value for our stockholders. Our strong performance is reflected in the appreciation of our stock price, which increased 14%, 102% and 294% over the one, three, and five-year periods ended December 31, 2015, respectively, as shown in the chart below.Contents
Executive Compensation |
In addition, as illustrated by the chart below, our common stock outperformed the NASDAQ Composite Index (U.S.) and the NASDAQ Biotechnology Index over the five-year period ended December 31, 2015.
The following is not deemed “filed” with the Securities and Exchange Commission and is not to be incorporated by reference into any filing we make under the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation by reference language in such filing.
| Fiscal Year Ending December 31, |
| ||||||||||||||||||||||
|
| 2010 |
|
| 2011 |
|
| 2012 |
|
| 2013 |
|
| 2014 |
|
| 2015 |
| ||||||
BioMarin Pharmaceutical Inc. |
| $ | 100.00 |
|
| $ | 127.66 |
|
| $ | 182.70 |
|
| $ | 261.23 |
|
| $ | 335.69 |
|
| $ | 389.01 |
|
NASDAQ Composite Index |
|
| 100.00 |
|
|
| 100.53 |
|
|
| 116.92 |
|
|
| 166.19 |
|
|
| 188.78 |
|
|
| 199.95 |
|
NASDAQ Biotechnology Index |
|
| 100.00 |
|
|
| 113.92 |
|
|
| 153.97 |
|
|
| 263.29 |
|
|
| 348.49 |
|
|
| 369.06 |
|
Compensation ObjectivesObjectives and Philosophy
We believe that the leadership of our current executive team has been instrumental to our success in 20152019 and prior years, and that an executive compensation program that attracts, motivates and helps retainretains key executives including our NEOs, is critical to the success of our business and to creating long-term stockholder value. Our compensation program is structured to achieve the following main objectives:
| Market Competitiveness | Long-Term Perspectives | Pay-for-Performance | Stockholder Alignment | ||||
Provide total compensation and compensation elements that are competitive with |
talent |
| Balance |
compensation |
|
|
and corporate performance |
|
|
To realize these objectives, we utilizeuse a balance of compensation elements and benefits, which are summarized in the table below and discussed in detail under “Elements of Compensation Package”.Package.” The focus of our compensation program is on total direct compensation opportunity (base salary, annual incentive compensation and long-term incentive compensation), with an explicit role for each element.
Purpose | ||||||||
Compensation Element | Market
| Balance
|
Performance | Stockholder
| ||||
Base Salary |
|
| ||||||
Annual Cash Incentive |
|
|
|
| ||||
Equity Grants |
|
|
|
| ||||
Limited Perquisites and Other Personal Benefits |
| |||||||
Potential Severance Benefits |
|
|
The Compensation Committee considered each of our compensation objectives in determining the 20152019 compensation of our executives, including the NEOs, as discussed in greater detail below. We provide our NEOs with competitive annual cash compensation in the form of salary and annual incentive,incentives but believe that a majority of our NEO compensation should be earned through long-term, equity-based incentives. Our focus on long-term, equity-based incentives is appropriate because of the lengthy time period required to develop pharmaceutical products, as well as the time required for pharmaceutical products to obtain regulatory approval on a worldwide basis and to reach peak sales.
During 2014, theThe Compensation Committee changed its compensation philosophy to be more focusedfocuses on providing NEOs and keyother executive officers with competitive compensation based upon all availableon a variety of factors, including the experience of the NEO, competitive market data and individual and corporate performance as opposed to targeting compensationperformance. Executive pay is not targeted to a specific market percentile. Using this approach, theThe Compensation Committee and the Board believesbelieve that theythis approach can more efficiently set NEO compensation to appropriately compensate each individual based on his or her skill and performance and/or expected future contribution to the Company’s business, and the performance of the Company as a whole.
www.biomarin.com | 47 |
Executive Compensation |
In 2015,2019, the compensation of our Chief Executive Officer, Mr. Bienaimé (whom we may also refer to in this discussion asand the Chief Executive Officer) and other NEOs consisted primarily of performance-based cash compensation and long-term incentives. For 2015, performance based2019, at risk, performance-based compensation (annual cash incentiveincentives and equity awards)awards, measured at target achievement) accounted for 93% of the total direct compensation of our Chief Executive Officer and 88%90% of the average total direct compensation of our other NEOs. In addition, during 2015 83%2019, 80% of the total direct compensation of our Chief Executive Officer and 79%80% of the average total direct compensation of our other NEOs was delivered through long-term incentives (option(stock option awards and RSUs).
CEO TOTAL COMPENSATION MIX IN 2019(1)
As a result of our emphasis on long-term incentive compensation, the compensation of our NEOs in 2015, and over the last three years, was closely aligned with the performance of our common stock over those periods. Both in 2015 and in the three-year period ended December 31, 2015, the year-over-year increases in NEO compensation was principally attributable to the increases in the grant date fair value of their RSU and stock option awards (as determined using the Black-Scholes model for valuing stock options), which reflect the significant appreciation of the price of our common stock on the NASDAQ Global Select Market over those periods.OTHER NEOs’ TOTAL COMPENSATION MIX IN 2019(1)(2)
(1) | Each percentage is calculated as a percentage of total compensation set forth in the“Summary Compensation Table”in this Proxy Statement and is based on the amounts in such table, including the “Target Payout” amounts in footnote (2) to such table. The amounts under “All Other Compensation” in the“Summary Compensation Table” in this Proxy Statement are not represented in the chart because such amounts as a percentage of total compensation round down to zero. Certain percentages are rounded up or down by less than 1% so that totals equal 100%. |
(2) | Percentages are calculated based on the sum of all other NEOs’ compensation. |
Compensation Adjustments
Recent Say-on-Pay and Stockholder Feedback
Our stockholders’ views and opinions on our executive compensation practices are extremely important to us. As stewards of good corporate governance, our Compensation Committee evaluates the design of our executive compensation program based on market conditions, shareholder views, and other governance considerations. We regularly engage with our stockholders through open dialogue and direct individual communication on topics related to the business, financial performance, corporate governance and compensation. Stockholder feedback is important, and the information we glean from these engagements is highly valued.
At our Annual Meeting of stockholders on June 9, 2015, we held a stockholder advisory vote on the compensation of our NEOs, commonly referred to as a say-on-pay vote. Our stockholders approved the compensation of our NEOs, with over 96% of stockholder votes cast in favor of our say-on-pay resolution.
In 2015, we continued our concerted effort to engage constructively with stockholders. Management reached out to all of our top thirty non-affiliated stockholders at least twice during 2015 and had discussions with the majority of our top 20 stockholders at least once per quarter. We found our outreach to be enlightening and extremely informative. As a result of feedback received from our stockholders,Each year, the Compensation Committee generally continued to apply the same effective principles and philosophy it has used in previous years in determining executive compensation. The Compensation Committee considered this feedback in increasing the performance-based RSU component in the 2016 annual equity grant (from 20% to 25%conducts a comprehensive analysis of the total equity grant value) as a regular part of the long-term incentive compensation for our NEOs and other executive officers.
The duties and responsibilities of the Compensation Committee are set forth above in the “Information Regarding Committees of the Board of Directors” section of this Proxy Statement and detailed in the charter of the Compensation Committee. The full text of the Compensation Committee Charter, as amended in March 2014, can be found in the Corporate Governance section of the Investors section of our website at www.bmrn.com. Information on our website is not incorporated by reference in this Proxy Statement. The composition of the Compensation Committee is determined by our Board, after a recommendation by the CGN Committee.
Highlights of Compensation Policies and Practices
Our Compensation Committee and Board have implemented compensation policies and practices designed to enhance governance of our executive compensation program and to further our compensation objectives. These policies and practices include:
|
| |
|
| |
| ||
|
| |
|
| |
| ||
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Independent Compensation Consultant
Pursuant to its charter, the Compensation Committee is authorized to select and retain independent advisors and counsel to assist it with carrying out its duties and responsibilities. We have provided appropriate funding to the Compensation Committee to do so. Since February 2014 the Compensation Committee has engaged Towers Watson (now known as Willis Towers Watson following a merger on January 4, 2016) as an independent adviser to the Compensation Committee (the Compensation Consultant). The Compensation Consultant conducted analysis and provided advice on, among other things, the appropriate peer group, executive compensation for our Chief Executive Officer and other executive officers, equity compensation, and compensation trends in the biotechnology industry.
The independent compensation consultants report directly to the Compensation Committee, which retains sole authority to direct the work and employ the Compensation Consultant. The Compensation Committee regularly reviews the services provided by the independent compensation consultant and believes that at all times the independent compensation consultant was engaged by the Compensation Committee, such engagement was consistent with NASDAQ listing standards and did not raise any conflict of interest. The Compensation Committee continues to monitor the independence of its independent compensation consultant on a periodic basis.
Compensation Adjustments and Peer Group Process
The implementation of our compensation philosophy is carried out under the supervision of the Compensation Committee. The compensation for our Chief Executive Officer is approved by our Board, after the Compensation Committee provides its analysis and recommendation. The Compensation Committee has direct responsibility for establishing the compensation for the direct reports to the Chief Executive Officer, including all of our executive officers. To assist the Compensation Committee, the Chief Executive Officer and the Executive Vice President, Human Resources make recommendations to the Compensation Committee as to specific elements (e.g., salary, annual cash incentive, equity awards) of compensation. Management, under the guidelines and policies established by the Compensation Committee, makes decisions on all aspects of compensation for non-executive officer employees.
Mr. Bienaimé, our Chief Executive Officer, Mr. Davis, our Executive Vice President, General Counsel and Secretary, and Mr. Ranieri, our Executive Vice President, Human Resources and Corporate Affairs, in addition to the Compensation Consultant, regularly attend portions of the Compensation Committee meetings for the purpose of providing analysis, information and management’s recommendations on various human resources and compensation matters. The members of management generally do not participate in the executive sessions of the Compensation Committee unless invited by the Compensation Committee to provide specific information during closed session. No individual member of management is present for votes related to such individual’s compensation.
As discussed in more detail below, in 2014, the Compensation Committee eliminated its prior practice of targeting compensation to a particular peer group percentile band. The Compensation Committee changed its practice to a more holistic analysis designed to provide competitive compensation necessary to attract and retain qualified executives, but acknowledging a greater focuswhile focusing on considering the qualification and performance of individual executives and the performance of the Company as a whole. This practice was reflected in the Company’s compensation decisions starting in December 2014.
We generally review our compensation practices on an annual basis over the course ofannually at several meetings of the Compensation Committee and the Board. The first stepTo ensure independence and candid communication, the Compensation Committee regularly meets with the Compensation Consultant in the process is that theexecutive sessions without management present.
48 | 2020 Proxy Statement |
Executive Compensation |
Peer Group Process
The Compensation Committee, with the support of the Compensation Consultant and management, reviews trends in biotechnology compensation practices and reviews and approves the list of peer companies used in the later stages of the process. As part of its analysis, for 2015,The Compensation Committee seeks input from management and the Compensation Consultant collected and analyzed compensation information from a comparative group of biotechnology companies, orto ensure the peer group approved by the Compensation Committee.is consistent with our current business model. The Compensation Committee evaluates the criteria used in establishing the peer group at least annually to ensure that it appropriately represents the companies competing with us to attract and retain talent. The Compensation Committee seeks input from management in additionthe best employees, which are necessary to the Compensation Committee’s independent compensation consultant to ensure the peer group is consistent with our current business model. In order to ensure independence and candid communication, the Compensation Committee regularly meets with the Compensation Consultant in executive sessions without management present.drive long-term stockholder value.
The list of companies in the peer group companies is approved based on various factors including size, market capitalization, development stage, of development, product revenue and product focus. Our criteriaThe peer group used to select the peer group we used in 2015set executive compensation for 2019 (the 2019 Peer Group) included commercial biotechnology and specialty pharmaceutical companies:companies with the following features:
|
|
candidates |
|
|
$5.0 billion |
| located predominantly in major biotechnology |
The Compensation Committee sets the ranges for the inclusion criteria to ensure that it will capture a broad set of companies. The Compensation Committee believes that this provides the best long-term trend data and minimizes year-to-year changes caused by excessive numbers of companies being added or removed due to acquisitions or product successes or failures or other major corporate events at member companies.events. The following table presents the peer group usedcompanies that make up the 2019 Peer Group, which has remained unchanged since 2016 (other than the elimination of Medivation, Inc., which was acquired by Pfizer Inc. in 2015 (the 2015 Peer Group)2016).
Alexion Pharmaceuticals, Inc. | Incyte Corporation |
| Seattle Genetics, Inc. | |
Alkermes plc | Ionis Pharmaceuticals | Shire plc | ||
| Jazz Pharmaceuticals plc |
| ||
|
| United Therapeutics Corporation | ||
Endo International plc. | Regeneron Pharmaceuticals, Inc. | Vertex Pharmaceuticals Incorporated | ||
| ||||
The Compensation Committee deliberately did not include in the 2019 Peer Group any companies outside the biotechnology and specialty pharmaceutical industries, such as contract research organizations and scientific instrument and materials manufacturing and testing companies. Those companies were excluded for the following reasons:
their business models are very different from biotechnology companies like BioMarin | they lack the growth and risk profiles of companies in the biotechnology and specialty pharmaceutical industries | they do not share common financial and operational characteristics of biopharmaceutical companies (for example, high gross margins and significant R&D expenses) |
As shown below, when comparing BioMarin against the companies making up its 2019 Peer Group (using data as of December 31, 2019), our number of employees falls between the median and the 75th percentile, our revenue falls between the 25th percentile and median, our market capitalization is approximately at the median, our total shareholder return (TSR) over the most recent 1 year is between the 25th percentile and the median and our TSR over the most recent 3 and 5 years is approximately at the median.
Employees | Revenue (in millions) | Market Capitalization (in millions) | 1-Year TSR | 3-Year TSR (annualized) | 5-Year TSR (annualized) | |||||||
75th Percentile | 3,150 | $4,784 | $36,770 | 36% | 25% | 9% | ||||||
50th Percentile (Median) | 1,928 | $2,160 | $15,824 | 16% | 2% | -1% | ||||||
25th Percentile | 1,356 | $1,135 | $5,010 | -14% | -12% | -9% | ||||||
BioMarin | 3,001 | $1,704 | $15,187 | -1% | 1% | -1% | ||||||
BioMarin Percentile Rank | 62% | 41% | 49% | 30% | 46% | 49% |
www.biomarin.com | 49 |
In addition to the analysisTable of the compensation data from the peer group, theContents
Executive Compensation |
The Compensation Committee also reviews the compensation levels and disclosed program design for executives of Amgen, Inc., Biogen Inc., Celgene Corporation, and Gilead Sciences, Inc., as we regularly compete with these companies for employees, particularly for senior positions. However, we generally do not utilize theuse compensation data from these companies whenin making pay decisions that directly impactingimpact the Chief Executive Officer or other NEO positions.
We reviewpositions because these companies’ revenues and make changes to our peer group from time to time to ensure that the peer group remains in compliance with our selection criteria. During 2015, as a result of acquisition activity, we removed Cubist Pharmaceuticals Inc., Pharmacyclics, Inc., Questcor Pharmaceuticals, Inc. and Salix Pharmaceuticals from the 2015 Peer Group. In order to maintain a robust sample size, in 2015 we added Alnylam Pharmaceuticals, Inc., Ionis Pharmaceuticals and Shire plc to the 2015 Peer Group.market capitalizations are significantly higher than BioMarin’s.
After the list of peer companies is approved, management presents the Compensation Committee with recommendations regarding proposed adjustments to compensation elements and a variety of supporting data, including comparative compensation information from the approved peer group and the Radford Global Life Sciences Compensation survey.survey and additional survey sources from the Compensation Consultant. This is presented individually for each executive officers,officer, including the NEOs, and based on classes of positionpositions for all other employees. Management and the independent compensation consultantCompensation Consultant each include significant supporting data with the presentation. These recommendations are discussed with and without management present and are discussed with the independent compensation consultant.Compensation Consultant. The Compensation Committee then determines what, if any, adjustments to the compensation elements are appropriate for employees other than the Chief Executive Officer.
The Compensation Committee also reviews the market information provided by the independent compensation consultant,Compensation Consultant, considers the Chief Executive Officer’s performance and experience and makes recommendations for adjustments to the Chief Executive Officer’s compensation. These discussions are conducted in executive sessions without involvement by management. The Compensation Committee then presents the recommendations for the Chief Executive Officer to the Board for consideration and approval. The Board must approve each of the Chief Executive Officer’s individual compensation elements.
Elements of 2019 Compensation Package
Our executive compensation program consists of the following three principal components:
Base Salary |
|
|
| |
Base salary rates are |
|
|
| Equity |
50 | 2020 Proxy Statement |
Executive Compensation |
The Compensation Committee uses its judgment to establish for each NEOestablishes a mix of current, short-term and long-term incentive compensation, and cash and non-cash compensation, that it believes is appropriate to achieve the goals of our executive compensation program and our corporate objectives as described above. Generally, the percentage of compensation at risk, either in the form of annual cash incentive or equity compensation, is higher for more senior employees than for those with more limited responsibility. Ourresponsibility, with our executive officers havehaving the highest percentage of their total compensation at risk and the highest percentage of total compensation allocated to equity compensation. We believe that this is appropriate as the more senior employees have more influence onover whether or not we achieve our strategic imperatives and long-term goals. In early 2019, we continued our move to enhance the link between pay and performance by increasing the proportion of performance-based equity we grant from 30% to 50% of the total equity grants for our NEOs, as shown in the graph below.
