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Two prominent shareholder advisory firms are urging Regeneron Pharmaceuticals (REGN) shareholders to remove a director who is on the compensation committee, citing concerns over “problematic” pay practices and “excessive” awards given to the top two executives.

In separate investor alerts, the advisory firms argue the Regeneron board has showered chief executive officer Leonard Schleifer and president and chief scientific officer George Yancopoulos with upfront performance stock units worth $130 million over five years, rather than annual grants. This approach may lock in executives, but the firms say it also robs the board of flexibility if job performance changes during that time.


Moreover, the annualized value of the PSU grants represents a 51% increase over the previous year, according to the Glass Lewis advisory firm. Although the potential value of the grants is not guaranteed, “the disclosed dollar value cost of the grants is quite substantial relative to executive compensation levels among public companies worldwide,” Glass Lewis wrote in its advisory note.

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