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Print Edition StoriesFriday, November 20, 2009
Biogen shareholders: CEO pay 'inconsistent' with poor stock performance
By Jackie Noblett
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One of Biogen Idec Inc.’s largest investors is criticizing CEO James Mullen’s compensation package and other corporate spending initiatives in an effort to goad the company into boosting its stock performance.
In a letter sent to Mullen and the Cambridge biotech’s board of directors, HealthCor Management LP called Mullen’s pay and incentives “inconsistent with Biogen Idec’s poor stock performance,” which is down nearly 3 percent year to date. Mullen received $1.2 million in salary and bonuses last year, and his total compensation ranked second among Massachusetts CEOs, according to Boston Business Journal research.
“James Mullen has made considerable personal profits while running Biogen Idec and has egregiously continued to sell down his personal holdings in the company while investors have been left holding the bag,” the company’s portfolio managers, Joseph Healey and Arthur Cohen, wrote.
They also criticized Biogen’s research and development budget as “excessive and fruitless” compared with its product pipeline.
The fund, Biogen’s tenth largest institutional investor and owner of about 2 percent of the company’s shares, proposes a $500 million to $1 billion annual stock buyback program to boost share prices.
A Biogen official said the company would not be making a formal response to HealthCor's letter, but defended its pay and spending practices.
"Mr. Mullen's 2008 compensation reflects the fact the company significantly exceeded its 2008 performance targets and outperformed many of its peers," said spokeswoman Jennifer Neiman. She countered the R&D spending criticism by noting the company's decision to truncate two of its late stage oncology projects.
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