2014 TO 2019: INCREASING NEO PERFORMANCE-BASED EQUITY AWARDS
Base Salary
General Principles
We provide base salaries to our NEOs to compensate them with a fair and competitive base level of compensation for services rendered during the year. Base salaries for our NEOs are intended to be competitive with those received byof other individuals in similar positions at the companies with which we compete for talent, taking into consideration that certain of our executive officers have largerdiffering scopes of responsibilities than the market data positions. Base salaries are initially established atbased on the time the NEO is hired based onjob profile, individual experience, skills and expected contributions, the Compensation Committee’s understanding of what executives in similar positions at other peer companies were beingare paid at such time and are also the result of negotiations with certain executives during the hiring process.
The base salary of each NEO is reviewed annually and may be adjusted to reflect market conditions, the NEO’s performance during the prior year, the financial position of the company,Company and any change in scope of an NEO’s responsibilities. We believe that a competitive base salary is a necessary element of any compensation program that is designed to attract and retain talented and experienced executives. We also believe that attractive base salaries can motivate and reward executives for their overall performance.
Merit-based increases in base salary for all of our executive officers, other than our Chief Executive Officer, are approved by the Compensation Committee based uponon a recommendation from the Chief Executive Officer. Any merit-based increase in base salary for our Chief Executive Officer is approved by the Board and based uponon an assessment of his performance and a recommendation by the Compensation Committee input from the Chair of the Board and a review by the Compensation Committee of the base salary of chief executive officers in our peer group.
20152019 and 2020 Salaries
In reviewing our 20142018 performance and its impact on salary increases in 2015,2019, the Compensation Committee considered our financial performance andthe following: efforts in advancing our development programs, particularly obtainingour achievements in gaining regulatory approval of VIMIZIMPalynziq in the United States and the European Union in early 2014 for the treatment of patients with Morquio A, or mucopolysaccharidosis IVA, and the subsequent successful commercial launch of VIMIZIM, as well as our achievements inU.S., advancing talazoparib, pegvaliase, BMN 111, reveglucosidase alfa and cerliponase alfavaloctocogene roxaparvovec, vosoritide and our continued revenue growth.growth and expense control. The Compensation Committee also considered budget constraints as we continue to aggressively invest our cash flow from operations into our
www.biomarin.com | 51 |
Executive Compensation |
development programs, and the competitive market for recruiting and retaining top talent in our industry.
In addition, as a result of positive clinical results and strong business progress, our stock price appreciated 31% during 2014. Based on the Company’s 2014 performance, the Board and the Compensation Committee approved the following increases to the base salaries of Mr. Bienaimé and our other NEOs.
| Salary Adjustments Effective March 2015 |
| ||||||
Name |
| 2015 Salary($) |
|
| Increase from 2014 |
| ||
Jean-Jacques Bienaimé, Chief Executive Officer |
|
| 985,000 |
|
|
| 6.5% |
|
Daniel Spiegelman, Executive Vice President and Chief Financial Officer |
|
| 510,000 |
|
|
| 5.2% |
|
Jeff Ajer, Executive Vice President, Chief Commercial Officer |
|
| 450,000 |
|
|
| 5.9% |
|
Robert Baffi, Executive Vice President, Technical Operations |
|
| 455,000 |
|
|
| 7.1% |
|
Henry Fuchs, Executive Vice President and Chief Medical Officer |
|
| 570,000 |
|
|
| 6.5% |
|
In 2015, the Compensation Committee also engaged Willis Towers Watson to perform an independent review of Mr. Bienaimé’s compensation. As a result of this review and the Company’s strong 2015 performance as outlined in the “Executive Summary” above, the Compensation Committee determined that a 6.6% increase to Mr. Bienaime’s salary (from $985,000 to $1,050,000) was appropriate to ensure that Mr. Bienaimé’s salary remains competitive against the 2015 Peer Group. This increase was approved in December 2015 and became effective in March 2016.
Each NEO other than our Chief Executive Officer is also individually evaluated based on tenure, performance and other issuesfactors specific to the NEO. Based upon this reviewon the Company’s 2018 performance, in December 2018, the Board and Compensation Committee approved the 2019 salary adjustments for our NEOs as shown below, which became effective in March 2019.
In addition, based on the Company’s strong 20152019 performance as outlined in“2019 Business Highlights”above, including achieving over $1.7 billion in December 2015total revenues, increasing non-GAAP income(1) and narrowing GAAP loss, gaining regulatory approval of Palynziq in the EU, and achieving product development milestones, the Compensation Committee approved the following increases to the base salaries of our other NEOs, each of2020 salary adjustments shown below, which became effective in March 2016:2020.
2020 Salary Adjustments Effective March 2020 | 2019 Salary Adjustments Effective March 2019 | |||||||||
Name | 2020 Salary($) | Increase from 2019 | 2019 Salary($) | Increase from 2018 | ||||||
Jean-Jacques Bienaimé | ||||||||||
Chief Executive Officer | 1,260,000 | 4.1% | 1,210,000 | 4.3% | ||||||
Daniel Spiegelman | ||||||||||
Former Executive Vice President and Chief Financial Officer | N/A | (2) | N/A | (2) | 625,000 | 4.2% | ||||
Jeff Ajer | ||||||||||
Executive Vice President, Chief Commercial Officer | 610,000 | 4.3% | 585,000 | 4.5% | ||||||
Robert Baffi | ||||||||||
President, Global Manufacturing & Technical Operations | 620,000 | 6.0% | 585,000 | 4.5% | ||||||
Henry Fuchs | ||||||||||
President, Worldwide Research & Development | 750,000 | 7.1% | 700,000 | 3.7% |
(1) | For 2018 and 2019, we define non-GAAP Income as reported GAAP Net Income (Loss), excluding net interest expense, provision for (benefit from) income taxes, depreciation expense, amortization expense, stock-based compensation expense, contingent consideration expense and gain on sale of intangible assets. |
(2) | On February 3, 2020, the Company announced that Mr. Spiegelman had stepped down as Executive Vice President and Chief Financial Officer, effective January 29, 2020. |
NEO |
| 2016 Salary ($) |
|
| Increase from 2015 |
| ||
Mr. Spiegelman |
|
| 535,000 |
|
|
| 4.9% |
|
Mr. Ajer |
|
| 500,000 |
|
|
| 11.1% |
|
Dr. Baffi |
|
| 500,000 |
|
|
| 9.9% |
|
Dr. Fuchs |
|
| 600,000 |
|
|
| 5.3% |
|
The Board determined that higher base salary increases relative to the other NEOs were appropriate for Mr. Ajer and Dr. Baffi in light of their extraordinary efforts in 2015, projected workloads and responsibilities in 2016 and competitive landscape for their positions. With respect to Mr. Ajer, the Board determined that the exceeding of revenue targets for 2015 and the increasing scope of his responsibilities as our commercial operations continue to grow warranted his relatively larger base salary increase. With respect to Dr. Baffi, the Board determined that his increasing scope of responsibilities relating to the manufacture of our pipeline and commercial products, including expanded manufacturing operations in our Shanbally, Cork, Ireland facility, justified his relatively larger base salary increase.
General Principles and 2015the 2019 Program
We maintain a company-wide annual cash incentive program under which awards are generally based on corporate and individual performance. For 2015,Our program has one annual cash incentive pool, so we introduceddo not separately fund formal corporate and individual performance weightings for each level of employee in order to reflect achievement of individuals in addition to corporate achievement against company-wide goals. The weighting for corporate and individual performance varies based on the employee’s level, with higher weighting of corporate performance corresponding to more senior positions in the company.pools. We believe that this is appropriate as theallows for more senior employees have more influence on whether or not we achieve our strategic imperatives and long-term goals. Consistent with this philosophy, the NEOs’ annual cash incentive opportunities are primarily determined based on corporate performance, rather than individual performance. The Chief Executive Officer’s annual cash incentive is based 100% on corporate performance, and the other NEOs’managerial discretion in determining annual cash incentives are based 85%company-wide and encourages employees at all levels to focus on achieving corporate performance and 15% on their respective individual performance.goals. The Compensation Committee’s assessment of achievement of the corporate goals determines the sizefunding of the annualone cash incentive pool designated for corporate performance. The funding for the individual component is also set by the Compensation Committee, and it is intended to be above 100% so that exceptional individual performance can be rewarded.pool. The annual cash incentive is paid in the first quarter of each year, based on the Company’s and each employee’s performance in the prior year.
The annual cash incentive program, including corporate goals and target payouts by level, is generally reviewed and approved by the full Board in December at the time the Board considers the budget for the following year. The goals are prepared in an interactive process in which the Compensation Committee works with the Chief Executive Officer and other members of management to develop corporate performance goals that are set at levels that the Compensation Committee believes management can reasonably achieve if we, as a whole, execute on our business plan. The corporate goals are designed to reward specific activities that the Board and Compensation Committee believe will enhance long-term stockholder value by providing a foundation that will enable us to realize our long-term strategic plan. In setting these goals, the Compensation Committee seeks to provide appropriate annual incentives to achieve operational goals that directly support our longer-term goals of commercialization of new products and our long-term profitability. We feel that this type of structure motivates executives to challenge their teams to not only meet but exceed goals that ultimately create value for our stockholders. However, because many of the goals, particularly the development goals, are tied to activities intended to enhance long-term stockholder value, the achievement of any particular goal may not have a meaningful impact on our valuation during the cash incentive year.
52 | 2020 Proxy Statement |
Executive Compensation |
As in previous years, the corporate component of the 2015 cash incentive pool was determined by two main categories of corporate performance, achievement of financial goals and achievement of goals for our development programs during the measurement year. Each year, we determine the allocation of the target annual cash incentive between financial goals and development goals while recognizing that current and future stockholder value is dependent on the success of each element of our business, but that over the one yearone-year performance period of the annual cash incentive program, one aspect may be more important than the other. For 2015, inIn recognition of the importance of our clinical programs, we allocated the annual cash incentive 40% to financial goals and 60% to development goals. In addition,goals, which is the same allocation used in 20152018. We continued to include a feature that we introduced a newadded in 2015: the opportunity for an extra 0-20% of weighting for goal achievement for value creatingvalue-creating activities, such as strategic acquisitions and divestitures, which would only be awardable only if at least 80% of the financial and development goals were achieved. Accordingly, the total possible weighting of performance goals for the 20152019 cash incentive equaled 120%., the same as in 2018.
Financial Goals
With respect to the financial goals, the sales revenue goal payout for the annual cash incentive program was based on an accelerated scale, as in 2018, to emphasize the importance of revenue growth to the Company, to recognize the difficulty in exceeding the sales revenue goal and to be more in lineconsistent with how many other companies reward revenue overachievement. The researchof our peers. To incentivize cost control, progress toward GAAP profitability, and developmentincreased non-GAAP profitability, the R&D expense and sales, general and administrativeSG&A expense goal payout was based on aan accelerated scale instead of the traditional sliding scale.scale used before 2017. The threshold funding level remained at 50% (previously lowered from 70% in 2016) and the maximum funding level remained at 200% in 2019 (previously increased from 150% in 2016) to remain competitive with peer company practices and serve as a valuable incentive for employees and tool for recruitment and retention. See the table below for details on the payout scales for the financial goals.
Financial Goal | Threshold Achievement Level | Threshold Funding % | Target Achievement Level | Target Funding % | Maximum Achievement Level | Maximum Funding % | ||||||
Managed Sales Revenue(1)of $1,566 million | Revenue at least 75% of Target | 50% | Revenue 100% of Target | 100% | Revenue of 125% of Target | 200% | ||||||
R&D and SG&A Expenses(2)of $1,200 million | Expenses no more than 110% of Target | 80% | Expenses 100% of Target | 100% | Expenses of 80% Below Target | 200% |
(1) | 2019 Managed Sales Revenue is based on total net product revenue calculated in accordance with U.S. GAAP, except that it excludes net product revenue attributable to Aldurazyme. (Revenue attributable to Aldurazyme is excluded because the product is commercialized by Genzyme Corporation (Genzyme), a wholly owned subsidiary of Sanofi S.A. (Sanofi), under a collaboration agreement with the Company. For further discussion regarding our collaboration with Genzyme, see“Major Commercial Products—Aldurazyme” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 27, 2020.) The calculation of the actual result for the financial goals used the same foreign currency exchange rates used for developing such goals. |
(2) | The 2019 R&D and SG&A Expenses are calculated in accordance with U.S. GAAP, except that they exclude the annual cash incentive program and stock-based compensation expenses. The calculation of the actual result for the financial goals used the same foreign currency exchange rates used for developing such goals. |
Financial Goal |
| Threshold Achievement Level |
| Threshold Funding % |
| Target Achievement Level |
| Target Funding % |
| Maximum Achievement Level |
| Maximum Funding % |
Managed Sales Revenue of $734 million |
| Revenue 80% of Target |
| 70% |
| Revenue 100% of Target |
| 100% |
| Revenues of 115% of Target |
| 150% |
R&D and SG&A Expenses of $948 million |
| Expenses of 10% Above Target |
| 75% |
| Expenses 100% of Target |
| 100% |
| Expenses of 10% Below Target |
| 125% |
Development Goals
With respect to development goals (e.g., goals related to clinical and preclinical programs), the Board determines broad program expectations for our primary programs in Decemberthe first quarter of the prior year and indicative annual cash incentive weighting for each program. The broad goals may include, by way offor example, timing of initiation or completion of clinical trials, achieving specific enrollment goals, completing filings or other milestones with the FDA or similar regulatory agencies, achieving manufacturing targets, completing research programs, and similar events. We have not disclosed the specific program expectations as they are based on various strategic elements, each of which is confidential and theconfidential. The Compensation Committee has determined that disclosure of the goals could result in competitive harm to us. At the time the development goals are set, the Compensation Committee establishes the target levels for each of the goals to be reasonable “stretch” goals, with a maximum payout only in the event of superior performance.
In December or January, the Compensation Committee reviews ourthe prior year development programs and determines an annual cash incentive payout attributable to that aspect of our business. In making the determination, the Compensation Committee assesses each program individually and its total impact on the Company. Among others, theThe factors that the Compensation Committee considers in evaluating the achievement of each development goal include:
www.biomarin.com |
|
|
Executive Compensation |
● | our effectiveness |
● |
| our effectiveness in adapting to new data generated or other changes to the assumptions implementing the original development plan; and |
● |
| the overall value created by the development efforts. |
Based on this assessment, the Compensation Committee determines a percentage payout attributable to our development efforts. TheSimilar to the financial goals, the performance rating can be up to 150%200% of target. However, similar to the financial goals, if the Compensation Committee determines that the development performance does not meet a minimum achievement level, no annual cash incentive associated with the development programs will be paid. Notwithstanding the calculated annual cash incentive amount, the Compensation Committee has the discretionary authoritydiscretion to modify payouts for any particular goal or annual cash incentive pool in total in any manner thatas it deems appropriate based on factors such as the actual impact of development efforts in enhancing long-term stockholder value.
We believe that this process provides the greatest incentive to management and all employees to maximize the value of our development efforts and adapt to changing circumstancecircumstances dictated by data generated, corporate development activities or other events. In the past, we have used firm goals established at the beginning of a year, but the Compensation Committee believes that this process doesfirm goals may not appropriately recognize the fluid nature of drug development and cancould lead to unintended consequences. For example, if scientific findings suggest that it would be in the best interest of the Company to cancelterminate a program, the goal related to that program may be removed and other program goals may be substituted.
The table below describes our financial, development and value-creating activities goals for the cash incentive goals for 20152019 and our actual performance against those goals. During our stockholder outreach in recent years, some investors requested we provide greater detail regarding the development goals for each clinical and pre-clinical program underlying the annual cash incentive program. As a result of such feedback, below we have provided significantly more detail regarding the development goals than we have historically provided.
