As Seagen prepares to be acquired by Pfizer, an investor advisory firm is raising concerns about “problematic” compensation practices that it claims will benefit two of its top executives and a former chief executive officer at the expense of shareholders.
In an alert to Seagen sent prior to the annual shareholder meeting coming up on May 31, Glass Lewis pointed to a recent proxy statement filed with regulators and identified moves made by the board that it called concerning. High on its list are so-called tax gross ups, which are payments a company makes to an employee in order to offset additional income taxes the employee would otherwise pay.
In this instance, Seagen agreed to pay tax gross ups to David Epstein, its new chief executive officer, and Roger Dansey, the president of research and development, shortly after Pfizer announced plans last March to acquire Seagen for $43 billion. Specifically, Glass Lewis cited regulatory filings indicating shareholders will pay an estimated $7 million of their personal tax obligations.
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