2019 PROGRAM GOALS AND RESULTS
2015 Program Goals and Results
Goal |
| Weight (% of Target Incentive) |
|
| Actual Result |
|
| Pool Contribution (1) (%) |
|
| |||
Financial Goals |
|
|
|
|
|
|
|
|
|
|
|
|
|
Managed Sales Revenue of $734 million (2) |
|
| 30% |
|
| $809.5 million |
|
|
| 40.2% |
|
| |
R&D and SG&A Expenses of $948 million (3) |
|
| 10% |
|
| $981.9 million |
|
|
| 9.1% |
|
| |
Sub-Total (Financial Goals) |
|
| 40% |
|
|
| — |
|
|
| 49.3% |
|
|
Development Goals |
|
|
|
|
|
|
|
|
|
|
|
|
|
Kyndrisa (drisapersen) |
|
| 20% |
|
| Exceeded goal |
|
|
| — |
|
| |
Vosoritide (formerly referred to as BMN 111) |
|
| 15% |
|
| Exceeded goal |
|
|
| — |
|
| |
Cerliponase Alfa (formerly referred to as BMN 190) |
|
| 10% |
|
| Met goal |
|
|
| — |
|
| |
Mid-Term Product Candidates: |
|
| 15% |
|
| Met goal |
|
|
| — |
|
| |
Talazoparib (formerly referred to as BMN 673) |
|
| — |
| (4) | n/a |
| (4) |
| — |
| (4) | |
Pegvaliase (formerly referred to as PEG PAL) |
|
| — |
|
| Met goal |
|
|
| — |
|
| |
Reveglucosidase alfa (formerly referred to as BMN 701) |
|
| — |
|
| Met goal |
|
|
| — |
|
| |
Sub-Total (Development Goals) |
|
| 60% |
|
|
|
|
|
|
| 68.7% |
| (5) |
Value-Creating Activities |
|
| 20% |
|
| Met goal |
|
|
| 12.0% |
| (6) | |
Total (Financial Goals, Development Goals and Value-Creating Activities) |
|
| 120% |
|
|
|
|
|
|
| 130.0% |
|
|
Goal | Weight (% of Target Incentive) | Actual Result | Pool Contribution(1) (%) | ||||||
Financial Goals | |||||||||
Managed Sales Revenue of $1,360 million(2) | 30 | % | $1,573 million | 30.7 | % | ||||
R&D and SG&A Expenses of $1,042 million(3) | 10 | % | $1,153 million | 12.0 | % | ||||
Sub-Total (Financial Goals) | 40 | % | 42.7 | % | |||||
Development Goals | |||||||||
Near-Term Value Drivers | |||||||||
Valoctocogene roxaparvovec: submit marketing authorizations | 20 | % | Exceeded goal | – | |||||
in the U.S. or Europe | |||||||||
Vosoritide: announce top line data from Phase 3 study | 15 | % | Exceeded goal | – | |||||
Palynziq: achieve regulatory review milestones | 10 | % | Exceeded goal | – | |||||
Mid-Term Value Drivers: | |||||||||
BMN 307: achieve regulatory submission milestones | 10 | % | Exceeded goal | – | |||||
BMN 250 and 290: determine paths forward for programs; | 5 | % | Exceeded goal | – | |||||
strategically reposition programs | |||||||||
Other: | |||||||||
Value-Creating Activities | 20 | % | Included | (4) | – | ||||
Sub-Total (Development Goals) | 80 | % | 117.3 | %(5) | |||||
Total(Financial and Development Goals) | 120 | % | 160.0 | % |
(1) | Based on actual |
|
| 2020 Proxy Statement |
Executive Compensation |
(2) | 2019 Managed Sales Revenue is based on total net product |
(3) |
|
(4) |
|
(5) | The Compensation Committee set the pool contribution for all development goals, including value-creating activities, at |
|
|
After determiningBased on the corporate goal achievement for 2015 was to be funded at 130% of target,results described above, the Compensation Committee determined to fund the individual component of theannual cash incentive pool at 125% to reflect the outstanding performance for 2015 at the individual level as well as the company-wide level.160% of target.
The 20152019 cash incentive targets for each NEO expressed as a percentage of base salary is determined by the employee’s position.position and set forth in the table below. The 2019 target percentages for all NEOs were unchanged from our disclosure in the Company’s previous proxy statement, except that in June 2019 the Compensation Committee increased Dr. Baffi’s target percentage from 60% to 65% in connection with his promotion to President of Global Manufacturing and Technical Operations in June 2019. The target amounts for the NEOs for 20152019 cash incentives (which were paid in March 2016)2020) are set forth in the table below. The Compensation Committee allocated a 125% individualthe standard annual cash incentive pool performance funding level for Messrs. Ajer, Spiegelman and Baffi in recognition of their outstanding performance during 2015.160% to all the NEOs, other than Dr. Fuchs. The Compensation Committee approved a higherbelieved that matching the corporate funding level was appropriate as these more senior employees had direct influence over whether we achieved company-wide strategic imperatives and long-term goals tied to the annual cash incentive program. The Compensation Committee allocated Dr. Fuchs an additional 22% funding level, or a 182% total funding level, to reward him for exceptional performance in 2019, including his instrumental roles in the Company obtaining European Commission approval of 135%Palynziq, progress made on the valoctocogene roxaparvovec and vosoritide clinical programs, submission of marketing applications for individual performancevaloctocogene roxaparvovec in the U.S. and the EU and identification and selection of BMN 331 as our newest product candidate for Mr. Ajer in recognition of his efforts behind the overachievement of sales revenue in 2015.a potential Investigational New Drug application submission. The specific cash incentive amount paid to each NEO for 20152019 is set forth below and is also included in the “Summary Compensation Table” in this Proxy Statement.
Name and Principal Position | 2019 Cash Incentive Target (% of base salary) | 2019 Individual Performance Funding Level | 2019 Cash Incentive Amount ($) | |||
Jean-Jacques Bienaimé | ||||||
Chief Executive Officer | 120% | 160% | 2,323,200 | |||
Daniel Spiegelman | ||||||
Former Executive Vice President and Chief Financial Officer | 60% | 160% | 600,000 | |||
Jeff Ajer | ||||||
Executive Vice President, Chief Commercial Officer | 60% | 160% | 561,500 | |||
Robert Baffi | ||||||
Executive Vice President, Technical Operations | 65% | 160% | 608,400 | |||
Henry Fuchs | ||||||
President, Worldwide Research & Development | 65% | 182% | 828,000 |
www.biomarin.com | 55 |
Name and Principal Position |
| 2015 Cash Incentive Target (% of base salary) |
|
| 2015 Corporate Goal Weighting |
|
| 2015 Corporate Goal Funding Level |
|
| 2015 Individual Performance Weighting |
|
| 2015 Individual Performance Funding Level |
|
| 2015 Cash Incentive Amount($) |
| ||||||
Jean-Jacques Bienaimé |
|
| 110% |
|
|
| 100% |
|
|
| 130% |
|
|
| — |
|
|
| — |
|
|
| 1,408,550 |
|
Jeff Ajer |
|
| 55% |
|
|
| 85% |
|
|
| 130% |
|
|
| 15% |
|
|
| 135% |
|
|
| 323,606 |
|
Daniel Spiegelman |
|
| 55% |
|
|
| 85% |
|
|
| 130% |
|
|
| 15% |
|
|
| 125% |
|
|
| 362,546 |
|
Robert A. Baffi, Ph.D. |
|
| 55% |
|
|
| 85% |
|
|
| 130% |
|
|
| 15% |
|
|
| 125% |
|
|
| 323,448 |
|
Henry J. Fuchs, M.D. |
|
| 55% |
|
|
| 85% |
|
|
| 130% |
|
|
| 15% |
|
|
| 125% |
|
|
| 405,199 |
|
Executive Compensation |
20162020 Program
In December 2015,February 2020, the Compensation Committee evaluated the annual cash incentive targets for the cash incentive opportunity for our NEOs for the 2016 cash incentive,2020, which areis payable in early 2017.2021. Based on the review, the Compensation Committee determined to increasemaintain the targetcurrent annual cash incentive target percentages for Messrs. Ajer, Spiegelman and Baffi by 5%, to a 60% target cash incentive in 2016. Additionally, the target annual cash incentive for Dr. Fuchs increased by 10%, to a 65% target cash incentive in 2016.all NEOs. The Compensation Committee believes that the annual cash incentive opportunities for each NEO areof the NEOs continue to be appropriate based on a combination of the relative experience and tenure of each NEO, as well as each of the NEO’s position within the Company and compensation practices within our industry.
We grant equity awards to virtually all newly hired employees, mainly in the form of RSUs. Additionally, we changed our equity award granting practices in 2014 to a performance-based approach as it relates to equity award allocation. Not all employees receive annual equity awards. All employees are eligible to receive annual equity awards, but theThe determination as to whether an employee does receivereceives an equity award is dependent uponas part of the Company-wide annual employee equity grant, and the amount of any such award, depends on the employee’s performance and level. Additionally, in orderAlso, to be eligible for an annual equity award, an employee must have been employed by the Companyfirst Monday in October of the previous year. We grant equity awards to virtually all newly hired employees, mainly in the form of RSUs below the vice president level and a mix of RSUs and options for six months priorvice presidents and above. Grants for new hires, with the exception of grants for executive officers reporting directly to the annual grant date. New hire grants for non-executivesChief Executive Officer, are approved by the Chief Executive Officer, subject to guidelines approved by the Compensation Committee. The guidelines are based primarily on competitive equity grant practices in our industry and market data. All other grants are approved by the Compensation Committee or the full Board.
2019 Annual Grant
The timing of the annual grant in 20152019 was made in March 2015. The timing of the annual grant was moved from the date of the Annual Meeting of stockholders to March in order2019 to coincide with employees’ year-end performance reviews and other compensation changes (base salary adjustment and annual cash incentive). The Board setsDetails regarding equity awards granted to the NEOs in March annual grant date at least 30 days2019 is set forth in advance to avoid the possibility“Grants of timing grants.Plan-Based Awards”table in this Proxy Statement.
Stock options have an exercise price equal to 100% of the fair market value of our common stock (the closing price of our common stock on the NASDAQNasdaq Global Select Market) on the date of the grant, so theygrant. They have value only to the extent that the market price of our common stock increases after the dategrant date.
Rapid Increase of the grant.Proportion of Performance-Based Awards
The allocation of equity awards between options and RSUs varies by employee and location. In most of the countries where we operate, all employees below vice president (VP) level that are granted equity awards receive RSUs only, whereas VPs and above receive a mix of RSUs and options.
In order toTo better align the interests of our senior executivesexecutive officers with those of our stockholders, in 2015 the Board implemented a new methodCompensation Committee has allocated an increasing portion of allocating theeach NEO’s annual equity grantgrants to senior executives (including our NEOs)performance-based awards since 2015. The allocation among three forms of equity awards (i.e.,(stock options, service-based RSUs and performance-based RSUs). The allocation among the different forms of equity awards was based on the Black-Scholes valuation model valuation using a three-month trailing average closing price of our common stock. For 2018 and 2017, the allocation was 40% stock with such valuation allocated forty percent (40%) to options, forty percent (40%) to30% service-based RSUs, and twenty percent (20%) to30% performance-based RSUs.
The This represents an increase in performance-based awards from the 2016 and 2015 equity compensation granted to senior executives (including our NEOs) in 2015 continues to include a substantial portiongrants of 25% and 20%, respectively in the form of stock options. Stock options grantedperformance-based RSUs. As discussed above, starting with the equity grants made in March 2019, we rapidly shifted the proportion of performance-based RSUs as a percentage of total long-term equity compensation. As reflected in the chart below, now 50% of long-term equity compensation is denominated in performance-based RSUs, up from 30% in the prior year.
56 | 2020 Proxy Statement |
Executive Compensation |
INCREASING NEO PERFORMANCE-BASED EQUITY AWARDS FROM 2015 TO 2019
20% -> 50% |
Performance-Based RSUs
To further align executive compensation with stockholder experience, we introduced a new type of performance-based RSUs for the March 2019 equity grant. These awards are earned based on total shareholder return compared to the NEOs vestperformance of companies that make up the Nasdaq Biotechnology Index over four years, whichthe three-year period of 2019 through 2021. This new type of performance-based RSUs made up 50% of the total performance-based RSUs granted in March 2019. The other 50% was granted in the form we believe provides an incentive to our NEOs to add valuehave used since 2015, using a 2019 revenue target performance condition. Under the terms of these awards, the number of performance-based RSUs earned is calculated by multiplying the target number of performance-based RSUs by a revenue multiplier.
The multiplier for the total shareholder return performance-based RSUs granted in March 2019 will be determined based on the Company’s performance during 2019 through 2021, measured as a percentile compared to the Companyaggregate performance of companies over the long-term.same period that made up the Nasdaq Biotechnology Index as of January 1, 2019 (with no changes to the comparator group during the performance period other than removing and not replacing any delisted or suspended companies). The multiplier used to determine the number of earned RSUs could range between 50% and 200%, with a threshold achievement level at the 25th percentile required for earning any RSUs and a ceiling achievement level at the 75th percentile. If BioMarin’s performance is above the 50th percentile but the Company’s total shareholder return is negative on an absolute basis over the three-year performance period, then the multiplier is capped at 100%. The total shareholder return performance-based RSUs vest in full on the third anniversary of the grant date, subject to the recipient’s continued service.
For the revenue performance-based RSUs granted in March 2019, the revenue target was $1.566 million of managed revenues (defined as the Company’s net product revenues, excluding net revenues attributable to Aldurazyme, and determined using fixed foreign currency exchange rates). (Revenue attributable to Aldurazyme is excluded because the product is commercialized by Genzyme, a wholly owned subsidiary of Sanofi, under a collaboration agreement with the Company. For further discussion regarding our collaboration with Genzyme, see “Major Commercial Products—Aldurazyme” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 27, 2020.) The revenue multiplier was determined based on the Company’s performance against the revenue target, which could range between 50% and 200%, with a threshold achievement level of 75% of target required for earning any RSUs and a ceiling achievement level of 125% of target. Based on the Company’s actual 2019 performance against the 2019 revenue target, the Company applied a multiplier of 102% to the target number of performance-based RSUs to determine the number of performance-based RSUs earned in 2019. The earned performance-based RSUs are subject to vesting at the rate of one-third on the anniversary of the grant date and one-third each anniversary of the grant date thereafter during the recipient’s continued service.
www.biomarin.com | 57 |
Executive Compensation |
Full Transition to Three-Year Performance Period As discussed above, beginning with the equity grants made in March 2020, 100% of performance-based RSUs will be earned based on the Company’s performance over a three-year period. |
Phase-Out of Revenue-Based Awards Also starting with the March 2020 grant, the performance-based RSUs that are earned based on revenue achievement (making up 50% of the total performance-based RSUs granted in March 2019) were phased out completely and replaced with awards that will be earned based on other metrics intended to increase stockholder value: profitability (non-GAAP Income) and strategic corporate goals (product regulatory filings and approvals). The awards based on total shareholder return, as described above, continued to make up 50% of the total performance-based RSUs granted in March 2020. |
Service-Based RSUs
The service-based RSUs awarded in 2015March 2019 are subject to a four-year service period, which is the same vesting schedule for service-based RSUs awarded as part of annual equity grants in recent years.
ForIn June 2019, the first time since 2012, ourCompany awarded Mr. Ajer and Dr. Baffi special retention grants of service-based RSUs. The Compensation Committee made the special grant to Mr. Ajer to recognize his extraordinary efforts supporting the commercial launch of Palynziq, among other accomplishments, and incentivize him to remain with the Company to support key, upcoming commercial initiatives. The Compensation Committee made the special grant to Dr. Baffi to recognize his extraordinary efforts supporting the production of Palynziq for commercial use, among other accomplishments, and incentivize him to remain with the Company to support key, upcoming technical operations initiatives. Mr. Ajer’s June 2019 grant of service-based RSUs vests in full on the third anniversary of the grant date, and Dr. Baffi’s vests in full on the second anniversary of the grant date, in each case, subject to the recipient’s continued service on the respective vesting date.
Stock Options
Stock options granted to the NEOs in 2019 vest over four years, which is the same vesting schedule for stock options awarded as part of annual equity grantgrants in recent years. We believe stock options further emphasize the pay-for-performance link and that the four-year vesting schedule provides our NEOs an incentive to senior executives (including our NEOs) in 2015 included performance-based RSUs. In furtherance of our goaladd value to achieve profitability in the near future, in 2015 the Board sought to incentivize senior executives to increase sales by granting RSU awards tied to achievement of a specified 2015 revenue target performance condition. Under the awards, the number of performance-based RSUs earned are calculated by multiplying the target number of performance-based RSUs by a revenue multiplier (determined based on the Company’s performance against the revenue target) which could range between 80% and 120%. In 2016, based on the Company’s actual 2015 performance against the revenue target, the Company applied a multiplier of 111% toover the target number of performance-based RSUs to determine the number of performance-based RSUs earned. The awards are subject to a three-year vesting period following the grant date.long term.
Compensation Committee Considerations
The equity compensation granted to the NEOs in March 20152019 was determined based uponon a number of factors. The Compensation Committee gave particular consideration to our performance, and also considered equity grants of the 20152019 Peer Group based on a Black-Scholes valuation and data from the Radford Life Sciences survey.survey and the Compensation Consultant. For a discussion of assumptions used in calculating the Black-Scholes valuation see Note 1816 to our financial statements for the year ended December 31, 2015,2019, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015,2019, as filed with the SEC on February 29, 2016. 27, 2020.
58 | 2020 Proxy Statement |
Executive Compensation |
In determining the allocation of stock options and RSUs (service-based and performance-based), the Compensation Committee considered a variety of factors, including the effect on the total number of shares to be issued under our equity plan, peer group practices and the comparative value of stock options and RSUs. Overall, the Compensation Committee sought to set equity compensation to be competitive in the market to retain the talent that the Company needs. The considerations in differentiating grants among the NEOs were principally level of responsibility and experience. The Committee also considered:
● |
|
● |
|
● |
|
● |
|
● |
| individual contribution; and |
● |
| expected future contribution. |
We have reviewed our historical stock option grant practices to consider if the stock options were properly dated. Based on such review, we believe that all stock options were issued on the date approved by the Board or a properly authorized committee and that the exercise price for each stock option issued since the date of our initial public offering was the closing price of our common stock on the date of issuance, unless the stock option grant specifically approved a different price in accordance with the terms of the applicable stock option plan pursuant to which such stock option was granted.
Other Benefits and Perquisites
In addition to base salary, annual cash incentive and equity grants, weWe provide a comprehensive benefits package, including health insurance, dental insurance, life insurance, disability insurance, a 401(k) matching program, and an employee stock purchase plan, which is intended to meet the requirements of Section 423 of the Code. These benefits are generally available to all employees, on an equal basis, including our NEOs. The 401(k) matching program matches 100% of an employee’s contribution up to the lesser of 6% of his or her annual salary or $12,000 per year,the IRS compensation limit, with immediate vesting of all 401(k) matches.
We purchase season and other tickets to sporting, cultural and other events for use in connection with our business. When these tickets are provided to executives (including our NEOs) for personal use, the value of the tickets is included in their compensation. Executives generally have first priority on such tickets. These tickets are not used for the entertainment of healthcare professionals.
We provide our NEOs, along with other officers, a limited number of perquisites. The specific perquisite amounts for each NEO for 2017, 2018 and 2019 are set forth under “All Other Compensation” in the“Summary Compensation Table”in this Proxy Statement.
An item is not a perquisite if it is integrally and directly related to the performance of the executive’s duties. An item is a perquisite if it confers a direct or indirect benefit that has a personal aspect, without regard to whether it may be provided for some business reason or for the convenience of the Company, unless it is generally available on a non-discriminatory basis to all employees.
We provide perquisites, including the following, perquisites to our NEOs:
● |
|
● | Reimbursement for Financial and Tax Planning and Preparation Services. We reimburse our executive officers, including our NEOs, for personal financial planning and tax preparation. The benefit is limited to $5,000 annually for our Chief Executive Officer, $3,500 annually for Senior Vice Presidents and Executive Vice Presidents and $2,500 annually for all other Vice Presidents and is taxable to the executive. The perquisite is intended to encourage and assist our executives to engage knowledgeable experts to assist with financial and tax planning. |
● |
| Life |
● |
| Health |
● | Financial Guidance. We offer our executive officers, including our NEOs, integrated financial counseling with a financial advisor. The taxable perquisite is intended to encourage our executives to engage knowledgeable experts to assist with their personal financial planning. |
www.biomarin.com | 59 |
Executive Compensation |
We also offer our executive officers severance benefits. See the “Post-Employment Obligations”“Post-Employment Obligations” section of this Proxy Statement below.
Nonqualified Deferred Compensation
Our NEOs, other members of management, and other highly-compensated employees and members of the Board are eligible to enroll in our Nonqualified Deferred Compensation Plan under which participantsthey may elect to defer all or a portionup to 100% of theirRSU awards and up to 50% of salary and annual cash incentive and RSU awards, otherwise payablein each case subject to them,limitations to allow us to make necessary withholding payments, and thereby defer taxation of these deferred amounts until actual payment of the deferral amounts in future years. This plan was implemented in 2006 as a financial planning tool for senior employees and allows them to save for retirement in a tax-effective way at minimal cost to us. The Board amended and restated the Nonqualified Deferred Compensation Plan on January 1, 2009 in order to comply with Section 409A of the Code (Section 409A), and related Treasury Regulations. The Nonqualified Deferred Compensation Plan was further amended on December 19, 2013 and October 7, 2014. See the table within the“Nonqualified Deferred Compensation Plan”” section of this Proxy Statement for detailed information regarding the account balances for each NEO.
Post-Employment Obligations
We have employment agreements with mostall of our executive officers (including all of our NEOs) that provide severance benefits if an executive terminates employment with us for a good reason specified in the employment agreement (e.g.(e.g., a change in work location of more than a specified distance from the previous location) or if the executive is terminated without cause or in connection with a corporate transaction or change in control. Additionally, pursuant to our Severance Plan, as amended and restated in October 2014 (the Severance Plan), all unvested option and restricted stock awards with time-based vesting granted to our full-time U.S. employees, including all our NEOs, automatically vest in full upon a change in control of the Company. In February 2016, we amended the Severance Plan to cover all full-time employees. The accelerated vesting occurs upon a change in control, whether or not the employee is terminated. Furthermore, the performance-based RSU awards granted to the NEOs in March 2015 provide that (i) if a change in control occurs before December 31, 2015, then the targeted number of RSUs vest immediately and (ii) if a change in control occurs after December 31, 2015 (when it is possible to determine the number of RSUs earned under such awards), then such amount of earned RSUs vest immediately. The performance-based RSUs granted to the NEOs in June 2011 and May and September 2012 provide that if a change in control occurs before December 31, 2015, any of the performance conditions that have not been met as of the change in control date will be deemed met and the shares will vest on the earlier of March 1, 2016 or the date the employee is terminated following the change in control. In addition, if an NEO other than the Chief Executive Officer terminates employment for a specified good reason or is terminated by us without cause not in connection with a change in control, then such NEO’s unvested time-based vesting equity awards and target amounts of performance-based equity awards vest for an additional 12 months following the termination date. If the Chief Executive Officer terminates employment for a specified good reason or is terminated by us without cause not in connection with a change in control, then all of the Chief Executive Officer’s unvested options vest in full. See the“Potential Payments Upon Termination or Change in Control”” section of this Proxy Statement for a more detailed discussion of the terms of these arrangements and the amounts payable to our NEOs under them.
We believe that these arrangements enhance retention in the face of the disruptive impact of a pendinghighly competitive industry and any possible change in control of the Company. In addition, the program is intended to align executive and stockholder interests by enabling executives to consider corporate transactions that are in the best interests of our stockholders and other constituents without undue concern over whether the transactions may jeopardize the executives’ own employment.
No post-employment benefits are payable to our NEOs under their employment agreements if their termination is for cause, for a voluntary resignation (other than as set forth above), retirement or due to death (except for a fully-paidfully paid whole life insurance policy with a stated death benefit of $500,000 maintained for Mr. Bienaimé). In order to
To remain competitive with peer company practices and serve as a valuable benefit for employee recruitment and retention, in June 2015 the Board adopted a policy for the acceleration of equity awards upon the death of an employee (including our NEOs). Upon the death of an employee, all the employee’s unvested equity awards with time-based vesting vest in full and all unvested equity awards with performance-based vesting vest in full as if the target values had been achieved, and such awards remain exercisable for one year after death. In addition, pursuant toAs of December 31, 2019, each of our Retirement BenefitNEOs was eligible for Directors and Officers policy adopted by the Board in May 2010 tothis benefit.
To reward long standinglong-standing service to the Company, officers and directors who served in such capacities for at least 54 months and reached age 59 before terminating service with the Company for any reason other than cause were permitted to exercise all their options that were both vested and outstanding as of the date of termination of service through the term of their options, as if their service were continuing. In FebruaryDecember 2016, we narrowedclarified the scope of the Retirement Benefit for Directors and Senior Officers policy by amending it so that it covers only directors and officers with a title of “Group Vice“Vice President” or above thatwho have a combined age and total term of employment (or service as director) of at least 65 years at the time of terminating service to the company for any reason other than cause are permitted to exercise all their stock options that were both vested and we also renamedoutstanding as of the policy “Retirement Benefitdate of termination of service through the term of their stock options, as if their service were continuing. As of December 31, 2019, all of the NEOs were eligible for Directorsthis benefit.
Furthermore, in December 2016, the Compensation Committee approved a new retirement benefit applicable to certain of the Company’s senior executives, including the NEOs, but specifically excluding the Chief Executive Officer. The retirement benefit provides that, upon a senior executive’s attainment of age 64 and completion of at least five years of service with the Company, (i) the executive’s then-unvested RSUs and (ii) RSU grants and non-qualified stock option award grants made after adoption of the retirement benefit (except award grants made pursuant to award agreements that specifically exclude the retirement benefit), whether time-based or performance-based, will continue to vest according to their terms, whether or not the executive’s service is continuing; provided, however, that the executive’s service is not terminated for cause. As of December 31, 2019, Dr. Baffi was the only NEO eligible for this benefit.
60 | 2020 Proxy Statement |
Executive Compensation |
Our Decision-Making Process
The Compensation Committee supervises the implementation of our compensation philosophy. The Compensation Committee charter requires that the Compensation Committee meet when deemed necessary or desirable by the Compensation Committee or its Chair, generally at least four times per year. The agenda for each meeting is usually developed by the Chair of the Compensation Committee, in consultation with our Chief Executive Officer, head of Human Resources, General Counsel and the Compensation Consultant. The Compensation Committee meets regularly in executive session. However, Mr. Bienaimé, our Chief Executive Officer, Mr. Davis, our Executive Vice President, General Counsel and Secretary, and Ms. Amy Wireman, our Senior Officers.” Vice President, Human Resources, in addition to the Compensation Consultant, regularly attend portions of the Compensation Committee meetings to provide analysis and information to assist the Compensation Committee with its recommendations on various human resources and compensation matters. The members of management generally do not participate in the executive sessions of the Compensation Committee unless invited by the Compensation Committee to provide specific information during closed session. No individual member of management is present for votes related to such individual’s compensation.
Compensation Committee
The duties and responsibilities of the Compensation Committee are set forth above in the“Information Regarding Committees of the Board of Directors” section of this Proxy Statement and detailed in the charter of the Compensation Committee. The full text of the Compensation Committee Charter, as amended in June 2016, can be found in the Corporate Governance section of the Investors section of our website atwww.bmrn.com. Information on our website is NOT incorporated by reference in this Proxy Statement. The composition of the Compensation Committee is determined by our Board, after a recommendation by the CGN Committee.
Compensation Consultant
The Compensation Committee is authorized to select and retain independent advisors and counsel to assist in carrying out its duties and responsibilities. The Company provides appropriate funding to the Compensation Committee to do so. The Compensation Consultant reports directly to the Compensation Committee, which retains sole authority to direct the work and employ the Compensation Consultant. The Compensation Committee regularly reviews the services provided by the Compensation Consultant and believes that the engagement was consistent with Nasdaq listing standards and does not raise any conflicts of interest. The Compensation Committee continues to monitor the independence of its Compensation Consultant on a periodic basis.
Since August 2016, Mercer LLC has served as the Compensation Consultant to the Compensation Committee. The Compensation Consultant conducts analyses and provides advice on, among other things, the appropriate peer group, executive compensation for our Chief Executive Officer and other executive officers, equity compensation, and compensation trends in the biotechnology industry. As part of its analysis, the Compensation Consultant collects and analyzes compensation information from a comparative group of biotechnology companies or “peer group” approved by the Compensation Committee. The Compensation Committee evaluates the criteria used in establishing the peer group at least annually, to ensure that it appropriately represents the companies competing with us to attract and retain talent and represents a sufficiently broad group to provide meaningful data trends across multiple years. The Compensation Committee seeks input from management in addition to the Compensation Consultant to ensure the peer group is consistent with our current business model. The peer group used for 2019 is discussed below.
In March 2020, the Compensation Consultant affirmed to the Compensation Committee that the total fees paid to it by BioMarin do not represent a significant concentration of its revenue for its most recent fiscal year, that it had policies in place to mitigate conflicts of interest, that it was not aware of any business or personal relationships between the members of its consulting team serving BioMarin and any member of the Compensation Committee, that it was not aware of any member of its consulting team serving BioMarin owning any stock of BioMarin, and that it is not aware of any business or personal relationships between the Compensation Consultant or the Company’s executive officers. The total dollar amount of services that the Compensation Consultant provided to BioMarin in 2019 was $1,106,305, of which approximately $316,059 was paid in connection with executive and director remuneration services and approximately $790,246 was paid in connection with health and benefit consulting services. In addition, for this same period, fees paid to the Compensation Consultant’s sister company Marsh approximated $294,261, which was paid in connection with insurance brokerage services. The Compensation Committee has reviewed the level of services provided to BioMarin by the Compensation Consultant and does not believe the services give rise to a conflict or compromise the Compensation Consultant’s independence in advising the compensation committee.
www.biomarin.com | 61 |
Executive Compensation |
Accounting and Tax Considerations.Considerations
Nonqualified Deferred Compensation—On October 22, 2004, the American Jobs Creation Act of 2004 was signed into law, adding Section 409A that changed the tax rules applicable to nonqualified deferred compensation arrangements. While the final Treasury Regulations under Section 409A did not become effective until January 1, 2009, we believe we have operated in good faith compliance with the provisions of Section 409A that became effective on January 1, 2005. A more detailed discussion of our nonqualified deferred compensation arrangements is provided below under the“Nonqualified Deferred Compensation PlanPlan”” section of this Proxy Statement.
Accounting for Stock-Based CompensationCompensation—— Beginning on January 1, 2006, we adopted the provisions of SFAS 123(R), now referred to asStock-based compensation is accounted for in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, which requirerequires us to estimate and record an expense for each equity award over the vesting period of the award and estimate prospective forfeitures.award. For assumptions used in determining these values, see Note 16 to the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 27, 2020. Generally, the Compensation Committee does not make compensation decisions based on the tax or accounting treatment of any particular form of compensation; however, it has considered and approved and may in the future consider the grant of alternative equity incentives to our NEOs in lieu of stock option grants in light of the accounting impact of FASB ASC Topic 718 with respect to stock option grants and other considerations.
Section 162(m)—— Section 162(m) of the Code (Section 162(m)) limits our deduction for federal income tax purposes togenerally provides that publicly held companies may not more than $1,000,000 ofdeduct compensation paid to certain of their top executive officers to the extent that such compensation exceeds $1 million per officer in a calendarany year. Compensation above $1,000,000 may be deducted if it is “performance-based compensation.” The Board andIn connection with 2017 tax reform legislation, the Compensation Committee regularly considerexemption from the impact ofdeduction limit under Section 162(m), regarding the deductibility of for “performance-based compensation” was repealed, such that compensation paid to certain executive officersour “covered employees” in excess of $1,000,000 but have$1 million will not yet established a policybe deductible unless it qualifies for determining which formstransition relief applicable to certain “grandfathered” arrangements in place as of incentive compensation awardedand not modified after November 2, 2017. We intend to our executive officers will be designed to qualify as “performance-based compensation.” To maintain flexibility in compensating our executive officers in a manner designed to promote our goals, the Compensation Committee has not adopted a policy that allows all executive compensation to be deductible. The Compensation Committee and the Board will continue to evaluatemonitor and review related guidance from the effects ofInternal Revenue Service as it becomes available, including the compensation limits of Section 162(m) on any compensation it proposes to grant, and may, in the future, consider qualifying our equity compensation plans and/or bonus plans so that compensation payable under those arrangements is fully deductibleproposed regulations under Section 162(m). In furtherancedetermining the form and amount of this, the amended and restated 2006 Share Incentive Plan, approved bycompensation for our stockholders at our Annual Meeting of stockholders held on June 9, 2015, is intended to allowNEOs, the Compensation Committee discretionmay continue to grant stock optionsconsider all elements of the cost of such compensation. While the Compensation Committee considers the deductibility of awards as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions and retains the flexibility to employeesaward compensation that will be intendedit determines to be eligibleconsistent with the goals of our executive compensation program even if the compensation is not deductible by us for exclusion from the Section 162(m) limit.tax purposes.
Director andExecutive Officer Stock Ownership Guidelines
In order toTo preserve the linkagelink between the interests of executives and those of stockholders, the Compensation Committee and the Board established stock ownership guidelines for our executives. See the“Director and Officer Stock Ownership Guidelines”section of this Proxy Statement for a more detailed discussion of our stock ownership guidelines.
Compensation Committee Report(1)
The Compensation Committee has reviewed and discussed theCompensation Discussion and Analysiscontained herein with management, and based on such review and discussions, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated into BioMarin’s Annual Report on Form 10-K for the year ended December 31, 2019.
Respectfully submitted on April 3, 2020 by the members of the Compensation Committee of the Board of Directors:
Michael Grey, Chair
Robert J. Hombach
Alan J. Lewis, Ph.D.
David E.I. Pyott, M.D. (Hon.)
(1) | The material in this report is not deemed “soliciting material,” is not deemed “filed” with the SEC, is not subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Exchange Act, and is not to be incorporated by reference into any filing of BioMarin under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. |
62 | 2020 Proxy Statement |
Executive Compensation |
Summary CompensationCompensation Table
The following table discloses compensation awarded to, earned by or paid to the following persons during 2013, 20142019, 2018 and 2015:2017: (i) Jean-Jacques Bienaimé, our Chief Executive Officer; (ii) Daniel Spiegelman, our former Chief Financial Officer; and (iii) Jeff Ajer, Robert A. Baffi, Ph.D. and Henry J. Fuchs, M.D., the three most highly-compensated officers other than the Chief Executive Officer and former Chief Financial Officer who were serving as officers at the end of fiscal year 20152019 and whose salary and bonus exceeded $100,000. These individuals are referred to throughout this Proxy Statement as the “Named Executive Officers” or NEOs.
Name and Principal Position |
| Year |
| Salary(1) |
|
| Bonus(2) |
|
| Stock Awards (3) |
|
| Option Awards (4) |
|
| Non-Equity Incentive Plan Compensation (5) |
|
| All Other Compensation (6) |
|
| Total |
| |||||||
Jean-Jacques Bienaimé |
| 2015 |
| $ | 973,461 |
|
|
| — |
|
| $ | 6,436,584 |
|
| $ | 4,768,445 |
|
| $ | 1,408,550 |
|
| $ | 49,510 |
|
| $ | 13,636,550 |
|
Chief Executive Officer |
| 2014 |
|
| 916,030 |
|
|
| — |
|
|
| 3,211,790 |
|
|
| 5,867,520 |
|
|
| 864,875 |
|
|
| 38,177 |
|
|
| 10,898,392 |
|
|
| 2013 |
|
| 868,796 |
|
|
| — |
|
|
| 2,563,218 |
|
|
| 6,850,935 |
|
|
| 1,054,030 |
|
|
| 27,059 |
|
|
| 11,364,038 |
|
Daniel Spiegelman |
| 2015 |
|
| 505,192 |
|
|
| — |
|
|
| 1,712,088 |
|
|
| 1,259,291 |
|
|
| 362,546 |
|
|
| 22,941 |
|
|
| 3,862,058 |
|
Executive Vice President, |
| 2014 |
|
| 480,576 |
|
|
| — |
|
|
| 870,780 |
|
|
| 1,588,224 |
|
|
| 226,738 |
|
|
| 17,413 |
|
|
| 3,183,731 |
|
Chief Financial Officer |
| 2013 |
|
| 457,769 |
|
|
| — |
|
|
| 895,092 |
|
|
| 2,392,390 |
|
|
| 277,200 |
|
|
| 6,838 |
|
|
| 4,029,289 |
|
Jeff Ajer |
| 2015 |
|
| 445,193 |
|
|
| — |
|
|
| 1,712,088 |
|
|
| 1,259,291 |
|
|
| 323,606 |
|
|
| 16,500 |
|
|
| 3,756,678 |
|
Executive Vice President, |
| 2014 |
|
| 417,674 |
|
|
| — |
|
|
| 719,340 |
|
|
| 1,311,744 |
|
|
| 212,500 |
|
|
| 16,043 |
|
|
| 2,677,301 |
|
Chief Commercial Officer |
| 2013 |
|
| 382,688 |
|
|
| — |
|
|
| 569,604 |
|
|
| 1,522,430 |
|
|
| 185,712 |
|
|
| 7,563 |
|
|
| 2,667,997 |
|
Robert A. Baffi, Ph.D. |
| 2015 |
|
| 449,231 |
|
|
| — |
|
|
| 1,712,088 |
|
|
| 1,259,291 |
|
|
| 323,448 |
|
|
| 19,819 |
|
|
| 3,763,877 |
|
Executive Vice President, |
| 2014 |
|
| 417,875 |
|
|
| — |
|
|
| 795,060 |
|
|
| 1,449,984 |
|
|
| 198,688 |
|
|
| 18,338 |
|
|
| 2,879,945 |
|
Technical Operations |
| 2013 |
|
| 384,391 |
|
|
| 30,000 |
| (7) |
| 813,720 |
|
|
| 2,174,900 |
|
|
| 232,766 |
|
|
| 9,664 |
|
|
| 3,645,441 |
|
Henry J. Fuchs, M.D. |
| 2015 |
|
| 563,269 |
|
|
| — |
|
|
| 2,178,036 |
|
|
| 1,607,045 |
|
|
| 405,199 |
|
|
| 21,738 |
|
|
| 4,775,287 |
|
Executive Vice President & |
| 2014 |
|
| 528,235 |
|
|
| — |
|
|
| 984,360 |
|
|
| 1,794,048 |
|
|
| 250,113 |
|
|
| 18,338 |
|
|
| 3,575,094 |
|
Chief Medical Officer |
| 2013 |
|
| 494,383 |
|
|
| 137,500 |
| (8) |
| 1,057,836 |
|
|
| 2,827,370 |
|
|
| 299,895 |
|
|
| 8,488 |
|
|
| 4,825,472 |
|
Name and Principal Position | Year | Salary(1) | Stock Awards(2) | Option Awards(3) | Non-Equity Incentive Plan Compensation(4) | All Other Compensation(5) | Total | |||||||
Jean-Jacques Bienaimé Chief Executive Officer | 2019 | $1,200,385 | $11,581,044 | $3,220,218 | $2,323,200 | $81,009 | $18,405,856 | |||||||
2018 | 1,149,423 | 7,745,268 | 4,958,437 | $1,709,840 | 64,925 | 15,627,893 | ||||||||
2017 | 1,094,423 | 7,783,876 | 5,253,707 | 1,726,010 | 58,969 | 15,916,985 | ||||||||
Daniel Spiegelman Former Executive Vice President, Chief Financial Officer(6) | 2019 | 620,192 | 3,120,022 | 867,181 | 600,000 | 32,507 | 5,239,902 | |||||||
2018 | 593,269 | 2,085,908 | 1,335,054 | 482,400 | 25,072 | 4,521,703 | ||||||||
2017 | 559,231 | 2,133,048 | 1,439,891 | 481,380 | 28,325 | 4,641,875 | ||||||||
Jeff Ajer Executive Vice President, Chief Commercial Officer | 2019 | 580,192 | 4,303,656 | 867,181 | 561,600 | 31,693 | 6,344,322 | |||||||
2018 | 554,232 | 2,146,078 | 1,373,198 | 450,240 | 21,635 | 4,545,383 | ||||||||
2017 | 524,231 | 2,133,048 | 1,439,891 | 451,560 | 19,572 | 4,568,302 | ||||||||
Robert A. Baffi, Ph.D. President, Global Manufacturing & Technical Operations | 2019 | 580,192 | 4,390,232 | 891,958 | 608,400 | 32,721 | 6,503,503 | |||||||
2018 | 553,270 | 2,025,736 | 1,296,910 | 525,240 | 26,762 | 4,427,918 | ||||||||
2017 | 524,231 | 2,075,350 | 1,401,232 | 447,300 | 25,115 | 4,473,228 | ||||||||
Henry J. Fuchs, M.D. President, Worldwide R&D | 2019 | 695,192 | 4,275,463 | 1,189,277 | 828,000 | 29,567 | 7,017,499 | |||||||
2018 | 668,269 | 2,680,926 | 1,716,498 | 687,925 | 24,111 | 5,777,729 | ||||||||
2017 | 637,231 | 3,460,084 | 2,335,264 | 590,720 | 22,125 | 7,045,424 |
(1) | See the |
(2) |
|
| The amounts in this column reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic |
NEO |
| Target Payout | Maximum Payout |
Jean-Jacques Bienaimé |
| $2,145,528 | $2,574,634 |
Daniel Spiegelman |
| 574,308 | 689,170 |
Jeff Ajer |
| 574,308 | 689,170 |
Robert A. Baffi, Ph.D. |
| 574,308 | 689,170 |
Henry J. Fuchs, M.D. |
| 726,012 | 871,214 |
In 2016, based on the Company’s actual 2015 performance against the revenue target, the Company applied a multiplier of 111% to the target number of performance-based RSUs awarded during 2015 to determine the number of performance-based RSUs actually earned. See footnote (9) and the related amounts in the “Outstanding Equity Awards at Fiscal Year-End” table below for the number of performance-based RSUs awarded during 2015 that were actually earned and the value of such earned performance-based RSUs using the closing price of our common stock on December 31, 2015.
NEO | Target Payout | Maximum Payout | ||||
Jean-Jacques Bienaimé | $8,293,291 | $ | 16,586,582 | |||
Daniel Spiegelman | $2,234,276 | $ | 4,468,552 | |||
Jeff Ajer | $2,234,276 | $ | 4,468,552 | |||
Robert A. Baffi, Ph.D. | $2,296,274 | $ | 4,592,548 | |||
Henry J. Fuchs, M.D. | $3,061,698 | $ | 6,123,396 |
| 63 |
Executive Compensation |
Two types of performance-based RSUs were awarded in 2019: (1) performance-based RSUs that are earned based on revenue achievement in 2019 and (2) performance-based RSUs that are earned based on relative total shareholder return over the three-year period of 2019 through 2021. In 2020, based on the Company’s actual performance, the Company applied a multiplier of 102% to the target number of performance-based RSUs granted during 2019 that are earned based on revenue achievement to determine the number of such performance-based RSUs actually earned. See footnote (5) and the related amounts in the“Outstanding Equity Awards at Fiscal Year-End”table below for the number of performance-based RSUs earned based on revenue achievement in 2019 and the value of such earned performance-based RSUs using the closing price of our common stock on December 31, 2019. The number of performance-based RSUs that will be earned based on relative total shareholder return over the three-year period of 2019 through 2021 will not be determined until after the performance period ends on December 31, 2021. | |
(3) | The amounts in this column reflect the aggregate grant date fair values computed in accordance with FASB ASC Topic 718. For assumptions used in determining these values, see Note |
| Amounts noted for |
2019 CEO Pay Ratio
As required by the Dodd-Frank Act and SEC Regulation S-K of the Exchange Act, we are providing the following information about the relationship of the annual total compensation of our CEO to the annual total compensation of our median-paid employee for 2019 (our “CEO pay ratio”). Our CEO pay ratio is a reasonable good faith estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
Our CEO pay ratio for 2019, calculated as described below, was 96 to 1. This ratio was based on the following:
|
|
● | the median of the |
Methodology for Determining Our Median Employee
The SEC CEO pay ratio rules allow a registrant to use the same median employee for up to three years, as long as there were no significant changes to the median employee’s status, aggregate employee population or compensation programs. As there were no significant changes to our employee population or compensation programs, we intended to use the same median employee for 2019 as was identified for 2017 and 2018. However, the employee was no longer employed by us as of December 31, 2019. Therefore, as permitted by Instruction 2 to Item 402(u) of Regulation S-K, we are using another employee whose compensation was substantially similar to that of the original median employee. The methodology and the material assumptions and estimates we used in 2017 to determine the median employee were as follows:
Employee Population
● | Total Global Population.We determined that, as of October 2, 2017, the date we selected to identify the median employee, our employee population consisted of approximately 2,500 individuals working for |
|
| 2020 Proxy Statement |
Executive Compensation |
● | De Minimis Exemption.As permitted by SEC rules, we have chosen to exclude employees who are employed in certain jurisdictions from the determination of our median employee, given the relatively small number of employees in those jurisdictions and the estimated additional time, effort and expense that would be required to obtain and analyze their compensation information. In total, we excluded less than 5% of our non-U.S. workforce (95 individuals) for purposes of identifying the median employee, as shown in the table below. As noted above, the total number of our U.S. and non-U.S. employees irrespective of this de minimis exemption as of October 2, 2017 was approximately 2,500. |
De Minimis Exemption Jurisdictions | Number of Employees | ||
Argentina | 10 | ||
Chile | 3 | ||
China | 4 | ||
Colombia | 13 | ||
Croatia | 1 | ||
Denmark | 1 | ||
Hungary | 1 | ||
Lithuania | 1 | ||
Malaysia | 1 | ||
Mexico | 5 | ||
Netherlands | 29 | ||
Poland | 1 | ||
Russia | 8 | ||
Slovakia | 1 | ||
Taiwan | 3 | ||
Turkey | 13 | ||
Total Number of Employees Excluded Pursuant to theDe MinimisExemption | 95 |
Compensation Measure Used to Identify the Median Employee
● | Given the geographical distribution of our employee population, we use a |
● | We annualized the compensation of employees to cover the full calendar year, and also annualized any new hires in |
● | We did not make any cost-of-living adjustments in identifying the median employee. |
● | Using this methodology, we determined the median-paid employee for |
Annual Total Compensation of Median Employee
To determine the annual total compensation of the median employee to calculate the ratio, we identified and calculated the elements of that employee’s compensation for the full year in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K.
Annual Total Compensation of Chief Executive Officer
With respect to the annual total compensation of our CEO, in accordance with SEC rules, we included the amount reported for Mr. Bienaimé in the “Total” column in the “Summary Compensation Table” included in this Proxy Statement.
www.biomarin.com | 65 |
Executive Compensation |
Grants of Plan-Based Awards
The following table sets forth certain information for each plan-based award during fiscal year 20152019 to each of the NEOs.
|
|
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) |
|
| Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Other Stock Awards: Number of Shares of Stock or Units(#) (3) |
|
| All Other Option Awards: Number of Securities Underlying Options(#) (4) |
|
| Exercise or Base Price of Option Awards ($/Share) (5) |
|
| Grant Date Fair Value of Stock and Option Awards ($) (6) |
| ||||||||||||||||||||||||
Name |
| Grant Date |
| Threshold ($) |
| Target ($) |
|
| Maximum ($) |
|
|
| Threshold (#) |
|
| Target (#) |
|
| Maximum (#) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Jean-Jacques Bienaimé |
| 3/3/2015 |
| (7) |
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 90,500 |
|
|
| 108.36 |
|
|
| 4,768,445 |
|
|
| 3/3/2015 |
| (7) |
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 39,600 |
|
|
| — |
|
|
| — |
|
|
| 4,291,056 |
|
|
| 3/3/2015 |
| (7) |
|
| — |
|
|
| — |
|
|
|
| 15,840 |
|
|
| 19,800 |
|
|
| 23,760 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,145,528 |
|
|
| n/a |
| (7) |
|
| 1,083,500 |
|
|
| 1,814,863 |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Daniel Spiegelman |
| 3/3/2015 |
| (7) |
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 23,900 |
|
|
| 108.36 |
|
|
| 1,259,291 |
|
|
| 3/3/2015 |
| (7) |
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 10,500 |
|
|
| — |
|
|
| — |
|
|
| 1,137,780 |
|
|
| 3/3/2015 |
| (7) |
|
| — |
|
|
| — |
|
|
|
| 4,240 |
|
|
| 5,300 |
|
|
| 6,360 |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
| 574,308 |
|
|
| n/a |
| (7) |
|
| 280,500 |
|
|
| 483,512 |
| (8) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Jeff Ajer |
| 3/3/2015 |
| (7) |
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 23,900 |
|
|
| 108.36 |
|
|
| 1,259,291 |
|
|
| 3/3/2015 |
| (7) |
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 10,500 |
|
|
| — |
|
|
| — |
|
|
| 1,137,780 |
|
|
| 3/3/2015 |
| (7) |
|
| — |
|
|
| — |
|
|
|
| 4,240 |
|
|
| 5,300 |
|
|
| 6,360 |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
| 574,308 |
|
|
| n/a |
| (7) |
|
| 247,500 |
|
|
| 426,628 |
| (8) |
|
| — |
|
|
| — |
|
|
| — |
| �� |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Robert A. Baffi, Ph.D. |
| 3/3/2015 |
| (7) |
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 23,900 |
|
|
| 108.36 |
|
|
| 1,259,291 |
|
|
| 3/3/2015 |
| (7) |
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 10,500 |
|
|
| — |
|
|
| — |
|
|
| 1,137,780 |
|
|
| 3/3/2015 |
| (7) |
|
| — |
|
|
| — |
|
|
|
| 4,240 |
|
|
| 5,300 |
|
|
| 6,360 |
|
|
| — |
|
|
|
|
|
|
| — |
|
|
| 574,308 |
|
|
| n/a |
| (7) |
|
| 250,250 |
|
|
| 431,368 |
| (8) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Henry J. Fuchs, M.D. |
| 3/3/2015 |
| (7) |
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 30,500 |
|
|
| 108.36 |
|
|
| 1,607,045 |
|
|
| 3/3/2015 |
| (7) |
|
| — |
|
|
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 13,400 |
|
|
| — |
|
|
| — |
|
|
| 1,452,024 |
|
|
| 3/3/2015 |
| (7) |
|
| — |
|
|
| — |
|
|
|
| 5,360 |
|
|
| 6,700 |
|
|
| 8,040 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 726,012 |
|
|
| n/a |
| (7) |
|
| 313,500 |
|
|
| 540,396 |
| (8) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units(#)(4) | All Other Option Awards: Number of Securities Underlying Options(#)(5) | Exercise or Base Price of Option Awards ($/Share)(6) | Grant Date Fair Value of Stock and Option Awards ($)(7) | ||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||
Jean-Jacques Bienaimé | 3/15/2019 | – | – | – | – | – | – | – | 87,080 | 94.53 | 3,220,218 | ||||
3/15/2019 | – | – | – | – | – | – | 34,780 | – | – | 3,287,753 | |||||
3/15/2019 | – | – | – | 17,390 | 34,780 | 69,560 | (2) | – | – | – | 3,287,753 | ||||
3/15/2019 | – | – | – | 17,390 | 34,780 | 69,560 | (3) | – | – | – | 5,005,538 | ||||
n/a | – | (8) | 1,452,000 | 2,904,000 | (9) | – | – | – | – | – | – | – | |||
Daniel Spiegelman | 3/15/2019 | – | – | – | – | – | – | – | 23,450 | 94.53 | 867,181 | ||||
3/15/2019 | – | – | – | – | – | – | 9,370 | – | – | 885,746 | |||||
3/15/2019 | – | – | – | 4,685 | 9,370 | 18,740 | (2) | – | – | – | 885,746 | ||||
3/15/2019 | – | – | – | 4,685 | 9,370 | 18,740 | (3) | – | – | – | 1,348,530 | ||||
n/a | – | (8) | 375,000 | 750,000 | (9) | – | – | – | – | – | – | – | |||
Jeff Ajer | 3/15/2019 | – | – | – | – | – | – | – | 23,450 | 94.53 | 867,181 | ||||
3/15/2019 | – | – | – | – | – | – | 9,370 | – | – | 885,746 | |||||
6/5/2019 | – | – | – | – | – | – | 14,160 | – | – | 1,183,634 | |||||
3/15/2019 | – | – | – | 4,685 | 9,370 | 18,740 | (2) | – | – | – | 885,746 | ||||
3/15/2018 | – | – | – | 4,685 | 9,370 | 18,740 | (3) | – | – | – | 1,348,530 | ||||
n/a | – | (8) | 351,000 | 702,000 | (9) | – | – | – | – | – | – | – | |||
Robert A. Baffi, Ph.D. | 3/15/2019 | – | – | – | – | – | – | – | 24,120 | 94.53 | 891,958 | ||||
3/15/2019 | – | – | – | – | – | – | 9,630 | – | – | 910,324 | |||||
6/5/2019 | – | – | – | – | – | – | 14,160 | – | – | 1,183,634 | |||||
3/15/2019 | – | – | – | 4,815 | 9,630 | 19,260 | (2) | – | – | – | 910,324 | ||||
3/15/2019 | – | – | – | 4,815 | 9,630 | 19,260 | (3) | – | – | – | 1,385,950 | ||||
n/a | – | (8) | 380,250 | 760,500 | (9) | – | – | – | – | – | – | – | |||
Henry J. Fuchs, M.D. | 3/15/2019 | – | – | – | – | – | – | – | 32,160 | 94.53 | 1,189,277 | ||||
3/15/2019 | – | – | – | – | – | – | 12,840 | – | – | 1,213,765 | |||||
3/15/2019 | – | – | – | 6,420 | 12,840 | 25,680 | (2) | – | – | – | 1,213,765 | ||||
3/15/2019 | – | – | – | 6,420 | 12,840 | 25,680 | (3) | – | – | – | 1,847,933 | ||||
n/a | – | (8) | 455,000 | 910,000 | (9) | – | – | – | – | – | – | – |
(1) | Annual Cash Incentive:Amounts represent potential payments under our |
(2) | Performance-Based RSUs:Amounts represent the potential numbers of performance-based RSUs based upon achievement of the |
66 | 2020 Proxy Statement |
Executive Compensation |
that were actually earned and the value of such earned performance-based RSUs using the closing price of our common stock on December 31, |
(3) | Performance-Based RSUs:Amounts represent the potential numbers of performance-based RSUs based upon relative total shareholder return over the three-year period of 2019 through 2021. Under the terms of these awards, the number of performance-based RSUs earned are calculated by multiplying the target number of performance-based RSUs by a total shareholder return multiplier (determined based on the Company’s performance as compared to the total shareholder return performance of companies that made up the Nasdaq Biotechnology Index as of January 1, 2019) which could range between 50% and 200%. The number of performance-based RSUs that will be earned based on relative total shareholder return will not be determined until after the performance period ends on December 31, 2021. The earned performance-based RSUs, if any, vest in full on the third anniversary of the grant date subject to the recipient’s continued service. For further discussion of the performance-based RSU awards granted in 2019, see the “Compensation Discussion and Analysis—Equity Compensation” section of this Proxy Statement. For a description of acceleration and extended vesting terms applicable to certain of the awards, please see the “Compensation Discussion and Analysis—Post-Employment Obligations” and “Executive Compensation Tables—Potential Payments upon Termination or Change in Control” sections of this Proxy Statement. |
(4) | Service-Based RSUs: |
|
|
(5) | Stock Options:Stock options vest 12/48ths on the 12-month anniversary of the date of grant, and 1/ |
|
|
| The amounts presented above represent the aggregate grant date fair value of the |
| The potential payouts under our |
|
|
The number of stock options and RSUs granted to the Chief Executive Officer is determined based on recommendations by the Compensation Committee and is approved by the Board and the number of stock options and RSUs granted to the other NEOs is determined based on a recommendation from the Chief Executive Officer and is approved by the Compensation Committee. See the“Equity Compensation”” section of this Proxy Statement for additional information regarding grant practices.
www.biomarin.com | 67 |
Executive Compensation |
Outstanding Equity AwardsAwards at Fiscal Year-End
The following table sets forth the outstanding unexercised stock options granted pursuant to equity awards as of the end of fiscal year 20152019 for each of the NEOs.
Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable(1) (#) | Number of Securities Underlying Unexercised Options Unexercisable(1) (#) | Option Exercise Price ($)(2) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | |
Jean-Jacques Bienaimé | 5/12/2010 | 115,000 | – | 21.51 | 5/11/2020 | |||
5/12/2011 | 140,513 | – | 26.49 | 5/11/2021 | ||||
5/8/2012 | 140,000 | – | 37.46 | 5/7/2022 | ||||
5/15/2013 | 220,500 | – | 67.81 | 5/14/2023 | ||||
6/4/2014 | 191,000 | – | 63.10 | 6/3/2024 | ||||
3/3/2015 | 90,500 | – | 108.36 | 3/2/2025 | ||||
3/15/2016 | 127,546 | 8,504 | 83.43 | 3/14/2026 | 15,178 | (3) | 1,283,300 | |
3/22/2017 | 99,033 | 45,017 | 87.42 | 3/21/2027 | 22,260 | (3) | 1,882,083 | |
3/22/2017 | 15,346 | (5) | 1,297,504 | |||||
3/15/2018 | 64,832 | 83,358 | 83.57 | 3/14/2028 | 34,755 | (3) | 2,938,535 | |
3/15/2018 | 30,214 | (5) | 2,554,594 | |||||
3/15/2019 | – | 87,080 | 94.53 | 3/14/2029 | 34,780 | (3) | 2,940,649 | |
3/15/2019 | 35,579 | (5) | 3,008,289 | |||||
3/15/2019 | 34,780 | (6) | 2,940,649 | |||||
Daniel Spiegelman | 5/29/2012 | 2,604 | – | 39.06 | 5/28/2022 | |||
5/15/2013 | 42,922 | – | 67.81 | 5/14/2023 | ||||
6/4/2014 | 21,700 | – | 63.10 | 6/3/2024 | ||||
3/3/2015 | 23,900 | – | 108.36 | 3/2/2025 | ||||
3/15/2016 | 34,959 | 2,331 | 83.43 | 3/14/2026 | 4,160 | (3) | 351,728 | |
3/22/2017 | 27,142 | 12,338 | 87.42 | 3/21/2027 | 6,100 | (3) | 515,755 | |
3/22/2017 | 4,207 | (5) | 355,702 | |||||
3/15/2018 | 17,456 | 22,444 | 83.57 | 3/14/2028 | 9,360 | (3) | 791,388 | |
3/15/2018 | 8,137 | (5) | 687,983 | |||||
3/15/2019 | – | 23,450 | 94.53 | 3/14/2029 | 9,370 | (3) | 792,234 | |
3/15/2019 | 9,585 | (5) | 810,496 | |||||
3/15/2019 | 9,370 | (6) | 792,234 |
68 | 2020 Proxy Statement |
| Option Awards (1) |
| Stock Awards | ||||||||||||||||||||
Name |
| Number of Securities Underlying Unexercised Options Exercisable(#) |
|
| Number of Securities Underlying Unexercised Options Unexercisable (#) |
|
| Option Exercise Price ($) (2) |
|
| Option Expiration Date |
| Number of Shares or Units of Stock That Have Not Vested(#) (3) |
|
| Market Value of Shares or Units of Stock That Have Not Vested ($) (13) |
|
| |||||
Jean-Jacques Bienaimé |
|
| 96,500 |
|
|
| — |
|
|
| 12.99 |
|
| 5/10/2016 |
|
| 372,000 |
| (4) |
| 38,970,720 |
|
|
|
|
| 250,000 |
|
|
| — |
|
|
| 17.54 |
|
| 11/19/2016 |
|
| 14,000 |
| (5) |
| 1,466,640 |
|
|
|
|
| 160,000 |
|
|
| — |
|
|
| 17.33 |
|
| 6/6/2017 |
|
| 18,900 |
| (6) |
| 1,979,964 |
|
|
|
|
| 425,000 |
|
|
| — |
|
|
| 38.59 |
|
| 5/21/2018 |
|
| 38,175 |
| (7) |
| 3,999,213 |
|
|
|
|
| 22,000 |
|
|
| — |
|
|
| 17.86 |
|
| 12/16/2018 |
|
| 39,600 |
| (8) |
| 4,148,496 |
|
|
|
|
| 240,000 |
|
|
| — |
|
|
| 14.39 |
|
| 5/11/2019 |
|
| 21,978 |
| (9) |
| 2,302,415 |
|
|
|
|
| 280,000 |
|
|
| — |
|
|
| 21.51 |
|
| 5/11/2020 |
|
|
|
|
|
|
|
|
|
|
|
| 280,000 |
|
|
| — |
|
|
| 26.49 |
|
| 5/11/2021 |
|
|
|
|
|
|
|
|
|
|
|
| 125,417 |
|
|
| 14,583 |
|
|
| 37.46 |
|
| 5/7/2022 |
|
|
|
|
|
|
|
|
|
|
|
| 142,406 |
|
|
| 78,094 |
|
|
| 67.81 |
|
| 5/14/2023 |
|
|
|
|
|
|
|
|
|
|
|
| 71,625 |
|
|
| 119,375 |
|
|
| 63.10 |
|
| 6/3/2024 |
|
|
|
|
|
|
|
|
|
|
|
| 16,968 |
|
|
| 73,532 |
|
|
| 108.36 |
|
| 3/2/2025 |
|
|
|
|
|
|
|
|
|
Daniel Spiegelman |
|
| 6,479 |
|
|
| 13,021 |
|
|
| 39.06 |
|
| 5/28/2022 |
|
| 93,000 |
| (10) |
| 9,742,680 |
|
|
|
|
| 15,651 |
|
|
| 27,271 |
|
|
| 67.81 |
|
| 5/14/2023 |
|
| 8,250 |
| (11) |
| 864,270 |
|
|
|
|
| 19,387 |
|
|
| 32,313 |
|
|
| 63.10 |
|
| 6/3/2024 |
|
| 6,600 |
| (6) |
| 691,416 |
|
|
|
|
| 4,481 |
|
|
| 19,419 |
|
|
| 108.36 |
|
| 3/2/2025 |
|
| 10,350 |
| (7) |
| 1,084,266 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 10,500 |
| (8) |
| 1,099,980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 5,883 |
| (9) |
| 616,303 |
|
|
Jeff Ajer |
|
| 3,498 |
|
|
| — |
|
|
| 38.59 |
|
| 5/21/2018 |
|
| 1,300 |
| (5) |
| 136,188 |
|
|
|
|
| 988 |
|
|
| — |
|
|
| 28.23 |
|
| 5/30/2021 |
|
| 37,200 |
| (12) |
| 3,897,072 |
|
|
|
|
| 2,166 |
|
|
| 1,355 |
|
|
| 37.46 |
|
| 5/7/2022 |
|
| 4,200 |
| (6) |
| 439,992 |
|
|
|
|
| 31,645 |
|
|
| 17,355 |
|
|
| 67.81 |
|
| 5/14/2023 |
|
| 8,550 |
| (7) |
| 895,698 |
|
|
|
|
| 13,012 |
|
|
| 26,688 |
|
|
| 63.10 |
|
| 6/3/2024 |
|
| 10,500 |
| (8) |
| 1,099,980 |
|
|
|
|
| 4,481 |
|
|
| 19,419 |
|
|
| 108.36 |
|
| 3/2/2025 |
|
| 5,883 |
| (9) |
| 616,303 |
|
|
Robert A. Baffi, Ph.D. |
|
| 6,949 |
|
|
| — |
|
|
| 14.39 |
|
| 5/11/2019 |
|
| 93,000 |
| (4) |
| 9,742,680 |
|
|
|
|
| 40,000 |
|
|
| — |
|
|
| 21.51 |
|
| 5/11/2020 |
|
| 4,000 |
| (5) |
| 419,040 |
|
|
|
|
| 80,000 |
|
|
| — |
|
|
| 26.49 |
|
| 5/11/2021 |
|
| 6,000 |
| (6) |
| 628,560 |
|
|
|
|
| 35,833 |
|
|
| 4,167 |
|
|
| 37.46 |
|
| 5/7/2022 |
|
| 9,450 |
| (7) |
| 989,982 |
|
|
|
|
| 45,208 |
|
|
| 24,792 |
|
|
| 67.81 |
|
| 5/14/2023 |
|
| 10,500 |
| (8) |
| 1,099,980 |
|
|
|
|
| 17,700 |
|
|
| 29,500 |
|
|
| 63.10 |
|
| 6/3/2024 |
|
| 5,883 |
| (9) |
| 616,303 |
|
|
|
|
| 4,481 |
|
|
| 19,419 |
|
|
| 108.36 |
|
| 3/2/2025 |
|
|
|
|
|
|
|
|
|
Henry J. Fuchs, M.D. |
|
| 2,000 |
|
|
| — |
|
|
| 21.51 |
|
| 5/11/2020 |
|
| 111,600 |
| (4) |
| 11,691,216 |
|
|
|
|
| 84,000 |
|
|
| — |
|
|
| 26.49 |
|
| 5/11/2021 |
|
| 6,000 |
| (5) |
| 628,560 |
|
|
|
|
| 53,750 |
|
|
| 6,250 |
|
|
| 37.46 |
|
| 5/7/2022 |
|
| 7,800 |
| (6) |
| 817,128 |
|
|
|
|
| 58,770 |
|
|
| 32,230 |
|
|
| 67.81 |
|
| 5/14/2023 |
|
| 11,700 |
| (7) |
| 1,225,692 |
|
|
|
|
| 21,900 |
|
|
| 36,500 |
|
|
| 63.10 |
|
| 6/3/2024 |
|
| 13,400 |
| (8) |
| 1,403,784 |
|
|
|
|
| 5,718 |
|
|
| 24,782 |
|
|
| 108.36 |
|
| 3/2/2025 |
|
| 7,437 |
| (9) |
| 779,100 |
|
|
Executive Compensation |
Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable(1) (#) | Number of Securities Underlying Unexercised Options Unexercisable(1) (#) | Option Exercise Price ($)(2) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | |
Jeff Ajer | 5/15/2013 | 49,000 | – | 67.81 | 5/14/2023 | |||
6/4/2014 | 30,700 | – | 63.10 | 6/3/2024 | ||||
3/3/2015 | 23,900 | – | 108.36 | 3/2/2025 | ||||
3/15/2016 | 34,012 | 2,268 | 83.43 | 3/14/2026 | 4,048 | (3) | 342,258 | |
3/22/2017 | 27,142 | 12,338 | 87.42 | 3/21/2027 | 6,100 | (3) | 515,755 | |
3/22/2017 | 4,207 | (5) | 355,702 | |||||
3/15/2018 | 17,955 | 23,085 | 83.57 | 3/14/2028 | 9,630 | (3) | 814,217 | |
3/15/2018 | 8,372 | (5) | 707,853 | |||||
3/15/2019 | – | 23,450 | 94.53 | 3/14/2029 | 9,370 | (3) | 792,234 | |
3/15/2019 | 9,585 | (5) | 810,496 | |||||
3/15/2019 | 9,370 | (6) | 792,234 | |||||
6/5/2019 | 14,160 | (7) | 1,197,228 | |||||
Robert A. Baffi, Ph.D. | 5/12/2010 | 40,000 | – | 21.51 | 5/11/2020 | |||
5/12/2011 | 80,000 | – | 26.49 | 5/11/2021 | ||||
5/8/2012 | 40,000 | – | 37.46 | 5/7/2022 | ||||
5/15/2013 | 70,000 | – | 67.81 | 5/14/2023 | ||||
6/4/2014 | 47,200 | – | 63.10 | 6/3/2024 | ||||
3/3/2015 | 23,900 | – | 108.36 | 3/2/2025 | ||||
3/15/2016 | 34,012 | 2,268 | 83.43 | 3/14/2026 | 4,048 | (3) | 342,258 | |
3/22/2017 | 26,413 | 12,007 | 87.42 | 3/21/2027 | 5,935 | (3) | 501,804 | |
3/22/2017 | 4,092 | (5) | 345,979 | |||||
3/15/2018 | 16,957 | 21,803 | 83.57 | 3/14/2028 | 9,090 | (3) | 768,560 | |
3/15/2018 | 7,902 | (5) | 668,114 | |||||
3/15/2019 | – | 24,120 | 94.53 | 3/14/2029 | 9,630 | (3) | 814,217 | |
3/15/2019 | 9,851 | (5) | 832,987 | |||||
3/15/2019 | 9,630 | (6) | 814,217 | |||||
6/5/2019 | 14,160 | (8) | 1,197,228 |
www.biomarin.com | 69 |
Executive Compensation |
Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable(1) (#) | Number of Securities Underlying Unexercised Options Unexercisable(1) (#) | Option Exercise Price ($)(2) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market | ||||||||
Henry J. Fuchs, M.D. | 5/15/2013 | 91,000 | – | 67.81 | 5/14/2023 | ||||||||||
6/4/2014 | 58,400 | – | 63.10 | 6/3/2024 | |||||||||||
3/3/2015 | 30,500 | – | 108.36 | 3/2/2025 | |||||||||||
3/15/2016 | 41,568 | 2,772 | 83.43 | 3/14/2026 | 4,948 | (3) | 418,353 | ||||||||
3/22/2017 | 44,020 | 20,010 | 87.42 | 3/21/2027 | 9,895 | (3) | 836,622 | ||||||||
3/22/2017 | 6,823 | (5) | 576,885 | ||||||||||||
3/15/2018 | 22,443 | 28,857 | 83.57 | 3/14/2028 | 12,030 | (3) | 1,017,137 | ||||||||
3/15/2018 | 10,459 | (5) | 884,308 | ||||||||||||
3/15/2019 | – | 32,160 | 94.53 | 3/14/2029 | 12,840 | (3) | 1,085,622 | ||||||||
3/15/2019 | 13,135 | (5) | 1,110,649 | ||||||||||||
3/15/2019 | 12,840 | (6) | 1,085,622 |
(1) | All stock options vest over a four-year period. |
(2) | Represents the closing market price of our common stock as reported on the |
(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| The value of RSUs shown in the table that have not yet vested was calculated using $84.55, the closing price of our common stock on December 31, |
(5) | Represents earned revenue performance-based RSUs. The numbers of performance-based RSUs reflected in this table are the actual numbers of RSUs earned by the NEOs based on achievement of performance criteria as of the respective measurement dates for each performance award. In early 2017, 2018 and 2019, based on the Company’s actual performance against the revenue target as of the measurement date (December 31st of the prior year, which is also the year of grant), the Company applied a multiplier of 103%, 98%, and 102%, respectively, to the target number of performance-based RSUs granted in 2017, 2018, and 2019, respectively, to determine the number of performance-based RSUs actually earned. The performance-based RSUs vest over a three-year period, vesting at the rate of one third on the anniversary of the grant date and one third each anniversary of the grant date thereafter during the recipient’s continued service with the Company. For a description of acceleration and extended vesting terms applicable to certain of the awards, please see the“Compensation Discussion and Analysis—Post-Employment Obligations”and“Executive Compensation Tables—Potential Payments upon Termination or Change in Control”sections of this Proxy Statement. |
(6) | Represents unearned total shareholder return performance-based RSUs. The numbers of performance-based RSUs reflected in this table are the target numbers of RSUs granted to the NEOs. Under the terms of these awards, the number of performance-based RSUs that will be earned, if any, are calculated by multiplying the target number of performance-based RSUs by a total shareholder return multiplier. The total shareholder return multiplier will be determined based on the Company’s performance over the three-year performance period of 2019 through 2021 as compared to the total shareholder return performance of companies that made up the Nasdaq Biotechnology Index as of January 1, 2019). The total shareholder return multiplier could range between 50% and 200%, and the number of performance-based RSUs that will be earned will not be determined until after the performance period ends on December 31, 2021. The earned performance-based RSUs vest in full on the third anniversary of the grant date subject to the recipient’s continued service. For a description of acceleration and extended vesting terms applicable to certain of the awards, please see the“Compensation Discussion and Analysis—Post-Employment Obligations”and“Executive Compensation Tables—Potential Payments upon Termination or Change in Control”sections of this Proxy Statement. |
(7) | Represents service-based RSUs. This grant of service-based RSUs vest in full on the third anniversary of the grant date, subject to the recipient’s continued service. The retirement benefit applicable to certain of the Company’s senior executives, including the NEOs, but specifically excluding the Chief Executive Officer, providing for continued vesting after certain criteria are met as described in the“Compensation Discussion and Analysis—Post-Employment Obligations”section of this Proxy Statement does not apply to this grant. For a description of acceleration and extended vesting terms applicable to certain of the awards, please see the“Compensation Discussion and Analysis—Post-Employment Obligations”and“Executive Compensation Tables—Potential Payments upon Termination or Change in Control”sections of this Proxy Statement. |
70 | 2020 Proxy Statement |
Executive Compensation |
(8) | Represents service-based RSUs. This grant of service-based RSUs vest in full on the second anniversary of the grant date, subject to the recipient’s continued service. The retirement benefit applicable to certain of the Company’s senior executives, including the NEOs, but specifically excluding the Chief Executive Officer, providing for continued vesting after certain criteria are met as described in the“Compensation Discussion and Analysis—Post-Employment Obligations”section of this Proxy Statement does not apply to this grant. For a description of acceleration and extended vesting terms applicable to certain of the awards, please see the“Compensation Discussion and Analysis—Post-Employment Obligations”and“Executive Compensation Tables—Potential Payments upon Termination or Change in Control”sections of this Proxy Statement. |
Options Exercised and Stock Vested
The following table sets forth the number and value of stock options exercised and share awards that vested in fiscal year 20152019 for each of the NEOs.
Options Exercised and Stock Vested
| Option Awards |
|
| Stock Awards |
| |||||||||||
Name |
| Number of Shares Acquired on Exercise(#) |
|
| Value Realized on Exercise ($) (1) |
|
| Number of Shares Acquired on Vesting(#) |
|
| Value Realized on Vesting ($) (2) |
| ||||
Jean-Jacques Bienaimé |
|
| 74,264 |
|
|
| 7,920,391 |
|
|
| 45,175 |
|
|
| 5,486,175 |
|
Daniel Spiegelman |
|
| 69,578 |
|
|
| 4,477,099 |
|
|
| 15,000 |
|
|
| 1,856,714 |
|
Jeff Ajer |
|
| 36,631 |
|
|
| 3,126,279 |
|
|
| 7,040 |
|
|
| 858,507 |
|
Robert A. Baffi, Ph.D. |
|
| 14,051 |
|
|
| 1,394,727 |
|
|
| 12,650 |
|
|
| 1,537,154 |
|
Henry J. Fuchs, M.D. |
|
| 40,000 |
|
|
| 4,082,276 |
|
|
| 16,800 |
|
|
| 2,041,866 |
|
Option Awards | Stock Awards | |||||||
Name | Number of Shares Acquired on Exercise(#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting(#) | Value Realized on Vesting ($)(2) | ||||
Jean-Jacques Bienaimé | 117,000 | 8,365,069 | 93,134 | 8,634,683 | ||||
Daniel Spiegelman | – | – | 25,310 | 2,346,153 | ||||
Jeff Ajer | – | – | 25,295 | 2,344,734 | ||||
Robert A. Baffi, Ph.D. | – | – | 24,687 | 2,288,517 | ||||
Henry J. Fuchs, M.D. | – | – | 34,158 | 3,153,469 |
(1) | The value realized upon exercise of stock options reflects the price at which shares acquired upon exercise of the stock options were sold or valued for income tax purposes, net of the exercise price for acquiring the shares. |
(2) | The value realized on vesting of RSUs was calculated as of the product of the closing price of a share of our common stock on the vesting date, multiplied by the number of shares vested. |
There is no retirement pension plan provided for the NEOs.
Nonqualified DeferredDeferred Compensation Plan
Our Nonqualified Deferred Compensation Plan allows members of management, other highly-compensated employees and members of the Board to make voluntary irrevocable deferrals of the compensation that would otherwise be paid by us to specified future dates, employment termination, hardship events, disability, retirement or death. Non-employee directorDirectors may elect to defer all or a portion of their fees and RSU awards otherwise payable to them. Non-Director participants are permitted to defer up to 100% of their annual Board retainer and meeting fees. All other participants are permitted to defer up to 100% of restricted stockRSU awards and up to 50% of salary and annual cash incentive awards, in each case subject to limitations to allow us to make necessary withholding payments. Plan participants’ deferred compensation is 100% vested under the Nonqualified Deferred Compensation Plan. We may make additional direct contributions to the Nonqualified Deferred Compensation Plan for the benefit of the participants, but any such contributions must be approved by the Board. Our contributions, if any, will become 100% vested after three years of service with us (or such other time as we designate at the time of the contribution), or upon a change in control of the Company, or the individual’s death or disability. Participants have an unsecured contractual commitment by us to pay the amounts that become due under the Nonqualified Deferred Compensation Plan. Deferred compensation may be held in trust and is deemed invested based on participant direction as allowed by the Nonqualified Deferred Compensation Plan. Participants’ accounts are credited or debited with the increase or decrease in the realizable net asset value of the designated deemed investments in accordance with the ratio the portion of the account of each participant that is deemed to be invested within that investment option bears to the aggregate of all amounts deemed to be invested within that investment option. Any funds held in a trust will be our sole property, subject to any claims of general creditors in the event of bankruptcy, and plan participants will have no vested interest with respect to such trust fund.
www.biomarin.com | 71 |
Executive Compensation |
The following table shows for the fiscal year ended December 31, 2015,2019, certain information regarding non-qualified deferred compensation benefits for the NEOs who participate in the Nonqualified Deferred Compensation Plan.
Name |
| Executive Contributions in 2015 ($) |
|
| Aggregate Earnings (Loss) in 2015 ($) |
|
| Aggregate Withdrawals/ Distributions ($) |
|
| Aggregate Balance at December 31, 2015 ($) |
| ||||
Jean-Jacques Bienaimé |
|
| 970,715 |
| (1) |
| 97,125 |
|
|
| — |
|
|
| 2,514,240 |
|
Robert A. Baffi, Ph.D. |
|
| 302,725 |
| (1) |
| 423,858 |
|
|
| 556,630 |
| (2) |
| 3,003,993 |
|
Dan Spiegelman |
|
| — |
|
|
| (7,019 | ) |
|
| — |
|
|
| 219,579 |
|
Name | Executive Contributions in 2019 ($) | Aggregate Earnings (Loss) in 2019 ($) | Aggregate Withdrawals and Distributions ($) | Aggregate Balance at December 31, 2019($)(1) | ||||||
Jean-Jacques Bienaimé | – | (1,520) | (679,680) | (2) | – | |||||
Daniel Spiegelman | 39,240 | (3) | 66,719 | – | 576,648 | |||||
Robert A. Baffi, Ph.D. | 15,121 | (3) | 47,241 | (343,584) | (4) | 199,290 |
(1) |
|
(2) | Reflects the value of |
(3) | Amount includes recontributed dividend and interest earned during 2019. |
(4) | Reflects the |
Potential Payments Upon Termination or Change-in-ControlChange in Control
We entered into an employment agreement with Mr. Bienaimé at the time of his hire and with each of our other executive officers, including the NEOs, onin April 9, 2007 or upon their respective date of hire. OnIn January 1, 2009, to comply with the changes to Section 409A, we amended and restated the employment agreements with each of our executive officers, including Mr. Bienaimé. We further amended the employment agreements onin December 17, 2012 to ensure that the timing of severance payments thereunder comply with Section 409A. In June 2015, we made certain changes to severance benefit provisions in the employment agreements for our NEOs (other than the Chief Executive Officer) to meet current market and peer company practices as well as to clarify certain terms. In December 2016, we amended and restated the employment agreement for our Chief Executive Officer primarily to adjust his benefits in connection with a change in control, including eliminating income tax “gross-up” payments in connection with a change in control as provided for in his prior agreement and make his agreement generally more consistent with the employment agreements for the Company’s other executives. The following discussion is based on the employment and equity award agreements with our NEOs and on our Severance Plan.NEOs. The amount and type of compensation payable to each NEO upon termination of employment under various circumstances and upon a change in control are described below.
The amount and type of compensation payable to each NEO upon termination of employment under various circumstances are described below. There are three general categories of terminations, which are:
● |
| voluntary termination of employment by the NEO for reasons not constituting constructive termination, which we refer to as voluntary termination; retirement of the NEO; and termination of the NEO’s employment by us for cause (as such term is defined in the employment agreements and in our stock plans), which we refer to as termination for cause; |
● |
| termination of the NEO’s employment by us for reasons not constituting cause, such as due to a companywide or departmental reorganization, or |
● |
| termination of the NEO’s employment or resignation by the NEO for a good reason in connection with a change in control that occurs within 12 months of such change in control, which we refer to as termination in connection with a change in control. |
72 | 2020 Proxy Statement |
Executive Compensation |
Compensation upon Voluntary Termination, Retirement or Termination for Cause
Except as described above under the“Compensation Discussion and Analysis—Post-Employment Obligations”section of this Proxy Statement, awards held by our NEOs will not be subject to accelerated vesting or otherwise enhanced in the event of voluntary termination, retirement, or termination for cause. A termination of employment due to voluntary termination, retirement, or termination for cause does not entitle the NEOs to any payments or benefits other than the accrued salary and vacation pay and vested benefits described above. SuchOther than the retirement benefits described above, such compensation and benefits are available to salaried employees generally, except that any amounts payable to the NEOs upon termination under our Nonqualified Deferred Compensation Plan would not be applicable to certain employees as only employees with the title of chief executive officer, vice president, senior director and executive director are entitled to participate in our Nonqualified Deferred Compensation Plan. Except as provided by the Retirement Benefit for Directors and Senior Officers Stock policy described above under the “Post-Employment Obligations” section of this Proxy Statement, awards held by our NEOs will not be subject to accelerated vesting or otherwise enhanced in the event of voluntary termination, retirement, or termination for cause.
Compensation upon Involuntary Termination without Cause
Each of the NEOs’ employment agreements includes specific benefits upon an involuntary termination without cause. For each of the NEOs, other than Mr. Bienaimé, these benefits consist of:
● |
| 150% of the NEO’s current annual base salary and target annual cash incentive for the year of termination; |
● |
| the NEO’s target annual cash incentive for the year of termination, pro-rated for the year in which termination occurs; |
● |
| an additional 12 months of vesting of the NEO’s unvested time-based vesting equity awards and target amounts of performance-based equity awards that have not vested; |
● |
| paid premiums under COBRA for 18 months; and |
● | outplacement services and legal advice consistent with the NEO’s position. |
Mr. Bienaimé’s benefits upon an involuntary termination without cause consist of:
● |
|
● | his target annual cash incentive for the year of termination, pro-rated for the year in which termination occurs; |
● | 100% vesting of all his unvested stock options; |
● | paid premiums under COBRA for 18 months; and |
● | reimbursement of outplacement |
Each NEO other than Mr. Bienaimé is eligible to receive the respective termination benefits described above within 45 days of his termination date, provided that he executes a standard form severance and release agreement and allows such release to become fully effective. The cash portions of the termination benefits are payable to the NEO in one lump sum on the 60th60th day after termination. In addition, if an NEO other than Mr. Bienaimé becomes disabled while employed by us, and if (a) the NEO is eligible to receive benefits under our Long-Term Disability Plan, then we will pay the NEO additional compensation so that the total received by the NEO (after taking into consideration the amounts payable to the NEO under the Long-Term Disability Plan) equals the cash portions of the termination benefits as described above; or (b) the NEO is not eligible to receive benefits under our Long-Term Disability Plan, then the NEO will be entitled to the full termination benefits described above.
Mr. Bienaimé’s benefits upon an involuntary termination without cause consist of:
|
|
|
|
|
|
|
|
|
|
Mr. Bienaimé’s termination benefits described above are payable in one lump sum within 30 days of his termination date, provided that he executes a standard form severance and release agreement within 20 days of his termination. Moreover, we are only obligated to provide such termination benefits so long as Mr. Bienaimé’s remains in compliance with our forms of Non-Competition Agreement and Confidentiality Agreement. In addition, if Mr. Bienaimé becomes disabled while employed by us, and if (a) he is eligible to receive benefits under our Long-Term Disability Plan, then we will pay Mr. Bienaimé additional compensation so that the total received by him (after taking into consideration the amounts payable to Mr. Bienaimé under the Long-Term Disability Plan) equals the full termination benefits as described above; or (b) Mr. Bienaimé is not eligible to receive benefits under our Long-Term Disability Plan, then he will be entitled to the full termination benefits described above.
Compensation upon Termination of Employment in Connection with Change in Control
Each of the named NEOs who is involuntarily terminated in connection with a change in control is entitled to certain benefits. For each of the NEOs other than Mr. Bienaimé, these benefits consist of:
● |
| 200% of the NEO’s current annual base salary and target annual cash incentive for the year of termination; |
● |
| the NEO’s target annual cash incentive for the year of termination, pro-rated for the year in which termination occurs; |
● |
| 100% vesting of all the NEO’s unvested time-based vesting equity awards and target amounts of performance-based equity awards that have not vested; |
● |
| paid premiums under COBRA for 24 months; and |
● | outplacement services and legal advice consistent with the NEO’s position. |
www.biomarin.com |
| 73 |
Executive Compensation |
Mr. Bienaimé’s benefits for termination in connection with a change in control consist of:
● | 300% of his current annual base salary and target annual cash incentive for the year of termination; |
● | his target annual cash incentive for the year of termination, pro-rated for the year in which termination occurs; |
● | 100% vesting of all his unvested time-based vesting equity awards and target amounts of performance-based equity awards that have not vested; |
● | paid premiums under COBRA for 36 months; and |
● | reimbursement of outplacement services and legal advice consistent with his position that he actually incurs and in an amount not to exceed $18,000. |
The payment terms, requirement to execute a release, and provision of termination benefits in the event an NEO becomes disabled as described above under“Compensation upon Involuntary Termination without CauseCause”” apply equally to termination benefits for NEOs in connection with a change in control. If termination compensation payable to an NEO other than Mr. Bienaimé as the result of a change in control as described above would result in a parachute payment under Section 280G of the Code, which would be subject to an excise tax under Section 4999 of the Code, or interest or penalties are incurred with respect to such excise tax, we will determine, before any such termination compensation is paid to the NEO, which of the following two alternative forms of payment would result in his receipt, on an after-tax basis, of the greater amount of the termination compensation notwithstanding that all or some portion of the termination compensation may be subject to the excise tax: (i) payment in full of the entire amount of the termination compensation, or (ii) payment of only a part of the termination compensation so that the NEO receives the largest payment possible without the imposition of the excise tax.
Mr. Bienaimé’s benefits for terminationChange in connection withControl - Continued Employment
Upon a change in control consist of:
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Potential Payments on Termination or Change in Control The table below sets forth the estimated current value of payments and benefits to each of the NEOs upon an involuntary termination or a change in control of the Company as described above. The amounts shown assume that the triggering events occurred on December 31,
Security Ownership of Certain Beneficial Owners and Management The table below sets forth certain information regarding the ownership of shares of our common stock as of March 6, 2020 (except as otherwise noted) by: (i) each
Director and Officer Stock Ownership Guidelines The Board approved stock ownership guidelines for our directors, Chief Executive Officer and employees at the Senior Vice President level or higher, which have been approved by the Board. Under these guidelines, executives are expected to use the shares of common stock obtained on the exercise of stock options or vesting of RSUs The following table summarizes the guidelines for our directors and NEOs as of December 31,
The charts below summarize our directors’ and NEOs’ compliance with the INDEPENDENT DIRECTORS NAMED EXECUTIVE OFFICERS
Compliance with our stock ownership guidelines is based on shares (including shares held in trusts for which the individual is the trustee and in a deferral account and issuable to such individual under our Nonqualified Deferred Compensation Plan) and the unvested service-based RSUs and performance-based RSUs
Section 16(a) of the To the
Equity Compensation Plan Information The
Questions and Answers about these Proxy Materials and Voting 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? Pursuant to rules adopted by the SEC, we have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending an Important Notice Regarding the Availability of Proxy Materials (the Proxy Availability Notice) to our stockholders of record. All stockholders will have the ability to access the proxy materials on the website referred to in the Proxy Availability Notice free of charge or request to receive a printed set of the proxy materials for the Annual Meeting. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Proxy Availability Notice. We intend to mail the Proxy Availability Notice on or about April 14, 2020 to all stockholders of record entitled to vote at the Annual Meeting. We expect that this Proxy Statement and the other proxy materials will be available to stockholders on or about April 14, 2020. What does it mean if I receive more than one Proxy Availability Notice? If you receive more than one Proxy Availability Notice, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on each Proxy Availability Notice to ensure that all of your shares are voted. How do I attend the Annual Meeting? We will be hosting the Annual Meeting live via the Internet.*You will not be able to attend the Annual Meeting in person. Any stockholder can listen to and participate in the Annual Meeting live via the Internet atwww.virtualshareholdermeeting.com/BMRN2020. Our Board annually considers the appropriate format of our annual meeting and this year has decided to hold a virtual annual meeting due to the If you attend the virtual meeting as described above, you will be deemed to be attending in person, as provided by Delaware law. The Annual Meeting webcast will begin promptly at 9:00 a.m. (Pacific Time) on May 27, 2020. We encourage you to access the Meeting webcast prior to the start time. Online check-in will begin, and stockholders may begin submitting written questions, at 8:45 a.m. (Pacific Time), and you should allow ample time for the check-in procedures. You will need the 16-digit control number included on your Notice of Internet Availability or your proxy card or voting instruction form (if you received a printed copy of the proxy materials) or included in the email to you if you received the proxy materials by email in order to be able to vote your shares or submit questions during the Annual Meeting. Instructions on how to connect to the Annual Meeting and participate via the Internet, including how to demonstrate proof of stock ownership, will be posted atwww.virtualshareholdermeeting.com/BMRN2020two weeks prior to the date of the Annual Meeting.If you do not have your 16-digit control number, you will be able to access and listen to the Annual Meeting as a guest, but you will not be able to vote your shares or submit questions during the Annual Meeting. We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting or submitting questions. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting web portal
Who can vote at the Annual Meeting? Only stockholders of record at the close of business on the Record Date will be entitled to vote at the Annual Meeting. On the Record Date, there were 180,760,753 shares of common stock outstanding and entitled to vote. Stockholder of Record: Shares Registered in Your Name If on the Record Date your shares were registered directly in your name with BioMarin’s transfer agent, Computershare Inc., then you are a stockholder of record. As a stockholder of record, you may vote at the Annual Meeting, which will be held virtually via the Internet, or vote by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy over the telephone, or on the Internet as instructed below, or complete, date, sign and return the proxy card mailed to you to ensure your vote is counted. Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Other Nominee If on the Record Date your shares were held not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and the Proxy Availability Notice is being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker, bank or other nominee regarding how to vote the shares in your account. You are also invited to attend and vote at the Annual Meeting, which will be held virtually via the Internet. What am I voting on? There are three matters scheduled for a vote:
What if another matter is properly brought before the Annual Meeting? The Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons named in the accompanying proxy will vote on those matters in accordance with their best judgment. What is the Board’s voting recommendation? The Board recommends that you vote your shares:
How do I vote? With regard to the election of directors, you may vote “For” all the nominees to the Board or you may “Withhold” your vote for all the nominees or any individual nominee you specify. With regard to each of the other matters to be voted on, you may vote “For” or “Against” or abstain from voting. The procedures for voting depend on whether your shares are registered in your name or are held by a bank, broker or other nominee: Stockholder of Record: Shares Registered in Your Name If you are a stockholder of record, you may vote at the Annual Meeting, which will be held virtually via the Internet, vote by proxy over the telephone, vote by proxy through the Internet, or vote by proxy using a proxy card that you may request or that we may elect to deliver at a later time. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the Annual Meeting and vote online even if you have already voted by proxy.
Beneficial Owner: Shares Registered in the Name of Broker, Bank or Other Nominee If you are a beneficial owner of shares registered in the name of your broker, bank, or other nominee, you should have received a Proxy Availability Notice containing voting instructions from that organization rather than from BioMarin. Simply follow the voting instructions in the Proxy Availability Notice to ensure that your vote is counted. To vote online at the Annual Meeting, which will be held virtually via the Internet, attend the Annual Meeting by visitingwww.virtualshareholdermeeting.com/BMRN2020and follow the instructions posted there. Please have your 16-digit control number to join the Annual Meeting. Internet proxy voting may be provided to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies. How many votes do I have? On each matter to be voted upon, you have one vote for each share of common stock you own as of the Record Date. What if I return a proxy card or otherwise vote but do not make specific choices? If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable, “FOR” the election of all ten nominees for director, “FOR” the ratification of KPMG as the Company’s independent registered public accounting firm and “FOR” the advisory approval of the compensation of the NEOs. If any other matter is properly presented at the Annual Meeting, your proxy holder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.
Will my vote be kept confidential? Proxies, ballots and voting tabulations are handled on a confidential basis to protect your voting privacy. This information will not be disclosed, except as required by law. Who is paying for this proxy solicitation? The accompanying proxy is solicited on behalf of the Board for use at the Annual Meeting. Accordingly, the Company will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees and Innisfree M&A Incorporated may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees of the Company will not be paid any additional compensation for soliciting proxies, but Innisfree M&A Incorporated will be paid its customary fee of approximately $20,000 plus out-of-pocket expenses if it solicits proxies. We may also reimburse brokerage firms, banks and other nominees for the cost of forwarding proxy materials to beneficial owners. Can I change my vote after submitting my proxy? Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:
Your most current proxy card or telephone or Internet proxy is the one that is counted, so long as it is provided within the applicable deadline. If your shares are held by your broker, banker or other nominee, you should follow the instructions provided by your broker, bank or other nominee. When are stockholder proposals and director nominations for inclusion in our proxy statement for next year’s Annual Meeting due? Stockholders wishing to present proposals for inclusion in our proxy statement for the 2021 Annual Meeting pursuant to Rule 14a-8 of the Exchange Act must submit their proposals so that they are received by us at our principal executive offices no later than December 15, 2020. However, if our 2021 Annual Meeting is not held between April 27, 2021 and June 26, 2021, then the deadline will be a reasonable time prior to the time that we begin to print and mail our proxy materials. Eligible stockholders wishing to nominate a candidate for election to the Board at the 2021 Annual Meeting and to have such candidate included in the proxy materials for such Proposals for inclusion in our proxy statement for the
Table of
When are other With respect to proposals and nominations other than those
For the 2021 Annual Meeting, stockholders wishing to present nominations for director or proposals for consideration under these provisions of our Bylaws must submit their nominations or proposals so that they are received at our principal executive offices not earlier than January 27, 2021 and not later than February 26, 2021 in order to be considered. In the event that the 2021 Annual Meeting is to be held on a date that is not within 25 days before or 60 days after May 27, 2021, then a stockholder’s notice must be received by the Secretary no later than the close of business on the 10th day following the day on which notice of the date of the 2021 Annual Meeting was mailed or the day we make a public announcement of the date of the 2020 Annual Meeting, whichever first occurs. In addition, with respect to nominations for directors, if the number of directors to be elected at the 2021 Annual Meeting is increased effective at the 2021 Annual Meeting and there is no public announcement by us naming the nominees for the additional directorships at least 100 days prior to May 27, 2021, a stockholder’s notice will also be considered timely, but only with respect to nominees for the additional directorships, if it is delivered to our Secretary at our principal executive offices not later than the close of business on the 10th day following the day on which such public announcement is first made by us. Nominations or proposals should be sent in writing to the Company’s Secretary at BioMarin Pharmaceutical Inc., Attention: G. Eric Davis, 105 Digital Drive, Novato, CA 94949. A stockholder’s notice to nominate a director or bring any other business before 2020 Annual Meeting must set forth certain information, which is
In order for a stockholder to have a candidate considered by the CGN Committee, a stockholder should submit a written recommendation that includes: (i) the name and record address of
Exchange Act. The notice must also be accompanied by a written consent of each proposed nominee to being named as a nominee if selected by the CGN Committee and nominated by the Board. Stockholder recommendations should be addressed to the Corporate Governance and Nominating Committee at 105 Digital Drive, Novato, CA 94949, c/o G. Eric Davis, Executive Vice President, General Counsel and Secretary. For stockholder nominations to be included in the proxy materials for a future meeting pursuant to our proxy access bylaw or brought before the stockholders at a future meeting, please see “When are stockholder proposals and director nominations for inclusion in our proxy statement for next year’s Annual Meeting due?” and “When are other proposals and director nominations for next year’s Annual Meeting due?” above. How are votes counted? Votes will be counted by the inspector of election appointed for the Annual Meeting, who will separately count, “For,” “Withhold” and broker non-votes for the proposal to elect directors, and with respect to other proposals, votes “For,” “Against,” “Abstain” and broker non-votes, if applicable. What are “broker non-votes”? Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker, bank or other nominee holding the shares as to how to vote. Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker, bank or other nominee holding the shares. If the beneficial owner does not provide voting instructions, the broker, bank or other nominee can still vote the shares with respect to matters that are considered to be “routine,” but cannot vote the shares with respect to “non-routine” matters. Under the rules and interpretations of the New York Stock Exchange (the NYSE), which generally apply to all brokers, bank or other nominees, on voting matters characterized by the NYSE as “routine,” NYSE member firms have the discretionary authority to vote shares for which their customers do not provide voting instructions. On non-routine proposals, such “uninstructed shares” may not be voted by member firms. Only Proposal No. Two—Ratification of the selection of our independent registered public accounting firm is considered a “routine” matter for this purpose, and brokers, banks or other nominees will generally have discretionary voting power with respect to such proposal. What is the effect of abstentions and broker non-votes? Abstentions:Under Delaware law (under which BioMarin is incorporated), abstentions are counted as shares present and entitled to vote at the Annual Meeting, and therefore counted as present for the purpose of determining whether a quorum is present, but they are not counted as shares cast. Our Bylaws provide that a stockholder action (other than the election of directors and unless otherwise required by applicable laws, regulations or stock exchange rules) shall be decided by the vote of the holders of a majority of the total number of votes of the Company’s capital stock cast on the matter. Therefore, abstentions will have no effect on Proposal No. Two—Ratification of the selection of KPMG as our independent registered public accounting firm and Proposal No. Three—Advisory vote on executive compensation. Broker Non-Votes:The “non-routine” matters on the agenda for the Annual Meeting for which brokers, banks and other nominees will not be able to vote uninstructed shares include Proposal No. One—Election of directors and Proposal No. Three—Advisory vote on executive compensation. Broker non-votes will be counted as present at the Annual Meeting for the purpose of determining whether a quorum is present at the Annual Meeting. However, because broker non-votes are not considered under Delaware law to be votes cast, they will have no effect on the outcome of the vote on: Proposal No. One—Election of directors and Proposal No. Three—Advisory vote on executive compensation. As a result, if you hold your shares in street name and you do not instruct your broker, bank or other nominee how to vote your shares on these proposals, no votes will be cast on your behalf on these proposals.Therefore, it is critical that you indicate your vote on these proposals if you want your vote to be counted. Proposal No. Two—Ratification of the selection of KPMG as our independent registered public accounting firm is considered a “routine” matter. Therefore, your broker, bank or other nominee will be able to vote on that proposal even if it does not receive instructions from you, so long as it holds your shares in its name.
How many votes are needed to approve each proposal?
A “Plurality,” with regard to the election of directors, means that the ten nominees who receive the most “For” votes cast by the holders of shares either present in person or represented by proxy and entitled to vote will be elected to our Board. A “Majority Cast,” with regard to the ratification of our independent registered public accounting firm and the advisory vote on executive compensation means that a majority of the votes cast on each proposal must be voted “For” the respective proposal. Accordingly:
What is the quorum requirement? A quorum of stockholders is necessary to hold a valid stockholder meeting. A quorum will be present if stockholders holding at least a majority of the outstanding shares entitled to vote are present in person or represented by proxy at the Annual Meeting. On the Record Date, there were 180,760,753 shares outstanding and entitled to vote. Thus, the holders of at least 90,380,377 shares must be present in person or represented by proxy at the Annual Meeting to have a quorum. As described above, Stockholders attending the virtual meeting will be deemed to be attending in person, as provided by Delaware law, and their shares will be counted towards the quorum requirement. Your shares will be counted towards the quorum only if you submit a valid proxy by mail, over the phone or through the Internet (or one is submitted on your behalf by your broker, bank or other nominee) or if you attend the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, then the holders entitled to vote thereat, present at the Annual Meeting in person or represented by proxy, by a majority of the votes cast, may adjourn the meeting to another date. At any adjourned Annual Meeting at which a quorum is present, any business may be transacted that might have been transacted at the Annual Meeting as originally notified. If the adjournment is for more than 30 days, or if after that adjournment a new record date is fixed for the adjourned Annual Meeting, a notice of the adjourned Annual Meeting shall be given to each stockholder of record entitled to vote at the adjourned Annual Meeting.
How can I find out the results of the voting at the Annual Meeting? Preliminary voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a current report on Form 8-K that we expect to file with the SEC within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Form 8-K with the SEC within four business days after the Annual Meeting, we intend to file a Form 8-K to publish the preliminary results within four business days after the Annual Meeting and file an amended Form 8-K to publish the final results within four business days after the final results are known to us. If you have any questions or need assistance in voting your shares, please call the following firm, which is assisting the Company in the solicitation of proxies: Innisfree M&A Incorporated New York, New York 10022 Stockholders may call toll free: (888) 750-5834 Banks and Brokers may call collect: (212) 750-5833
The SEC has adopted rules that permit companies and intermediaries This year, a number of brokers with account holders who are our stockholders will be “householding” our proxy materials. A Proxy Availability Notice or proxy materials will be delivered in one single envelope to multiple stockholders sharing an address unless contrary instructions have been received from one or more of the affected stockholders. Once you have received notice from your broker that they will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate Proxy Availability Notice or proxy materials, please notify your broker or contact Broadridge Financial Solutions, Inc. in The Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment.
Special Note Regarding Forward-Looking Statements This Proxy Statement and other materials we are sending you or that are available on our website in connection with the Annual Meeting (the Other Materials) contain “forward-looking statements” as defined under federal securities laws. Many of these statements can be identified by the use of terminology such as “believes,” “expects,” “intends,” “anticipates,” “plans,” “may,” “will,” “projects,” “continues,” “estimates,” “potential,” “opportunity” or the negative versions of these terms and other similar expressions. These forward-looking statements may be found in the sections of this Proxy Statement titled “Proxy Overview,” “Executive Compensation,” and other sections of this Proxy Statement, as well as the Other Materials. These forward-looking statements are based on our current expectations and assumptions, and are subject to risks and uncertainties that could cause our actual results or experience and the timing of events to differ significantly from the forward-looking statements. Factors that could cause or contribute to these differences include those discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 27, 2020 under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in the Annual Report. You should carefully consider that information before voting. You should not place undue reliance on these statements, which speak only as of the date that they were made. These cautionary statements should be considered in connection with any written or oral forward-looking statements that we may make in the future. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect later events or circumstances or to reflect the occurrence of unanticipated events. APPROVAL The contents of this Proxy Statement and the sending thereof to the stockholders have been authorized by the Board. By Order of the Board of Directors
April A copy of our Annual Report on Form 10-K for the year ended December 31,
VOTE BY INTERNET - www.proxyvote.com ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS VOTE BY PHONE - 1-800-690-6903 VOTE BY MAIL
The undersigned hereby appoints Jean-Jacques Bienaimé and G. Eric Davis, and each of them, with power to act without the other and with power of substitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the other side, all the shares of BioMarin Pharmaceutical Inc. Common Stock, that the undersigned is entitled to vote, and in their discretion, to vote upon such other business as may properly come before the Annual Meeting of Stockholders of the company to be held on When properly executed, this proxy will be voted in the manner directed herein, or if no such direction is made, it will be voted in accordance with the Board of Directors' recommendations. This proxy is governed by the laws of the State of Delaware. *We are monitoring the situation regarding the coronavirus or COVID-19, and are planning for the possibility that the Annual Meeting may be held in person at the Company’s offices in the Morning Glory Conference Room, 750 Lindaro Street, San Rafael, CA 94901. If we take this step, we will announce the decision to do so in advance, and details on how to attend in person will be available at https://investors.biomarin.com. (PLEASE DATE AND SIGN ON REVERSE SIDE) |